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HomeMy WebLinkAboutAgenda Report - July 21, 1982 PH (4)MAYOR AND CITY CLERK AUTHORIZED TO EXECUTE GAS AND OIL LEASE AGRFE- MENT Council was apprised that on September 1, 1981, Council adopted i Resolution No. 81-123 accepting the bid received from Texas Oil and Gas Corp. of $15,000.00 - cash bonus including the first years rent as set forth in Exhibit "A" of the specifications. The appropriate lease agreement was prepared and executed and forwarded to the San Joaquin County Recorder for recordation. The Recorder has contended that the document was not of reproducable quality and new Agreements had to be drawn up. Council authorized the Mayor and City Clerk to execute Gas and Oil Lease Agreement with Texas Oil and Gas Corporation covering 760.87 acres as approved on September 1, 1981 with Council's adoption of Resolution No. 81-123. sS-j i 'n r rJ C oW ) 7Yy,'2` i 1 4 s ` fH yY y� yt� t a: y. •S }Y 4�, 4 ?,,r 55 ,� �r.�„� i IOUNCIL COAIAIUNICATj"'N TO THE CITY COUNCIL DATE FROM THE CITY MANAGER'S OFFICE July 16 , 1982 SUBJECT: Oil b Gas Lease Covering 760.87 Acres--�aC,_. TXO Production Corp. On September 1, 1981, Council adopted Resolution No. 81-123 accepting the bid received from Texas Oil and Gas Corp. of $15,000.00 - cash bonus ircluding the first years rent as set forth in Exhibit "A" of the specifications. The appropriate lease agreement was prepared and executed and was sent to the San Joaquin County Recorder fc r recordation. We have since that date been working with the Recorders Office attempting to have this document recorded. The Recorder has not been willing to record, stating the documents were not of reproducable quality. We have for the third time drawn up new Agreements which the Recorder advises are now acceptable. We.. would ask that Council 1-uzhorize the Mayor and City Clerk to execute the Agreements pursuant to Resolution 81-123 on behalf of the City. AI A - Pei the City Clerk AMR/1f 1. TXO PRODUCTION COAR A %.pW.Y} of T..M 0+:4N CMD TXO PRODUCTION CORP. 100 KOWE AVENUE. SUITE 200 NORM SACRAMENTO. CALIFORNIA 93025 (9161972-14" July 9, 1982 Attention: Alice Reimche City of Lodi P.O. Box 320 Lodi, California 95241 r I It .y ALICE M. P,`MCHE CITY CITY OF Re: Oil and Gas Lease Cr r i.n q ':,0. "37 %cres Dear. Alice: Enclored are three copies each of our short and long form oil and gas lease. A notary's acknowledgement is necessary on two of the three short form leaser; for recording purposes. The long form lease simply spells out the terms of the lease. When you have made whatever changes are necessary, please retain one copy of each short anA long form lease for your records, and see that the remaining copies are completely executed and in.tialed where indicated, and that the two short fo*-m leases are notarized. Thank you for your special attention tc this matter. When I receive your executed copies, I will forward them again to our Dallas Office for execution and recording. ery m y your , .,L - O� atrick A. Rogers Land Representative PAR/ju Enclosure } Califgrnis Standard Form Prrw deers 88 - TXO Form W (Rev. 7.81) With Pooling Clause Recording Requested B% �•cad When Recorded Mail To: Pcxas Cil s Gas CorP._ Fidelity Union Tower Dallas, Tn1s 752111 AP N 055_120-1• 7,. 055-130.4, 13, 14, 15; 055-150-11, 12, 14, 15, 17 OIL AND GAS LEASE Space above for recorder's use THIS AGREEMENT made this l 4l.— dal of _gept a er .19 R1 to twcen The CITY OF LODI Lector (whrr!.cr one or more). whose address is P•O. Box 320, Lodi, CA 95241 and Texas Oil & Gas Corp., a Delaware Corpo Ation Lessee, whose add,. is _ FIDELITY UNION TOWER, DALLAS, TEXAS 75201 WITNESSETH: That Lessor, for and in consideration of One Dollar (31.00) paid bl Lessee to Lessor, the receipt of which is acknowledged, and of the covenants and agreements hereinafter contained on the parr of Lemet to be it rpt and p.edor.td, does hereby lease, let and demise unto Lessee the lands hereinafter described (herein sometimes called the "leased land—or—"id land(s)" (or the purposes and with the exclusive right of prospecting, explor Ing (bi geophysical and!or any other meansl mining; Pilling and operating for oil and all gas of whosoever nature or Lind, including all liquid or gaseous ydrocarbons, as well as all other commercially waluablt substances or minerals s+soei:trd of produced therewith by means of wells _;.rofin6 whateve method or means, whether or not similar in composition to the specifically above mentioned substances (hereinafter sometimes �ferred to as "o8 and ger or "leased substamri '1 and to produce. extract• tale care of, treat, store, process, remove, transport and dispose of said ltaxd substances and other products manufactured therefrom, together with the right 10 construct, erect, maintain, operate, use, repair, and replace thereon, and during or after the term hereof to remove thrrrfrum, pipelines, telephone, telegraph and power fines, tanks, boilers, machintfl. appliances, roads, buildings and other strictures, facilities and equipments as may be useful, necessary or eonveaient in conducting Lessers operations on said lands and to inject gas, water, %tram, or other suhstances Enta su'..%urface strata andtor to use thermal or other proeesrs for the purpose of secondary recovcry,.pressure maintenance, or otherwise to fac3i,ateLesxe's operations hereunder, to drift or use existing abandoned welt on said land for disposal of water or other waste materials produced from said landor other land with which said Iard is pooled or combined- together with righ.-.1.ar for pm%arc over, upon and across, and ingress and egress to and front, the leased laud, or neighboring lands.,for any Wall of the above mentioned purposcr, Any pipeline%, pole lin, %, or roads so constructed by Lessee mal alta be used by it in connection with operations on lands in the vicinity of the leased land. The land hereby leased is situated in the County of San Joaquin State of California, and 'n cle.cribed as follows: See Exhibit ";," attached tic -rete and max:: a part hereof. together with such rights as Lessor say have in any roads, alleys, waterways, canals, dough+, levees, ditches, easements and rightrot.ity upon, within or adjoining the above dcscr-hed property, in all containing 750. BT acres, more as fess. TO HAVE AND TV HOU) the same for s term .4 dive (51 years from and after the date hereof (hereinafter referred to as the" primal/ ercri'1 and so long>tlirrraficr as oil and gas• leased substance+, or my of tl.rm are produced from the leased=land, or lands with which the leased land been pooled or combined, in quantitio deemed Wying by Les,et: or so Tong: thrrcaftet as .Lessee shill, in good faith and with the degree of "6rligence hereinafter specified, conduct drill -ng operssions (a+ defined herrinafie: in para�rapb l2) on tke leased land, or finds pooled or combined therewith, or be excused the+efrom as mal be pwor:ded elsewhere in this lease, and shoo d production rewh from such operations, tbis1tase shay remain in full force and effect. so long sa oil sndtor ga., leaved substances, or any of them: shag be produced thercfrorai. IN CONSIDERATION OF THE PREMISES. the parties hereby muiwwn; agree as follows: 1) The eapression-ro_alty share" when used herein shall mr.-n the fraction -one -s I x1th (I /6th). 