HomeMy WebLinkAbout1997 Ordinance No. 019-.
•
-9
ORDINANCE NO. J!l
SERIES OF 1997
BY AUTHORITY
COUNCIL BILL NO. 17
INTRODUCED BY COUNCIL
MEMBER VORMITTAG
AN ORDINANCE AUTHORIZING AN OIL AND GAS LEASE BETWEEN THE
LITTLETON/ENGLEWOOD WASTEWATER TREATMENT PLANT AND J.
MICHAEL McGHEE.
WHEREAS, the City of Englewood City Council authorized the purchase of a
farmsite for beneficial use of the Littleton/Englewood Wastewater Treatment Plant
Biosolids Management Program with the passage of Ordinance No . 2, Series of
1995/1996; and
WHEREAS , the Oil and Gas Lease is for approximately 320 acres of land used by
the Littleton/Englewood Wastewater Treatment Plant for a five (5) year term by J .
Michael McGhee ; and
WHEREAS, enteri ng the lease will preserve maximum surface activity control in
the event the rights are developed;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF ENGLEWOOD , COLORADO, AS FOLLOWS:
Section 1. The City Council of the City of Englewood hereby authorizes the Oil and
Gas Lease between the Littleton/Englewood Wastewater Treatment Plant and J .
Michael McGhee.
Section 2. The lease provides that the Cities be paid one-eighth of the gross proceeds
per year in the event that oil and gas is found. The lease includes a one-time $320
bonus consideration representing $5.00 per net mineral acre .
Section 3. The City Manager or his designee is authorized to execute the Oil and
Gas Lease for the City of Englewood, Colorado.
Introduced, read in full, and passed on first reading on the 3rd day of March, 1997 .
Published as a Bill for an Ordinance on the 6th day of March, 1997.
Read by title and passed on final reading on the 17th day of Marxh, 1997 .
-1-
10 b iv
Published by title as Ordinance No. Ji , Series of 1997, on the 20th day of March,
1997.
I , Loucrishia A. Ellis, City Clerk of the City of Englewood, Colorado , hereby
certify that the above and foregoing is a true copy of the Ordinance passed on final
r e ading and published by title as Ordinance No . 4 , Series of 997 .
-2-
•
••
.-
' .. RODUCERS H·PAlD UP
11.cv. ~. No. '--Is><.
II • .
November 96 --:-:------...::..-------· 19 _____ , by and i.ec-een
Wascewater Treatment Plant
lewood Co herc:I~ caJJcd Lc.o Who,,..postoff".ce8ddrasi1 2900 S. Platte River Drive
J. Michael McGllee, 1100 Four T~~l'lt~ St:reec. enver. CoJ.orador <s'~~~one oc more) and
---------------------· hcrcinal\er c:all-1 i:..-: WITNESSBTH. Tbat tJ'le LeMor. ror and In coruiicJe,..ion oC T•m 6. more
cash In hand JHlid, the .-eipt of wblch u hereby acicnowlc:dged, ";:an:;:;d-;th:;:e-:co=v~enan=:'~ts::-".and:'::::"7•::1f'Mnleft=:::=::::u~h:-:er.i:='.'.7:n:-:•:-::n.:-::r:-:co __ n_ia-:-lned-,,...,.bu----ted...,._dem..,..._,.l _____ DOL1.ARS :!p'::i..:i;';'~ ~ .!i'"d ="~~et eAc;lu3ively unlD tho -1~ W.-, che I~ he...Ooatt.r deocribed, wilh ~ ... ct~e ridtt for~; ~ ~ !::u:';1 ~ Ml . . r ,.... an • opcnuanir for and produc:mg thcn:frvm cnl and all ... of wb.taoe...:r nature or kind ..,;,fa ri,lbto or --•
or Yin& pipe inn. and erectJon of atructura thereon to produu, .. w: and \ale• care or ll&ld producu, all that C&tUin trect ;,f land alruaied I Y the ~
Ar•p•hoe SUl1e or Colorado n oun1y o
dcscrlMd as follows. LO-wit: '
Township 4 South, Rans• 57 Weec
Section 28: Nl/2.
