2005-202SAOur Documents \0rdinances \05 \Air Surf Use Agr- Stroud Energy.doc
ORDINANCE NO. 2005-2 0�
AN ORDINANCE APPROVING AN ASSIGNMENT OF A GAS WELL SURFACE USE
AGREEMENT AT THE DENTON MUNICIPAL AIRPORT BETWEEN THE CITY OF
DENTON, TEXAS AND DAN A. HUGHES COMPANY AS ASSIGNOR AND STROUD
ENERGY, LTD. AS ASSIGNEE; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Dan A. Hughes Company wishes to assign its interest in that certain Gas
Well Surface Use Agreement, as amended, (Assignment) to Stroud Energy, Ltd.; and
WHEREAS, the Airport Board has recommended this Assignment be approved by the
City Council; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager or his designee is hereby authorized to execute an
Assignment of Gas Well Surface Use Agreement between the City of Denton and Dan A.
Hughes Company as Assignor and Stroud Energy, Ltd. as Assignee at the Denton Municipal
Airport, in substantially the form of the Assignment of Gas Well Surface Use Agreement, which
is attached to and made a part of this Ordinance for all purposes.
SECTION 2. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the 2lo7'k day of 12005.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CIT SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY:
�I
i
ASSIGNMENT OF GAS WELL
SURFACE USE AGREEMENT AT
DENTON MUNICIPAL AIRPORT
DATE: July 15, 2005
ASSIGNOR: Dan A. Hughes Company
ASSIGNEE: Stroud Energy, Ltd.
LEASE: Date: January 17, 2002
Surface Owner: City of Denton, Texas
Operator /Assignor: Dan A. Hughes Company
Premises: The property located on the Denton Municipal Airport and
identified in the Surface Use Agreement dated January 17,
2002 and the Amended Agreement dated April 29, 2004
and the Amended Agreement dated August 30, 2004, which
is made a part of this Assignment for all purposes.
Operator /Assignor assigns to Assignee Assignor's interest in the Surface Use Agreement.
A. Assignee Agrees To:
1. Assume Operator /Assignor's obligations under the Surface Use Agreement as
amended.
2. Accept the premises in their present "as is" condition including those
commitments identified in the Letter of Understanding dated July 13, 2005
addressing Well Site Airport #2 -H Well. Said letter is attached as Exhibit A.
Should the items not be accurately addressed and approved by Airport
Management within the identified time frame, the assigned Surface Use
Agreement will be terminated.
3. Complete all obligations of purchase from Operator /Assignor prior to this
Assignment becoming effective.
Surface Owner consents to this assignment. Surface Owner agrees to notify Operator /Assignor
within 30 days of any Assignee default.
B. Operator /Assignor agrees that:
1. Operator /Assignor and Assignee will comply with their gas well permit, the gas well
ordinance and all other applicable laws and regulations, including without limitation,
Section 35.22.15 of Subchapter 22 of the Denton Development Code, which governs
the transfer of gas well permits.
2. Operator /Assignor will remain liable on the Surface Use Agreement, as amended,
should Assignee default on the Agreement.
PREVIOUS ASSIGNMENTS:
June 19, 2002 Assignment of the Enexeco, Inc. Oil, Gas and Mineral Lease and Leasehold dated
January 17, 2002 between Enexeco, Inc. and the City of Denton to Dan A. Hughes Company.
Dan A. Hughes Company, Operator /Assignor
U B Dan A. Hughes, Sole Proprietor
Zmz
Dan A. Hughes
Stroud Energy, Ltd., Assignee
By: Stroud Energy Management, Ltd., its sole General Partner
By: 4Gre '1 Properties, Ltd., its sole General Partner
By:
. Smith
Division Land Manager
City of Denton, Texas, Surface Owner
Michael A. Conduff Ci ager
Attest:
Jennifer Walters, City Secretary
By:
Approved as to Legal Form:
Edwin M. Snyder, Interim City Attorney
By:
Page 2 of 3
STATE OF TEXAS
COUNTY OF DLNT�N
This instrument was acknowledged before me on the L day of
2005, by Dan A. Hughes, President of Dan A. Hughes Company, a sole propri orshi�f
of Dan A. Hughes Company.
�Y..P \�
[SEA ra °' C I • URST
Npy Pubic
sane N .6,
ttycammisonFx�Nr.s.zom
1tE `ft
STATE OF TEXAS
COUNTY OF BE4F4:eN Tke¢kA)T
U� e dli�4�
Notary Public, State of Texas
My Commission Expires
(or Notary Stamp)
This instrument was acknowledged before me on the -Lq!�day of
2005, by Gregory P. Smith, Division Land Manager of Stroud Energy, Ltd, Tex Ns Limited
Partnership Company, on behalf of said Company and Stroud Energy Management, Ltd. and
Stroud Oil Production, Ltd. j
ti
LISA KfE04ROW
Notary Public
[SEAL] — vale ofle 3s
My Co:mmissien Ecpires
Cuca_ 31, Zr 5
STATE OF TEXAS
COUNTY OF DENTON
Notary-Public, State of Texas
My Commission Expires a�
(or Notary Stamp)
This instrument was acknowledged before me on the "day of
2005, by Michael A. Conduff, City Manager on behalf the City of Denton, Te as, a i -micipal
corporation.
„:r "o JANE E. RICHARDSON
Notary Public, State o1 Texas
[SEA .',` My Commission Expires
7t�r�' Jun e 27, 2009
Notary Public, State of Texas
My Commission Expires xas 2% �9
(or Notary Stamp)
Page 3 of 3
ppppp�
DANA. HU HEs COMPANY
Petroleum Exploration And Production
July 15, 2005
Stroud Energy, Ltd
210 West 6 °i Street. Suite 500
Fort Worth. TX 76102
Attention: Greg Smith
Rc: Assignment of Gas Well Permits
from the City of Denton
Gentlemen:
Dan A. Hughes Company hereby transfers and assigns to Stroud all Gas Well Permits
hone the City of Denton. Stroud agrees to be bound by the terms and conditions of the
said permits and to comply with the terms and conditions of the City of Denton's
Development Code. It is understood and agreed that this transfer does not relieve Hughes
from any liability to the City arising out of any activities conducted prior to the transfer.
