HomeMy WebLinkAbout1997 Ordinance No. 041ORDINANCE NO . ii
SERIES OF 1997
BY AUTHORITY
COUNCIL BILL NO . 37
INTRODUCED BY COUNCIL
MEMBER WAGGONER
AN ORDINANCE AUTHORIZING AN OIL AND GAS SURFACE OWNERS
AGREEMENT WITH UNION PACIFIC LAND RESOURCES CORPORATION,
AND EASEMENT, RIGHT OF WAY , SURFACE USE AGREEMENT WITH HS
RESOURCES AND A LETTER AGREEMENT WITH HS RESOURCES.
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 . 15 , Series of
1986;and
WHEREAS, the Cities of Englewood and Littleton own a total of7,040 acres of
farmland to ensure stable and secure biosolids recycling for the Littleton/Englewood
Wastewater Treatment Plant; and
WHEREAS, Union Pacific Land Resources owns 100% of the mineral rights
underlying a 40 acre parcel of the property; and
WHEREAS , Union Pacific leases the right to explore and develop the minerals to
HS Resources requiring HS Resources enter into a Letter Agreement and Easement
with the Cities to use the surface of the property for their operations; and
WHEREAS , the Surface Owner's Agreement for oil and gas provides that the
Cities be paid 2 1/2 % royalty if oil or gas is found ; and
WHEREAS , entering into the agreements gives the Cities maximum land control
if rights are developed , such rights can be developed with or without the agreements ;
and
WHEREAS the agreements because of the terms are for a one year period or for as
long as the well produces if oil or gas is found;
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
Easement, Right-of-Way and Surface Use Agreement, attached hereto as Exhibit A;
and a Letter Agreement , attached hereto as Exhibit B ; between the
Littleton/Englewood Wastewater Treatment Plant and HS Resources, Inc ..
10 b ii
Section 2. The City Council of the City of Englewood hereby authorizes the Surface
Owner's Agreement, attached hereto as Exhibit C, between the City of Littleton and the
City of Englewood and Union Pacific Land Resources Corporation .
-1-
Section 3 . The City Manager or his designee is authorized to execute the Surface
Use Agreement For Oil and Gas Lease for the City of Englewood, Colorado .
Introduced, read in full , and passed on first reading on the 19th day of May, 1997 .
Published as a Bill for an Ordinance on the 22nd day of May, 1997.
Read by title and passed on final reading on the 2nd day of June, 1997.
Published by title as Ordinance No . !/L Series of 1997, on the 5th day of June,
1997.
Loucrishia A. Ellis , City Clerk
I , Loucrishia A. Ellis, City Clerk of the City of Englewood , Colorado, hereby
certify that the above and foregoing is a true copy pj}he Ordinance passed on final
reading and published by title as Ordinance No . '1f_, Series of 97 .
Loucrishia A. Ellis
-2-
I! x
H
I
ll
I
T
A
El\S™ENT, RIGIIT--OF-WAY
and
SURFACE USE AGREEMENT
This Easement and Surface Use Agreement ("Agreement") is entered into as of the __ day
of 1997 by and between The City of Englewood and The City of Littleton, whose
address is 3400 S. Elati, Englewood, CO 80110 ("Surface Owner," whether one or more) and
!IS RESOURCES , INC., a Delaware corporation ("llSR"), with offices at 3939 Carson, Evans,
Colorado 80620 OR 1999 Broadway, Suite 3600, Denver, CO 80202, covering certain lands, (the
"Lands") situated in Arapahoe County, Colorado, described as follows:
Township 5 South. Range 63 West, of the 6th P.M.
Section 23: SE/4SW/4 except the West 40 feet
For and in consideration of the sum of ten dollars ($10.00), and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree
to the terms and provisions set forth as follows:
I.Compensation for Well; Release of All Claims
HSR shall pay to Surface Ow ner the sum as set forth in and according to the terms of that
certain Letter Agreement by and between Surface Ow ner and HSR, dated 1997, as
full and final settlement and sa tisfaction for a ny and all detriment, depreciation, injury or
damage o f any nature to the Lands or growing crops thereon that may occur as a result of
llSR's drilling or completion operatio ns or its continuing activities for the production or
transportation of oi l. gas, or other hydrocarbons or products associated with the foregoing
including, but not limited to, surface use, access, mud and reserve pits, wellhead equipment,
separators, tank batteries, pipelines, gathering Jines, flow lines, pipeline interconnections, and
any and all other reasonable or customary uses of land related to said operations or
activities.
