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Home My WebLink About2003-286Sri\Our Documents\Ordinances\03\North Lakes Oil and Gas Lease Ordinance .doc ORDINANCENO. 6VA0 a4(J AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT FOR AN OIL AND GAS NON -DRILL SITE/POOLING AGREEMENT AT THE NORTH LAKES PARK WITH JOINT RESOURCES COMPANY AND ALLOWING THE CITY MANAGER TO EXECUTE A LEASE AS LONG AS THE LEASE IS IN SUBSTANTIALLY THE SAME FORM AS THE CITY'S STANDARD LEASE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, The City Council of the City of Denton has heretofore determined that it is advisable to lease for oil and gas purposes certain real property located at North Lakes Park, Denton, Texas; and WHEREAS, in compliance with Chapter 71 of the Texas Natural Resources Code (the "Code") the City published notice of its intention to lease such real property for oil and gas purposes once a week for three consecutive weeks in a newspaper with general circulation and published in Denton County, Texas; and WHEREAS, in compliance with the Code, the City Council of the City of Denton held a public hearing under Chapter 26 of the Texas Parks and Wildlife Code and Chapter 71 of the Texas Natural Resources Code; and WHEREAS, Pursuant to the Code, the City of Denton desires to negotiate the lease of the property for oil and gas well development with the best bidder submitted by Joint Resources Company; and WHEREAS, Joint Resources Company desires to enter into lease negotiations for the land at North Lakes Park for a non -drill site/pooling agreement for oil and gas well development and after negotiation, to enter into a lease for the land for oil and gas well development and to agree to pay to the City the agreed upon amounts; and WHEREAS, after negotiation the City desires to authorize the City Manager to execute the lease as long as the lease is in substantially the same form as the City's standard lease agreement for non -drill site/pooling agreements. NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. Incorporation of Preamble. The above and foregoing preamble is incorporated into the body of this Ordinance as if copied herein in its entirety. SECTION 2. The City Manager or his designee are hereby authorized to negotiate a non -drill site/pooling oil and gas lease agreement between the City of Denton and Joint Resources Company in return for the payment(s) as outlined in Attachment A for the approximately 353 acres of North Lakes Park. SECTION 3. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance or application thereof to any person or circumstance is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validityofthe remaining portions of this Ordinance, and the City Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the — day of , 2003. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 'a/'o a ATTACHMENT A CITY OF DENTON BID FORM GAS WELL DEVELOPMENT ON NORTH LAKES PARK PROPERTY NON -DRILL SITE/POOLING AGREEMENT Description of property: The lease will be a non -drill site/pooling agreement. Legal Description to be provided. Minimum Standards of the Bid: Please check each item that will be included in the lease. �� dA primary term of not more than-tiNyears from date of execution. d/A royalty to lessor of -'2-1 6! b of all oil and gas produced from said land. ❑ The royalty to be paid at the highest price in the area. A statement by the Lessee that the royalty to be paid the City is equal to the highest price paid by the Lessee to any mineral owner in Denton, County; and that if the Lessee pays a mineral owner in Denton County, Texas a higher royalty percentage during the term of this lease, the Lessee shall increase the royalty paid to the City so as to equal this higher amount. d An annual delay rental of — —' per acre. (This is a year Paid Up Lease) dShut-in payment of t7 per acre. sr/Bonus money as specified by bidder. 3.S 3 acres X $ 2_C 9- Ocl = total bonus money r% Z �J OS� d t) For bonus money as specified in the bid. &'�A Development Plat or other drawing showing a drill plan and drill sites must be submitted with this bid. The City reserves the right to award this bid based on both price and the most `adyyantagequs location o th drilling locations and sit s. N*CA'�yti v •wl(j / Q. r -- I— d{':%\�%At8 a.�2w � fc:�..