Yours truly,
��..�
V. Henry Kremers
Land Manager
ACCEP,rED AND AGREED to
this _ f clay of July, 2005
STROUD E ERG TD
13Y
Greg u
Division Land Manager
P.O. DRAWER 669 • BEEVILLE, TX 78104 -0669 • (361 ) 358 -3752 • GENERAL FAx 362 -2839 • GEOLOGICAL FAx 358 -0598
Exhibit A
DANA. HU HES COMPANY
Petroleum Exploration And Production
July 13, 2005
City of Denton
Denton Municipal Airport
Mr. Mark Nelson, Director
5000 Airport Rd.
Denton, Texas 76207
Re: City of Denton - Airport #2 -H Well
Dear Mr. Nelson:
As you are aware, Dan A. Hughes Company has reached agreement to sell its production in the Denton County
area to Stroud Energy, Ltd. including its lease covering the City of Denton Airport. With regard to the surface
location concerning the Dan A. Hughes Company - City of Denton Airport #2 -H well, Hughes and Stroud are
aware the current entrance to the location is temporary and the Airport has agreed to allow the entrance to
continue to be used in its present location and condition for a period not exceeding 180 days from the date of this
letter, in an effort to minimize the traffic on airport property pending a secondary frac of the #2 -H well. Hughes
and Stroud hereby agree that promptly after the completion of such secondary frac, but in any event no more than
180 days from the date of this letter, the following actions will be taken:
I . The three strand barbed wire fence will be replaced with a permanent security fence.
2. The temporary drainage culvert used to access the location from Westcourt Road will be
removed and the drainage ditch will be returned to its original condition.
3. The security fence along Westcourt Road will be returned to its original location and in its
original condition.
d. The permanent access point to the location will be identified and constructed with ingress
and egress from Skylane or Spartan Road.
Hughes and Stroud request that if the foregoing accurately expresses the parties' agreement with respect to said
temporary entrance, that you so signify by executing and returning to Hughes a counterpart of this letter. Thank
you for your help and assistance in this matter.
AGREED and ACCEPTED this
u ay of July, 2005.
CITY of DENTON AIRPORT
Mnr Nelson, Director of
Airport Operations
Sincerely,
SE—
John Shears
Landman
AGRUD and ACCEPTED this
lay of July, 2005
STROUD ENERGY, LTD.
-P'
Gr y ith, Lan Managcr
P.O. DRAWER 669 • BEEVILLE, TX 78704-0669 • 1361 358 -3752 • GENERAL FAx 362 -2839 • GEOLOGICAL FAx 358 -0598
SAOur Documents \Contracts \02 \Redline Enexco Surface Use Agreement.doc
SURFACE USE AGREEMENT
CITY OF DENTON AIRPORT
This Agreement is made and entered into effective this 17t11 day of January, 2002, by and
among ENEXCO, INC. whose address is 3500 Oak Lawn Avenue, Suite 390, Dallas,
Texas 75219 (Operator ") and the CITY OF DENTON, TEXAS, a home rule municipal
corporation, acting by and through its duly authorized City Manager ("City");
WHEREAS, Operator owns the right to explore the lands described as follows:
TRACT 1: The land described in condemnation proceedings identified by Cause
No. 3922 filed on November 30, 1943 between the City of Denton and R.M.
Evers, et al and subsequently filed in Volume 1675, Page 546 of the Real Property
Records of Denton County, Texas, containing 147.26 acres, 2.26 acres of which is
in a public road, in the William Wilburn Survey, Abstract Number 1419.
TRACT 2: The land described in that Warranty Deed dated December 23, 1943
between P.T. Underwood and wife Jimmie Underwood and the City of Denton
recorded in Volume 304, Page 503 of the Real Property Records of Denton
County, Texas, containing 74.94 acres, 1.75 acres of which is in a public road, in
the Thomas Toby Survey, Abstract Number 1285.
TRACT 3 The land described in that Warranty Deed dated January 18, 1944
between Mrs. Ellen Pearl Corbin, a widow, Hugh C. Corbin and wife, Sue Lou
Corbin, John S. Corbin, Alice Corbin Brown and husband W.O. Brown, Grace
Corbin, a feme sole, Georgia Corbin, a feme sole, James E. Corbin and wife,
Johnnie Corbin, Mrs. Gertie Corbin Hurst and husband, G.E. Hurst, and the City
of Denton, recorded in Volume 305, Page 216 of the Real Property Records of
Denton County, Texas, containing 331.94 acres, 2.61 acres of which is in a public
road, in the Wm. Smith Survey, Abstract Number 1188, and the Wm. Neill
Survey, Abstract Number 970.
Denton County, Texas ( "the Lands ") for oil and gas operations; and
WHEREAS, Operator and City desire to enter into an agreement regarding Operator's
use of the Lands for its proposed oil and gas operations thereon in connection with
Operator's wells to be located at a surface location and drilled to a projected vertical
depth pursuant to the Oil, Gas and Mineral Lease of the City of Denton Airport (the
"Well ").
NOW, THEREFORE, in consideration of the premises and the covenants set forth below,
Operator and City agree as follows:
1. In connection with the Well, and pursuant to the terms and Provisions herein after
contained, Operator shall have the right:
(a) to construct and use a drilling pad location and related drilling and circulation
pits on the Land on which such Well is to be situated (the "Site ") for the
purposes of drilling for, equipping, operating and producing oil, gas and other
minerals from the Well (including, but not limited to, the installation and
maintenance of a tank battery, heater treater, separator, and other equipment
on the drilling pad); and
(b) to install flowlines and pipelines to and from the Site; to install electric poles
on the Site.
2. Drilling Operations. For purposes of this Agreement, the drilling pad shall be
constructed in the approximate dimensions and configuration depicted on a gas well
development plat as approved by the City. No well shall be drilled within 500 feet of
any structure on the land without the written consent of the City Manager or his
designee. During drilling operations, the perimeter of the drill site shall be fenced by
Operator at its sole expense with a fence sufficient to turn livestock; thereafter, in the
event of production, said fence shall be maintained around the perimeter of the well
site and tank battery area actually utilized by Operator. Operator shall use only the
entrances and roadways for entering upon and leaving the land and will use only the
routes in going upon, over or about the land as are designated by City in writing for
Operator's use in accessing the drill site. Operator shall access the Site directly from
Airport Road, and that Operator shall construct roads to the Site as depicted on the
gas well development plat approved by the City. Operator shall maintain all roads,
existing or new, used by Operator in good repair free of rocks and ruts to the
reasonable satisfaction of City. Annual maintenance must include, as a minimum,
addition of at least two inches of caliche and motor grading. Operator will construct
diversion terraces as may be reasonably necessary to prevent soil erosion. Use of
roads shall be confined to lease operations and to the use of the City and Surface
tenants. Operator shall never obtain or assist anyone to obtain or have designated a
public road across the land. Operator may open new roads only upon written
concurrence of City noted upon a survey plat of the road showing its location and a
legally sufficient centerline description. All new roads shall be straight and parallel
to survey lines to the extent the terrain permits. No interior gate or opening in the
fence shall be constructed so as to access any other part of the Land from the Site or
rectangular area described in this paragraph without City's consent. All travel shall
be confined to roads and no off -road travel is permitted unless written percussion is
obtained from the Airport Manager and the property restored to the same condition.