2.Grant of Right of Way and Easement
Surface Owner hereby grants, bargains, sells, assigns and conveys to HSR an easement and
right-of-way for the purpose of constructing, using and maintaining access roads, locations
for surface equipment and subsurface gathering Jines for each well drilled upon the Lands,
pipelines, and pipeline interconnections for one year from the date of commencement of
surface activities for drilling op erations and so long thereafter as oil or gas is produced or
capable of being produced from any well drilled on the Lands or lands pooled or unitized
therewith.
This Agreement shall be binding upon the respective heirs, executors, administrators,
successors, and assigns of the undersigned.
The undersigned have executed this Agreement as of the day first above written .
SURFACE OWNER
THE CITY OF ENGLEWOOD
THE CITY OF LITTLETON
R: \trans! er \lz nd \!oms \ease row .ag t
HS RESOURCES, INC.
Janet W. Pasques
Attorney-in-Fact
Appnmd by C. R&r1J011 llole11ber I, 199!
STATE OF
COUNTY OF
)
)
This instrument was acknowledged before me this
by
Witness my hand and official seal.
My commission expires
STATE OF
COUNTY OF
)
)
Notary Public
____ day of ____ _ 199_
This instrument was acknowledged before me this ____ day of _____ , 199_
by
Witness my hand and official seal.
Notary Public
My commission expires ________________ _
STATE OF COLORADO )
CITY AND )ss
COUNTY OF DENVER )
This instrument was acknowledged before me this day of
________ , 199_ by Janet W. Pasque, Attorney-in-Fact of HS Resources, Inc., a
Delaware corporation, on behalf of the corporation .
Witness my hand and official seal.
Notary Public
My commission expires
H:\tmm er\land\form\merow J~t Apprond by C. Hamon Norember I, 1994
LE'ITER AGREEMENT
This Letter Agreement is entered into this_· _day of 1997, by and between City
of Englewood and City of Littleton, whose address is 3400 S . Elati, Englewood, CO 80110,
("Surface Owner," whether one or more), and HS RESOURCES, INC ., a Delaware corporation
("HSR"), with offices at 1999 Broadway, Sui te 3600, Denver, Colorado 80202 or 3939 Carson
Avenue, Evans, CO 80 620 in conjunction with that certain Easement, Right-of-Way and Surface
Use Agreement , dated tv1arch 4, 19976 by and between Surface Owner and HSR covering certain
lands (the "Lands"), situated in Arapahoe County, Colorado described as follows:
Township 5 South. Range 63 West. of the 6th P.M .
Section 23 : SE/4SW/4 except the West 40 feet
I. Compensation for Operations; Release of All Claims
Subject lo the provisions of paragraph 3 .C) below, HSR shall pay to Surface Owner the
sum of One Thousand Five Hundred dollars ($1,500.00) on or before the spud date of each well
that may be drilled on the Lands , which shall be a one time payment per well as full and final
settlement and satisfaction for any and all detriment , depreciation, injury or damage of any nature
to the Lands or crops growing thereon that may occur as a result of HSR's drilling and
completion operations or continuing activities for the production or transportation of oil or gas.
3 . Additional Provisions
A) Ways of ingress and egress, well site areas, tank battery/treater locations and tanker
truck service areas shall be discussed by and between Surface Owner and HSR prior to com-
mencement of operations.
B) Restoration of the Lands shall commence as soon as practicable after drilling and
completion activities are concluded. The Lands shall be restored as close as reasonably
practicable to their condition when HSR first commenced operations on them .
C) HSR has negotiated with the Surface Owner, pursuant to Sec . 304.b of the Colorado
Oil and Gas Conservation Commission Rules and Regulations, and HSR agrees that the payment
in compensation for surface damages set forth in paragraph 1 above shall be for unreasonable
crop losses or land damage resulting from use of the premises by HSR and shall not relieve HSR
for liability for injury or damage of any other nature . HSR further agrees that this one-time
payment does not relieve it of any other bonding requirements or standards for operation,
including but not limited to pit closure, well plugging, and E&P waste management. The
payment referenced in paragraph 1 above does not prevent the Surface Owner from pursuing
remedies of any kind through the Colorado Oil and Gas Conservaton Commission.
This Letter Agreement shall be binding upon the respective heirs, executors, adminis-
trators, successors, and assigns of the undersigned.
The parties hereto have executed this Letter Agreement as of the day first above written.
SURFACE OWNER
CITY OF LITILETON
By : ______ _
CITY OF ENGLEWOOD
By: ______ _
HS RESOURCES, INC .