and contalnlnq 3 2 0 • 0 OJC"'"• more o r 1.,... /five
I I . l~j·1~ th.al .lhia lcue oh.oil runain in force for a term or ten ycaro fmm this date •nd a• Inna ihereancr u oil ur s-orwha11oever nature or kind i. produced ch'i."i.::.. oil or ~ i°~~-•ci;:r~led i!'~rew_l_.lh . or drlllU.i: operation• arc continued ':" bercln•flcr P'°"lded. IC. at the explratJon of the primary '""" of
' . u, nu .....-u.15 P . on t ..,_,. prectuses or un ..:.n::.ge pooH:id therewith but l...c..ce i• then engiqred in drilling ur rc-woriUn ti
th"'"°!", th.,. Ulll 1-~hall continue &n force .., loni: u open.lion• ere being conlinuou.ly p1VM>CUlod on lhe lcaoed prem; .... or on ~ e l..i u.!,. ~ °"'
operatac;>,... •hall be """'!'dered lo be ~llnuoualy Pf'OSCCUllOd if DOI more lhan n.tnety (90) days lb•ll el-becween the compla>on or •~nt of one w~j ::: ~/tnnanr. r°f opcnwona for the clrilltn~ o{ a 1ub9equent well. If afu:r diocovery of oil or 1u on oaid l•nd or on ac~c pooled therewith, the oroduetion thereof
ceaee rom any cauoc after the pnmary term, tlu~ 1-....c shall not termi.nelc If Lca..ee commenc.n additional drilhna or re-worki o at1on1 within ·
(90) dayo ln:>m da!e o_1..-1on ~( productlo!I or ~rom d•ta '?( completion of dry hole. Jf oil or ,.. ohall be diacovcred and pnxlucod a•"! ~t of llUCh 0 O:~~
•• or al&.cr the ~q>1rauon of the pran..t')' c..nn o( th.i• M:aac , th.ia lcaac a.hall ooa.tinuc in fOf"OC ao lone u. oil or~ g pruJuced frum the 1-....J -pe pooled thenowuh. prom•-"' °" acr-•
2. Th•• !a a PAl~-UP L....E.A.S~. l~ C'Unai~tion of the down ca&h pey1nent. 1...ea.ur a1reea thac Lcaaoc shall not be obligated. •Jt.oc:p• ~ orhc.rwi~ provided hcTcin,
lo comrnen.ce or continue any opN"aOona dunns the primary '!'"": ~9CC may u any ~hne nr timet. durina or after the primary tcnn 1.urre.nder thia 1 .. .e u to all
or any portion of aald land and u to •DY llrata or sll'etum by uehvennc to Lessor or by filing for rocord a release or relMMa, and be relieved of all oblisation therealler
acen.1lnf, u 1u 1he acragc •u~.
3 . n oon•idc:notion of the prcmlt.eo the sa.id Les"" covenant• a.nd ~grec.s :
. IM. To deliver to the credit o( Lcsoor. free nf coot , In the pipe hne lo whM:h Les.cc naay connec< well• on .. Id land, the equal one-ci11hlh ( 118) .,.n of all
011 pruduo;;ed and saved from 1he lcuod prem1s..,,.
2nd. To pay Lestor one-eli:J>th 018) of I~ gro"" pmceeda cac:h yea~. pe)'1lble quarterly. for the su from each well "'here , ... only iA found, while the lllll>C
I• beln1 used off the: prcmloes, and tf used 1n the manufacture of 1~hnc • "'>'•lty of ono-.aghth (1 /8), peyable monthly at the prcvaiHng inarlr.ot ret.c for , ...
3rd. To pay Lco ... r for r;as produced from any otl well and u1ed off the prenuses or in the rruinufacture of gasolina or any other product a royalty of onc-cir.hth
(1/8) of the prooood•. at tn. mouth of lhc: well, pily;>blot 1nnn1hly at the prevailin1 m:>rit£t note .
4 . Where&~ Ct0tn a we.II capebJc uf producing gas be not «uJd ur usod. Lessee may pmy ur tender •ti rnyalty to 1hc royalty owne" One Dnll•r per year per net
royah:y acre retasn~ her~nder . such payment or icndcr to be made on or before the anniverury d»te n( 1hi• lease neJU en1uin1 aOcr the cx.pJra1ion of 90 day• from
the date ouch well 11 shut on and lhcrcaflw <>n nr before the 11nniverury d.oac or this lease during the period 1uch well io shut in. If auch paymen1 or tender ii made
ii will be c:on1id-thal 1a• Is belna produced wilhin the 11ie:inin11 nf 1hi• leeac. '
S. If Nid J...cuor OWn& a las interQ>t in the above dc:xribecf land then the entire and undivided fee simple estate lherein , then lhc rorahies (includin& any shut-in
CH royalty) herein pr<>Ylded for shall be paid the Lc..osor only in the propon1nn which ~or's in1ere" bears to the whole and undivodod fee .