3. Refineries prohibited. Operator is prohibited from constructing an oil or gas
refinery or a plant for cleaning up gas or removing H2S on the leased premised
Page 2
without first obtaining a separate written lease agreement with City. The location of
separators, dehydrators and compressors shall not be considered as plants.
4. Compensation. An annual rental for a 40 x 40 well site (16,000 square feet) at $.05
per square foot for any well sites located on the west side of the lands or at $.08 per
square foot for any well sites located on the east side of the lands shall be paid to the
City as compensation for the use of the surface. This annual rental shall be adjusted
every two years according to the Consumer Price Index. The annual rental payment
shall be payable to the City of Denton prior to the start of construction of each well
site and on each year anniversary thereafter until the well is abandoned and plugged.
5. No water wells may be drilled on the property
6. Notification. Operator shall notify City at least 3 days, exclusive of Saturdays,
Sundays and legal holidays, prior to commencement of all exploration, drilling,
highline or pipeline construction operations on the land, specifying the approximate
date of commencement, and the nature and location of the operations. No facilities
required for any operation permitted under this lease shall be commenced, placed,
erected or constructed until City and Operator have conferred and mutually selected
the site or sites for location of the facilities, taking into consideration the use of the
land for airport operations.
7. Pipelines and Flowlines. Prior to constructing pipelines and flowlines on the Lands,
Operator shall consult with City so that the pipelines and flowlines shall be located,
insofar as reasonably practical, to cause minimum interference with City's surface
operations and use of the land. Pipelines and flowlines shall be limited to natural gas
transported through such pipeline to natural gas produced under the terms of the lease
from the leased premises. Operator agrees that all flowlines and gas sales pipelines
shall be constructed as near as practical to public right of ways and shall be buried
to a depth as the City determines or as may be required under applicable laws
including FAA rules and reeulations A plot plan showing proposed pipelines shall
be filed with the Director of the Airport. "As built" plans shall be filed with the
Director of the Airport on completion. Operator shall place pipelines and flowlines
with the ingress easements to the well sites and shall obtain an easement from the
City. Compensation for the easement shall be $10 /rod (16 feet). Operator shall
remove pipelines or flowlines after the well is abandoned or shall make the pipelines
and flowlines dormant as requested by the City.
8. Abandonment of Wells. At Operator's cost, Operator agrees to conduct a
gammaray neutron log survey from the surface to the bottom of the surface casing of
any well drilled on leased premises by Operator in order to assist City in determining
whether water sands have been encountered to such depths. Operator shall provide
Page 3
City or City with a copy of such log and, without any warranty whatsoever,
Operator's opinion as to whether such log indicates water bearing sands and if so, the
location or depth thereof. Prior to abandoning a well, Operator agrees to give City
prior notice of such intended plugging and City shall have twenty (20) days after
notice within which to elect to take over such well for completion as a water well. If
City elects to take over same, Operator shall plug such well to the depth designated
by City and thereafter City shall own such well together with the obligation to plug
the remaining, unplugged portion of such well when City abandons same. City
agrees to execute the appropriate forms required by the Railroad Commission of
Texas and other regulatory authority in order to transfer operations and ownership of,
as well as liability for, such well to City. In the event City declines to take over such
well, then Operator shall promptly plug same. At each stage of Operator's
operations, Operator will maintain the site of operations in a neat, orderly, safe
condition, free of litter and free of all objects not reasonably necessary to the
operation: Upon abandonment of any site, operation or road, Operator will notify and
confer with City, and except to the extent City waives, in writing, Operator's
obligation to do so, the site or road will be cleaned, all mounds will be leveled, and all
pits, pit liners will be removed at the appropriate time and all pits, ruts and other
excavations (after being allowed to dry out) will be filled, leveled and smoothed, all
caliche will be removed from the site or road will be seeded with grass of City's
choice and otherwise returned, as nearly as practical to its natural state, all within a
reasonable time.
9. Penalties. In the event Operator fails or refuses to pay City for penalties, claims,
surface use or damages, as required under this lease, within 30 days after same are
due, then Operator shall be required to provide City with security in the form of cash
in the sum of $10,000.00 payable to City which sum may thereafter be applied by
City toward Operator's obligations for past unpaid, as well as future compensation for
penalties, claims, surface usage and damages and on each occasion that City applies
all or a part of said security deposit toward unpaid penalties, claims or compensation,
Operator agrees to restore such security deposit to $10,000.00. If Operator fails to
make such $10,000.00 security deposit and/or maintain same, within 20 days after
notice from City to tender same, then this lease shall terminate. City shall have a first
lien against the leasehold interest of Operator therein to secure City under the terms
of this lease and further this lease shall constitute a Security Agreement sufficient to
satisfy the Uniform Commercial Code of Texas to establish a security interest in this
leasehold estate for the benefit of City to secure them in the event of default by City.
Until such time as Operator breaches its obligation to timely perform under this lease,
City agrees that all production and revenue attributable to the working interest
hereunder shall be temporarily exempt from this lien. Upon notice to City of
Operator's breach of this or any other provision of this lease, which breach constitutes
an accrued but unpaid claim owned by Operator to City, then said temporary
exemption shall be lifted and this security interest and lien shall thereafter attach to all
production and revenue attributable to the working interest under this lease.
Page 4
10. Preferential Right to Sell. As part of the consideration for this lease, Operator
covenants and agrees that the owner of the surface estate shall have a first preferential
right to sell City or its contractors or assignees, at the same price and terms Operator
can obtain elsewhere, any water, sand, gravel or caliche or any one of them, which
Operator or any of its successors, assigns, agents or independent contractors might
need incidental to any exploration or development operations on leased premises.
11. Place of Payment. All payments, compensation and damages which may be due and
payable to City shall be payable to the City to the City Manager, 215 E. McKinney,
Denton, Texas 76201. Payment shall identify if the payment is for the bonus, the
royalty, delay rental, shut in rental, or annual rental payment for the well site.
12. Environmental. As used in this lease, the term "Hazardous Materials" means any
substance defined or identified as a hazardous, extra hazardous or toxic substance,
waste, or material under any applicable federal, state, or local statute or regulation.
"Remedial Work" is defined as any site investigation or monitoring, any cleanup,
containment, remedial removal, or restoration work performed in response to any
federal, state or local government authority or private attorney general action, or
pursuant to any federal, state or local statute, rule regulation or other laws. Operator
agrees (1) to remove from the leased premises, if, as and when required by law, any
Hazardous Materials placed or released thereon by Operator, (2) to perform remedial
work where the need therefore arises in connection with Operator's operations or
activities on the leased premises, and (3) to comply in all respects with all federal,
state and local governmental laws and regulations governing operations by Operator
and remedial work on or associated with the leased premises. Such remedial work
shall be performed by one or more contractors selected by Operator and approved in
advance by City and under the supervision of a consulting engineer selected by
Operator and approved in advance by City. All costs and expenses of remedial work
made necessary by Operator's operations shall be paid by Operator, including,
without limitation, the charges of such contractors and/or the consulting engineer and
City's reasonable attorneys' fees and costs incurred in connection with the monitoring
or review of remedial work. If Operator shall fail to timely commence or cause to be
commenced, or fail to diligently prosecute to completion, such remedial work, City
may, but shall not be required to, cause such remedial work to be performed.