2) Lessee shall paw Lessor as rolalty on uil (including other liqu-d hydrocarbons) the value of the royalty, share of all oil produced and acid or removed from the kaseu land (afiWasa4ing the customary &,Nustm nes for temperature, water, bottom sediment, and the actual costo( treating sa;d royalty oil for pipeline of carkrt acecpta.). at she ...debt, Gwful ).oared mar its price of the well for oil of like grade, gravity, and qualitprevailing L for the eld nearest where such oil n. produced on the date %r; : a is so removed ortold, of at Lessoi s option, in lieu of such payment Lessee shall deliver the royalty share of sa-d ud. free of cost, into Lrv,ur's tank% on the ka.rd land yr into the pipeline thereon designated by i.esvor. A change from payment in cash to delivery in kind, or vice versa, may not be made more often than once in am calendar year and then only upon 60 days prior written a.b1-cr to Leaver. if royalty on oil is paid in Lind. L-sver shall not fro obligated to d -wide the same among several vwners thereof, if more tlivn one. but shall only he required I.. make .one d0i.rr. t.. all. If royals• .,a oil is palaldr in cash, Lr "t may dedu..t therefrom a rrwv i.hle et%arle for dehydration, cksn-ng and treating such oil and a res onahk charge fur tran%lwrtaiion to the treating plant and/or pureha,er. Nothini, herein contained shall -lie conoturd a. obligating L••re In troat oil. H Lessor shall tire, In rrcri%e the royaly-on uif'in kind. it shall lie of the sauu:quality as the oil removed from the leasrdland fur Le,.ee's nwn areuunt, and if L,._e's o.n oil ►halfbetrrated bcforcsuch removal, Lessor's oil will hetteated therewith before drfiycry to Lr -r. snit Lr•s.n, in sueh event, shall pay a proportionate part of the east of treatment. No royalty shall he due Lessor for ur u i scrount 4 oil vied by Lc%,rr in o1wra6un, on ill, ka,ed land e • host through rysp.urat-oo. leskagr, fire or other casualty prior to the removal of the some or firs v to delivery to Le,.or if to%aft% that; be delivered in kim1. 3) Lessee s1.a l pay Lswg a% ro?At% on naturai gaz the royalty share of a value which shall he the mm of the fullnwin,- s) Tl.e Pet proverds rereisrd bl L•.r: from the ,.de of ga. prrduerd from well, on the Ir-.wd land (whether such gas he :.fit by U-ce in Pt% natural state or as residual dry gas aftrr eurariing Ra -lint, and ather content ihetrfroml G» treated at a gasoline rx4rar6nn plant not nwnrd or operated by Lr -re and for which t row rrcri.r. ■ I.I.E. filo. the uIwraiur of surh plant shall be dremrd mild in its natural state for an amount equal to the market value of the ru,alt, rreri.ed by lt..er. ) r rcpt a othrr.4c p,.,idrd i.eirin, gas word ur eomumed by Le -re in upera6uns other than on this Irae shall br dremrd sold (or thr n.arkr: %slur Iher. if. The %slur of ga. slid pradue extracted thcrefrunt, u,rd or comunird it.. the operas -un of a ga,oline eatrscsion plant (In the earent that it .. %n u.. d urr. fur S.r,i•�g gas from the frs%rd landl or in operation. on the leasrd land, or in rrl.rr..uring an) oil braving forotation from which a .011r .AI.... the card 6.d it producing, or lost through vhr-nlage. leakage. fere, or otberwur, s wall not he included. The Bust of pror.•.,ing. Ir%aiing, romprrssing. Landling and ttan,porting ga% in connection with the sale thcrrnf shall Lr drduetrd in drtrrmining ort procrrd% of sale. r— bl The market +ahr- at 1h.• evtr.c16hn pl..nt; jelal gasoh., J other ligaid h. dr rhe 1 n- -1-11.11 ed ronm."a, g.s Irt,m , lb, l . -J land a- • resuh of pnhrr-wing wch gas At . plant o. t or op, -rated by Lr.—C. Ira. il,r .,vet of -urh prora� l;-w.hom isb co -t La if., purl . , h• rr•.( .,ill he drnm•d to h: wool. percent (09%) of .aid last ni%rniiunrd market .ahm r) The matter sAosc at the plant where roiracted, of all g,wline and other liquid hldnn:.rlmn. ircri.cd by Le -re a. a rr-soh of the prorr,.ing of natural ga. from the Ira -rd land at a plant not owned ear operated by lessee (if such prove -sing, it nett un a rtsya111 1-0 ir- the cost to L ­ r, of such prhrr.meog W*nthing hereon re,ni,ined shall obligatr i.r-ere to treat or process natural gas nor +hall Les-ec be old:g.teJ In .aye, sell or otherwise J:,po,e of .rural gas or sr.idual dry gas, as the rase mat he, unless there shall lc a surplus above Irate fuel rrquitrmrnts and a market thcre(ore at the .ell ear processing p.iam at a price andunder conditions arrrlrLlc to Lesw, or In par royaltr on am Res which is neither sold or used. It 1, undenpsod that there mss be rt•mo,inglyd with am gas w pr��e._T Ras produced from Other proprrt:r., in -hirh event royalty no gasoline. liquid hydrocarbon po.duct and tr.i.fuaf dry ga. pao.l.lr be-tioder shall he computed upturn an apfnopri-le Itrrtiun or the ron.sminglyd gas. 4) lx,s. .hall par to Ionto a. royalty for any suLslancrw entered by this Ixa.ea other than oil and gas and ?he prawlucts thereof, which Lessee may elect in produce, save and market from the leased land, lite royalty share of the rnavlrt value thereof, after deducting any prr.ccwsing of treating costs '-r;drnt to placing such sul,mance in a ma•trtahlc condition, and any trampoitaiion or other rusts incurred in marketing same. S) The term •'markct value" as used in this lease shall he applied to lite particular irstrd substancr or prudurt at its point of production and %shall be deemed to be the actual sales price when .old to third parlor} " the reasonable lawful .atur of such substance or product when purchased or retained by Lessee. 6) Lesser p shall account for and as s to Leor on or before the last day of each calendar month lot all rovaltics which accrued and/or for which Lessee received the proceeds from the »Ir thrrrn( during the preceding calrolar month, and Loeser shall furnish Lrs.ur monthly statements showing the computao:rsn of rot airier. lyssa ague. to rumina protoptts rxch and all wtattttarnt. and temitlaoers for.rrded by Lessee hereunder sod I ppromptly ad,;" lessee of any objection thereto. Letter -Visit not be required n. amount to ixssr.t for o par rent or ro)altr on oil and gas, leased subsUnces, and/or rater produced by Lester from said land and owed by Lester in its opriationo, hereunder, but Les -cc mar so use same free of charge. Lester Shan out he required to pay royahy for or on account of ant substance produced from said land and usr.i for reptevsuring or at a secondary recovery, method in any formation underlying said land: and if an. suhstmres are sowed by L-e.wre for such put 0, which bare not been produced from said land. such subwlance, when produced from said land than m Ise royalty free and coputed on a 'Mast -in, fust outbasis. in the event that the amount of am royalty (including advrrct annual royalt)) payable under chi. base Shall ever rrsoll in an individual payment of less than Thirty Dollars (530.00) b.coming due the rrcipie:.t thereof, then in such event Lessee may, at its option, withhold and accrue suffccnt periodic payments until the total due such recipient rscceds Thirty Dollars (530.001 7) Lrswce has paid to Lrstor*s rental in full hr•seutdrs (tis the first . _ 12months of :hr trim hereof. i( Leswre has not commenced drilling operations on the kaxd land or terminated this (case withir, that time. Leser a tron,rurncing with the expira;ion thereof, shall pay or ttnder to Lessors annually in advance, aw rental the sum of %54 per acre for w much of the said land row may then still be held und: r this lease at the time of prymrnt and Shall eontiene wurh paymenis unti! drilling operations are commenced or this icaw terminated. n) Subject to Lx.,re s right to defer drilling or mining operations during the primary term her, of by the payment of advance annual rental as provided hr•rr;nabovr. Lessee agues to commence drilling or mining operations on said jand on or before the capitation of the primary torr-. hereof and thereafter to prosecute the drilling of a well or wells with reawonable diligence ural) oil or gas, or ant leased substance, is found in gpantitin deemed paying by Lessee• or aro a depth to which furthrr drilling operations would in the judgment of Lcssce he unprofitable or impracticable, or ��c�..see coy at any time without commencing of contsuing any drilling or mining operations quitclaim the Ixawd land to Lessor as hereinafter 1110n'ded and thereby terminate this lease. 