2004-109S:\Our Documents\Ordinances\04'd~ake Forest park Oas Lease Ordinance Best Bid.doc
O IN NCE NO.
AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT
FOR AN OIL AND GAS NON-DR I1 J. SITE/POOLING AGREEMENT AT LAKE FOREST PARK
WITH TRIO CONSULTING & MANAGEMENT, LLC. AND ALLOWING THE CITY
MANAGER TO EXECUTE A LEASE AS LONG AS THE LEASE IS IN SUBSTANTIAl .I .y 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 Lake Forest 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 Trio Consulting &
Management, LLC. and
WHEREAS, Trio Consulting & Management, LLC. desires to enter into lease negotiations
for the land at Lake Forest 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 is hereby authorized to negotiate a non~drill
site/pooling oil and gas lease agreement between the City of Denton and Trio Consulting &
Management, LLC. in return for the payment(s) as outlined in Attachment A for the approximately
51.9225 acres of Lake Forest 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 o f 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
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 ~/~,dayof f~~ , 2004.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APP~VED '[
AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
' TRIO CONSULTING &
MANAGEMENT, LLC
EXHIBIT "A"
March 9, 2004
Tom Shaw, Director
Purchasing Agent
City of Denton
901-B Texas Street
Denton, Texas 76209
Re: Oil & Gas Lease, Lake Forest Park (69 acres) BID Number 3142:
Dear Mr. Shaw:
This letter accompanies the bid package for the above referenced Oil and Gas
Lease bid. Trio Management & Consulting, LLP is interested in submitting a bid
and negotiating a Lease for the Lake Forest Park lands south of Ryan Road in
Denton.
Tdo Management & Consulting, LLP has previously submitted a bid and
successfully negotiated a lease with the City of Denton on the Hickory Creek
Substation site south of Hickory Creek Road. The background, qualifications and
safety information submitted with that bid/lease package is still valid and is
hereby incorporated into this submission by reference.
Trio Management & Consulting, LLP has either permitted or drilled 18 wells in
and around the City of Denton over the last several years and is in the process of
permitting several others at this date. Additionally, we are currently Under
negotiation with Lake Forest Good Samaritan Village fora lease on the
remaining acreage on both sides of the City of Denton Lake Forest Park tract.
This would enable Trio to best develop the oil and gas beneath this site.
Our research indicates the City of Denton only owns 75% of the minerals under
the 69 acre tract. Our figures on the attached Bid form reflect this 75% interest
as opposed to a 100% interest.
Attached with this letter is the official City of Denton bid form and a map of the
area showing our proposal for gas development of the site prepared by Coleman
& Associates Land Surveying.
Respectfully, ,/']
J~ ~tokes. Agent
P.O. Box 2.09 · Wichita Falls, TX. 76307 · 940/767-2847 · Fax 940/761-6d2.Z · lnfo@tdooperating.com
CITY OF DENTON BID FORM
GAS WELL DEVELOPMENT ON LAKE FOREST PARK PROPERTY
NON-DRILLING/POOLING AGREEMENT
Description of property and lease: The lease will be a non-drilling/pooling agreement for the
following Parks
Lake Forest Park
An alternate bid of a portion of the Park may be considered.
Minkmum Standards of the Bid: Please check each item that will be included in the lease.
~'/A primary term of not more than three (3) years from date of execution.
Commencement of Drilling Clause to drill within the first 6 months.
Include a proposal for a continuous development after initial welt establishes production
rate.
a~'A royalty to lessor ~ J ~O 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.
a An annual delay rental of $
~'"Shut-in payment of
per acre. (This is a 3 year Paid Up Lease)
per acre.
Bonus money as specified by bidder.
~/.*/g2'~resX$ ~oo~'~ = total bonus money //~'~2C~ 7~' For
bonus money as specified in the bid. /
~AD evelopment Plat o r other drawing s howing a d rill p lan and d rill sites t hat a re not
located on /-/~/~.,' F-eft7'- 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
drilling locations and sites for poohng purposes.
The successful bidder shall pay the cost of the advertisement of the bid.
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~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
Kaikoad Commission 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 be obtained in the City Secretary's office or on
the City of Denton's website, www.cit¥ofdenton.com.
A bidder's conference will be held onFebmary25, 2004 at 10:00 a.m. at the City of
Denton Service Center Conference Room, 901-A Texas Street, Denton, Texas 76209.
n/An Oil and Gas lease will be negotiated within thirty (30) days after the successful bidder
is selected.
O/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. The City will consider alternative 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 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 with/n the bid documents, which include, the
waiver provisions, and that it had the right to consult with counsel regarding all of the
above documents.