Operator promises to notify City of any claim or other action by any governmental
agency or other third party involving the actual or alleged existence of hazardous
materials on the leased premises or on City's adjoining property and to provide City
with copies of (1) any notice of any release of Hazardous Materials given to Operator
pursuant to any law or regulation and (2) any report of and response to any such
incident. Operator agrees to indemnify, pay and protect, defend and save City
harmless from all claims, liabilities, fees and expenses of any kind that arise from the
actual or alleged presence or release any Hazardous Material in connection with
Operator's operators on the leased premises. This indemnification shall include costs
in connection with any remedial work when performed by City or any third party in
response to any federal, state or local governmental authority, laws or regulations,
due and payable upon demand therefore by City.
Page 5
13. Notices. Operator agrees to designate in writing the name of the person or persons to
be present from time to time on said premises as current operations are being
conducted, with whom City may resolve any claim for use, injury and damage to
airport operators surface area or improvements on said premises occasioned by or
arising from Operator's operations or other activity on the said premises. In regard to
notice of surface use, the City affected by such operations shall be entitled to prior
notice of such operations. Either party hereto may from time to time designate in
writing a different address or agent. The following persons are designated as each
party's initial agent:
To City:
City Manager
Attn: Airport
215 E. McKinney
Denton, Texas 76201
To Operator:
C. Noell Rather
Ralph E. Rather
Enexco, Inc.
3500 Oak Lawn, Suite 390, LB #15
Dallas, Texas 75219
14. Second/Tertiary Operations. Operator is denied the right and privilege of injecting
any substances into the subsurface for secondary or tertiary recovery operations
unless allowed under the gas well permit.
15. Memorandum of Agreements. Operator and City agree to execute a Memorandum
of this Agreement in the form attached as Exhibit "A" hereto, which may be recorded
in the records of Denton County, Texas.
16. Assignment. This Agreement shall remain in effect for so long as the oil and gas
leases owned by Operator on the Lands are in force and effect, and be binding upon
and shall inure to the benefit of the parties hereto, their respective heirs, personal
representatives, successors and assigns.
17. Indemnification. Operator shall indemnify and hold harmless and defend City and
City's officers, agents and employees from all suits, actions, claims, damages,
personal injuries, accidental death, property damage, losses, and expense of any
character whatsoever including attorney's fees brought for or on account of any
injuries or damages received or sustained by any person or persons or property, on
account of any negligent act of Operator, Operator's officers, agents and employees
whether such negligent act was the sole proximate cause of the injury or damage or a
proximate cause jointly and concurrently with Operator or Operator's employees,
agents or subcontractors' negligence, in the execution, supervision and operations
Page 6
growing out of or in any way connected with this Agreement and Operator will be
required to pay any judgment, with costs, which may be obtained against City or any
of their officers, agents or employees, including attorney's fees.
18. Insurance. Operator shall file evidence in the form of a certificate of insurance with
the City Secretary for the City of Denton, acceptable to the City Attorney, that it has
obtained liability insurance in accordance with the Oil and Gas Mineral Lease, City's
Gas Well Ordinance and with the City of Denton as an additional insured and
covering its operations on the Lands. Operator shall also file evidence in the form of a
certificate of insurance with the City Secretary for the City of Denton, acceptable to
the City Attorney, that its workers' compensation and general liability coverage
includes in its provisions a waiver of any rights of subrogation as against the City of
Denton, Texas in accordance with the City's Oil and Gas Regulations.
19. Operator shall follow FAA rules and regulations prior to the commencement of
drilling operations under this agreement. Operator shall file a aeronautical study
request form (Form 7460) before commencing drilling operations and shall obtain all
prior consents, approvals or waiver of FAA regulations. Operator shall indemnify
and hold City harmless for any FAA orders requiring Operator to cease operations.
20. This agreement shall be construed under the laws of the State of Texas, without
reference to conflict of law principles which would require the application of the law
of another jurisdiction, and exclusive venue shall be in Denton County, Texas for
any claims lawsuits or actions in connection with this Agreement.
21. In the event of any conflict between the parties hereto such that either party brings or
commences any legal action or proceeding related to this license, including but not
limited to, any action pursuant to the provisions of the Texas Uniform Declaratory
Judgments Act (Tex. Civ. Prac. & Rem. Code § 37.001, et seq., as amended), the
parties hereto agree to waive any and all rights to recovery of attorneys fees to which
the prevailing party might otherwise be entitled.
22. This Agreement shall never be construed to constitute the parties hereto as partners or
joint venturers, or to create a relationship of principal- agent, employer - employee,
trustee beneficiary, an association for business or profit, or any other relationship,
legal or equitable, among the parties hereto. In all respects, each party shall be
responsible for its own conduct in connection with the subject matter of this
Agreement as though it were an independent contractor, free from all control and
direction of the others.
23. This Agreement may be executed in multiple counterparts, each of which when taken
together shall constitute but one and the same instrument, but none of which shall be
Page 7
effective until and unless executed by all parties named herein. Additionally, this
Agreement may also be executed in multiple originals, any one of which, when fully
executed as herein provided, shall be effective for all purposes. `When fully executed
as herein provided, the terms and conditions of this Agreement shall be binding upon,
and inure to the benefit of, the parties hereto, their heirs, successors and assigns.
24. EXECUTED by each party hereto as of the date indicated beside its signature, to be
effective for all purposes as of the Effective date.
Date: l- 1'"1 —��
ATTEST:
BY
Jenni r Walters, City Secretary
Date: i -- 1-1-- (>')-
APPROVED AS TO LEGAL FORM:
BY: 1--,
Herbert L. Proukj, City Attorney
City:
Michael A. Cond ty Manager
CITY OF DENTON, TEXAS
Operator:
By:
Noel
Page 8
ACKNOWLEDGMENTS
STATE OF TEXAS §
COUNTY OF DENTON §
Before me, the undersigned authority, on this day personally appeared Michael A.
Conduff, CITY MANAGER OF THE CITY OF DENTON, TEXAS, known to me to be
the person and official whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of said City, and for title purposes and
consideration therein expressed, and in the capacity therein stated.