9) After the discovery of oil, gas or any other bated Substance in paying quantities os deemed by Lessee upon the lensed land, or lands pooled or combined therewitft, lessee shall reasonably develop the acreage retained hereunder, but in discharging this obligation Lrsvre Shan in bis event be required to drill more than ostr well per forty (4o) screw of the area retained hereunder and capable of producing oil in paying quantities and one well per via hundred forty (640) acres of the area retained hereunder and capable of producing gas in paying quantities. Further, in fulfilling said development Obligation Leasee shall prosecute drilling or mining operations with due diligence and in good faith to completion, but in no event Shan Lessee he required to proceed at a more rapid pace than the ariumentrement of drilling o1wrstions a,n the nest Succeeding subsequent well within Sox (6) month. from the date Or completion or abantionmrnt of the immediately pircedsng well drillyd hereunder. 11, prior to diocotery of oil, gas or other leased. Substance on Said lard or on land poled or combined therewith. Lease should drill and abandon a Arl, )role o! bore► thereon, or if after discovery of oil• gas or oslrt leased suWanres, the production thereof should crate from any cause, this lease, if then beyond the primary term. Shan not terminate w bong as L.ewscer commences aduitional drilling opetations (u ho,reinabove defaMd) or reworking unerations within ninety (90) days thereafter, or if the lease W within the primary term L.esare than commence or reSume the p•))mcni of tender of rentals on of before the rental paying date neat ensuing after the expiration of twelve (12) months from the date of completion and abandin trent of mid dry hole, or holes, or the cnrssYron of production, but in no creat Shan the commencement of drilling uper,tions be deferred beyond the espisatiotof the primary fetes by the payment of such rentals. If, at the expiration of the primary term or within ninety (9o) days prior thrreto, oil, vas or other teased substance is not being pro iuced on said land, of land pooled or combined therewith, but Lessee is then or within Said period has been engaged in operations Lor drilling, mining or reworking of &try well or mitre thereon, this lease shall :cmun it force ►o long as such operations or additional cperstiom are comme:aed and prosecuted (whether on the carne or wcceswict wells) with no cessation of more than airorly (90) eunsecative day►, and, if any Such operations result in production, so )Ong thereafter as oil, gas or other L-a*rd substance is produced from sat lard, or howl pooled or combined therewith, in quantitks deemed paying by Lessee. 10) if at any time while there is a gas well or orlls on the leased land (fur the purlh.nes hereof the term '•gas wr l'• Phan include wells capable or producing natural Pas, condensate, distillate or spy gaseous substance and tells classo cd a gas wens by any governmental autteority) and such well or wells air shut-in, such that the production of gas from or attributable to this kaw is suspended, unless royalties attributable to o l Df other leased substances produced hereunder continue to be parable. Letsre shall pay to Lessor or the party or paries oiherwi►e entitled thereto, eachear as hereinafter provided, on advance annual royalty eqqual to the amount of annual rentals provided elsewhere in this lease for the acreage then heli under this lease by the party making such payment, we h payments to continue until royslnrs are payable hereunder to Lessor for Or gas or other leased substances sold from or attrib•.tablc to said land; proytried that any and all sate» so paid by kwee to Lesso►h r ill be considered as advance roval6cs to be repaid to lessr. iron any and all royalties on leased suhsbncn which shall thereafter become payable under this tease, and lessee is authorized to deduct Same from any such royalties thereafter payable. Advance annual royalties as herein provided shall become payable only if such shut-in situation as above described continues through the latest of the fultuwing dares: (1) nines) (90) day. after the date such well or wells are shut-in; (2) ninety (90) days after :he effective date for the inclusion of said land or a portion thereof within a unit on which 6locafed-a shut-in gas well; or (3) the date through which the commencement of drilling operationshereunder may have been deferred by the payment of advance annual reatal as provided treinalsove, and in lite manner annually therea'ner until the produciion of oil, gas or other irawd substances commences tinder this lease or until the to is terminated by Leasee. So long as advance annual royalties are paid or rendered as provided herein it Shan be deemed for the purpose of thio Icsse that gas a itring produced from said land in paying quantities and, if this : vsc remains within its primary term• no further advance annual rentals Shall be payable. 11) in thr event a well ear wells producing oil or gas in paying quantities should he brought in on adjacent land not owned or controlled by. Lessor and within 330 fret of the bto ndary of said land in the ease of an oil well. or 1320 feet of the boundary of said land in the rase of a gas well, and draining said land. Lwsue Shall commence drilling such offset well or weds on Said land ss would a seasonably prudent operator under the some cc similar circum -lances iwt in co event shall (ester be required 10 eserrd the total well rejuirements or development schedule specifwd elsewhere in this lease, at 'so drill more .baa one well on said land at any given time, or to commence drilling any such offset well on "hi )and until ninety (90) days after the Marta ling of oil or pas has commenced from arty said adjacent an. draining well. Ana well drillcd punwnt to the provisions of this paragraph shall be con" -ted rhe vquitvlrnt in all respeetw of any other wen required to lir drilled under the pprovisiuns of this i"wr and no offset well shall 1.e required hereunder if at the time of the completion of a well on adjacent prop.errs t: aforesaid• a urlI hat been drilled or is then being drilled on Said lands which offsets N when completed will offset such competing adjacent well. The )udgme t of Lxswee, when trot frau.l-Akmly eserci-rd, is carrying out the purposes hereof .h•.Il he eonrhs.6c. 12) The term "drilling oprratiom•• at used herein shall be held to mean any work at actual olrcrations undertaken ur commenced in go -d faith for the purproe of rarrving owl any of lite right, privilcgrs or duties of the Lr rc under this trate, fallowrd diligrnth and in due course by the in.tallstirm of ncremary rquil—rot for the drilling of a well. and by actual operation or drilling in the ground, and Shall hirwi,e ipaudr, lout not neesr-sarily be limited to up.rratinns in connection with drilling, redri(ling. drelwning, repairing• anti trwurking. 