2004-108S:\Our Decument s\Ordinances\O4'uMack Park Gas Lease Ordinance Best Bid.doc
ORDINANCE NO. ~'~04-//~¢
AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT
FOR AN OIL AND GAS NON-DRILL SITE/POOLING AGREEMENT AT MACK PARK WITH
HEP OIL COMPANY, LTD. AND Al I .OWING 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 Mack Park, Denton, Texas;
and
WHEREAS, in compliance with Chapter 71 of the Texas Natural Resoumes 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 cimulation 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 HEP Oil Company, Ltd.;
and
WHEREAS, HEP Oil Company, Ltd. desires to enter into lease negotiations for the land at
Mack 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 HEP Oil Company, Ltd in
return for the payment(s) as outlined in Attachment A for the approximately acres of Mack 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 validity of the remaining portions
of this Ordinance, and the City Council hereby declares it would have passed such remaining
of this Ordinance, and the City Council hereby declares it would have passed such remaining
portions of this Ordinance despite such invalidity, which rema'ming 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 ~>l-/~ day of _/'/~t,t~.~ ,2004.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPR~gED A S~TO ~G~L FORM:
HERBERT L. PROUTY, CITY ATTORNEY
,,% EXHIBIT "A"
CITY OF DENTON BID FORlVI
GAS WELL DEVELOPMENT ON MACK PARK PROPERTY
NON-DRll J,ING/POOI,ING AGREEMENT
Description of property and lease: The lease will be a non-drilllng/pooling agre~nont for the
renewing Parks
Mack Park
An alt~ate bid of a portion of the Park may be considered.
Minimum Standards of the Bid: Please chock each item that will be included in the lease.
.one .(Jne 1)
~ A prlmary t~m of not more th~ years from date of execution.
)~ ACx>mmcnccmcntofI)rillingClansetodrillwithinthe ~ : ~ :l primary term.
Include a proposal for a continuous development afarr initial well establishes production
o Aroyaltyto lessor
oil and gas produced ~om said land.
Thc royalty to be paid at thc highest price in the area, A statement by the Lessee that thc
royalty to be paid the City is equal, to the highest price paid by the Leesee to any mln~ral
owmx in Denton, County; and that if tho Lessee pays a mineral owner in Denton County,
Texas a higher royalty percentage during the tr, m~ of this lease, the Lessee shall inOlTaSe
the royalty paid to the City so as to equal this higher ~mount.
Ail annllai delay rilD. tal of $
per acre. (This is a 3 year Paid Up Lease)
Shut-in payment of $1 On nO Vet acre.
Bonus money as specified by bidder.
ii a~l acresX$ 500.00 = total bonus money
bonus money as specified in the bid.
I5_.010.50 ' For
A D ~velopmcmt Plat o r oth~r d tawing s hewing a d rill p lan and d rill sites t hat a re n et
locatedon South ~ack Park must be submitted with this bid. The City reserves
the right to award this bid based on both price and the most advantageous location of the
drilllnglocationsandsitesforpoolingpurposes.(See attached Hap & Proposed Unit.)
The successful bidder shall pay the cost of the adver'dsement of the bid.
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Bidders shall submit infomaation of the bidder's reputation and quality of the bidder's oil
and gas services including but not limited to thc 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 tho dete,,,in~tion of best value. A letter from the
l~ ~ilroad Commi.~fion that the company is in good standing will suffice.
The successful bidder shall comply with all requirements in the Code of Ordinances for
the City of Denton, Texas. A copy may bo obtained in the City Secretary's office or on
the City ofDenton's wobsite, www.cityofdenton.com.
A bidder's conference will be held on F ebraary 2 5, 2004 at 10:00 a.m. at the City of
Denton Scawice Center Conference Room, 901-A Texas Street, Denton, Texas 76209.
~ An Oil and Gas lease will be negotiated within thirty (30) days after the successful bidder
is selected.
City shall allow the successful bidder to pool the lease, thc 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 roma a drilling or spacing unit for the exploration, development, and
production of oil and gas. The City will consider aRernative bids on a portion of the
Park lands, described, herein.
By submitting a bid, each bidder agrees to waive and does hereby waive any claim the
bidder h~.~ 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 re.~oommendation 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 fight 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
dght.
By execution and submission of this Bid, the Bidder hereby represents and warrants to
thc City of Denton that the Bidder has read and understands the Bid Documents and the
Contract Decrements and this Bid is made in accordance with the Bid Documents. Bidder
acknowledges that it unders~tauds all terms within the bid documents, which include the
waiver provisions, and that it had the fight to consult with counsel regarding all of the
above documents.
By ~bmitting a bid, each bidder agrees to waive and does hereby waive any claim the
bidder has or may have agai~ the City of Denton, Texa~ and the City's employees,
agea~ts and o/~5ce~, ar/dug out ofoz/n anyway connected w/th the following:
1. the admini.~tion, evaluation or recommendation of any bid;
2. · waiv~ or deletion of any o £ the requirements under the B id Docm-aents or the
Contract Documents;
3. acceptance or rejection of any bids; and
4. award of/he Bid or Lease.
By submitting a bid, the bidder acknowledges that the biddex understands all terms of the bidding
documents and consents to the bi&tlng 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 ~ is the intentional rolinqu/.~hment of the above Hated presently existing
fights.
The City reserves tho right to waive, delete or amend any of the requirements connected with this
bid and to reject auy and all bids. ~~
%----~edificati~'n~of~lidd~ Kenne~ah R. Couch
Title: Agent
HEP 0IL COHPANY, LTD.
Company
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-'ountains of
Denton
Apartments
Mack
South
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Gas
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