Notary Public, State of Texas
STATE OF TEXAS §
COUNTY OF DENTON §
The foregoing instrument was acknowledged before me on i - 1'7 — 2002 by,
on behalf of the corporation.
r �--
�v'"'Oe� CHRISTINE A. DICK Notary Public, State of Texas
Notary Public
State of Texas
Comm. Expires 3- 2 -2005
Page 9
ACKNOWLEDGMENTS
STATE OF TEXAS §
COUNTY OF DENTON §
Before me, the undersigned authority, on this day personally appeared C. Noell
Rather, PRESIDENT OF ENEXCO, INC., known to me to be the person and official
whose name is subscribed to the foregoing instrument and acknowledged to me that the
same was the act of said Operator, and for title purposes and consideration therein
expressed, and in the capacity therein stated.
Notary Public, State of Texas
STATE OF TEXAS §
COUNTY OF DENTON §
The foregoing instrument was acknowledged before me on 1- 1`1-0� 2002 by,
on behalf of the corporation.
0'�00 CHRISTINE A. DICK
Notary Public
State or rcx=
Comm Exvrr- 3 -2 -2005
Notary Public, State of Texas
Page 10
EXHIBIT "A"
to Surface Use Agreement dated effective L- i'1 -off
between and
the CITY OF DENTON, TEXAS
MEMORANDUM OF SURFACE USE AGREEMENT
The Memorandum is being executed for the purpose of giving notice of the
existence of that certain Surface Use Agreement dated effective of even date entered into
by and between Enexco, Inc. (as "Operator ") and the CITY OF DENTON, TEXAS (as
"City ") regarding Operator's use of the lands owned by City located in Denton County,
Texas, to wit:
(the "Land ") for Operator's oil and gas operations on such lands.
Dated effective this — day of 2002.
ATTEST:
a
Jenni r Walters, City Secretary
APPROVED AS TO FORM:
Herb Prouty, Ci Attomey
OPERATOR:
By: C�
Noell Rather, President
CITY OF DENTON, TEXAS
Page 11
04/29/2004 09:32 FAX 3813822839 HUGHES X002
t4 'ar 50
a•
This Amaudment to the Surface I lee Agreement City of Denton Airport of January 17
2002 ("Amendment to the Ag ,.anent') is made and entered into Effective Date s
provided below by and among 11 io DAN A. HUMM COMPANY, whose aduiteas is a
P.O. Drawer 669, Beeville, Tex. • 7810440669 (Opetateij and the CITY OF DENT01 1,
TEXAS, a home rule municipal corporation, soft by and through its duly authorize d
City Manager ("Surfaca Ownee' ) .
WFIEFJ S, Operator and SurEi, ' Owner desire to enter into an amendment to the abo, e
mentioned agreement regarding 1perator's use of the Lands for its proposed oil and g is
operations thereon in conneatl : i with Operator's gas well operations on the Airpc rt
Property.
NOW, T! 1 MWOM in oonsid,. lation of the premises and the covenants act forth belo, r,
Operator and Surface Owner arat to amend their agreement to add these addition ti
provisions as follows:
1, Compensation. An annual , :ntal thr a 200' X 300' well site of $.05 per square fo )t
for wells located on the we. 1 side of the lands or T.08 per square foot for proper y
located on the east side oft] - lands shall be paid to the City as compenufm for ti $
use of the surfsae. Addiliol ral compensation will be required for the road scones a
each well site. This comps -isation will be determined once the access road .s
established. The same rate liar square foot used for the well site will be used n
calculating the access road 113e compensation. The annual rental shall be adjuat, d
ovary two yam xcording tk - the Consumer Price Index_ The annual rental shall 1 e
payable to the City of Denur, upon the start of construction of each well site and e n
each year anttiversary therea n err until the well is abandoned.
2. Assignment This amendtnc :it to the agreement shall remain in effect for so long is
the oil and gas leases owtral by Operator on the Lands are in force and effect, and ],a
binding upon and shall inure a the beaefii of the parties hereto, their respective heb s,
personal representatives, su- -:esson and assigns. Surface Owner has the right 'o
comet to mch assignment, :•i ich consent will not be unreasonably withheld_
3. This amendment to the agro-nent shall be construed under tho two of the State ,f
Texas, without reference a. - conflict of law principles which would require t c
application of the law of anoiler jurisdiction, and exclusive venue Shalt be in Dent+ •n
County, Texas for aq% claims lawsuits or aetloes In congtggga with tub is
Aereeme n
Zd Wdffi:10 tW 6? ' +dt1 6SZ2--64£ 016: 'ON Wd T- And+?i i u° }uaQ: WOLlj
04/29/2004 09:39 FAX 3813822839 ..� HUGHES � 3J003
4. In the event of any conflict 1, swan the parties hereto such that either party brings , it
cotnmcmo w any legal acdor ,r proceeding related to this license, including but n )t
limited to, any action pursui-nt to the provisions of the Tens Uniform Declarw. y
dudgmeztts Act (Tex. Civ. V--ic. & Rem. Code § 37.001, et seq., as amended), ti e
parties hereto agree to waivt .toy and all rights to recovery of attorneys fees to whit h
the prevailing party might of t•,>rwisc be entitled.
S. This amendment to the W, most shall never be construed to constitute the parti, s
hereto u partners or joint - aturers, or to create a relationship of principal -ager
arnployer employee, trustee 1,cneficiary, an association for business or profit, or ar Y
other relationship, legal or o i citable, among the parties hereto. In all respects, ear h
Party shall be responsible for , is own conduct in eonaaction with the subject matter i f
this Agrmmetd as though It an iadepandmrt ovntraotor. f= fmm all control ar i
direction of the others.
6. This amendment to the agrerniant may be executed in multiple counterparts, each ( f
Which when taken together s) lal l constitute but one And the some instrument, but not c
of which shall be effective l ntil and unless executed by all parties named heteh ..
Additionally, this Agreemoni may also be eaecuMl in multiple originals, any one t f
which, whit fully executed as herein provided, shall be effective for all purpose
`When fully executed as her. nt provided, the terms and renditions of this Agteemei .t
shall be binding upon, and mute to the bearefit of the parties hereto, their heir ,
Successors and assigns.
E-3MCUTED by each pan-, hereto to be effective as of the later date of th e
aelntowledgtaent for each pan ly (the `affective Date").
s.