\ AM hQ bJ cv%1%%*Atxi d The successful bider shall pay the cost of the advertisement of the bid, S A", -tt. a4 `'"j d Bidders shall submit information of the bidder's reputation and quality of the bidder's oil and gas services including but not limited to the bidder's financial ability to provide the oil and gas services, safety record, compliance history and any other relevant information that the bidder submits to the city for the determination of best value. A letter from the /Railroad Commission that the company is in good standing willsuffice. d The successful bidder shall comply with all requirements in the Code of Ordinances for -2- the City of Denton, Texas. A copy may be obtained in the City Secretary's office or on the City of Denton's website, www.citvofdenton corn The City of Denton's Gas Well Ordinances may be obtained from the City Secretary, website or City Attorney's Office. Et/ A bidder's conference will be held on Monday, July 28, 2003 at 2:00 p.m.. at the City of Denton Purchasing Office conference room, 901 B Texas Street, Denton, Texas. d/An oil and Gas lease, and Right of Way Use Agreement, if any, will be negotiated within thirty (30) days after the successful bidder is selected. d The City shall allow the successful bidder to pool the lease, the land or minerals included in the lease, or any part of these with any other land, leases, minerals estates or parts of any of these to form a drilling or spacing unit for the exploration, development, and production of oil and gas. By submitting a bid, each bidder agrees to waive and does hereby waive any claim the bidder has or may have against the City of Denton, Texas, and the City's respective employees and representatives for the award of attorney fees, arising out of or in connection with the administration, evaluation, or recommendation of any bid, waiver of any requirements under the Bid Documents, or the Contract Documents, acceptance or rejection of any bids, and award of the Bid. By submitting a bid, the bidder specifically waives any right to recover or be paid attorney's fees from the City of Denton, Texas, or any of the City's employees and representatives under any of the provisions of the Texas Uniform Declaratory Judgments Act (Texas Civil Practice and Remedies Code, Section 37.001, et. seq., as amended). The bidder agrees that this is the intentional relinquishment of a presently existing known right. By execution and submission of this Bid, the Bidder hereby represents and warrants to the City of Denton that the Bidder has read and understands the Bid Documents and the Contract Documents and this Bid is made in accordance with the Bid Documents. Bidder acknowledges that it understands all terms within the bid documents, which include the waiver provisions, and that it had the right to consult with counsel regarding all of the above documents. By submitting a bid, each bidder agrees to waive and does hereby waive any claim the bidder has or may have against the City of Denton, Texas and the City's employees, agents and officers, arising out of or in anyway connected with the following: 1. the administration, evaluation or recommendation of any bid; 2. waiver or deletion of any o f the requirements under the B id Documents or the -3- Contract Documents; 3. acceptance or rejection of any bids; and 4. award of the Bid or Lease. By submitting a bid, the bidder acknowledges that the bidder understands all terms of the bidding documents and consents to the bidding process and the possibility of a negative assessment. By submitting a bid, the bidder acknowledges and agrees that there was and is no disparity of bargaining power between the bidder and the City of Denton, Texas. The bidder agrees that this is the intentional relinquishment of the above listed presently existing rights. The City reserves the right to waive, delete or amend any of the requirements connected with this bid and to reject any and all bids. S cn 1b,*..16.►,. va:r,- �aalt Cc1 r•��.M� Certification idder Mw..V- G. �c►,��o.�C.bt A RC.�ewr alE Joint Resources Company is the Operator of the closest Wells to the North Lakes Property and is presently responsible for bringing in the only gas line to gather gas from this area and is a leaseholder owner of leases in very close proximity to the North Lakes Property. In addition, Joint Resources Company is presently negotiating to obtain additional leases directly offsetting the North Lakes Property from which additional directional and/or horizontal Wells can be drilled from, thereby allowing development of the minerals under the North Lakes Property without drillsites or operations thereon. Joint Resources Company presently maintains all insurance and bonding commensurate with the Texas Railroad Commission and City of Denton requirements, and has successfully already drilled two (2) gas Wells in the immediate vicinity of the North Lakes Property, and operates in excess of 200 oil and/or gas Wells. TX Railroad Commission Letter of Good Standing attached. Contact Information: Mark G. Kalpakis, President Joint Resources Company 770 N. Fielder Road Arlington, TX 76012 Tel # (817) 459-2570 xt. 1 Fax # (817) 459-1719 WIN 03 08 04