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2003-285.~ S:\Our Documents\Ordinances\03~Hickory Creek Elec Substa~n Oil and Gas Lease Ordinance Best Bid.dcc ORDINANCE NO. ~3qPgg,_ff-,~ ~3~-- AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT FOR AN OIL AND GAS NON-DRILL SITE/POOLING AGREEMENT AT THE HICKORY CREEK ELECTRIC SUBSTATION WITH TRIO CONSULTING & MANAGEMENT COMPANY, L.L.C. AND ALLOWING THE CITY MANAGER TO EXECUTE A LEASE AS LONG AS THE LEASE IS IN SUBSTANTIALLY THE SAME FORM AS THE CITY'S STANDARD LEASE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, The City Council of the City of Denton has heretofore determined that it is advisable to lease for oil and gas purposes certain real property located at Hickory Creek Electric Substation, 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 Company, L.L.C.; and WHEREAS, Trio Consulting & Management Company, L.L.C. desires to enter into lease negotiations for the land at Hickory Creek Electric Substation 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 Trio Consulting & Management Company, L.L.C. in remm for the payment(s) as outlined in Attachment A for the approximately 3.13 acres at the Hickory Creek Electric Substation. 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 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~--d("day of k_~~'~---, 2003. ATTEST: JENNIFER WALTERS, CITY SECRETARY HERBERT L. PROUTY, CITY ATTORNEY EULINE BROCK, MAYOR 2 CITY OF DENTON PURCHASING 940 349 ~02 ATTACHMENT "A" PACE. 2/5 CY[~f OF DENTON BID FORPA GAS "WELL DEVELOPMENT ON HICKORY C~K ELE~IC S~$TA~ON ~ROPERTY NON-D~LL SIT~OO~NG AG~E~NT Description of propen'y: The lea~e will be a non-drill site/pooling agreemenj. · 3.13 acres, moro or less, out of and part of the S, A, Venters Surve~ A-1315 and being tine satne land de~ribocl that certain Warranty Deed dated A(tgust 3, 2000 fi'om Gordon Meredith lo tile, City of Denton, Texas and recorded in Volume 4647 ?agv 3452 of the Real Prop~ty Records of Denton County, Texas. Minimum Standards of tlhe Bid: Please cheek each item that will be in¢lud~x~ in the lease. A prim;~y te~m of not more than three (3) years f~om date ofexeeuti.bn. A rc,yalty to lessor not less than one-fourth (I/4) of all oil and gasl produced from said land. (I f greater than 1/4, please specify. The royalty to bo paid at the highest price in the area. A statement 1~ the Lesse~ that the royalty to 1~ paid the City :is eqaal to the highest price paid by the I~see to any mineral owner in Denton, County; and [hat if the Lessee pays a mineral own,er in Denton County, Tcx,-m a higher royalty percmtage during the term of this lease, the Lessee shall increase the royalty paid to the City so as to eqaal this higher mnount. : An annaal delay ~ntal of riel: less than ten and no/100 dollm-s ($10.00) per acre. (If greater than $~0.00 per acre, specify.) (This ~s a 3 year Paid Up Lease) m Shnt-in payment of no.t les:_~ than twenty and no/100 dollars ($20.00) per acre (if greater than $2.0.~ r~r sere, spe~if.y)_ m Bonus money as specified by bidder. g.~ am'es X $ ~0 -- total bonus money $i0~:~i00 For bonus ratmey as specified h~ ,the bid and with thc minimum to be $175.00 per acre. A Development Plat or other drawing showing a drill plan and subnfitted with this bid. The City reserves the right to award this bid and thc most adwmtageous l~ation of the drilling locations and sites, drill sites must be based on both price m The ~uccessful bidder shall pay the cost of the advertisement of the bid. 00:27 CITY OF DENTON PURCHABINO 940 349 7302 PAOE. 3/5 Bidder~ ~ll submit infommfion of the bidder's r~putation mid quality of the bidder's oil and gas selwices :including bat uot limited to the bidder's financial ability to provide the oil/tad gas sc:reich, safety mco~.'d, compliance history and any other relevant information that 'the bidder submits to the city for the determination orbit value. The au,,:c~s~d bidder shall comply with ail requkec~mts in the Code of Ordinances for the Cily ofD.enton, Texes. A copy maybe obtained in the City .