�1• Ina .rrt
P„ '
•. ss s •a•
£d WOS:L@ VOM 6Z 'Jdtl GB& -64g 6x+6: 73N )O!U '4JOddiN L-I-L dQ: iJ(RU
04/29/2004 09;33 FAX 3810822859 HUGHES \ [a 004
DAN A. HUGHES
By; /
Dan Alley BuIIhes, J
Attorney in Fact i (J
Dan A. Hughes
P.O. Dnwor 669,
Beeville, Texas 78104 -0669
Date:
9d WUiS:LO MW 6Z "-IdFJ 6871 -6K 006: 'ON XUA 1aod -Ill, .a'iuM: WOW
04/27 /2004 08:49 FAX 8613822K
HUGHES
T. TO BY
A•1285
0-110094
:I
100'
f
"T
:I
270' try
W. N E I L
A - 9 7 0
— SURVEY LINE
—• —•— FENCE LINE
ROAD
-- - - - - -- LEASE LINE
H A R D 1 N
A - 1 6 5 6
IZ007
Enlargement of Well -Sol as Area
Proposed F_ x -- —�—
Entrance x i 100
I
E
1
1
Dan A. Hughes Company
Site Plan Plat
City of Denton Airport #2 -H
X O 16{/0'
1 I
x-
�E 270' -*
:I
f
:I
H A R D 1 N
A - 1 6 5 6
IZ007
Enlargement of Well -Sol as Area
Proposed F_ x -- —�—
Entrance x i 100
I
E
1
1
Dan A. Hughes Company
Site Plan Plat
City of Denton Airport #2 -H
X O 16{/0'
1 I
x-
�E 270' -*
I
AMENDMENT TO SURFACE USE AGREEMENT
CITY OF DENTON AIRPORT
This Amendment to the Surface Use Agreement City of Denton Airport of January 17`h,
2002 ( "Amendment to the Agreement ") is made and entered into effective this 30`h day of
August, 2004 by and among the DAN A. HUGHES COMPANY, whose address is a P.O.
Drawer 669, Beeville, Texas 78104 -0669 (Operator ") and the CITY OF DENTON,
TEXAS, a home rule municipal corporation, acting by and through its duly authorized
City Manager ( "Surface Owner ");
WHEREAS, Operator and Surface Owner desire to enter into an amendment to the above
mentioned agreement regarding Operator's use of the Lands for its proposed oil and gas
operations thereon in connection with Operator's gas well operations on the Airport
Property.
NOW, THEREFORE, in consideration of the premises and the covenants set forth below,
Operator and Surface Owner agree to amend their agreement to add these additional
provisions as follows:
1. An annual lease at the rate of $0.08000 cents per square foot for a tract of land
totaling 35,629.94 square feet, which is $2850.40 payable annually to be used for a
gas collection pipeline. Attachment A, a survey of the leased premise from Alliance
Area Surveying, identifies the proposed tract of land. A survey showing the corrected
15 -foot width of property lease will be provided no later than 30 days after the
signing of this Surface Use Agreement Amendment. Such payment for land to be
payable upon completion of construction and each year anniversary thereafter until
gas pipeline removal. Operator shall remit the payments required in this paragraph
payable to the City of Denton, the Surface Owner.
2. An annual payment of $10.00 per rod for a total of 87.81 rods (1404.95 feet), which is
$878.10 for the right of way to lay a gas collection pipeline on Airport property.
Attachment A, a survey of the leased premise from Alliance Area Surveying,
identifies the proposed tract of land. A survey showing the corrected 15 -foot width of
property lease will be provided no later than 30 days after the signing of this Surface
Use Agreement Amendment. Such payment for pipelines to be payable upon
completion of construction and each year anniversary thereafter until removal.
Operator shall remit the payments required in this paragraph payable to the City of
Denton, the Surface Owner.
3. An annual lease at the rate of $0.08000 cents per square foot for a tract of land
totaling 200' x 400' well site or 80,000 square feet, which is $6400.00 payable
annually. Attachment B, a survey of the leased premise from Alliance Area
Surveying, identifies the proposed tract of land. A survey showing the corrected
dimensions of the property lease will be provided no later than 30 days after the
signing of this Surface Use Agreement Amendment. Such payment for land to be
payable upon signing of this Surface Use Agreement and each year anniversary
thereafter until the well is abandoned and plugged. Operator shall remit the payments
required in this paragraph payable to the City of Denton, the Surface Owner.
4. This amendment to the agreement shall be construed under the laws of the State of
Texas, without reference to conflict of law principles which would require the
application of the law of another jurisdiction, and exclusive venue shall be in Denton
County, Texas for any claims lawsuits or actions in connection with this
Agreement.
5. In the event of any conflict between the parties hereto such that either party brings or
commences any legal action or proceeding related to this license, including but not
limited to, any action pursuant to the provisions of the Texas Uniform Declaratory
Judgments Act (Tex. Civ. Prac. & Rem. Code § 37.001, et seq., as amended), the
parties hereto agree to waive any and all rights to recovery of attorneys fees to which
the prevailing party might otherwise be entitled.
6. This amendment to the agreement shall never be construed to constitute the parties
hereto as partners or joint venturers, or to create a relationship of principal- agent,
employer - employee, trustee beneficiary, an association for business or profit, or any
other relationship, legal or equitable, among the parties hereto. In all respects, each
party shall be responsible for its own conduct in connection with, the subject matter of
this Agreement as though it were an independent contractor, free from all control and
direction of the others.
7. This amendment to the agreement may be executed in multiple counterparts, each of
which when taken together shall constitute but one and the same instrument, but none
of which shall be effective until and unless executed by all parties named herein.
Additionally, this Agreement may also be executed in multiple originals, any one of
which, when fully executed as herein provided, shall be effective for all purposes.
`When fully executed as herein provided, the terms and conditions of this Agreement
shall be binding upon, and inure to the benefit of, the parties hereto, their heirs,
successors and assigns.
8. EXECUTED by each party hereto as of the date indicated beside its signature, to be
effective for all purposes as of the Effective date.
TEST:
a�
�kmfer alters, City Secretary
Date:
APPROV � S TO F RM:
l�
Herbert L. P uty, Oty Attorney
Surface Owner:
Jo ortu Assistant City Manager
CI Y OF EJ; TEXAS
Operator:
Ord'II�, A
I'M ON
P.O. Drawer 669,
Beeville, Texas 78104 -0669
STATE OF TEXAS
BEE
COUNTYOF Bw6�
Before me, }{FTRCk,Ne- UNc , the undersigned notary public, on this day
personally appeared
of haINJ rparatierr-
✓ known to me;
proved to me on the oath of ; or
proved to me through his/her current
{description of identification card or other document issued by the
federal government or any state government that contains the photograph
and signature of the acknowledging person
to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he /she executed that instrument for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 30th day of August, 2004.
} w' KATHERINE A. YOUNG
NOTAAy PUBLIC
STATE OF TEXAS
., My commission Expires 11 -18 -2004 o ary Public
.>.. _ j
MEMORANDUM OF SECOND AMENDMENT TO SURFACE USE AGREEMENT
The Memorandum is being executed for the purpose of giving notice of the
existence of that certain Surface Use Agreement dated effective of even date entered into
by and between, whose address is (as "Operator ") and the CITY OF DENTON, TEXAS
(as "Surface Owner ") regarding Operator's use of the lands owned by Surface Owner
located in Denton County, Texas, to wit:
(the "Land ") for Operator's oil and gas operations on such lands.