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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 any way connected with the following:
1. the administration, evaluation or recommendation of any bid;
waiver or deletion of any o f the requirements under the B id Documents or the
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 o£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 require_men, l~ eonn~te.d with this
b/Sand to reject any and all bids. ,/~~~~//~f/f~
C
Title:
Comply
" pIo d_rp,'ogocT/,,o ¥ TM /__Lo___
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RYAN ROAD
T. LAYBOR
SURVEY
A-779
LAX_E FOKEST PARK
\
\
PROPOSED
WELL SIT~
OPERATOR
TRIO CONSULTING &
MANAGEMENT, LLC
P.O. BOX 209
WICHITA FALLS, TEXAS
76307-0209
(940) 767-2847
LAKE FOREST PARK
PROPOSED DEVELOPMENT EXHIBIT
69 ACRES IN THE N. BRITTON SURVEY A-51
CITY OF DENTON
DENTON COUNTY, TEXAS
DRAWN: CF JOB #: 1005
CHECKED: MGD DATE: 2-16-04
REVISED: N/A SCALE: 1" = 300'
Coleman & Associates
Land Surveying
P. O. BOX 686 · DENTON, TEXAS 76202
PH(940)565-8215,FAX (940) 565-9800,
WWW.COLEMAN SURVEYIN G.CO M
(~) 2003 COLEMAN &ASSOC. SURVEYING
N
01 O0 600
OIL, GAS AND MINERAL LEASE
NON-DRILL SITE/POOLING AGREEMENT
THIS OIL, GAS AND MINERAL LEASE (the "Lease") is made this 16th., day of July, 2004
(the "Effective Date"), between The City of Denton, Denton, Texas, acting herein by and
through its City Manager, Michael A. Conduff, duly authorized by resolution to execute this
Lease ("LESSOR"), whose address is: 215 East McKinney, Denton, Texas 76201 and Trio
Consulting & Management. LLC. ("LESSEE"), whose address is: __P. O. Box 209, W~chita
Falls, Texas Zip Code 76307-0209 ,
WITNESSETH:
1. Lease of Land. LESSOR in consideration of Thirteen Thousand Three Hundred Forty-
seven and 00/100 Dollars ($13,347.00), in hand paid, of the royalties herein provided, and of the
agreements of LESSEE herein contained, hereby leases and lets exclusively unto LESSEE for
the purpose of a non-drill site/pooling agreement for investigating, exploring, prospecting,
drilling and mining for and producing oil, gas and all associated minerals, to produce, save, take
care of, treat, transport and own said products, the following described land in Denton County,
Texas, to-wit:
Lake Forest Legal Description:
BEING all that certain lot, tract, or parcel of land situated in the N. Britton Survey Abstract
Number 51 and in the T. Labor Survey Abstract Number 779 in the City of.Denton, Denton
County, Texas, being a part of Lot 1, Block A of Lake Forest Good Samaritan Village, an
addition to the City of Denton, Denton County, Texas according to the plat thereof recorded in
Cabinet F, Page 36, Plat Records, Denton County, Texas, and being more particularly described
as follows:
BEGINNING at an iron rod found for comer in the south line of Ryan Road, a public roadway,
said point being the northeast comer of that certain tract of land conveyed by deed from Mary
Ryan to Wayne S. Ryan and wife, Melbagene Ryan recorded in Volume 730, Page 599, Deed
Records, Denton County, Texas, said point also being the northwest comer of said Lot 1, Block
A of said Lake Forest Good Samaritan Village;
THENCE south 88 degrees 21 feet 16 inches east, 1014.59 feet with said south line of said Ryan
Road to an iron rod set for PLACE OF BEGINNING;
THENCE south 88 degrees 21 feet 45 inches east, 468.72 feet with said south line of said Ryan
Road to an iron rod set for comer;
THENCE south 0 degrees 15 feet 54 inches west, 2543.39 feet to an iron rod set for comer in the
north line of that certain tract of land conveyed by deed to Acme Brick Company recorded in
Volume 3127, Page 930, Real Property Records, Denton County, Texas;
THENCE north 89 degrees 33 feet 3 inches west, 1869.59 feet with said north line of said Acme
Brick tract to an iron rod found for comer, said point being the northeast comer of that certain
"Tract A" of land conveyed by deed from Ryan Ventures, LTD. to the City of Denton recorded
in Volume 4994, Page 235, Real Property Records, Denton County, Texas;
THENCE north 89 degrees 54 feet 30 inches west, 254.10 feet with the north line of said City of
Denton "Tract A" to an iron rod found for comer in the east line of Lot 39, Block J of Ryan
Ranch, Phase I, an addition to the City of Denton, Denton County, Texas according to the plat
thereof recorded in Cabinet S, Page 122, Plat Records, Denton County, Texas;
THENCE north 0 degrees 29 feet 54 inches west, 676.32 feet with said east line of said Ryan
Ranch Phase I and with the east line of that certain tract of land conveyed by deed fxom Wayne
S. Ryan et al to Wayne Ryan recorded in Volume 2522, Page 898, Real Property Records,
Denton County, Texas to an iron rod set for comer;
THENCE south 88 degrees 55 feet 53 inches east, 574.60 feet to an iron rod set for comer;
THENCE north 47 degrees 58 feet 14 inches east, 157.26 feet to an iron rod set for comer;
THENCE north 14 degrees 4 feet 10 inches east, 123.83 feet to an iron rod set for comer;
THENCE north 37 degrees 34 feet 35 inches east, 348.92 feet to an iron rod set for comer;
THENCE north 11 degrees 55 feet 56 inches east, 113.51 feet to an iron rod set for comer;
THENCE south 88 degrees 55 feet 53 inches east, 199.39 feet to an iron rod set for comer;
THENCE north 33 degrees 3 feet 22 inches east, 258.89 feet to an iron rod set for comer;
THENCE north 24 degrees 55 feet 1 inch east, 290.75 feet to an iron rod set for comer;
THENCE south 88 degrees 55 feet 53 inches east, 248.41 feet to an iron rod set for comer;
THENCE north 0 degrees 15 feet 54 inches east, 790.81 feet to the PLACE OF BEGINNING
and containing 69.320 acres of land, LESS AND EXCEPT that land described in that Warranty
Deed dated December 5, 1940 between Mrs Josh Wood, et al as Grantors and E.E. Fletcher, as
Grantee, said deed recorded in Volume 288, Page 479, of the Deed Records of Denton Cotmty,
Texas, leaving a total of 59.320 acres, more or less, covered by this lease.
See drawing (Attachment A).
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However, there is expressly excepted from this Lease and reserved to LESSOR, its successors
and assigns, all vanadium, uranium, plutonium, thorium, fissionable minerals and all other
minerals of every kind and character in, on and under the land, except only oil, gas, casinghead
gas and their byproducts and such other hydrocarbon substances, carbon dioxide and sulfur as
are necessarily produced with and incidental to the production of oil and gas, or either of them.
2. Reservation and Surface Use Prohibition. There is hereby excepted and reserved to
LESSOR the full use of the land covered hereby and all rights with respect to the surface and
subsurface thereof for any and all purposes and all minerals except those expressly leased for
pooling purposes and only to the extent herein leased to LESSEE. LESSOR reserves and
excepts from this Lease all of the surface of the land described in paragraph I, and LESSEE
agrees that it will not conduct drilling operations or any other operations or activities of any
nature on the surface of such land.