By : _____ _
Janet W. Pasque
Attorney-in-Fact
II x
H
I
B
I
T
8
DOCU.ME.1 T J.'iO . n -uZ4
SURFACE OWNER'S AGREEMENT
THIS AGREEMENT, made and entered into this 20th day of March, 1997, by and between THE
CITY OF LITTLETON and THE CITY OF ENGLEWOOD, MUNICIPAL CORPORATIONS
(hereinafter. for convenience called the "Landowner") and UNION PACIFIC LAND RESOURCES
·CORPORATION (hereinafter for convenience called "UPLRC");
W I T :S-E S S E T H:
RECITALS:
Landowner is the owner of the following-described premises, hereinaftc:rreferred to as "described
premises":
Township SS. Range 63W
Section 23: SE/4SW/4 except the West 40 feet
Arapahoe County, Colorado
SUBJECT, however. to exceptions and reservations of minerals and rights of entry and of surface use
contained in a certain deed or deeds of conveyance, as follows: Warranty Deed No. 213 dated October
17, 1899 from The Union Pacific Land Company ro Frank Girardot, recorded December 23. 1899 in
Book A-72 at Page 264 in the office of the County Clerk and Recorder of Arapahoe Counry . Colorado.
Union Pacific Railroad Company is successor in interest to The Union Pacific Land Company and
UPLRC is successor i n interest to all the right, ticle and interest of Union Pacific Railroad Company in
and to the oil. gas and associated liquid hydrocarbons in said premises for. a term or period equal to or
exceeding the term of this Surface Owner 's Agreement.
UPLRC proposes for UPLRC or itS agentS . lessees, licensees, successors or assigns to prospect
upon and explore the described premises for the development and production of oil. gas and associated
liquid hydrocarbon substances either on UPLRC's behalf or under or pursuant to an oil and gas lease
or license. or under or pursuant to a "unitization agreement", meaning here and wherever that term is
used herein any operating agreement, or any other agreement covering the exploration or development
for or the production of oil, gas or associated liquid hydrocarbons, or any pooling. comrnunitization,
:,. unit or other agreement whereby the described premises may be included with other lands in proximity
.thereto as a unit area under a plan of unit or joint exploration, development and operation .
. .
Besides confirining the surface uses expressly set forth below, this agreement is intended to avoid
and resolve.any and all disputes of whatever nature in connection with the ownership of oil , gas and
associated liquid hydrocarbon substances in the described premises, including rights to extract, remove
or market such minerals, and including any sucn dispute that may arise hereafter, whether or not the
basis for such dispute is now known or has been identified in disputes involving exceptions and
reservations of minerals in other deeds from Union Pacific Railroad Company or its predecessors.
AGREEMENT:
NOW, THEREFORE, it is agreed as follows:
Section 1. In consideration of the mutual benefits and other good and valuable consideration.
Landowner hereby confirms, extends and grants to UPLRC, its agents, lessees, licensees, successors
and assigns. including any operator or unit operator from time to time in charge of operations under a
unicizationagreement, and their respective successors and assigns, the easements and rights to enter upon
the described premises and any lands adjacent or contiguous thc:reto owned or claimed by the Landowner
and to extract, remove, store, transport, and market for its or their account oil, gas and associated liquid
hydrocarbon substances in or from said described premises. and to drill, construct, maintain and use
upon. within, and over said described premises all oil wells, gas wells, derricks, machinery, tanks,
drips, boilers, engines, pipelines, power and telephone lines, roadways. water wells, and, without
limitation by reason of the foregoing enumeration, any and all other strucrures, equipment, fixtures,
appurtenances, or facilities (all of the above being included under the term ·facilities~) necessary or
1
e: x
11 '-I
.B
I
T
c e
·convenient in prospecting and developing for, producing, storing, transporting. and marketing oil, gas
and associated liquid hydrocarbon subsrances under or produced from any portion of the described
premises or under or produced from any portion of the unic area created under a unitiz.ation agreement,
together with the right co remove said facilities and the right to use such water as may be needed from
the described premises, not including water from Landowner's wells.
Section 2. UPLRC agrees, so long as it is receiving oil and/or gas production from or oil
and/or gas royalties upon production from the described premises or allocated thereto under the
provisions of a unitization agreement, to pay or cause to be paid to the Landowner in cash the value
(which shall never be greater than the amount realized by UPLRC from the sale of such production) on
the premises of rwo and one-half percenc (2 1/2 3) of all the oil and gas and associared liquid
hydrocarbons hereafter produced, saved, and marketed therefrom or allocated thereto as aforesaid,
except oil and gas and associated liquid hydrocarbons used in operations on the premises or used under
the unitization agreement, and excepc that as to casinghead gasoline and other produces manufactured
from gas there shall be deducted the cost of manufacture; provided, however, that during any time the
described premises or any portion thereof are included wilhin the boundaries of a participating, pooled,
or communitized area, and there is no provision for the payment of royalties to UPLRC but it partici-
pates in the production from the pooled, communitized , or unit area as a working interest owner. then
the two and one-half percent (2 112 % ) above set forth shall be applied to that percencage of the total
production from such area which is allocated to che described premises. Any payment made to the
Landowner pursuant to this Section 2 for production which is sold or which is used otf che premises shall
be calculated after deducting all taxes, now or hereafter levied against, paid on. or measured by
production or the value thereof, and after deducting all costs incurred or borne by UPLRC for creating
the production to make it merchantable, and for gathering, transporting and compressing the production
prior to delivery ro the purchaser at the point of sale or use.