13) Pavmrnt sir tender by Lewwr to Les -..r of annual rentals, advance annual royaltir., ro oolhrs and am other payments required hereunder may be made lir matting or delivering • check w draft therefor to Lrss.rr at tLeaddrrt. indirated hrteinslwve. All per -ons entitled to participate or share in Such pa)mrnto shall, at the request of lx.sce, unite in a written designation of one person• bank or rurp,.ration •- Le.snr's ►gri.i tar. rreriwr wuch pay mrnt, to the end that Let— shalt not ase required to make any payment otherwise than by one check, which rhr• it thall by payah)e in but one payrr, such paw re to s.,umr the burden ar 3 rrtpontihilisy of making a proper di,,162 bon without esprit -r to. L, ­among lite leer -ons entitled thrum. When -urh dr iguStion is mad said payment., ms) lie made by mailing such check to it., payrc at it. - address dr-ignaird. A wirer b) Lr-.rr or the provi-tun. of chi. p.ragtapft in the mating of any psoment shall tint he rrmrd a waivrr thrrrnf with restores is* %uls.ralurnt paymrns.. If at an, ti it,, rr Ise no one Torr -on, bunk or corporation auttu rirrd to seeme pa)mrnt, hereunder, the Lim, tnr making such payrornt .hall he eatrrdrd until Le --re has bent r.nl:firti of I—!, dr+ignition. 14) Thr tight. or tuber party hereon 'rr nay lir .--ignrd in w,holr m in put rr,d the prwi-ions herruf shall ra ti•nd to their rr-prr6.e hrtn, syr o utot adm:nhtrasor weer --or. .nJ .--igot, but no clung, it, nrnhip. of $)or sand, rental. ear no slur;, honer ace..... ,hid• .hall .q•erate m rnl.,gr the. ,.I:gn:on- v .linen .h rite „ hl- of I.,- Ku ..ch rho g, or d,.i-inn in the o.urr-h: p, of tl,, land, rental, ar binding g nl..n I.r . r far s - purl,.. -r ..lot . n'h p. 4 ' )ar.lnirinq ons intrrr•t ha. iurni-o-4 la' -r .ill, n.rnrnv-tit .• .muumrnn, ..r n n,Lr•1 r,•1••.. thrr.•••(, r..n.titoting hi. chain of till, from ,h, —iri—I Lr....r. in the r.rnt of an a•-ignn,•-nt •d IM. ,. .r a• a. a-,grrgatr•I p••rti.•n of • u•I lan.l, the rrntal- pr riot• het-10-I1l -hall hr ayq •rninn.-1 a. l.• t.r,n the -..ctrl Ira-rh.4•1. wr..-r. retable a ...r•Gng t•• the -l(- a,--- ••f .•m h An .of thi. Ira.'. in .hot, or in pan, .hall• tt• the rarest ..f "wh a--,gnm,nt, rrGr., aa.I .li-h•'arge Lr--rr If am ••!•Ggrti•.n- hrr...n•1• r, aml..f I.r--cr ..r a..,gnrr .•t part .•t pert. hrrt••d •ha11 fail ..r male •IrLrult in th, l.a sent to( the pr.q•t.r ti••nan.• part of thr ,-nta- for fr.nn surto I.­­- fail .r- -fad a• ,.•mph with an..•Ih,r pr..,i.i..n ..r .•I.Lgati•.n of the Irv-r..u.�h .tefaoh .hall nal .fit" :M- l.v .n ... far a. n to.,r- a pan ..f .aryl lar.•I. Lith Lr r .•r an, a--ig—c three•.( -hall orator pr.mrnt of •aid rentak nr other. i -r rcn.rin i a ....... pha n.-•• »id. th•- pest........- m•I .•Lbganun...f�thi- I—. The r..mmror,mctit ..f .trilling -ai-1 land sn.l thr pro-eral,un thrrr•f either by 1.,-- r ..-,gat. r h•�rrond•'r -hall inner a• tit, hcnrfil ••f all Ira.rhnt•1 owner-, sant -half p--t—i and maintriu the I. -a- a. a .h..lr. 5M.u1.1 'a- thin -i% patio L. herota, natitlr l 4. rrntal. ..r rn..dtlr. hrrrun.lrr, Lr..rr may rr.luirr th, apl.••intmrnt of a tingle agent to rn-ri,t pay anent Gtr .11end utay withol•I pay anent unto .u,h .1.1 ntm.•nt ha. h-. matte. IS) Lr ­t h.•rr-b, watranl- and acro -c- to.lrfrml the 1.11r 1. yid larol, anti agree. that Lr--rr, at its ..prion, a., .It-,h.rgc am tat, m••rtag,, or other two up,• -ai•1 lan•I, anti in Ihr runt Ir ser d.w•, .... it shall be .uhr..gatrd to. •u. -h lien and .hall ha„ the r,zht to rnf..r„ -aro.• ...I apph rrn6d- and n..-altir. a.rruing i r, -u Ire tn.ar.l vti.f,ing vane. If Lr -..•r town, a Ir inure -1 in the Ira-r.l prrmi-r-- than the entire (cc .itnpl, r-latr of the emit, interr-1 in thr tr--rd -ub-tan, r- antler the lea.. -•1 6-1 (whrthrr Lr--ot s interr-t is herein .pit ifir•-I nr -11. th,n the rrntal. and mottle- arc ruinq Mrellndrr .hail it, paid to Ir-»tr m the pr..p..rti..n which hi,, interr-i lo—r. to the entire fee -imp►r estate or to the entire t -tate in vol tea-r.I ,uhstanrr-• Lr. -or h,rrh. irate. and Iris unto th, I.r--rr Ilse entire int,rro and r.tatr which Lru...r now ha, at ma. 6rrcaftrr arquitr in the Ica -rd pre.,- am) all part, th.-re.•f including canals, toad. and alb.s thrrrupnn air adjoining. Should it -stir hcrraftrr ar leirr a further tit .dditi.o..l inlrrr.t in the Ira- 4 premiw%w in the tea- .f suh-tames prool.n,•d therefrom• thrn the rentals anti ro.alti,s accruing hrrrun•lrr by rra-on of soril metra- in interest shall herons cffreti.e awl parable to Les -or as of the neat suerrrding t -Mal or ro. alt. paymr til date .(let Lr,-, bas hrrn a•I, i -••d of .ueh after ae,yoncl title. If ail. ela.bl M .•.xrtrd or am action or proceeding in,tiluted by Lrs-or, or by anv third park claiming tit!•• to the Ira -r.) land or any part thrre•d or any interrst thrrcin at in ans production therefrom adtrrse to Lessor or in hostility to rights claimrd in tend faith by Lrr cr uu•ter this tease, then luring the pendency of such rontrr,rrsv anti until 90 days after final determination thrrrof. L—we mi, defer t r discontinue all operations an the teased land andlor Le,.re may wit!.Mdd all rentals• royalties and other payments accruing herrundet with rro jecct to the contcsir:l interest without liability for intere.t on such funds, peno.ng .he final Jrterminotinn of such eontro.ersy. All the rights ane! obligations of the parites hereto are exp: ly set out at referenced herein and no implied covenants shall be real into or otherwiu. imputed to chi, lease, Ib) Le-sa•c shall pay all lases levied upon or a.>csse.l against ifs intprnsemrnts, fixture, and pchonal property on the Ira - 1 land. including Les,we'f W stored thereon. Lr., - w agree to pay all taxes amt assessment, levied against Le -,.w'. interest in said land and against Lc --or s improvements thereon, except that Les.ee shall pay the increase of taxvs nn petraleum mineral rights in said IawL i -ss the royalty .hare, wln-n such inrtra,e is camord by the discovery of oil or gas thereon, awl l.e•.or agrees to pay the royalty share of such increased a.sessmcnt. In the rvcntthe Un=tett-State.• the state. cov..rty, municipality or other governmental authority or agency ksics a licrn,e, severance, production or ther tax on IM it or gas p:uJucrd hereunder, or an Lgsxc's right to operate on saiJ land, then awl in that event Lessor agrees to pay It..: ro.altv share of said tax anti las-re utters to pay the b,sance of said tax. Lessee .hall not be liable for any sprcial assessment ft.- local improvements at benefit.. Isth,idrd, however. Lessee shall not be liable far payment of any taxes on Lessors petroleum mineral rights in said land prior to discovery of oil, ga, or leawd-substances nn said lac') or on land pooled therewith. 