3. Primary Term: This is a paid up lease and subject to the other provisions here contained,
this Lease shall be for a term of three (3) years from the Effective Date (the "Primary Term") and
as long thereafter as oil, gas and other minerals are produced in paying quantities from said land
or land with which said land is pooled hereunder. L~:cc rGrcc~ tc cch:ri:chez ciz~:-z;t~cn~ cn ~
4. Royalty: As royalty, LESSEE covenants and agrees to pay:
a. As a royalty on oil (including all hydrocarbons produced in liquid form at the
mouth of the well and also condensate, distillate, and other liquid hydrocarbons recovered
fi'om oil or gas mn through a separator or similar equipment)_ 23% of the gross
production or the market value thereof, at the option of LESSOR, the value to be
determined by (i) the highest posted price, plus premium, if any, offered or paid for oil,
condensate, distillate, or other liquid hydrocarbons, respectively, of a like type and
gravity for the field where produced and when mn, or (ii) the highest market price offered
or paid for the field where produced and when nm, or (iii) the gross proceeds of the sale
whichever is greater. LESSEE agrees that before any gas produced from the land is sold,
used or processed in a plant, it will be nm, free or cost to the parties entitled to royalties,
through an adequate oil and gas separator of conventional type or other equipment at least
as efficient to the end that all liquid hydrocarbons recoverable from the gas by such
means will be recovered. Upon written consent of the royalty owners, the requirement
that gas be mn through a separator or other equipment may be waived upon terms and
conditions as prescribed by them.
b. As a royalty on any gas, which is defined as all hydrocarbons and gaseous substances
not defined as oil in subparagraph 4.b. above, produced from any well on the land
(except as provided in this Lease with respect to gas processed in a plant), 23% of
the gross production or the market value thereof, at the option of LESSOR, the value to
be based on the highest market price paid or offered to a third party LESSEE under a gas
purchase agreement negotiated at arms' length for gas of comparable quality and quantity
in the general area where produced and when run, or the gross price paid or offered to the
producer, whichever is greater.
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c. As a royalty on any gas processed in a plant, 23% of the residue gas and the
liquid hydrocarbons extracted or the market value thereof, at the option of LESSOR. The
royalty percentage shall be applied to 100% of the total plant production of residue gas
attributable to gas produced from this Lease, and on 50% or that percent accruing to
LESSEE, whichever is greater, of the total plant production of liquid hydrocarbons
attributable to the gas produced from this Lease; except if liquid hydrocarbons are
recovered from gas processed in a plant in which LESSEE or an affiliate owns an
interest, then the royalty percentage for liquid hydrocarbons shall be 50% or the highest
percent accruing to a third party processing gas through the plant under a processing
agreement negotiated at arms' length. The respective royalties on residue gas and on
liquid hydrocarbons shall be determined by (i) the highest market price paid or offered
for any gas (or liquid hydrocarbons) of a comparable quality in the general area or (ii) the
gross price paid or offered for such residual gas, or the weighted average gross selling
price for the respective grades of liquid hydrocarbons, F.O.B. the plant in which the gas
is processed, whichever is greater.
d. On all substances, including, but not limited to carbon dioxide and sulfur, permitted
to be produced fi'om the land by virtue of this Lease, and products, except liquid
hydrocarbons, produced or manufactured fi.om gas, and for which no royalty is otherwise
specified in this Lease, LESSOR shall have and be entitled to the royalty percentage of
that produced or saved to b'e delivered to LESSOR, free of all costs, or, at the option of
LESSOR, which may be exercised from time to time, LESSEE shall account to LESSOR
for the royalty percentage of the market value thereof, which market value shall be
deemed to be the greater of (i) the highest market price of each product for the same
month in which the product is produced, or (ii) the average gross sale price of each
product for the same m
e. Accounting and payment to LESSOR of royalties from the production of oil and
gas from any well shall commence no later than ninety (90) days after the date the well
commences first production. Thereafter, all accountings and payments of royalties shall
be mailed to the LESSOR within fifteen (15) business days of LESSEE'S actual receipt
of payment from any third party gatherer(s) or purchaser(s). ~
~ Should LESSEE at any time fail to make royalty payments to LESSOR on or
before the last day of the third calendar month following the calendar month in which the
production occurred, this Lease shall automatically terminate unless the payments are
made within thirty (30) days after written notice is given to LESSEE. Any royalties
provided for in this Lease which are not paid to LESSOR within the applicable time
periods specified in this paragraph shall accrue interest at the same rate as judgments
under the laws of the State of Texas from due date until paid. Acceptance by LESSOR of
royalties which are past due shall not act as a waiver or estoppel of LESSOR'S right to
receive or recover any and all interest due under the provisions of this paragraph unless
the written acceptance or acknowledgment by LESSOR to LESSEE expressly so
provides. LESSEE shall pay all reasonable attorney's fees incurred by LESSOR in
connection with any lawsuit in which LESSOR is successful in recovering royalties or
-4-
interest or in terminating this Lease due to LESSEE'S failure to pay royalties within the
periods set forth above.
LESSOR'S royalty shall never bear, either directly or indirectly, any part of the costs or
expenses of producing, gathering, dehydrating, compressing, transporting, manufacturing,
processing, treating or marketing of the oil or gas from the land, nor any part of the costs of
constructing, operating or depreciating any plant or other facilities or equipment for processing
or treating oil or gas produced from the land.