6 . l..al,,_ &hall have the riaht to use, free of co~t. aas . oil and waler produced nn J.llid land for 1..cMcc'a operation thereon . cxc;c;pt w31er from the wells o( Lessor.
7 . When requested by Leasor, Less-shall bury Lessee's pipe linL helow plow depth .
8 . No well shall be drilled .-rer than 200 foci to the hou!<C or barn now on said prcmUe. wichout written cono.cnt o< Leuor.
9. Leuee ahall pay for damaa.,. cauaecl by Lesa-'• operaiion• 10 '"'""'"!! cmpo on said land.
IO. Lessee shaH have the rir.ht at any lime IO remnve •II machinery .and fixtures placed on oaid premises. includinl! the right to draw •nd remove casinr..
11 . The righu of L.e.uor and L.cea.ce hereunder mav be as.signed in whole or pen . No c:hanpc: in ownership of l..c45or'• Int-(by ... ignmenl or o<hcrwiM:) shall
be bindinr on Lea.ace until Lc:::Nr.e h.s been tumi.•hed wfth notice, consiAting uf certified copica o aU recorded in&iruments or doc:u.rnenu-and other informatK>n necessary
to cstabli•h a compl~ chain of record title frum Leasor. &1'd then only with rnpcc:t. to payments then:.al'ler m..:le. No other kind of nouce, whe1hcr ac:tual or cons<ruc-
tivc, shall be binchns on Lessee. No pJ"'C&C'nt or fuwre. divi1ion of Le!\..~or'1 ownership a.a to different portions or parcel• o( aid land shall operate to enlarae the oblip·
tiona or dlminiah the righu nf LeHcc, and all LeH.cc"s operations nwy be conducted without regard 10 any ~uch division . If all or eny pan of 1hi• lctUC I• AMilncd,
no lcuchold owner &hall be liable for any act or omi11ion of any ocher leuehold owner .
12. Less.ee, al iu opdon. i1 ~n:::by glven the: ri~t and power at any time and from time. (O lime u a recurring right. either before or af\er production 1 a& to
aH or any pan of tbe land described herein and as 10 any one or more a( the formation• hereunder. to pool or unitixc the leaJe.hold ~tate and ttle mineral C$t&te CO'-'ered
by thi• lease wi1h 01her land, lea5e or leases in the immediate vicini1v for the JH'Oduaion of oil and 1u , or acperately for the production of either. when in ~·.
judsment ir is ne.ceau.ry or advisable to do so. and icrcapcc;tivc of whether authority ~imil•r to rhi1 calns with ~pc.ct to such other land. lc.&e or lcaloC&. Llkcwt.e .
unit• previously formed to include forma&ion1 not producm~ oil or gac. may be reformed to c~clude 1uch non-producing fornwtiuns. The fonnlng or reformin£ of
any unit •hm.Jl be ace:ompli.Ahed by Lcucc CJlccuting and fihng of record a dccl•nnlon C'tf such unitlution or reformation. whkh dcclhnuion 111hall del.cribe the unit .
Any unit may Include: land upon which • well ha1 thercoofore been completed or upon which operation• for drUlin11 have: theretofo~ t>cc:n cumn>ence<I. Production.
