2013-330
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AmendedbyOrdinanceNo.201404002/04/14JR
AmendedbyOrdinanceNo.201406903/04/14JR
sAlegal \our documents \ordinances \13 \standstill approval Ordinance.doc
ORDINANCE NO. 2013 -330
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A "STANDSTILL
AGREEMENT" BETWEEN THE CITY OF DENTON, TEXAS AND EAGLERIDGE
OPERATING, LLC UNTIL MIDNIGHT ON JANUARY 31, 2014 WITH REGARD TO
CERTAIN DISPUTES AND ISSUES OVER GAS DRILLING IN THE CITY TO ALLOW
THE PARTIES AN OPPORTUNITY TO ENGAGE IN GLOBAL SETTLEMENT
NEGOTIATIONS AS IT CONCERNS UNRESOLVED ISSUES BETWEEN THEM; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, certain disputes have arisen between the City of Denton and Eagleridge
Operating LLC as it concerns gas drilling in the corporate limits of the City; and
WHEREAS, the parties deem it in their respective best interests to attempt to negotiate
the disputes between them; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The preambles above are incorporated in this ordinance as though set forth
in full.
SECTION 2. The City Council of the City of Denton hereby authorizes the City
Managermto execute the "Standstill Agreement" attached hereto as Exhibit "A."
SECTION 3. This Ordinance is effective immediately.
�� " Y...��� 2013.
PASSED AND APPROVED this the�a�a of
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
ANITA lll.J'ir1 SS, CITY ATTORNEY
...
STATE OF TEXAS §
COUNTY OF DENTON
STANDSTILL AGREEMENT
This Standstill Agreement is expressly made subject to the authorized representatives of
Eagleridge and the City signing it before midnight on November 22, 2013. Until and unless this
Standstill Agreement is signed, there is no binding agreement between Eagleridge and the City
regarding the matters set forth below.
1. The City of Denton and Eagleridge agree to a stand down period from execution of this
Standstill Agreement until 11:59 pm, January 31, 2014 (the "Standstill Period ") with
respect to those disputes and issues between the parties not specifically addressed in
this Standstill Agreement, to allow the parties the opportunity to engage in global
settlement negotiations regarding the unresolved issues between them. This Standstill
Agreement is intended only to address issues related to the gas wells as specified
herein. Nothing in this Standstill Agreement is intended to apply to any other gas wells
located within the corporate limits of the City except as stated herein. Nothing in this
agreement is intended to prevent the City of Denton from enforcing operational
standards or requirements of its ordinances as they relate to gas wells, including those
specifically referenced herein.
2. During the Standstill Period, Eagleridge will not drill, redrill or frac (or continue to drill,
redrill or frac) any wells within the corporate limits of the City except for the following:
a) Bonnie Brae 4H (API 121 - 31934), 3H (API 121 - 31597), and 2H (API 121-
34424);
b) ACME Brick D1H (API 121 - 31340), and D2H (API 121 - 31976), D3H (API 121-
34428), and D4H (API 121 - 34429);
c) A redrill of one existing well on the existing pad site at Gamble -Boyd Unit 1
(API 121 - 32240); and
d) The Rayzor West Gas Unit 12H -1 (API 121 - 34382), Rayzor West Gas Unit 12H-
2 (API 121 - 34383), Rayzor West Gas Unit 12H -3 (API 121 - 34384), and Rayzor
West Gas Unit 12H -4 (API 121 - 34385).
3. During the Standstill Period, Eagleridge will not drill any additional new well(s) on the
Bonnie Brae A and Bonnie Brae B pad sites or on the Joab A or Joab B pad sites (as such
sites are shown on Exhibit 1. In addition, during the Standstill Period, as part of the
discussions of a global settlement, Eagleridge will consider plugging and abandoning the
Joab B well. Further, with respect to the wells referenced in ¶2(b) above, Eagleridge
Page 1
1392.010 \36536.8
agrees to the operational limitations set forth on Exhibit 2. To facilitate a global
settlement during the Standstill Period, Eagleridge agrees to use its reasonable efforts to
provide the City with copies of relevant public records Eagleridge may have in its
possession that evidence prior permit applications and regulatory approvals relating to
gas well sites located within the corporate limits of the City.