5. Shut-In Gas. If LESSEE drills a well on land which the LESSOR has permitted to be
pooled herewith, which well is capable of producing gas but such well is not being produced, and
this Lease is not being maintained otherwise as provided herein, this Lease shall not terminate,
whether it being during or after the Primary Term (unless released by LESSEE) and it
nevertheless shall be considered that oil and gas is being produced from the land covered by this
Lease. When, at the expiration of the Primary Term or any time or times thereafter, the Lease is
continued in force in this matter, LESSEE shall pay or tender as royalty to the parties who at the
time of such payment would be entitled to receive royalty hereunder if the well is producing, or
deposit directly with LESSOR at its address shown herein, a sum equal to .___$20.00 for
each gross acre of land subject to this Lease at the time such payment is made. The first payment
of such sum shall be on or before the first day of the calendar month at the expiration of ninety
(90) days from the date the Lease is not otherwise maintained, and thereafter subsequent
payments may be made at annual intervals. LESSEE'S failure to pay or tender or properly or
timely pay or tender such sum as royalty shall render LESSEE liable for the amount due and
shall operate to terminate this Lease automatically.
6. Limit of Shut-In: Notwithstanding anything to the contrary in this Lease, it is expressly
agreed and provided that this Lease cannot and shall not be extended beyond the Primary Term
by reason of the shut-in well provisions of Paragraph 5 for any single period of more than two
(2) consecutive years or more than three (3) years in the aggregate.
7. Pooline: Subject To the reservations and surface use prohibitions of paragraph 2 of this
Lease, LESSEE, at its option, is hereby given the right and power to pool or combine the acreage
covered by this lease or any portion thereof as to oil and gas, or either of them, with any other
land not covered by this lease, and/or with any other land, lease or leases in the immediate
vicinity thereof to the extent hereinafter stipulated, when in LESSEE'S judgment it is necessary
or advisable to do so in order to properly to explore, or to develop and operate said leased
premises in compliance with the spacing rules of the Railroad Commission of Texas, or other
lawful authority, or when to do so would, in the judgment of LESSEE, promote the conservation
of oil and gas in and under and that may be produced from said premises. Units pooled for oil
hereunder shall not exceed forty (40) acres, plus a tolerance of 10 percent (10%) thereof, each in
area, and units pooled for gas hereunder shall not exceed in area 640 acres each plus a tolerance
of ten percent (10%) thereof, provided that should governmental authority having jurisdiction
prescribe the creation of units larger than those specified, for the drilling or operation of a well at
a regular location or for obtaining maximum allowable from any well to be drilled, drilling or
already drilled, units thereafter created may conform in size with those prescribed by
governmental regulations. LESSEE under the provisions hereof, may pool or combine acreage
-5-
covered by this lease or any portion thereof as above provided as to oil in any one or more strata
and as to gas in any one or more strata. The units formed by pooling as to any stratum or strata
need not conform in size or area with the unit or units in to which the lease is pooled or
combined as to any other stratum or strata, and oil units need not conform as to area with gas
units. The pooling in one or more instances shall not exhaust the rights of the LESSEE
hereunder to pool this lease or portions thereof into other units. LESSEE shall file for record in
the appropriate records of the county in which the leased premises are situated an instrument
describing and designating the pooled acreage as a pooled unit; and upon such recordation of the
unit shall be effective as to all parties hereto, their heirs, successors, and assigns, irrespective of
whether or not the trait is likewise effective as to all other owners of surface mineral, royalty or
other rights in land included in such unit. LESSEE may at its election exercise its pooling option
before or after commencing operations for or completing an oil or gas well on the leased
premises, and the pooled unit may include but is not required to include, land or leases upon
which a well capable of producing oil or gas in paying quantities has theretofore been completed
or upon which operations for the drilling of a well for oil and gas have theretofore been
commenced. In the event of operations for drilling on or production of oil or gas fi.om any part
of a pooled unit which includes all or a portion of the land covered by this lease, regardless of
whether such operations for drilling were commenced or such production was secured before or
after the execution of this instrument or the instrument designating the pooled unit, such
operations shall be considered as operations for drilling on or production of oil or gas from land
covered by this lease whether or not the well or wells be located on the premises covered by this
lease and such event operations for drilling shall be deemed to have been commenced on said
land within the meaning of paragraph 8 of this lease; and the entire acreage constituting such unit
or units, as to oil and gas, or either of them, as herein provided, shall be treated for all purposes,
except the payment of royalties on production from the pooled unit, as if the same were included
in this lease. For the purpose of computing the royalties to which owners of royalties and
payments out of production and each of them shall be entitled on production of oil and gas, or
either of them, from the pooled trait, there shall be allocated to the land covered by this lease and
included in said unit (or to each seParate tract within the unit if this lease covers separate tracts
within the unit) a pro rata portion of the oil and gas, or either of them, produced from the pooled
unit after deducting that used for operations on the pooled unit. Such allocations shall be on an
acreage basis--that is to say, there shall be allocated to the acreage covered by this lease and
included in the pooled unit (or to each separate tract within the unit if this lease covers separate
tracts within the unit) that pro rata portion of the oil and gas, or either of them, produced from
the pooled unit which the number of surface acres covered by this lease (or in each such separate
tract) and included in the pooled unit bears to the total number of surface acres included in the
pooled unit. Royalties hereunder shall be computed on the portion of such production, whether it
be oil and gas, or either of them, so allocated to the land covered by this lease and included in the
unit just as though such production was from such land. The production fi.om an oil well will be
considered as production from the lease or oil pooled unit from which it is producing and not as
production from a gas pooled unit; and production from a gas well will be considered as
production fi.om the lease or gas pooled unit fi.om which it is producing and not from an oil
pooled unit. The formation of any unit hereunder shall not have the effect of changing the
ownership of any shut-in production royalty which may become payable under this lease. If this
lease now or hereafter covers separate tracts, no pooling or unitization of royalty interest as
between any such separate tracts is intended or shall be implied or result merely from the
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inclusion of such separate tracts within this lease, but LESSEE shall nevertheless have the right
to pool as provided above with consequent allocation of production as above provided. As used
in this paragraph 7, the words "separate tract" mean any tract with royalty ownership differing,
now or hereinafter, either as to parties or amounts fi:om that as to any other part of the leased
premises.