17) Lessee shall have the right to drill on the leased land for water or otherwise to us- water obtained from the leased land (but not water from Lessors wells or rexrvoirsk as well as oil or gas prolumd from or attributable to the leased land, for all operations hereunder, including but not uwteJ to «pressuring, pressure maintenance, eyling, and secontiaiv recovery, and no rent, royalty, fee or other payment shall be required of Lesser erefor. Leswr shall have the right to occupy and use the leasc,l land is any manner and to any extent riot incoasistcret with Lessee's right or in mterfereace with Lessees operations hereunder. Lessee shall occupy or othrrwise utilize only sel much of the surface of the (eased land as n reowmble, necessary or convenient in order to conduct opr•ations hereunder or otherwise exercise the rights herein conferred upon Lessee. ►!h Lessee shall conduct its drilling and producing activities an said lanu in accutdance with goof oil and gas field practice, and shall carry on itti operations hereunder in a careful and workmanlike manner. All tabor to be performed and material to be furnished in the operations hereunder shall he at the cost and expense of Lessee, and Lea<or shall nut be chargeable with, nor liable for, any part thereof. During the life of this lease Lessee shall keep said land duly and fully, protected against .ability for judgments based upon lirns for labor or materials ariving from, or eonnrctsd with, its operations. Lessee will at all tie- -, hold Lessor harmless from any damage or liability to any third person or persons by teason of the opstalions conducted by Lessee on said 1. Itomee agrees that no well shall be drilled within two hundred (200) feet r f any dwelling house now on the Izased premise.,. without the written c.. -nt of Lessor. 19) Lessec shall pay the surface owner or surface levant fur ap damages to livestock, growing crops and trees, and existiaX knees, pipe lines, canals, buildings and other improvements directly caused b- its operations under this lease. When required by Lessor in writing. Lena shall kart Lump holes or other openings to safeguard livestock on the leased premises and shall lay tit pipe tines which it constructs through cultivated ftehls below the depth to whit► said fields are being plowed or cultivated at the time of such construction. 20) The performance of any of the obligations of Lease: hereunder shall, notwithstanding anything contained in this lease to the contrary, be suspended while and solong as Lessee is presented from complying with such obligations in part or ir. whole, by stales, lockouts, acts of Cod, action of the elements, accidents. laws, rules and regulations, of any federal, skate,count, municipal, or other governmental agency, sonih4 or react use ordinances of any governmental agency, acts or requests of any gorernmenta officer or agent purporting to act under authority, delays in transportation, inability to obtain necessary materials in the open market, inadequate facilities for the transportation of materials or for the disposition of production, or other shatters beyond the reasonable control of the Lessee whether s6ilne'to the matters herein specifically enumerated or not, or while legal action contesting Lessors title to slid land or Lessers right in said land by virtue hereof shall be pending fia-1 sdjudicatlon in a court swumrng jurisdiction thereof, or when there is no available market for oil produced hereunder at the well. All covenants of this lease shall be subject to all ederato State and local laws, executive orders, rules rx regulations and this tease shall not be terminated, in whole or in put, nor Lessee held liable in damages for failure to comply therewith if compliance is prevented by, or if such failure is the result of, any such to.. order, rule or regulation. 1f from any of the above causes Lessee is prevented from conducting drilling t:c reworking operations on, or producing oil or gas from. the leased land or land pooled therewith, the time while Lessee n wpQrerevented "I not be counted against Lessee, and this lease shatl be extended for a period a( time equal to that during which Lessee is so pre ated room conducting drilling or reworkinf operations on, or producing oil or gas from, such leased land or land pooled therewith, notwithstanding any other provision hereof. Time consumed in cleaning, repairing, deepeain¢, at improving arty producing well or in necessary appurtenances scall not be deemed or construed as an interruption nr discontinuance of lessee v operations under this lease. [Asset need not ,form any rege4cment hereunder, the performance of which would violate any reasonable conservation andlor curtailment program or pian of ordery�develop,nent to which Lessee may voluntarily or by order of say governmental agency subscribe or observe. WJ21) Lessor, at all reasonable times and at Lessor's sok risk, may inspect the leased land and the wall dote and in proy,Yess thereon, and the roduction therefrom. Lessor may oho examine the books and records kept by Lessee in relation to the amount and character of the production from the teased land and the disposition thereof. 22) Lessee shall have the right at any time to remove from the lc --sed land any machinery, rigs• piping• casing and other property and improvements belonging to or furnished lot Lessee, including that installed in wells or otherwise affixed to the land; provided that, in the event of the termination of this lease is its entirety, such removal shall be completed within 4 months thereafter and, in the event of the termination of this lease as to a portion of the leased land, an such property not needed by Leseee for its operations on land retained under this lease shall be renw:ed from the land as to which this tease is terminated within 4 months after such partial termination and the remainder shall be removed within 4 months after the termination of the lease in its entirely. Lessee, after termination J this iease, shall fill ail sump holes and other excavations made by it on the leased land and in other respects restore the leased land as nearly to its original condition as is reasonably practical, or at Lessee's option it may pay Lessor or the appropriate owner the market value of that portion of the land, if any. which may be damaged and not restored. In no event shall Lessee be obliged to restore anything for which it may theretofore have made payment by way of damages. 23) Lessee, at its option, may at ar time qui:elaiw. and surren3era!l of the leased land, in which event this lease shall be at an end and Lessee shall be refired of all ob intions thereunder save and except the obligation to pay rents and royalties theretofore accrued and any obligation hereby imposed for removal of equipment and restoration of the premises. Lessee• at its option, may at any time, or from time to time. quitclaim and surrender any part of the leased land not d) sired by it, and in such event the amount of any rental or advance royalty provided for in this lease shall thereafter accrue only on the basis of the land not so quitclaimed. Land x quitclaimed shall remain subject to the er,emenls and Aghts of way herein provided for so long as operations are bring carried on by lessee on the retained part of the leased land. A quitclaim deed shall be effective when mailed or delivered to Lessor or when filed for record by either party with the County Recorder. Upon the expiration of this lease or its sooner termination, in whole or in part. Lessee shall surrender possession of the leased land as to which this least may be terminated and shall deliver to Lessor or rate for record a good and sufficient quitclaim deed to such premises. Lessor shall have no right to locate• drill or bottom any well for oil or gas upon or under surrendered or forfeited land hereunder within 330 feet of the boundary of any of said fund retained by Lessee. 24) Should there be a diversified nwnership in the leased land, all of the leased land shall be developed and operated as ora lease in which event the sev.