Dated effective this, August 30, 2004.
Surface Owner:
Jo Fortune Assistant City Manager
CITY OF DENTON, TEXAS
ATTEST:
Je Walter City Secretary
APPROVED AS TO FORM:
Herb Prouty, City Attorney
GAS PIT )INE EASEMENT EXHIBIT
DEN1..1 MUNICIPAL AIRPORT
1.636 ACRES
FIELD NOTES to all that certain tract of lane situated in the WILLIAM NEIL SURVEY, Abstract No. 970,
in the City of Denton, Denton County, Texas and being a part of Lot 1, Block 1, Southeast Airport
Addition, on addition in the City of Denton cecording to the plot thereof recorded in Cabinet G. page
295 of the Plot Records of Denton County, Texas, and o part of o tract of land now owned by the
City of Denton Municipal Airport; the subject tract being more particularly described as follows:
BEGINNING at the intersection of the South US of said Lot 1 and o 25' building line as shown on
said Plat, from which the Southeast corner �f said Lot 1 bears North 89 degrees 43 minutes 03
.*.ends East of a distance of 25.01 feet;
THENCE South 68 degrees 43 minutes 03 seconds West with the South lino thereof o distance of
30.01 feet;
THENCE North OD degrees 06 minutcs 03 seconds West parallel with and 30.00 feel West of said
building line a distance of 1405.57 feet of Inc beginning of a tangent curve to the left having a
radius of 215.00 feet, a chord bearing and distance of North 02 degrees 23 minutes 20. seconds
West, 17.16 feet and o Celia Cagle of 04 degrees 34 minutes 23 seconds;
THENCE along said curve pa; allN with and 30.00
17.16 feel; feet West of said building line on arc distance of
THEN
THENCE North 89 degrees 39 minutes 14 seconds West parallel with and 30.00 feet South of a 80'
access and utility easement as shown on sad Plat a distance of 438.14 feet to the East line of 0
60' access, drainage and utility ....meal as shown on said Plot;
THENCE North 00 degrees 20 minutes 46 seconds East with the East line thereof a distance of
516.42 feet to the Northwest comer of the norein described easement:
THENCE South 89 degrees 39 minutes 14 seconds East a distance of 30.00 fool to the Northerly
most Northeast Connor of the herein descrbud easement;
THENCE South 00 degrees 20 minutes 46 seconds West a distance of 486,42 feet to the South line
of sold 80' Access and Utility Easement;
THENCE South 89 degrees 39 minutes 14 seconds East with the South line thereof 0 distance of
434.06 feet to the intersection of said S-UU: line with sold building line at the beginning of a
non— Wngcnt curve to the right having a radius of 245.00 feet, a chord bearing and distance of South
05 degrees 37 minutes 30 seconds East, 47.16 feet and a delta angle of 11 degrees 02 minutes 44
seconds;
THENCE along said Curve end said building fine an arc distance of 47.23 feet;
THENCE South 00 degree, 06 minutes 03 seconds East with Bald building line a distance of 1404.95
test to the PUCE OF PrGINNING and encloa;ng 1.638 acre. of land, more or less.
CERTIFICATION: I hereby certify that 1 have ccnductcd an accurate on the ground survey of the premises
depicted hereon and described in the legal description attached hereto and that the findings and results of
said survey are true sad --meet to the best of my knowledge and belief and that the size, type and
location of the permanent improvements One cs shown, and that said survey correctly shows the location of
all alleys, streets, rights —ot —way, and eosemer;s of record of which the undersigned has been advised
effecting the subject premises according to the descriptions of record, and that except as shown there are
no— V,sible encroachments, visible overlaps, visib.e conflicts or visible protrusions.
J.E. THOMP60N II I R.L'.C.S. No 4857 `oat.
SURVEY NOT VALID
H
J.E. TkOMPSONki o
P.O. BOX 507
KRUM, TX 76249
940- 462 -6723 OFFICE
940 -462 -3660 FAX
114 -B MAIN STREET
GAINESVILLE, TX 76240
940 - 665 -9105 OFFICE
940 - 665 -9106 FAX
ALLIANCE
tAREA
URVEYING
GAS PIPELP- lEASEMENT EXHIBIT
DENTON JNICIPAL AIRPORT
1.636 ACRES
5 89'39'14 "E 30.00'
i
a
1 v
w 3 DENTON
m
o MUNICIPAL
I v 'op AIRPORT
IN N
o b
,o
I Z - ✓+- - ._ _- -- L= 47.23'
I 50 I-CCss , -rnrt'. 'e = -r,.,
S 8r 39'14 "E 434.06' R =245.00'
CH= 505'37'30 "E 47.16'
N 89'39'14 "W 438
DELTA= 11-02'44"
1
5 .4
L= 17.16'
R= 215.00' O
,� s�RVEY 0 I y lCH= NO2'23'20 "W 17.16' lio
DELTA= 04'34'23"
p11S11�PC , o- _.
o J 1b�6
Hp \i0,� �o R
nASTK : C
A
LOT 1, BLOCK 1 c
SOUTHEAST WRPORT ADDITION
CABINET G, PAGE 295 °.
I A
n
S 88'43'
N I
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0
w
ni I
AI
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� 1
1
'II
I1,
P.O. BOX 507
KRUM, TX 76249
940- 482 -6723 OFFICE
940- 482 -3680 FAX
114 -B MAIN STREET
GAINESVILLE, TX 7624(
940- 665 -9105 OFFICE
940 - 665 -9106 FAX
25" eultom0 I.mE
+
LLIANCE
AREA
URVEYING
0
I
1
,
I
1" =200'
, I
I
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5 SURVEY NOT VALID%
H
J ^•�' �se tip,,
H
-E i'FIOIMPSON
0
S 88'43'
N I
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0
m_
0
w
ni I
AI
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� 1
1
'II
I1,
P.O. BOX 507
KRUM, TX 76249
940- 482 -6723 OFFICE
940- 482 -3680 FAX
114 -B MAIN STREET
GAINESVILLE, TX 7624(
940- 665 -9105 OFFICE
940 - 665 -9106 FAX
25" eultom0 I.mE
+
LLIANCE
AREA
URVEYING
0
6Z&A-c(
A�gTRA � ��gtRAC'T
Q`11�7 V l O °ENTON
ar
,y l 4"
•�+, W SM1TR �o v l8� � Ic J � �D T N�1R 6c�U
AstRA 40 ACRE �ocarar;
LEASE An. WWI H -;
Sr- h o
_t8S RA��UN�ZS 673
A
1 r' =1000'
3- \3AC0� ,to
I I
I certify this plat to be true and correct to the beet
of my knowledge.