8. Termination.
a. If, at the expiration of the Primary Term, LESSEE is not engaged in the actual
drilling ora well under the terms of this Lease or if LESSEE has completed or abandoned
a well on the land within thirty (30) days prior to expiration of the Primary Term and is
not, at the expiration of ninety (90) days after the date or completion or abandonment of
the well, engaged in the actual drilling of another well under the terms of this Lease, this
Lease shall then terminate as to all of the land, save and except the following:
Each well producing oil or being reworked, and classified as an oil well
under the rules and regulations of the Railroad Commission of Texas,
together with forty (40) acres around each such well (an "Oil Unit").
Each well producing gas (or capable of producing gas with all shut-in royalty
having been paid thereon) or being reworked, and classified as a gas well under
the rules and regulations of the Railroad Commission of Texas, together with the
one hundred sixty (160) acres around each such well (a "Gas Unit").
b. Each Oil Unit or Gas Unit shall be in as near the form of a square as reasonably
practicable considering the boundary of the land and the necessity of a legal location of
the well on the unit. Notwithstanding the foregoing, if the Railroad Commission of
Texas or other authority having jurisdiction, by rule or order prescribes a larger or a
smaller number of acres for the purposes of securing the maximum allowable production,
each unit shall be increased or decreased in size as necessary to conform to the number of
acres prescribed by the rule or order, but if the rule or order provides for or permits
optional sized tracts or spacing, the unit shall be the smallest tract permitted by the rule or
order.
c. If, at the expiration of the Primary Term, LESSEE is engaged in the actual drilling
of a well under the terms of this Lease or if LESSEE has completed or abandoned a
well on the land within thirty (30) days prior to expiration of the Primary Term and is,
at the expiration of ninety (90) days after completion or abandonment of the well,
engaged in the actual drilling of another well under the terms of this Lease this Lease
shall not terminate so long as LESSEE pursues the drilling of the well with
reasonable diligence to completion or abandonment and so long as LESSEE
commences the actual drilling of additional and successive wells under the terms of
this Lease at intervals not exceeding ninety (90) days between completion of a well as
a producer or dry hole and commencement of actual drilling of the next well under
the terms of this Lease. If and when LESSEE fails to commence the actual drilling of
a well within the applicable interval (or within the extended time provided in
subparagraph 8.d. below, this Lease shall then terminate to all of the land, save and
except the Oil Units and Gas Units provided in subparagraph 8.a. above. Upon
expiration of the Primary Term or the cessation of the continuous drilling program set
forth herein, whichever is later, this Lease shall also terminate as to all depths below
each unit retained as to depths below a depth of one hundred feet (100') beneath the
deepest producing horizon or zone for each unit.
d. If LESSEE, in the conduct of actual drilling operations under this Lease after the
expiration of the Primary Term, commences the actual drilling of any next succeeding
well within less than the ninety (90) day time interval specified in subparagraph 8.c. and
thus speeds up the development of the land, LESSEE shall have credit in time for the
accelerated development and may, in the conduct of subsequent actual drilling
operations, take advantage of the credit in time on a cumulative basis and thus extend the
time for the commencement of actual drilling of any subsequent well or wells required to
be drilled under thc provisions of this Lease in order to prevent termination of this Lease.
Within ten (10) days of the commencement of the actual drilling of each well under the
terms of this Lease, LESSEE shall give LESSOR written notice of the date of
commencement. Within ten (10) days after the completion or abandonment of each well
under the terms of this Lease, LESSEE shall give LESSOR written notice of the date of
completion or abandonment and also of the time credit, if any claimed by LESSEE as a
result of having commenced the actual drilling of the well within less than the required
interval. If LESSEE fails to timely so notify LESSOR in any of these respects, LESSEE
shall not be entitled to any credit in time for accelerated development. Nothing contained
in this paragraph shall relieve LESSEE of any offset obligation arising by implication or
under the terms of this Lease, but any well drilled by LESSEE to satisfy an offset
obligation will entitle LESSEE to the privileges of this paragraph.
_,, _.~ ........ ~: ....... ,_:_~ · ~oo~: .... :"-~ "-~-" ' ...... No Surthce Operations Allowed"
10. Assignment. LESSEE shall not assign this lease without the written consent of
LESSOR. The assignment of this Lease by LESSEE, or any successor LESSEE, shall not reheve
LESSEE, or any such successor, fi:om its obligations hereunder. LESSOR may, unless it agrees
to the contrary, look to LESSEE and/or any successor of LESSEE for performance of any one or
more of such obligations
11. Title. LESSOR does not warrant or agree to defend the title of the lands covered hereby.
LESSEE takes this Lease without warranty of title either express or implied. If LESSOR owns
an interest in the oil, gas and minerals leased hereby less than the entire fee simple estate, then
the royalties, or other monies accruing fi:om any part of the land to which this Lease covers less
than such full interest shall be paid to LESSOR only in the proportion which LESSOR'S interest
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therein, if any, bears to the whole and undivided fee simple mineral estate therein. It is the sole
responsibility of LESSEE to determine the LESSOR's mineral interest. The bonus payment paid
for this Lease shall be deemed to be final if no title problems are submitted for resolution within
ninety (90) days of the Effective Date.
12. Force Maieure: When drilling, production or other operations under the terms of this
Lease or land pooled with such land, or any part thereof are prevented, delayed or interrupted by
fire, storm, flood, war, rebellion, insurrection, sabotage, riot, strike, or as a result of some law,
order, rule, regulation or necessity of governmental authority, either State or Federal, the Lease
shall nevertheless continue in full force and effect and be extended for the period such drilling,
production and other operations are so prevented, delayed or interrupted. LESSEE shall not be
liable for breach of any express or implied covenants of this Lease when drilling, production or
other operations are so prevented, delayed or interrupted, except that nothing in this paragraph 12
shall be construed to suspend the payment of delay rentals, shut-in royalty or any other amount
otherwise required to maintain this Lease in effect.