drUlins or reworkin1 opel"8tion.s ur a wel1 shut in for want of a nurket anywhere on a unh which includea all <>r a pu1 of thi~ le.ate .. hn.JI be treated a,; i t' h were
production. drilling nr rewmlr.lng opcratiuns or a well •hut in for want of• marl<et under this leau:. In lieu or lhe royalties ebewhere herein specified. inch>dlng 1hu1-1n
~11.-. :-oyalties. Les.&or-sh:i11 rec-eivc en produc&ion frum the unit ~, pouled myalti o only on the ronion of auch productton ;alloca1ed to tht~ lc.asc : such allocation sh . .a.H
be that proportion of the unit production th.at the total number of aurfacc acres covered tty &his lease and included in the unit be.at":'\ to the to<al numbct' <'f aurfacc
acres in such unit. In addi1ion to 'he forcaoing. Lcs•ce ~hall have the right co uni1iz.e, pool, or combine all or any pan of the abov< dcr.cribed lands ~ to one or
more Of the fonnationt th.,...,..nder wilh other lands in the .. me general area by enterin~ into a coopc:ratl\le or unn plan Of <lc:vclopment or opcnotion 8pproved by
any io"ernmental authoriry and. from time to time. with Ilk~ •pproval. to 1noditv . change or te~inate any 1uc.h _plan or agreement aod. in sue~ everu. t~ 1enn.,,
condniorui and provialona o< thla leaH shall be dumc:d modified to conform 10 dM: turns, ccmdhoons, and prov1&1on1 of Juch appro"W cnoperauve or umt plan of
development or openilon and, particululy , all drillinr. and development requtrunent• ofthi• lcaae, c:"prn• or impl ic<l. !~II be ,..,;,fled by compliance with the drillins
and d evelopment requirements or such pJan or a1recment. and 1hi~ lcosc shaU not terminate or expire during the life. of such pl.:\n or a~rccment . Jn lhc event t~•
a.aid above described \and.a. or any pan thereof. ah•ll hereafter be. opcnted under any 1uch cooperative or untt plan of development or operatnm whereby the productton
therefrom it allocated to dif(arena portlooo or the land cnvu..:.l by aaid pl.an . then the pmductlon allocated 10 11ny p•nicular tract of land ~hall , for lhe purpose of
con•putint: the: rny.lties rn be peld hereunder 10 Les•or. be regarded u havif\l? been pmduc:e<i from 1he p•nicular 1rec1 nf lanJ tn which ii i' allncatcd and n<>I to any
ott>cr 1racl nf lltlld; and the royalty payments ID be made hereunder tt> L.eo<wr shall be b • ....U upon prucluc:tlon only•• •o nlloca1cu. l..csM>r shall formally eJ<pre,. Lcnor·s
consent to any cooperative or unit plan of development or opera1ion Ddoptcd by Le.see ar)d approved by any governmental agency by cxccuun~ \he $amc upon roqucs.c
or 11'3~11 expreao or impli<ed covenants of thi• lee.., shall be 1ubjcc1 to •II Pedcr•I and S~ie Law•. f!xecutive Orders. Ruic• or Re~ula1iuna. llJ\d thio 1-llhall
not be terminated, In whole or in pul, nor Lease• held liable in damages. for failure to comply !herewith , if oompltancc i• prevent.ed by . <>r if suc:h .failure h tt>c
result of, any ouch Law, Order, Rule or RegUletion . . . .
14. Lcnor hereby w•rn.nt.S and agree1' to defend the li•le tu the land. hcreu1 dct:cnbed. and agrees that the Lcuee a~lt have lhc T•Sht at •ny time 10 red4E:em
for Lcsoor, by payment . any monpgea. UUtca or other liens on the above described lands. in the event or dcfaull of p•yment by Les...,r •nd be subroiated In the
riahta of lhc holder theTcof. and the unden;igncd Lesson;. for t ti.Tnselveo end their hein, s~cccnors &nd aa.•igns . hereby ,...rrcnc1er a!"l rel~•e all right of .dower •.nd
~ead in the prernisa dcacribed herein, insofar.,.. said right o f dower and homcMcad rl'MIY tn any ""•Y af'fcci the pu~ for ~hte~ th_rs lea~ t!' made. as rec~led he:~m .
15. Should any one or more of lhe J>9.Mies hereinabovc named as Lea~r fail lO execute lhis le.au. It sh•l_1 nevcnhe.Je..•~ be ~1nd1n' upon all s.ucr pa.rue. who do
Cll'.CCUIC it as L.ca"ur. TM word ""Less.or, .. as used in tht~ lease! "h&ll man any one or more or all of the pan1~ who e~ecu•c tht!l 1c.a~c •'-Lcs~r . All rhe prov1st0ns
uf \hira lease shall be binding: on the hcin. succeq;o~ and au1gn:i1 t'r Lcs.'-Or and Lessee .
IN WITNESS WHEREOF. thi• instrument is eJ<ecutod "-'or the uatr Ii"'' •bove written .
, ....... , :·
EXHIBI T
A
••••• 1._,
Old.i.-a. X--, N.-M88oo, W,.-inc, MoDlana, C ... ......SO, UtAb,
N ........... ~ bak.ala, South Dak.ola
ACKNOWLJmGMENT-INDIVIDIJAL
BEPORB ME, lhc Ur>d""'ignccl , a Notuy Public, in and fur ,.;d County IUld State. un lhis . .z=,;__ __________________ _
day of.i::::;. ______________ , 19 __ -_, personally appc:ar-.......c----------------------------
and ____________ ~------------------------------------------~
---------------------------•to me known to be the Identical perso.~-----· dHcribed in and who ea..:utcd
the within and forcsoln& instrument of writing and acknowled&cd 10 n\e th.ai._ ______ _..duJy executed the same as ________ free
and voluntary act and d9ed for the llSea and purposes therein 8et forth .