-ral parties herein termed "Lessor" do hereby pool their interests in this lease and ague that during the continuance of this lease ear it owner of land sub•ect hereto shall share in all benefits accruing hereunder to all owners in the ratio which the acreage owned by each owner bean to the entire acreage �errby leased. Upon surrender by Lessce of less than all of the lend des,ribcd Itrrin the owner of owners of surrendered land shall cease to rrrticiS.ate it. rentals and royalties payable hereunder and attr.butable to such surrendered land. Upon the total surrender of the !cased premises, the land of each owner shall be free from the effect of this lease ^.51 Lcs,ce hereby given the power and right, as to all or any part of '..end described herein and as to any on • or more of the fon ration, thereunder and the mincraf. thcrrin cr produced therefrom, at its 0 Linn and without Lessors joinder or further consent, at any time, and from W.". to tie . ­ ellen trGnr or after production, to pool and unitise the leasehold estate and the Less.•rb royalty estate created by this Icrse with the rights of third any• .n AN or any part of the lane! described herein and »ith any other land, lands, Ie-ses, mineral and royalty rights, or any of them adjacent. In .4), nit.g. or L.fatr.l wilhto Ile ito ...... Iim' a;. ;nits of this 1.•.t.r, whrthcr owed I.t Les ..r "mr -.thee pi t. fir m ur fivepor..Y,on, sai a. to create b1 such p.wtl... iz n' uu; va on nue of it doi1L•' r pn•durtion unit•, when tr d.. su would, in the s I,dgntcnt of Lrssre, preu.nt, the tom• cal;un of u;1. ga• or c.tbcr h-­­4•u1•.tanrrs. Each sort. " +fling• est produrI.— unit..thrn limited to am o .rc h•rmatmna anal to ;mJ nor or r suer of the mtnrrals ther6n or prodnred thorirom, malt ..sta tier to limr be enlargrd and e.wo.l'd 1.1 L`- ..:"elude eddinnnall. anv Other f-.. enation or fermalior.. and ant ether nuneral it, nunrrals $limo•;n or pn•durc.! therefrom. Alio, au, such unit anal lac' alteted or rnlarga•d b) Lcesre at an. time $o hong as :hr total -, ear.. there;n does not au-rCd the masinmm herri"afler sperifir& l:arb web drilbng or pro-luftion unit shall nal e .... d 10 +fres, plus an acreage tolerants not to esca-rd ten percent (107.) of 40 -rtes, when err..wd (.,I the putp"se of dr filing for or pendueing it therefor. and 64o 61 errs, plu- an acreage a.leranoe not to c.rrrd ten percent (10%) "f 610 acres, .fine created for the purl -o- of drilling for or prtulucing gas, rundensatr am r.•.!.i..Iinn Of such mere ale them-.', pr"tidrd• bwwrvrr. if the n—iotamr drilling or productitm unit fixed or allowed b) the regulator Federal air State, ha.ing pi—hcGun in tf.r prem;acs, as a Iasi. for the .1—t-lupn.ent and uperati"n est or the production from The field in which the al..,.r described land is I..ratrd. I.- more or Ir-. than said rit-in m, than, in either such event, tach such unit created hereunder shall not ",red the o—onom so presc;brd or p•ermitt.•d amt in for'.• in at..- fi,•bl .t O.c limr such unit is erv*trd. As to each such unit so created h1 Lessee, Shire shall he allo,aled 1. the acreage ccuered b% this t.•a-.', an.l in, 1u 14-d to the I.... bA un;t, such portion of the production from said unil as the ..meter of arms out of this k,.c plarcd in ane such uun. a- -url. o it I..m. liter too t;ens- ma% le constituted, bears tar the total number of acres incuded in .uch unit, amt I.c.— arirr- t" arcepm anal .hall rr. rna• the nnahn-. (.hut., a.r other 1;std) el-r.hcre specified in this (rase• based upnu the pr.ularltan -u all.-fatrd t" this lea.' u. the pe..'vrd. tlw•ra•L"nu. TI ... ...nu..crov tent, drilling, completion of, trworling of or production from a well on any portion of the unit ceaa•d hcrcurtder s4all ha.r the -me effect upon the terms of this (rase a% if a well were commenced, drilled, completed. reworked or producing on the land rnabtared It%. thio (rase. L—re mal place and use on each unit created hereunder common measuring and rrwauling tanks for pf-luctioo from such unit. If Irssre titles meatt ans such unit ur units under the rights hetrin granted, then Lrsscr shall execute in writing and record in ahr (-ount% or counties in which each such unit or units crrAted hereunder ma)- be located an instrument identifying and deseril.ing each ",ch unit of units so created- The developmrni of and produclinn from each such unit shall be in accordance with the salid orders, rules and regulations of the lawful authority, either Federal or State, having j•srisdirl;on in the premises. Art- such unit created by Lessee in acrerdance with the toms hr.e.f ma. lie relea.ed and de-4rd by Lesser b1 a trlca%e (ileal for record in the county or counties in which such unit is Initialed at an. tier after the Completion of a dr. hole or the cr-satin. of production on such unit. Upon the dissolution of any such unit created hereunder, .!ether or not this teas of an, other lease in."hrd therein remains in effect, all rights of Lessor hereunder to royalty or. pooled substances producrd from the lands which were so ptroh•d folher than thf Ivased laud) shall cease and terminate; but such dissolution shall Cot otherwise affect or impair ons of Le-wes rights or obligatium under this lease, including its right to create a new unit or -mils out of lands previously pooled pursuant to Stns paragrAph, or constitute a surrendee of anv part of or anv interest in the leasehold estate created hereby. The pro�-isions of this pa:.graph sfiall . amszrurd as a cotrnanl running with the land and shall inure to the benefit of and be binding upon the parties herelo, their heirs. leRtJ representatives, successors and assign.. in lieu of the taws pro%ided to be paid by Lessorunder the paragraph 16 hereof. Levator shall bear and par the royalty /hare; of the pruportior. of such taxes on anv such Poslesl Area and the production thrr&orn equal to the propmliat of Slit production allocated to Lessor's land. A grant. assignment, contrt.ewr or other dcorunaent r%idcncing the transfer of the Lessor's interest in lands included in any rich Poelyd Area or in the mistrial, oil or gas rights in such lands shall, unless therein olherwise expressly provided• be deemed to include Lessor's rights hereunder to share in the production alltcatrd from such Pooled Area to the intrce.t so co avvyed or transferred. 26) Deilling operations under this irau mal le Conducted by mrans of a %ell or wells• the surface locations of which are on other land andwhkh are drilled into and bottomed in the leased land (any such well being deemed to be drilled on the leased land) or by means of a well Sir wells the surface locations of which are on the leased land and which are bottd,mrd in the leased land, or by A combination of such wells. Drilling operations under lands pooled or unitirrd in accordance wish paragraphs 25 or 28 may also be conducted by mrans of well or wells, the surface locations of which are on other lands and which are drillyd into and boudomrn to the pooled lands (any such well living deemed to be drilled on the pooled lands). or by means of a well or wells the surface locations of which are on the pooled lands and which are bottomed in the pooled lands• or by at combination of such wells. 27) Lessor berets. grants to lessee or to Lrswe's munince, fox Lc-,vs benefit, perm; -,ion to conduct geological and geophysical sunrys on said d and surveys and explorations on said )and It% other mrthc.ds, whether similar tothosespecified or not, and whether now lot o.nor not, including the right to drill core holes fair the purpoux of drtrrmining r.ub%urfscr grolugical conditions+ provided that Lessee. or Lessres nominee shall pay the party or parties entitled thereto for any damages to prison or property, including damage to watet wells located on sa;d land, resulting from the making of such sur.rss; larot;ded futthrr that claim therefor 4 made by such party or parties within ninety (90) days from the date such survey or surveys are eompleted. The drilling of core hales or slim hole drilling for grolugi.