13. Desienation of Gas Unit.
a. Upon completion of the first well as a producer of oil and/or gas in paying
quantities (whether the first or a subsequent well drilled), LESSEE shall designate an
approximately sized drilling unit around said first producing well, all out of the above
described property, by filing a written designation in the Deed Records of Denton County
Texas and shall provide LESSOR with a copy of such unit designation.
b.. If a second well is completed as a producer of gas in paying quantities, LESSEE
shall again designate an approximately sized drilling unit around said second producing
well, all out of the above described property, by filing a written designation in the Deed
Records of Denton County, Texas and shall provide LESSOR with a copy of such unit
designation. LESSEE shall designate all drilling units in a fair and reasonable manner so
that the remaining acreage not included in the drilling units is capable of being drilled or
pooled with other lands.
All designations of units as provided in this paragraph 13 shall be in accordance with and subject
to the provisions of paragraph 8 above.
14. Indemnifications and Insurance. LESSEE shall provide or cause to be provided the
insurance described below for each well drilled under the terms of this Lease, such insurance to
continue until the well is abandoned and the site restored. Such insurance shall provide that
LESSOR shall be a co-insured, without cost, and that said insurance can not be canceled or
terminated without thirty (30) days prior notice to LESSOR and ten (10) days notice to LESSOR
for nonpayment of premiums.
a. General Requirements. Indemnification and Express Negligence Provisions.
LESSEE shall expressly release and discharge, all claims, demands, actions, judgments, and
executions which it ever had, or now have or may have, or assigns may have, or claim to have,
against the LESSOR, it agents, officers, servants, successors, assigns, sponsors, volunteers, or
-9-
employees, created by, or arising out of personal injuries, known or unknown, and injuries to
property, real or personal, or in any way incidental to or in connection with the performance of
the oil and gas drilling and production performed by the LESSEE under this lease and the
LESSEE shall fully defend, protect, indemnify, and hold harmless the LESSOR, and/or its
departments, agents, officers, servants, employees, successors, assigns, sponsors, or volunteers
from and against each and every claim, demand, or cause of action and any and all liability,
damages, obligations, judgments, losses, fines, penalties, costs, fees, and expenses incurred in
defense of the LESSOR, and/or its departments, agents, officers, servants, or employees,
including, without limitation, personal injuries and death in connection therewith which may be
made or asserted by LESSEE, its agents, assigns, or any third parties on account of, arising out
of, or in any way incidental to or in connection with the performance of the oil and gas well
drilling and production performed by the LESSEE under this lease and, the LESSEE agrees to
indemnify and hold harmless the LESSOR, and/or its departments, and/or its officers, agents,
servants, employees, successors, assigns, sponsors, or volunteers from any liabilities or damages
suffered as a result of claims, demands, costs, or judgments against the LESSOR and/or, its
departments, it's officers, agents, servants, or employees, created by, or arising out of the acts or
omissions of the LESSOR occurring on the drill site or operation site in the course and scope of
inspecting and permitting the gas wells INCLUDING, BUT NOT LIMITED TO, CLAIMS AND
DAMAGES ARISING IN WHOLE OR IN PART FROM THE NEGLIGENCE OF THE
LESSOR OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COURSE
AND SCOPE OF ITS DUTIES UNDER THIS LEASE. IT IS UNDERSTOOD AND AGREED
THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN INDEMNITY
EXTENDED BY THE LESSEE TO INDEMNIFY AND PROTECT THE LESSOR AND/OR
ITS DEPARMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES FROM THE
CONSEQUENCES OF THE NEGLIGENCE OF THE CITY OF DENTON, TEXAS AND/OR
ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES, WHETHER
THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE
RESULTANTANT INJURY, DEATH, AND/OR DAMAGE.
b. All policies shall be endorsed to read "THIS POLICY WILL NOT BE
CANCELLED OR NON-RENEWED WITHOUT 30 DAYS ADVANCED WRITTEN NOTICE
TO THE OWNER AND THE CITY EXCEPT WHEN THIS POLICY IS BEING CANCELLED
FOR NONPAYMENT OF PREMIUM, IN WHICH CASE 10 DAYS ADVANCE WRITTEN
NOTICE IS REQUIRED".
c. Liability policies shall be written by carriers licensed to do business in Texas and
with companies with A: VIII or better rating in accordance with the current Best Key Rating
Guide, or with nonadmitted carders that have a fmancial rating comparable to carriers licensed to
do business in Texas approved by the City.
d. Liability policies shall name as "Additional Insured" the city and its officials,
agents, employees, and volunteers.
e. Certificates of insurance must be presented to the City evidencing all coverages
and endorsements required by this Section 35-508, and the acceptance of a certificate without the
required limits and/or coverages shall not be deemed a waiver of these requirements.
-10-
f. Claims made policies will not be accepted except for excess policies or unless
otherwise provided by this Article.
g. Required Insurance Coverages
1. Commercial General Liability Insurance. Coverage should be a minimum
Combined Single Limit of $1,000,000 per occurrence for Bodily Injury and
Property Damage. This coverage must include premises, operations, blowout or
explosion, products, completed operations, blanket contractual liability,
underground property damage, broad form property damage, independent
contractors protective liability and personal injury.
2. Environmental Impairment (or Seepage and Pollution) shall be either
included in the coverage or written as separate coverage. Such coverage shall not
exclude damage to the lease site. If Environmental Impairment (or Seepage and
Pollution) Coverage is written on a "claims made" basis, the policy must provide
that any retroactive date applicable precedes the effective date of the issuance of
the permit. Coverage shall apply to sudden and non-sudden pollution conditions
resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste material or other irritants, contaminants or
pollutants.
3. Automobile Liability Insurance. Minimum Combined Single Limit of
$500,000 per occurrence for Bodily Injury and Property Damage. Such coverage
shall include owned, non-owned, and hired vehicles.
4. Worker's Compensation Insurance. In addition to the m'mimum statutory
requirements, coverage shall include Employer's Liability limits of at least
$100,000 for each accident, $100,000 for each employee, and a $500,000 policy
limit for occupational disease, and the insurer agrees to waive tights of
subrogation against the city, its officials, agents, employees, and volunteers for
any work performed for the city by the LESSEE.