Data
P.O. BOX 507 ALLIANCE
KRUK tat .76249 AREA
940 - 462 -672a OMCE URVEYING
940-- 482 -3680 FAX-
Operator. Dan A. Hughes Company 114 -8 CAIN . EIS,,,
Loose Nome k Well Number: Airport 'D' GAINESVUE, TX 7824(
Elegy tlon: 632 940 -685 -9105 OFFICE
Nearest Town in Count), t Mile West of Denton, Texas 940 -665 -9108 FAX
VU a -h. uuss xaa, -It
I-- -.._ .. Z�H
'd ILf39 –ZBb A3"1�Od QIAtiQ eSS�OI t•D OT
F
cr,
T
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rA
)ENTON MUNICIPAL AIRY ')RT
#G.U. #I- -H &
CENTRAL FACILITY SITE LAYOUT
I I LOT 1, BLOCK 1
I I SOUTHEAST AIRPORT ADDITION
CABINET G; PAGE 295
LINE HEATERS
PROPOSED
- WELL HEAD
ts
J
RESERVE I `
L PIT I o
° 1
u
GUY ANCHOR CM.)—\
U
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TANK BATTERY
I l�l
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— 60' rna0 EAS MENT
LOFIU OHI;—
..— ..20"Yi.E_� EXfJIF1Z; QFtAV
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II
I
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III
II
I
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P.O. BOX 507 +ALtLUNCE ERUM. TX 76249 ,Ej 940- 482 -6723' OFFICE RVEiING
940 -462 =3680 FAX:..
JOH NiJbfBER:0208
114 —H MAIN STREET DATE: 8 -9-
GAINESVEURE TX 78240 DRAWN BY: IHCl
�_ o00 940- 665 - 9105.. OFFICE CHECI{ED BY: JET
940 -666 -9106 FAX
"I I R_P_L_S. IJF.T
fk
I'd IL89 -ZBb A3-I-iOd QIAHO ell :OT b0 Ll 2nU
to
OIL AND GAS DIVISION ORDER
PLEASE RETURN TO:
Stroud Energy, Ltd.
Attn: Division Orders — Lia Bowers
801 Cherry Street, Suite 3800 /Unit 19
Ft. Worth, TX 76102
Date: June 26, 2006
The undersigned severally and not jointly certifies it is the legal owner of the interest set out below of all the oil, gas
and related liquid hydrocarbons produced from the property described below:
Operator:
STROUD ENERGY, LTD.
Property Name:
City of Denton Airport #3 -H
County:
Denton State: Texas
Legal Description:
138.54 acres, more or less, located in the WM Smith Survey, A -1 188 and WM Neil Survey, A -970
Property No.:
43710.017
Effective:
May 13, 2006
Owner No.:
7217
Owner Name:
City of Denton
Owner Tax I.D. /Social
Security No.: 75- 6000514
Type of Interest:
RI
Decimal Interest:
.25000000
THIS AGREEMENT DOES NOT AMEND ANY LEASE OR OPERATING AGREEMENT BETWEEN THE INTEREST OWNERS
AND THE LESSEE OR OPERATOR OR ANY OTHER CONTRACTS FOR THE PURCHASE OF OIL OR GAS.
The following provisions apply to each interest owner ( "Owner ") who executed this agreement: iriF
TERMS OF SALE: The undersigned will be paid in accordance with the division of interest set out above. The payor
shall pay all parties at the price agreed to by the operator for oil, gas and related hydrocarbons to be sold pursuant to this
division order. Purchaser shall compute quantity and make corrections for gravity and temperature and make deductions for
impurities.
PAYMENT: From the effective date, payment is to be made monthly by payor's check, based on the division of
interest, (1) for oil and its products within sixty (60) days after the end of the calendar month in which oil production is sold;
and (2) for gas and its products within (90) days after the end of the calendar month in which gas production is sold, from the
property listed above, less taxes required by law to be deducted and remitted by payor as purchaser. Payments of less than
$100.00 may be accrued before disbursement until the total amount equals $100.00 or more, or until 12 months' proceeds
accumulate, whichever comes first. However, the payor may hold accumulated proceeds of less than $10.00 until production
ceases or the payor's responsibility for making payment for production ceases, whichever occurs first. Payee agrees to refund
to payor any amounts attributable to an interest or part of an interest that payee does not own. �r.LiI
-illy`
xffixiktx Rxxsrx inxde�y rlLoxt�c7effh; such xlteisfomcatxotfeseat ida�riotgc hrmwtoa �iro#ad xat x,>axa�reg 7E�s7c�r7G8d[Rri(BWt�c f4xcY,7f�1Ga1r1r
x�z vk ft 3c tix��§t�lfix+�scfrxaatis s�+les a� xxxhios muAa}� a�asr�x
DISPUTE; WITHHOLDING OF FUNDS: If a suit is filed that affects the interest of the owner, written notice shall be
given to payor by the owner together with a copy of the complaint or petition filed.
In the event of a claim or dispute that affects title to the division of interest credited herein, payor is authorized to
withhold payments accruing to such interest, without interest unless otherwise required by applicable statute, until the claim or
dispute is settled.
TERMINATION: Termination of this agreement is effective on the first day of the month that begins after the 30'^ day
after the date written notice of termination is received by either party.
NOTICES: The owner agrees to notify payor in writing of any change in the division of interest, including changes of
interest contingent on payment of money or expiration of time.
No change of interest is binding on payor until the recorded copy of the instrument of change or documents
satisfactorily evidencing such change are furnished to payor at the time the change occurs.
Any change shall be made effective on the first day of the month following receipt of such notice by payor.
Any correspondence regarding this agreement shall be furnished to the addresses listed unless otherwise advised by
either party.
In addition to the legal rights provided by the terms and provisions of this division order, an owner may have certain
statutory rights under the laws of this state.
Witnesses
Ja>i,u ,cvd�
Si nature of Interest Owner
Interest Owner's Address:
215 E. McKinney
Denton, TX 76201
Interest Owner Tax ID /SS#
75- 6000514
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
Failure to furnish your Social Security /Tax I.D. number will result in withholding tax in accordance with federal law, and any
tax withheld will not be refundable by payor. RETURN ORIGINAL TO STROUD ENERGY, LTD., Attn: Division Orders - Lia
Bowers, 801 CHERRY STREET, SUITE 3800 /UNIT 19, FT. WORTH, TX 76102.
F "ISTROUD ENERGY, LTD., RANGE RESOURCES SHALL REMAIN RESPONSIBLE FOR ALL OBLIGATIONS UNDER
ITS LEASE AND OTHER AGREEMENTS WITH THE CITY OF DENTON.