IN WITNESS WHEREOF. I .have hereunto set my hand and affi1tcd my notarial -1 the day and year 1a~1 above wri11en .
My Commission E.xpires....Ji.::;__ ______________ _
NOlary Public .
Address : ...c:'-------------------------~
STATE. OP _______________ }•·
COUNTY OF~--~----~~--~----~
Oldaboona, "-• New Maldco, ~ina· Montana, Colorado, Utah,
Nebrutca, Nonh " South Dakota
ACKNOWLEDGMENT-INDIVIDUAL
BEPORB ME. chc: underslaned, a Notary Public, In and for utd County and S1111e, on thi•--------------------
day of. ________________ , 19 __ ~ per11<>nally appcare....._ _____________________________ _
and---------------------------------------------------------------
--------------------------· 10 me kl>own to be !he idc:ntical person , described in and who execu1cd
the within and foreaoins instrument or writin& and acknowledged to me th• uly cxecut.ed the same as free
and voluntary act and deed for ll1e ....,,. llnd purpoliC£ therein £Cl fonh.
IN WITNESS WHEREOF, J have hereunto •el my hand and affi1tcd my notarial -1 the day and year l:lst above written .
~Y Conunisalon l!J<p' ~-----------------Notary Public.
Addrc!is; -------------------------
STATEOF·z=;.;;..._ ____ ~~--~------~~
COUNTY OF-} n.
ACKNOWLEDGMENT (For -by CorporaUon)
On 1hi~.,/ _____________ day o ...... "'-----------------------· A .O . 19 ___ , before me pereonally
•ppc•n::o"'*""~-------------------·---------------------· to me personally known, who, being by
me duly IWC>n\, dio.l .. Y thal ha ia uM"""~-------------·of -
----------------------------------·and that tho seal affixed 10 aaid lnstrwnenl ''the corporate seal of
said corporation and that uaid instrument was signed and sealed In behalf or said corporation by authority of it& Board of Directors. and said
,.M::;__ _________________________ cknowledgcd said in1tnunern IO be free eel and deed of ;aid corporation.
Witness rny hand and seal thi,,_."'------------·d3Y o(....<::---------------------A .O . 19 __ .
N(ltary Public.
(SEAL) Addrc:is :...-::::...-------------------------
My Commia•ion eapire8.-=.---------------
l .. .s
1 l 8 i:.
! ~
.s 2: f ~ ! g 0
l .!!! s
"E! -5 i ~ j ~ 'a
:E .B p., 1 l 0
"' 1! g,,, IE -5
:Q ' 0 ii' z
.I ·1
0 ~ .!' ~ :;.:; ....
,/ . •
ADDENDUM
To That Certain Oil & Gas Lease
Dated November 25, 1996,
by and between the City of Littleton and
the City of Englewood, Colorado (Lessor), and
J. Michael McGhee (Lessee)
TIIlS ADDENDUM shall modify paragraphs numbered 6, 7, 8, and 9 of
the Oil and Gas Lease between the parties dated November 25, 1996, and
concerning the North 1/2 of Section 28, Township 4 South Range 57 West,
Arapahoe County, Colorado. The incorporation of this Addendum shall occur by
reference to the Addendum's existence in paragraph 9. For purposes of consis-
tency, all terms utilized in the Lease shall be utilized in this Addendum.
The Lessor's permission, grant, demise, and lease of the subject lands is
subject to the following conditions, which the Lessee acknowledges, accepts, and
agrees to be bound by, together with the Lessee's specific agreement that it will
bind its heirs, successors, and assigns to these terms and conditions as well. The
conditions of this Addendum to said Oil and Gas Lease are as follows:
1. In accordance with paragraph 6 of the Lease, Lessee's right to use,
free of cost, gas, oil and water is subject to uses solely related to the production of
said gas, oil and water from Lessor's premises and for no other purpose.
2. All pipeline facilities constructed by Lessee shall be located at least
three feet below the soil surface at any location on the property, with the
exception of well heads, tanks, separators, and other facilities and access roads.