5. Excess (or Umbrella) Liability Insurance. Minimum limit of $10,000,000
covering in excess of the preceding insurance policies.
6. Control of Well Insurance.
a. Minimum limit of $5,000,000 per occurrence.
b. Policy shall cover the Cost of controlling a well that is out of
control, Redrilling or Restoration expenses, Seepage and Pollution Damage.
Damage to Property in the LESSEE's Care, Custody, and Control with a sub-limit
of $500,000 may be added.
-11-
15. Offset Well Requirement. In the event a well or wells producing oil and gas in any
quantities that should be brought in by LESSEE or any other LESSEE on adjacent lands and
within 330 feet of the land or lands pooled, by permission of LESSOR, with such lands, LESSEE
agrees to drill such offset wells as a reasonably prudent LESSEE would drill under the same or
similar circumstances.
16. Location of Drilling Activity~ Pipelines and Eauioment: No drilling activity shall be
conducted on and no pipelines, equipment or other structures shall be placed on or under any
pavement, concrete or asphalt or any other improved surface area situated on the above described
land. The location of any pipelines installed by LESSEE shall be approved in advance by
LESSOR, shall not be located on the lands covered by this Lease, and shall be situated along
routes that least interfere with LESSOR's existing or future use of the surface. No equipment or
roads shall be built on city property.
When required by LESSOR, LESSEE will bury all pipelines at a depth of three feet (3'), and the
location of wells shall comply with Chapter 29, Fire Code, of the Code of Ordinances of the City
of Denton, as amended, and all other applicable laws; provided, however, in no event will any
such activities or operations be conducted on the surface of the lands covered by this Lease.
17. Compliance with Laws: LESSEE shall comply with all applicable rules, regulations,
ordinances, statutes and other laws in connection with any drilling, producing or other operations
under the terms of this Lease, including, without limitation, the oil and gas well regulations of
the City of Denton.
18. Lease Assignment: The assignment of this Lease by LESSEE, or any successor
LESSEE, shall not relieve LESSEE, or any such successor, from its obligations hereunder.
LESSOR may, unless it agrees to the contrary, look to the LESSEE and/or any successor of
LESSEE for performance of any one or more of such obligations.
19. Water: LESSEE shall not use any water in, on, or under the above-described land.
20. Diligent, Good Faith Operations. Each well drilled under this Lease shall be drilled
with reasonable diligence and in good faith and in a good and workmanlike manner in a bona
fide attempt to product oil, gas and associated minerals therefrom.
21. Captions and Headines: The captions and headings in this Lease are for convenience
only and shall not modify, change, amend, alter, or affect the true meaning of any paragraph,
sentence, clause, phrase, or words herein.
22. Memorandum of Lease. LESSOR and LESSEE agree that a memorandum of lease
shall be filed of record in the Official Records of Denton County, Texas, evidencing this Lease
and the provisions contained in such memorandum to the parties hereto, the land covered by the
Lease, the term of the Lease and notice provisions informing the public of the existence of the
Lease.
- 12-
23. Entire Agreement. This Lease states the entire contract between the parties, and no
representation or promise, verbal or written, on behalf of either party shall be binding unless
contained herein; and this Lease shall be binding upon each party executing the same, regardless
of whether or not executed by all owners of the above described land or by all persons above
named as "LESSOR", and, notwithstanding the inclusion above of other names as "LESSOR",
this term as used in this Lease shall mean and refer only to such parties as execute this Lease and
their successors in interest.
1N WITNESS WHEREOF, this instrument is executed on the date first above written.
~SOR
MICHAEL A. CONDUi~Y MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
/ Texas 76307-0209
-13-
STATE OF TEXAS
COUNTY OF DENTON §
Before me, the undersigned notary public, on this day personally appeared Michael A.
Conduffin his capacity as the City Manager of the City of Denton, Texas, who is know to me to
be the person whose name is subscribed to the foregoing instrument, and acknowledged to me
that he executed that instrument for the purposes and consideration therein expressed.
Printed Name of Notary Public
STATE OF TEXAS
COUNTY OF WICHITA §
Before me, the undersigned notary public, on this day personally appeared Bill Setzler, in
his capacity as President of Trio Consulting & Management, LLC, who is know to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to me that he
executed that instrument for the purposes and consideration therein expressed.
Printed Name of Notary Public
-14-
Attachment A
T. LAYBOR
SURVEY
A-779
4.°
~bx~-~ to
17002
.%
LAK~ FOI~ST PAPER
\
\
\
PROPOSED
WELL SITE
I.