-al information shall not be coav irued as drilling operations as defined in paragraph 12 hoof. 28) in addition tot and distinct from the rights granted L'ss. ut.drr paragraph 25 hereof, Lessee is hereby given the tight to make this lease and Lrswr's rights herein And the said lands• or any I•art therenr, subject to any unit agreement or any plan Of aggreement which may be subscribed to or enured into by Lesser and sppi—ed It. ans governmental authority having for its pufli otr the orderly once effteirnt development and operation of one or note oil or gas producing zones urnlrrlting said lands sn! other hands within the field or productive area in which She ssid lands tire situatedi the prevention of waste and damage to subsurface resrnoics, and the promotion of conservation of the oil and gas deposits underlying said area. The development and operation of the leases and properlics included within the productive arra designated in said a�Ctermen nI or plan in aeeordaract with the :erns and renditions thereof shall constitute full p.erformanre of all ol•ligations and conditions imposed upon Lessee by this lease for the *vrlopment operation of s.;J )ands; and provided further• that the royalties herein trwrvrd shall thereafter lar calculated out the )nopoftion of the production of ala gas. haidrocarbons and ai xocialed substances produced from all of the!rases and pcoprrGes unitised within said area, dkcated under said agreement ur plan to said lands, and ;bar! lie in lieu of royah;;s on production from said lands. If there shall be production in paying quantities on any of the fra,cs or Starts c..verrd by said agreement or plan• this lease sh-H continue in force so long as *Itch production continues. Lessor shall formally "Vrr%s Lrssur's Consent to any such Unit Agrecmrnt or plan a lopicd by lessee and approsrifby any governmental agency by executing the same or a consent thereto upon request of -Lison. 29) Upo.., failure of Lesser to pay ata renal or royalty moneys praq.er►t due hereunder fur sixty (60) days after receipt of written notice from Lessor of Lemre s default therein• or upon the %iotation of amv of the other wlostantial irrtes or conditions of this lease by Lessee and the failure toproceeIf to remedy the same within r-inrty (90) days after rrcei)oi of wrinm en notice froLeswr so to do• then, at the option of Lessor. this lease shall forthwith cease and terminate and ail rights of the Lessee in and toile Irasrd perm;sex shall Ire at on end, saving and excepting as to any and all wells theretofore drilkd or being drilled and in resl.ect to whisk I.e%sec shall not lie in default. Swelter with appurtenances of said wells and 40 acres of hand surrounding each such .ell which has been or is bring drilled for it. snit 630 acres of laud surrounding each such well which has been or is being drilled for gas or any, of the other leased +uh-itinces. wrh acreage in each case to be selected and located by Lessee, and saving and excepting easements and rightsof-way ever forfeited or surrrndrrrd lands necessary or convenient for continuing. Lessers operations on lands retained. Forfeiture shall be the enk treed.. of L -sot for lailurr of Lesser to comply with any of its obligations hereunder, except obligations as relate to the payment of money Or the drlivevy of roylaty for which forfrilorr will not lie. 30) Any notice So h' giten by either party In the other hereunder may lie delivered in person or by registered or certified mail, postage petrified, dressed a. the party fur whom intended as Gallows: It, Lessor at P.O. Box 3?_ LOBI , CA 95241 s and to Lessee al F )rlits Union Tower.PP-Ilas. Texas 75201 _ Either party may from time to lime by written notice to t1e other, designate a different address which shall be substituted for the one above spe;;$ed if any notice f: ons one patty 10 the other is g;.en by registered or rcrlifird marl• usual tier for transmission of mail shall be computed and at the end of such time scr.ire of notice will be rensidered. made. 31) Th;% Ira•r mat be executed in ant numler of counterparts by ant prr.ae having an interest in the lease land, whether named hereinofnot. with the same effect as if all Lr—ers hrrrin carte mord a. Les.or in one document a -.d all had signed the same document. All counterparts sbeell be eun.trurd t..grthrr and shall constitute one boa -r. The failure of ant prr.o.a os ping an imerrst in the leased permi%cs, or She fa lute of any person named as t r—tr in It.:%kaw or ant counterpart. t•. execute this least or a counterpart hereof shall not affect the hin.ling four of this le.+r a. to those who hair executed or .hall rarrutr thi- Irate of a count..rpar, hereof. All the trent% anJ condition. of this lea -e, u,grther w-ith am ealens;ons, ten •:Cls I m..dificat:ort hereof, shall Le binding III— and inure in She !merit of the heirs, raccutors. Adm;n;Mralor%. grantees, successors and assign• of the r E ect;.r paetirt brerc. r/Q) Z) attached hereto and trade a part hereof. tl'IT\FSS WHEREOF. the part.- }.ereto hate rau.rd 114. ar-en—i ao be duly --.led as of the dote Ent berritial.rwe wrinen Texas Oil 6 Cas Corp. By —=— r el r Mayor ATTEST: Attest: By -- -- -Sym ppj� A•.i.t,rt Srerer.ry C1jyeCT erkl� eicnche Approved as to forme 4?� Ron Stein, City Attorney r. ) EXHIBIT "A" Portions of Sections 23, 24, 25 and 26, Township 3 North, Range 5 East, Mount Diablo Base and Meridian, also being described as Assessor's Parcels 055-120- 1, 055-120-7, 055-130-4, 055-i30-13, 055-130-14, 055-130-15, 055-150-11, 055-150-12, 055-150-14, 055-150-15, and 055-150-17. The property is also commonly known as the White Slough Control Plant Property. 8 32) Lessor shall permit drillsites only at such locations on "said lands" as may be mutually agreed upon by Lessor and Lessee. Producers 88 - TXO Form 386 (7/81 j With Pooling Clause California ;,tandard Short Form Recording Requested by and When Recorded Mail to: Texas Oil & Gas Corp. FIDELITY UNION TOWER DALLAS. TEXAS 75201 AP f 055-120-1, 7; 055-130-4, 13, 14, 15; 055-150-11, 12, 14, 15, 17 OIL AND GAS LEASE (Short Form) above for recorders THIS AGREEMENT made this 1st day of September , 19}81-, between The CITY OF LODI Lessor (whether one or more), whose address is P.O.