When production of oil from lands under several surface ownerships is commingled in one central
tank setting for practical operating reasons, periodic individual well rests may be made to compute the
quantities of commingled oil properly allocable to each well , and the two and one-half percent (2 I/2 % )
payment provided herein shall be payable upon che quantities apportioned to e~ch well as reported to
UPLRC in full satisfaction of the obligacions of UPLRC under this s~ction 2.
Section 3. Nothing herein concained shall be construed as a covenant to drill by UPLRC. its
agents, lessees, licensees, successors, or assigns , or by any operator or unit operator, or as a granc to
Landowner of oil ·~r gas rights or rights in other associated liquid hydrocarbons .
Section 4. UPLRC, its agents , lessees , licensees ; successors and assigns, including the
operator or unit operator under a unitization agreement, shall be required: (a) to pay for aU damage to
Landowner's lands, buildings. and growing crops caused by the erection or construction of facilities to
be used in connection with oil or gas or associated liquid hydrocarbon operations; (b) to bury all
pipelines below plow depth where such lines cross cultivated land; and (c) to construct gates or, at its
option, install cattle guards where necessary for crossing fenced land in connection with exploration.
development, or producing operations and, where an election has been made to construct gates in lieu
of cattle guards, to keep such gates in repair and closed. In no event shall che amount of damages exceed
···the value (as determined by the use of the land at the time the damages are sustained) of that portion of
the Landowner's lands acrually used by UPLRC, its agents, lessees, licensees, successors or assigns,
for the location of its facilities. The fact that damages have not been agreed upon shall in no way delay,
restrict, impair or diminish the right of UPLRC, its agents, lessees, licensees, successors and assigns
to commence or conduct oil and gas operations on ~e described premises.
Section 5. Other than the payments to be made as aforesaid, the Landowner shall not be
entitled to any other or additional payments as a result of the conduct of the operations described in
Section 1 hereof, and Landowner will claim no right, title or interest in or to the oil, gas and associated
liquid hydrocarbon substances in the described premises.
Section 6. Subject to the provisions of Section 8 hereof. it is agreed that the covenants to pay
the sums provided in Sections 2 and 4 hereof shall be covenants running with the surface ownership of
the described premises and shall not be held or transferred separately therefrom. and any sums payable
under this agreement shall be paid to the person or persons owning the surface of the described premises
as of the date the oil or gas or associaced liquid hydrocarbon production is marketed. UPLRC shall not.
2
: •. .,: :. -_._. ~-:-•... :. ~ •.. -:. : . .=. ... .; · .. -.
however. become obligared to make such payments to any subsequent purchaser of che described
premises and shall continne to make such payments to the Landowner until the first day of the month
following the receipt by UPLRC of notice of change of ownership, consisting of the original or certified
copies of the instrument or instruments constiruting a complete chain of title from the Landowner ro the ·
party claiming such ownership, and then only as to payments thereafter made.
Section 7. The easements, rights, and uses herein shall be binding upon the described
premises and each and every part thereof, and the present and future owners thereof, and shall continue
for the benefit of UPLRC and its successors and assigns, as owners of the oil and/or gas and/or
associated liquid hydrocarbon rights in the described premises and each and every part thereof, and their
agents, lessees, licensees, successors, and assigns, including any operator or unit operacor, and for the
benefit of other lands within any unit area within which the described premises, or any portion thereof
may be included, and each and every part thereof.
Section 8. This agreement shall be in full force and effect from and after execution and
delivery and shall continue in full force and effect for a period of one (1) year and so long thereafter as
the oil and gas rights in the descri.bed premises are committed to an oil and gas lease or license or to a
unitization agreement, or so long as a well capable of producing oil or gas or associated liquid
hydrocarbons is located upon the described premises, or drilling or reworking operations are being
conducted thereon, and, upon termination of such lease, license, or unitization agreement, or upon
abandonment of such well, or upon cessation of such drilling or reworking operations, whichever last
occurs, t:his agreement shall terminate; provided, however, that such termination shall neither affect: nor
terminate the rights, expressed or implied, in the deed or deeds referred to in the Recitals hereof.