OPERATOR
TRIO CONSULTING &
MANAGEMENT, LLC
P.O. BOX 209
WICHITA FALLS, TEXAS
76307,0209
(940) 767-2847
LAKE FOREST PARK
PROPOSED DEVELOPMENT EXHIBIT
69 ACRES IN THE N. BRITTON SURVEY A-51
CiTY OF DENTON
DENTON COUNTY, TEXAS
DRAWN: CF JOB #: 1005
CHECKED: MGD DATE: 2-16-04
N
Coleman & Associates
Land Surveying
P.O. BOX 686 - DENTON, TEXAS 76202
PH(940)565-B215,FAX (940)565-9800,
WWW.COLEMAN SURVEYING.CO M
01 O0 600
City of Denton
~City Attorney's Office
215 E. McKinney
Denton, TX 76201
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU
MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR
SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
MEMORANDUM OF OIL, GAS AND MINERAL LEASE
THE STATE OF TEXAS §
COUNTY OF DENTON §
KNOW ALL MEN BY THESE PRESENTS:
That on the 16t~., day of July, 2004, being the effective date hereof, The City of Denton, Detuon, Texas
(hereinafter referred to as "Lessor") and Trio Consulting & Management, L.L.C., whose address is 730 Bluff Street,
Wichita Falls, Texas 76301 (hereinafter referred to as "Lessee"), entered into an Oil, Gas and Mineral Lease
(hereinafter referenced as "Said Lease'-') covering the following described land (hereinafter referred to as "Subject
Land") situated in Denton County, Texas, tn-wit:
BEING all that certain lot, tract, or parcel of land situated in the N. Britton Survey Abstract
Number 51 and in the T. Labor Survey Abstract Number 779 in the City of Denton, Denton
County, Texas, being a part of Lot 1, Block A of Lake Forest Good Samaritan Village, an addition
to the City of Denton, Denton County, Texas according to the plat thereof recorded in Cabinet F,
Page 36, Plat Records, Denton County, Texas, and being more particularly described as follows:
BEGINNING at an iron rod found for corner in the south line of Ryan Road, a public roadway, said
point being the northeast corner of that certain tract of land conveyed by deed from Mary Ryan to
Wayne S. Ryan and wife, Melbagene Ryan recorded in Volume 730, Page 599, Deed Records,
Denton County, Texas, said point also being the northwest corner of said Lot 1, Block A of said
Lake Forest Good Samaritan Village;
THENCE south 88 degrees 21 feet 16 inches east, 1014.59 feet with said south line of said Ryan
Road to an iron rod set for PLACE OF BEGINNING;
THENCE south 88 degrees 21 feet 45 inches east, 468.72 feet with said south line of said Ryan
Road to an iron rod set for corner;
THENCE south 0 degrees 15 feet 54 inches west, 2543.39 feet to an iron rod set for corner in the
north line of that certain tract of land conveyed by deed to Acme Brick Company recorded in
Volume 3127, Page 930, Real Property Records, Denton County, Texas;
THENCE north 89 degrees 33 feet 3 inches west, 1869.59 feet with said north line of said Acme
Brick tract to an iron rod found for corner, said point being the northeast corner of that certain
"Tract A" of land conveyed by deed from Ryan Ventures, LTD. to the City of Denton recorded in
Volume 4994, Page 235, Real Property Records, Denton County, Texas;
THENCE north 89 degrees 54 feet 30 inches west, 254.10 feet with the north line of said City of
Denton "Tract A" to an iron rod found for corner in the east line of Lot 39, Block J of Ryan Ranch,
Phase I, an addition to the City of Denton, Denton County, Texas according to the plat thereof
recorded in Cabinet S, Page 122, Plat Records, Denton County, Texas;
THENCE north 0 degrees 29 feet 54 inches west, 676.32 feet with said east line of said Ryan
Ranch Phase I and with the east line of that certain tract of land conveyed by deed from Wayne S.
Ryan et al to Wayne Ryan recorded in Volume 2522, Page 898, Real Property Records, Denton
County, Texas to an iron rod set for corner;
THENCE south 88 degrees 55 feet 53 inches east, 574.60 feet to an iron rod set for corner;
THENCE north 47 degrees 58 feet 1.4 inches east, 1.57.26 feet to an iron rod set for corner;
THENCE north 1.4 degrees 4 feet 1.0 inches east, 1.23.83 feet to an iron rod set for corner;
THENCE north 37 degrees 34 feet 35 inches east, 348.92 feet to an iron rod set for corner;
THENCE north 1.1. degrees 55 feet 56 inches east, 1.1.3.51. feet to an iron rod set for corner;
THENCE south 88 desrees 55 feet 53 inches east, 1.99.39 feet to an iron rod set for corner;
THENCE north 33 desrees 3 feet 22 inches east, 258.89 feet to an iron rod set for corner;
THENCE north 24 desrees 55 feet 1. inch east, 290.75 feet to an iron rod set for corner;
THENCE south 88 degrees 55 feet 53 inches east, 248.41. feet to an iron rod set for corner;
THENCE north 0 degrees 1.5 feet 54 inches east, 790.81. feet to the PLACE OF BEGINNING and
containing 69.320 acres of land, LESS AND EXCEPT that land described in that Warranty Deed
dated December 5, 1.940 between Mrs Josh Wood, et al as Grantors and E.E. Fletcher, as
Grantee, said deed recorded in Volume 288, Page 479, of the Deed Records of Denton County,
Texas, leaving a total of 59.320 acres, more or less, covered by this lease.
Reference to said deed is hereby made for a complete description of the lands covered hereby and for all
pmposes.
For the exclusive right for investigating, exploring, prospecting, drilling and mining for and producing oil,
gas and all other minerals, conducting exploration, geologic and geophysical surveys and other related oil and gas
operations on and under Subject Land. The Said Lease shall extend until July 15, 2006 and as long thereafter as oil,
gas or other minerals is produced from Subject Land or lands with which Subject Land are pooled therewith.
The execution of this Memorandum of Oil, Gas and Mineral Lease, shall serve as notice of execution and
existence of a Said Lease and be incorporated herein, and made a part hereof in all respects. This memorandum
shall be subject to all term and provisions as set forth in Said Lease. A copy of Said Lease can be found in the
business files of Trio Consulting & Management, L.L.C., at the address above.
WITNESS THE EXECUTION HEREOF as of the respective acknowledgment date below.
CITY OF DENTON, TEXAS-LESSOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY
ATTORNEY
LESSEE ~
~TATE OF TEXAS §
COUNTY OF DENTON §
Before me, the undersigned notary public, on this day personally appeared Michael A. Condaff in his
capacity as the City Manager of the City of Denton, Texas, who is know to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he/she executed that instmmant for the
purposes and considera.ti~s~.d~
_ ~v~,~ LINDA HOLLEY
~1(,~ ~ Notary Public
~[ ~ J~] State of Texas
~My Comm, Exp, 12-08-2005
Printed Name of Notary Public
STATE OF TEXAS §
COUNTY OF WICHITA §
Before me, the undersigned notary public, on this day personally appeared Bill Setzler, in his capacity as
President of Trio Consulting & Management, LLC, who is know to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed that instrument for the purposes and
consideration therein expressed,
Printed Name of Notary Public