2003-286S~i\Our Dccuments~Ordin antes\0 3~Nor~h Lakes Oil and Gas Lease Ordinmee .doe
O INANCE NO.
AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT
FOR AN OIL AND GAS NON-DRILL SITE/POOLING AGREEMENT AT THE NORTH LAKES
PARK WITH JOINT RESOURCES COMPANY 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 North Lakes 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 Joint Resources
Company; and
WHEREAS, Joint Resources Company desires to enter into lease negotiations for the land at
North Lakes 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 mounts; 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 Joint Resources Company
in return for the payment(s) as outlined in Attachment A for the approximately 353 acres of North
Lakes 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
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.
P^ssED A~ A~?ROVED this ~e ~ ~--~day of &~'~k~, 2003.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
EULINE BROCK, MAYOR
ATTACHMENT A
CITY OF DENTON BID FORM
GAS V~ELL DEVELOPlVl]gNT ON NOP. T~ LAKES PARK PROPERTY
NON-D]Rr~.L SITE/POOLING AGREEMENT
Description of property: The lease v¢iIl be anon-drill site/pooling agreement
Legal Description to be provided.
Minimum Standards of the Bid: Please check each item that will be included in the lease.
¢ZA re= of not
more _~ mr-ecW~ years from date of execution.
A royalty to lessor of "2-1 ~$b of all oil and gas produced from said land.
m/rAn annual delay rental of
Lease)
JBonus money as specified by bidder.
The royalty to be paid at the kighest 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 m~neral
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 mount.
-- I~ -- per acre. (This is a/year Paid Up
Der acre.
~ ~ acres X $ ~, ~ = total bonus money ~ '~'"l '-~ ~' ~- For
bonus money as ~ec~ed ~ ~e bid.
~A Development Plat or o~er ~a~g sho~g a ~5 pl~ ~d ~ sites m~t'be
subdued ~ ~s bid. ~e CiW rescues the fi~t to awed ~s bid b~ed on bo~ price
~d ~e most,ady~ageq~ location of~ ~g locafio~ ~d sit~s.
~e success~ b~{der sh~l pay ~e sost of~e adve~sement of the bid ~
~Bidders sh~ sub~t ~o~afion'of ~e bidder's r~utafion ~d qu~ of ~e bidder's o~
~d g~ se~ces ~clu~g but not lqm~ted to ~e bidder's ~ci~ abiS~ to pro,de
oil ~d g~ se~ces, safeWrecord, compS~ce ~stow ~d ~y o~er relev~t
~at ~e bidder ~b~ts to ~e ciV for ~e dete~inafion of best v~ue. A le~er ~om ~e
Rhkoad Commission ~at ~e comply is ~ good st~ding ~ suffice. ·
~e success~ bidder sh~l comply M~ ~ req~ements ~ ~e Code of Or~ces for
the City of Denton, Texas. A copy may be obtained in thc City Secretary's office or on
thc City of Denton's wcbaite, www.c~Wofd~nton.¢om. The City of Denton's Gas Well
Ordinances may be obtained from the City Secretary, wcbsite or City Attorney's Office.
m/ A bidder's conference will be held on Monday, Iuly 28, 2003 at 2:00 p.m..at the City of
Denton Purchasing Office conference room, 901 B Texas Street, Denton, Texas. ·
An oil and Oas lease, and Pdght of Way Usc Agreement, if any, will be negotiated within
thirty (30) days after the successful bidder is selected.
The 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 exploratio.n, devclopment, and
production of oil 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, Texas, and the City's respective
employees and representatives for the award of attorney fees, arising out of or in
connection with thc administration, evaluation, or recoraraendation 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 thc City of Denton, Texas, or
any of the City's employees and representatives under any of the provisions of the Texas
Uniform Declaratory Yudgments 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 ail terms within the bid documents, which in61ude the
waiver provisions, and that it had the right to consult with counsel regarding all of the
above documents.
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 ha any way connected with the following:
1. the administration, evaluation or recommendation of any bid;
2. waiver or deletion of any o f the requirements under the B id Documents or the
-3-
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 of the bidding
documents and consents to the bidding process and the possibility ora negative assessment. By
submitting a bid, the'bidder acknowledges and agrees tb~l there was and is no disparity of
bargaiuing power between the bidder and the City of Denton, Texas. -
The bidder agrees that th/s is the intentional relinquishment of the above listed presently existing
rights. ' .'
The City reserves the fight to waive, delete or amend any of the requirements connected with this
bid and to reject any and all bids.
Certification.
Joint Resources Company is the Operator of thc closest Wells to the North Lakes Property and is
presently responsible for bringing in the only gas line to gather gas from this area and is a
leaseholder owner of leases in very close proximity to the North Lakes Property. In addition,
Joint Resources Company is presently negotiating tO obtain additional leases directly offsetting
the North Lakes Property from which additional directional and/or horizontal Wells can be
drilled from, thereby allowing development of the minerals under the North Lakes Property
without drillsites or operations thereon.
Joint .Resources Company presently maintains all insurance and bonding commensurate with the
Texas Railroad Commission and City of Denton requirements, and has successfully already
drilled two (2) gas Wells in the immediate vicinity of the North Lakes Property, and operates in
excess of 200 oil and/or gas Wells. TX Railroad Commission Letter of Good Standing attached.
Contact Information:
03 08 04
Mark G. Kalpakis, President
Joint Resources Company
770 N. Fielder Road
Arlington, TX 76012
Tel # (817) 459-2570 xt. 1
Fax # (817) 459-1719