Section 9 . Subject co rhe provisions of Sections 6 and 8 hereof, this agreement: shall inure to
t:he benefit of and be binding upon the parties hereto and rheir respective heirs, executors, administrators,
successors, and assigns.
Secrion 10. This Agreement may be executed as one document signed by all parties or the
parties named herein may join herein by execution of a counterpart wit:h the same effect as if all parries
exccur.ed this Agreement. The failure of any one or more of the parties named herein to execute this
Agreement shall not in any manner affect the validity of same as to t:he parties who do execute this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed t:his agreement t:his ___ day ot"
---------' 1997, to be effective as .of the day and year first above written .
. .
3
--
~ . . -::· .. .; .· .. ·~ --· ---.·: ;-
..
·,
UNION PACIFIC LA.i.'lD RESOURCES CORPORATION
ATrEST:
BY: ______________ _
Secretary
ATTEST:
BY: _______________ _
Secretary
Susan Whiteside, Attorney-in-Fact
THE CITY OF LITTLETON, COLORADO
Title
Taxpayer Identification Number
C I O Stu Fonda, Director of Utilities
3400 S. Elati. Englewood, CO 80110
THE CITY OF ENGLEWOOD, COLORADO
BY:------------------~
Title
Taxpayer Identification Nwnber
C I O Stu Fonda, Director of Utilities
3400 S. Elati. Englewood., CO 80110
-~====::s:::=:m:========================-==:.======:::::s======= e Seate of
County of
)
) SS
)
The foregoing instrument was acknowledged before me this __ day of-------· 1997,
by of
-------------~
as
---------------------;!! _________ corporation. on behalf of c.he
corporation.
Notary Public
My Commission Expires:
~-~=======~-~--~======~-~~~~=======~~~~-~====
State of .)
) SS
County of )
,a corporation. on behalf of the ------------------------------
by
The foregoing instrument was acknowledged before me this __ day of-------· 1997.
~ ~
corporation.
Notary Public
e My Commission Expires:
4
··-· -. -
==~~---======~~=~=======~~=======~--~======~~
State of Texas )
) SS.
County of Tarrant )
The foregoing instrument was acknowledged before me this __ ._ day of 1997.
by SUSAN WHITESIDE, as an Attorney-in-Fact of UNION PACIFIC LAND RESOURCES
CORPORATION, a Delaware corporation. on behalf of the corporation.
Notary Public
My Commission Expires:
s
. '
COUNCIL COMMUNICATION
Date
May 19, 1997
INITIATED BY
Agenda Item
10 a iv
STAFF SOURCE
Subject
Oil & Gas Surface Owners
Agreements, Littleton I Englewood
Beneficial Use Farm
Littleton I Englewood Wastewater Treatment Plant Stewart H. Fonda, Director of Utilities
Charles J. Caudill, Process Development Analyst
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
Ordinance No . 15, Series 1986, approving purchase of 960 acres of farm land in Arapahoe County.
RECOMMENDED ACTION
The recommended action is to approve by Ordinance an Oil and Gas Surface Owners Agreement with Union Pacific Land
Resources Corporation , an Easement, Right of Way, Surface Use Agreement with HS Resources, and a Letter Agreement
with HS Resources on the SEY.. SW Y.. of Section 23 Township 5 South, Range 63 West in Arapahoe County , Colorado .
• ACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
The Cities of Englewood and Littleton own a total of 7,040 acres of farmland to ensure stable and secure biosolids
recycling for the Littleton/Englewood Wastewater Treatment Plant. Union Pacific Land Resources owns 100% of the
mineral rights underlying a 40 acre parcel of the property. Union Pacific leases the right to explore and develop the
minerals to HS Resources. Union Pacific requires that HS Resources enter into a letter agreement and easement with the
Cities to use the surface of the property for their operations .
Entering into the agreements gives the Cities maximum land control if rights are developed . Rights can be developed with
or without the agreements.
The agreements terms are for a one year period or for as long as the well produces if oil or gas is found.
FINANCIAL IMPACT
There are no costs associated with entering into the agreements.
The Union Pacific agreement will provide a 2~% royalty to the cities if the well produces.
LIST OF ATTACHMENTS
1 . Surface Owner's Agreement with Union Pacific Land Resources Corporation
2. Easement, Right of Way and Surface Use Agreement with HS Resources e 3. Letter Agreement with HS Resources
4 . Anne LaPorta of Hill & Robbins Attorneys letter to Daniel Brotzman, Englewood City Attorney