4. For the wells identified in paragraph 2 above, the City of Denton agrees to issue all
required permits (including, but not limited to, drilling permits and all operational
permits issued by the Fire Marshal or any other City official upon inspection and
compliance with the Fire Code) on a well -by -well basis within two (2) business days of
the City's receipt of an approved RRC permit for each well. Once issued, such permits
will not be revoked for any reason except the failure to comply with operational
requirements. The permits shall survive the failure of the parties to agree upon a global
settlement before the expiration of the Standstill Period. Each permit shall be
considered a "permit" under Chapter 245 of the Texas Local Government Code.
5. For the Gamble -Boyd Unit 1 redrill identified in paragraph 2(c) above, the Fire Marshall
is authorized to issue immediately (upon inspection and compliance with the Fire Code)
an above - ground storage permit.
6. The parties agree and stipulate that the issuance of permits for the wells identified in
paragraph 2 and Eagleridge's acceptance and use of such permits is without prejudice to
Eagleridge's position that it is not required to obtain some or all of such permits.
Further, the parties agree that the fact Eagleridge obtained such permits will not be
admissible in any litigation or other proceeding between Eagleridge and the City for the
purpose of showing or supporting an argument that Eagleridge was required to obtain
such permits for these wells or any other wells.
7. The parties agree and stipulate that the issuance of permits for the wells identified in
paragraph 2 is without prejudice to the City's position that Eagleridge is required to
obtain permits for wells that are not identified in paragraph 2 above. Further, the
parties agree that the fact the City issued the permits for the wells identified in
paragraph 2 will not be admissible in any litigation or other proceeding between
Eagleridge and the City for the purpose of showing or supporting an argument that
Eagleridge has vested rights under Chapter 245 or any other legal theory with respect to
any wells not identified in paragraph 2 above.
8. The public hearing from Eagleridge's October 31, 2013, appeal to the Board of
Adjustment will be deferred until after the end of the Standstill Period.
9. Eagleridge will not be denied the right to drill, redrill, or frac wells that Eagleridge
otherwise has the right to drill, redrill, or frac from the "Pittner" pad site (as shown on
Exhibit 3) or any of the pad sites identified in paragraph 2, as a result of any
development that is approved by the City (i) within the Standstill Period and (ii) within
Page 2
2.010 \36536.8
1,200 feet of the pad sites. The rights of Eagleridge pursuant to this paragraph 9 shall
survive (i) any termination of this Standstill Agreement and (ii) the failure of the parties
to arrive at a global settlement.
10. This Standstill Agreement must be executed by authorized representatives of the City
and Eagleridge by midnight on November 22, 2013, and if not, the offer represented by
this Standstill Agreement shall automatically terminate without further action by either
party.
11. The Confidentiality and Nondisclosure Agreement of November 18, 2013, shall not apply
to discussions between and among the parties, occurring after 11:59 pm, November22,
2013.
FA
AGREED TO THIS, the day of November, 2013, by the undersigned officers acting
on behalf of their respective legal entities.
EAGLERIDGE OPERATING, LLC,
as Operator and on behalf of EAGLERIDGE
ENERGY, LLC
By: ^Markm L. Grawe, Chief Operating Officer
........................_
and Executive Vice President,
Eagleridge Operating, LLC
THE STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the
� _day of November, 2013, by Mark L.
Grawe, as Chief Operating Officer and Executive Vice President, Eagleridge Operating, LLC, as
Operator and on behalf of Eagleridge Energy, LLC
M a Notary
EMILY KLEIN
................ ('
nd�aNr
r�
Public, State of Texas
, a-2
My Comm,ssRon Expires Nt:rt4�� y i'tikslic. "t e of Texas
„U February 28, 2015
Page 3
1392.010 \36536.8
THE CITY OF DENTON, TEXAS
By.
George C l�bell
' ,
City Manager,
City of Denton, Texas
THE STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on the -� . day of November, 2013, by George
C. Campbell as City Manager on behalf of (lie City of Denton, Texas, pursuant to delegated authority
specifically conferred by Ordinance 2013 - � 11,` =' -412 of the City of Denton, Texas.
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
M.Ai.r ' Public, State of Texas
Page 4
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1392.010 \36536.8
JANE t , NC HARDSOp
UVI "Ns�Oon Expires
'�Xpd9ptl0h'I�i
o11 t,II 2 , i2011 itl
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
M.Ai.r ' Public, State of Texas
Page 4
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1392.010 \36536.8
Exhibit 1
Well Locations
Page 5
1392.010 \36536.8
Exhibit 2
Operational Limitations
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1392.010 \36536.8
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Exhibit 3
Pittner Pad Site
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