%gretary's office or on the City of Denton's web,Ate, w:~.cltvofa~nton.~om. The City of Denton's G-as Well Ordinance; may bc obtain~ from the City Secretary, website or City Attorney's Office. A bidder's conference will 'be held on May 5, 2003, An c,il and (];~ lease, and R/ght of Way Use Agreement, if eny, will be negotiated within thirty.! (30) .days at%r thc successful bidder is selected. The ,CRy shf,]/1 ailow the sm:cessfu] bidder to pool the lease, the land or minerals included in the l,:ase, or ~ay part of these with any other land, leases, minerals estates or parts of any of thew to form a d~il]ing or spacing unit for the exploration, development, and produvtion ofoil .and gas. By submitting a bid, each 'bidder agrees to waive and does hereby waive any claim the bidder has or may have against the City of Denton, Texa% and the City's respective employees m~d representative, for the award of attomey fees, arising om of or in connection with the administration, evaiuation, or recommendation of any bid, waiver of any :requirl,,mants under thf: Bid Docnments, or the Contract Documents, acceptance or rejection at' any l~dds, and ~.ward 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, T~as, or any of the City's employee.,~ ~d representatives under any of the provisions of the Texas Uni~arrn Declaratory $udl~aent~; Act (Texas Civil Practice and Remedies Code, Section 37.001, ct. wq., a~ amended). The Mdder agxees that this is the; intentional relinquishment of a presently existing known By execration and submission of tlfis Bid, the Bidder hereby represents and warrants to the City of Denton that the Bidder has read and understands the Bid Documents and the Contract Documents and this Bid is made in accordance with the Bid Documents. Bidder ecknowlcdges that it under, Rand.~. ail terms within the bid documents, which include the waiver pro'd~ions, and that it had the right to consult with counsel regarding all of the above documents. By sl:~bmltting a bid, each bidder agrees to waive and does hereby waive any claim the bidder has or may have age:inst, the City of Denton, Texas and the City's employees, -3- ~:nu; ~,~:2~ CITY OF DENTON PURCHASING 940 ~49 7~02 PAGE. 4/5 agenm and oflicera, arising out of or in any way connected with the following: 1. the t~ckniniatration, .~,ahration or recommendafon of any bid; waiver m' deletion 0.f any o f the requirernems under the B id Documents or the Con,act Docttment s; 3. acceptance or rejection of any bids; and 4. award of thc Bid or Lease. By submitting a bid, the biddor a~:z~owled8~ that the bidder understands all terms of the bidding documents ~d cons~ts to th~ bidding process and tho possibility of a negative a,~easmeat. By submitting a bid, the bidder a~lmowledges and agrees that there wa~ and ia no disparity of bargaining pow~ between the bi&let and the City ofDonton, Texa~. 1'he biddor agl:eea that ~tis is the inP'ntional rolinquishment of the above listed presently ~isting rights. The City re,serves the right to waive, delete or amend any of the requirements connected with this hid and to ~je,.~t ~tay and all bids. By: itll Set.~l~ President -4- CITY OF EENTON PURCFIAEING 940 ~49 7~09 PAGE. 5/5 Q~esQmm that ~$~/tom the May ~, 2003 Pro-Bid: ~ A I~tter :ii'om ~ho Rsilroa~ ¢',ommissit~, or ~m the bidcl~ bmlk ~tmtintz that they · "~-~ ~ii~ll',? ~'1~1~. '.~1'~'~11] b~ ~l'~i~:i~lt' fo~ tile ~'~tllir~n'lO~t rofe~c~l U~ the' b, A D~vdopment Plan is ~ot l~quired, bm a dn~inll (mu~t be legible) will Thm~ ~zc :~o oth,,~ chan~o~; ~t this llrn~, Ploa.~ include thi~ e.ddondum with your prol~osal, Note: ?'hl~s ~dtfendum ~f muet be acknowledgs'cl, signed and returned ~vM~ your bid m',sJ~onae.