3. All wells drilled on the subject property shall be drilled at locations
agreed to by the Lessor in advance, which approval of said locations shall not be
unreasonably withheld by the Lessor.
4. The construction of access roads, well sites, and other activities, pump
stations, tank batteries, separators, and other facilities associated with the
production of oil and gas shall only be constructed at locations approved by the
Lessor in advance, which approval shall not be unreasonably withheld by the
Lessor.
5. Construction of any facility on the property shall occur only at times
that reduce the possibility of environmental damage and destruction of the
Lessor's premises. In this regard, construction shall not occur immediately after
rain or snow events or at times when said construction activities would be
impaired by the unstable condition of the soil.
6. The Lessee's right to remove machinery and fixtures on the premises
shall be limited by its obligation to undertake those removal activities at times
when the condition of the premise is dry and unsaturated, and the Lessee
specifically agrees and accepts its obligation to fully and completely restore the
premises, including the removal of all evidence of road construction, drill pad
construction, mud pits, sumps or other surface disturbances.
7. Lessee specifically agrees to reclaim all areas disturbed by its
activities and shall cover any disturbed areas affected by its operation with a
minimum of four inches of clean top soil. Lessee further agrees to insure that full
. \,
'
,, t -. . .
restoration of the site occurs in accordance with the specifications of the National
Resource Conservation Service.
8. Lessee, prior to the initiation of any activities on the subject property,
agrees and covenants to obtain a bond in the amount of $50,000 payable to the ·
Lessor upon the failure of Lessee to perform any of the requirements specified in
this document, said bond to remain in full force and effect so long as Lessee
retains any interest in the Lessor's property. Retention of an interest shall include
the continued existence of this Lease and any exploration, drilling or production
activities arising from the existence of this Lease throughout its term as the same
may be extended.
DATED this_ day of _______ . 199 .
LESSEE: LESSOR:
J. Michael McGhee for City of Englewood
for City of Littleton
STATE OF COLORADO )
) SS.
COUNTY OF )
Subscnbed under oath before me by J. Michael McGhee on this_ day of
_______ , 199_.
My commission expires ----------
NOTARY PUBLIC
' .
l
, ,
STATE OF COLORADO )
) SS.
COUNTY OF )
Subscribed under oath before me by ----------on behalf
of City of Littleton on this _ day of-------' 199_.
My commission expires----------
NOTARY PUBLIC
STATE OF COLORADO )
) SS.
COUNTY OF )
Subscribed under oath before me by ---------on behalf of
City of Englewood on this _ day of-------' 199_.
My commission expires----------
NOTARY PUBLIC
(IS-232)
•
~: !2 H LI E WW TP F X NO. 3037622620
COUNCIL COMMUNICATION
Date Agenda Item
March 3, 1997
INITIATED BY
Littleton/Englewood Supervisory Committee
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
STAFF SOURCE
Subject
Oil & Gas Lease. Littleton/
Englewood Beneficial Use Farm
Stewart H. Fonda, Director of Utilities
Charles J. Caudill, Process Development Analyst
f .
Ordinance No. 2. Series 1995 • 1996, January 2, 1996, approving purchase of 5760 acres of farm land in Adams and
Arapahoe Count ies ,
RECOMMENDED ACTION
The recommended action Is to approve by Ordinance an Oil and Gas Lease with J. Michael McGhaa on the North Y2 of
Section 28. Township 4 South , Range 57 West, Arapahoe County. Colorado.
'
e BACKGROUND, ANALYSIS, ANO ALTERNATIVES IDENTIFIED
The cities of Englewood and Littleton own a total of 7040 acres of farmland to ensure stable end secure biosolids recycling
for the L ittleton/Englewood Wastewater Treatment Plant. The cities also own full or partlal mineral Interests on the farm .
The cites have been offered an oil and gas lease by J . Michael McGhee on 320 acres of the farm in which the cities own a
20% interest in the mineral estate. The lease term is for five years.
Entering into the lease gives the Cities maximum land control If rights are developed . Rights can be developed with or
without our agreement.
The lease proposal has been reviewed by the Llttleton/Englewood Supervisory Committee and approval of the lease ,
Including an addendum to protect the Cities' environmental and farming interests. is recommended.
FINANCIAL IMPACT
The lease prov ides that the Cities be paid one-eighth of the gross proceeds per year in the event that oil and gas is found .
The lease includes a one-time $320 bonus consideration representing $5 .00 per net mineral acre .
LIST OF ATTACHMENTS
Oil and Gas L"45C and Addendum