-Box 320, Lodi, CA 95241 and Texas Oil & Gas Corp. , whose address is Fidelity Union Tower, Dallas, Texas 75201 WITNESSETH: Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the land hereinafter described, for the purposes and with the exclusive right of prospecting, exploring (by geophysical and/or any other means), mining, drilling, operating for and producing, oil and 211 gas of whatsoever nature or kind, including all liquid or gaseous hydrocarbons, as well as all other commercially valuable substances or minerals associated or produced therewith by means of wells utilizing whatever methed or means, whether or not similar in composition to the specifically above mentioned substances (hereinafter refected to as "oil and gas', or "leased substances"). The land hereby leased is situated in San Joaquin County. California, and is described as follows: See Exhibit "A" attached hereto and made a part hereof. This lease is fora term of Five (5) years from. and after the date hereof, and so long thereai'ter as oil and gas, leased substances, or any of them are produced from the leased land, or lands pooled or combined therewith,. or this lease may be otherwise maintained. This lease it subject to all the terms, provisions, covenants and condiSons set forth in that certain Oil and Gas Lease of even date herewith between the parties hereto covering the land herein- above described; and said Oil andl Gas Lease i hereby incorporated herein with the same force and effect.. as though the terms and provisions thereof were herein set forth at length. IN WITNESS WHEREOF, said parties have caused this lease to be duly executed as of the date fust hcreinabove written. LEESEE: Texas Oil & Gas Corp_ By: Attest: Asci -taut Secretary Fred M. Reid, Mayor Attest: A ice M. Reime e, C ty C erk Approved as to form: Qlc1 � �• Ron Stein, City Attorney STATE OF TEXAS X X /COUNTY OF DALLAS X On before me. the undersigned, a Notary Public in and for said State, personally appeared known to me to be the President of TXO PRODUCTION. a Delaware corporation that executed the within instrument. known to me to be the person who executed the within instrument on behalf of TXO PRODUCTION, and acknowledged to me that said corporation executed the within instrument pursuant to its by-laws or a resolution of its board of di►ectors. WITNESS my hand and official sral. Signature STATE_ X X COUNTY OF X On bAforc me. the undersigned. Notary Public in and fo—r said State, personally appeared , known to me to be the President, and , known to mr to be the Secretary of the corporation that executed the within instrument, towp to me to be the persons who executed the within instrument on behalf of the corporation therein named 4d acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. Signature STATE OF X X COUNTY OF X On , before me, the undersigned, a Notary Public in and for said State, personally appeared 9 known to me to be the person whose name.. subscribed to the within instrument and acknow- ledged that executed the same. WITNESS my hand and official seal. 0gnature STATE OF CALIFORNIA ) COUNTY OF ) On 198_, b: fore me, the undersigned, a Notary Public in and for said State, personally :ppeated , personally known to me to be the person whose name is subscribed to the withir, Instrument as a witness thereto, who br;rd by inc dttly sworn, deposed aad says: That resides in and that was present ;-nd saw , personally known to to be the same person thereto, execute and deliver the same, executed the same; and that affiant subscebed nome thereto as a Witness. WITNESS my hand and official seal. Notary Public in and for said State i EXHIBIT "A" Portions of Sections 23, 24, 25 and 26, Township 3 North, Range 5 East, Mount Diablo Base and Meridian, also being described as Assessor's Parcels 055-120- 1, 055-120-7, 055-130-4, 055-130-13, 055-13n-14, 055-130-15, 055-150-11, 055-150-12, 055-150-14, 055-150-15, and 055-150-17. The property is also commonly xnown as the White Slough Control Plant Property. e P.1 CITY COUNCIL FRED M REID. Mayor ROBERT G MURPHY. Mayor Pro Tempore EVELYN M OLSON JAMES W PINKERTON. It JOHN R (Randy) SNIDER r - CITY OF LODI- CITY HALL. 221 WEST PINE STREET POST OFFICE BOX 320 LODI. CALIFORNIA 95241 (209)334-5634 July 26, 1982 Mr. Patrick A. Rogers Land Respresentative TXO Production Corp. 100 Howe Avenue, Suite 200 North Sacramento, California 95825 Re: Oil and Gas Lease Coverin7 760.87 Acres HENRY A GLAVES, it City Manager ALICE M REIMCHE C ity Clerk RONALD M STEIN City Attorney Dear Pat: Pursuant to your July 9, 1982 letter and previous telephone conver3ations we brought to the Council at the July 21, 1982 meeting the retyped oil and gas leases for the subject acreage. Council authorized Mayor Fred Reid and myself to execute these documents on behalf of the City. - Enclosed please find executed copies of both the short form and the long form. A Notary's acknowledgement is attached on the short form leases. Pat, we certainly appreciate your patience in this matter and we have been assured by the County Recorder that he will record the docuements this time. If you have any questions or problems, please do not hesitate to call. Very truly yours, Alice M. Reimche City Clerk AMR/If Enc. - y CITY COUNCIL MEETING �^ JULY 21, 1982 �C- G Council was apprised that on September 1, 1981, Council adopted Resolution No. 81-123 accepting the bil received from Texas '? and Gas Corp. of $15,000.00 - cash bonus including the first years rent as set forth in Exhibit "A" of the specifications. The appropriate lease agreement was prepared and executed and forwarded to the San Joaquin County Recorder for recordation. •. The Recorder has contended that. the document was not of f reproducable quality and new Agreements had to be drawn up. MAYOR AND CITY Council authorized the Mayor and City Clerk to execute Gas and CLERIC AUTHORIZED Oil Lease Agreement with Texas Oil and Gas Corporation covering � TO EXECUTE GAS AND 760.87 acres as approved on September 1, 1981 with Council's OIL LEASE AGREE- adoption of Resolution No. 81-•123. MEW 1 NOTICE OF PUBLIC HEARING BY THE CITY COUNCIL OF THE CITY OF LODI TO CONSIDER THE APPEAL OF TERRY PIAZZA OF BAUMBACH AND PIAZZA, CIVIL ENGINEERS, 323 WEST ELM STREET, LODI OF CONDITIONS 1 and 3 OF RESOLUTION NO. 82-74 OF THE LODI CITY COUNCIL APPROVING THE LOT LINE ADJUSTMENT BETWEEN 320 and 450 NORTH CHEROKEE LANE, LODI (i.e., ASSESSORS PARCEL NOS. 041-300-05 and 041-300-02). NOTICE IS HEREBY GIVEN that on Wednesday, September 1, 1982, at the hour of 8:00 p.m. or as soon thereafter as the matter may be heard, the Lodi City Council will conduct a public hearing in the Council Chambers, City Hall, 221 West Pine Street, Lodi, California, to consider the appeal of Terry Piazza of Baumbach and Piazza, Civil Engineers, 323 West Elm Street, Lodi of Conditions 1 and 3 of Resolution 82-74 of the Lodi City Council approving the Lot Line Adjustment between 320 and 450 North Cherokee Lane, Lodi (i.e., Assessors Parcel Nos. 041-300-05 and 041-300-02) Resolution No. 82-74 reads in full ar. follows: RESOLUTION APPROVING THE LOT LINE ADJUSTMENT BETWEEN 320 AND 450 NORTH CHEROKEE LANE, LODI, (i.e., ASSESSOR PARCEL NOS. 041 -30n -ns AND 041-300-02) RESOLVED, by the City Council of the City of Lodi that pursuant to Government Code Section 66412, the lot line adjustment between 320 North Cherokee Lane, Lodi (Assessor Parcel No. 041-300-05) and 450 North Cherokee Lane, Lodi, (Assessor Parcel No. 041-300-02) as shown on Exhibit "A" attached hereto and thereby made a part hereof is hereby approved with the following conditions: 1. That street improvements be installed along the 25 feet of Cherokev Lane which is being transferred by this Lot Line Adjustment; - 1 - 2. That public utility easements as required by the various utility companies and the City of Lodi be dedicated; and 3. That 2 feet of public: street right-of-way be dedicated along the Lockeford Street frontage of Parcel Dated: July 21, 1982 Information regarding this itEm may be obtained in i the office of the Community Development Director at 221. West Pine Street, Lodi, California. All interested persons are invited to present their views either for or against the above matter. Written statements may be filed with she City Clerk at any time prior to the hearing scheduled herein and oral statements may be made at said hearing. Dated: August 4, 1982 By Order of the City Council ALICE M. 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