Bid Instructions
1. Set forth in a letter or cover sheet for each mineral interest being bid upon the following:
a. The Full legal name, address of the bidder and the person authorized to sign the oil
and gas lease covering the interests being bid upon;
b. An affirmation that the bidder is fully capable of drilling or cause to be drilled in
accordance with good industry practices, oil and gas wells to include the mineral
interests being bid upon in a pooled unit.
c. An affirmation that the bid is good for and may not be withdrawn for thirty (30)
days from the bid opening date;
d. The proposed royalty to be paid by the bidder to the BISD;
e. The proposed bonus to be paid by the bidder for the primary term of three years;
f. Attach a copy of the form of Paid Up Oil and Gas Lease prepared by the BISD. Do not
alter or amend the form;
g. Attach a copy of the form of Memorandum of Oil and Gas Lease prepared by the
BISD. Do not alter or amend the form;
h. Attach a check in the full amount of the bonus for each mineral interest being bid
upon.
i. Attach a copy of the completed form of W-9.
2. Submit the completed bid or bids in a sealed envelope marked ‘Bid for Oil and Gas Lease’ to the
location and prior to the expiration of the date and time set forth in the invitation to bid.
NOTICE TO BIDDERS
Invitation to Bid - Lease of Oil, Gas and Related Hydrocarbon Mineral Interests
Bryan Independent School District is receiving sealed proposals for the lease of five (5) mineral tracts as
follows:
TRACT ONE: 9.00 acres of land, more or less, lying and being situated in the F. Henderson
Survey, A-20, Brazos County, Texas, and being described in Exhibit “H” as 8.94 acres of land,
more or less, in that certain Affidavit dated January 29, 1988, from Calvin Guest to The Public,
recorded in Volume 1026, Page 843 of the Official Records of Brazos County, Texas.
TRACT TWO: 1.876 acres of land, more or less, lying and being situated in the S. F. Austin
Survey, A-63, Brazos County, Texas, and being described in that certain Warranty Deed dated
August 23, 1989, from William D. Barkley, Trustee to Bryan Independent School District, recorded
in Volume 1138, Page 457 of the Official Records of Brazos County, Texas.
TRACT THREE: 9.74 acres of land, more or less, lying and being situated in the S. F. Austin
Survey, A-63, Brazos County, Texas, and being described in that certain Special Warranty Deed
dated February 19, 2010, from Brazos County, Texas to Bryan Independent School District,
recorded in Volume 9507, Page 228 of the Official Records of Brazos County, Texas.
TRACT FOUR: 14.03 acres of land, more or less, lying and being situated in the T. McKinney
Survey, A-33, Brazos County, Texas, and being more particularly described in that certain Deed
dated June 12, 1996, from the Bryan Independent School District to Young Contractors, Inc.,
recorded in Volume 2620, Page 207 of the Official Records of Brazos County, Texas.
TRACT FIVE: 19.172 acres of land, more or less, lying and being situated in the J. Austin Survey,
A-2, Brazos County, Texas, and being more particularly described in that certain Warranty Deed
dated July 20, 1972, from S. J. Enloe, Jr. and J. Carroll to Bryan Independent School District,
recorded in Volume 306, Page 393 of the Deed Records of Brazos County, Texas.
Bids/Proposals may be for one or more of the tracts and will be received by the Bryan Independent
School District (BISD) in the office of Amy Drozd, Assistant Superintendent of Business Services, 101
North Texas Avenue, Bryan, Texas, 77803 until 2:00 PM on Tuesday, June 10, 2014 and will be publicly
opened at that time in Room 208 of the same location. Only the names of the bidders will be announced
at that time. Bid/Proposal packets may be obtained from our website, www.bryanisd.org > Departments >
Finance > Competitive Bidding or the BISD Business Services Office (979-209-1008) at the address listed
above.
The property will be leased for not less than fair market value. Copies of the bid form; the Oil, Gas and
Related Hydrocarbon Lease form; Memorandum of Oil, Gas and Related Hydrocarbon Lease; and
W-9 are available upon request. The District will select the proposal that is deemed most advantageous
to the District. Acceptance of the proposal is subject to approval by the BISD Board of Trustees. The
award of any Oil, Gas and Related Hydrocarbon Lease shall be approved by Resolution of the Board of
Trustees.
The District reserves the right to accept or reject any and all bids and to waive any informality in said bids.
Published:
___________
___________
___________
8972
PROD 88
(1994-10/03)
PAID UP OIL AND GAS LEASE
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING
INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN
REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.
THIS LEASE AGREEMENT is made as of June ___, 2014 between THE BRYAN INDEPENDENT SCHOOL DISTRICT,
whose address is 101 North Texas Avenue, Bryan, Brazos County, Texas 77803, as Lessor, whether one or more, and []., whose
address is [], as Lessee. All printed portions of this lease were prepared by the party hereinabove named as Lessee, but all other
provisions (including the completion of blank spaces) were prepared jointly by Lessor and Lessee.
1.
Description. In consideration of a cash bonus in hand paid and the covenants herein contained, Lessor hereby grants,
leases and lets exclusively to Lessee the following described land, hereinafter called leased premises:
[]
See Exhibit “A” attached hereto and made a part hereof for additional paragraphs of this lease.
In the County of Brazos, State of Texas, containing [] gross acres, more or less (including any interests therein which Lessor may
hereafter acquire by reversion, prescription or otherwise), for the purpose of exploring for, developing, producing and marketing
oil and gas, along with all hydrocarbon and non-hydrocarbon substances produced in association therewith. The term “gas” as
used herein includes helium, carbon dioxide, gaseous sulfur compounds, coal bed methane and other commercial gases, as well
as normal hydrocarbon gases. In addition to the above-described land, this lease and the term “leased premises” also covers
accretions and any small strips or parcels of land now or hereafter owned by Lessor which are contiguous or adjacent to the
above-described land, and, in consideration of the aforementioned cash bonus, Lessor agrees to execute at Lessee’s request any
additional or supplemental instruments for a more complete or accurate description of the land so covered. In the event the leased
premises are determined to contain more acreage than is set forth herein then Lessee shall pay bonus and royalty thereon. Lessor
shall never be required to refund, re-pay or be subject to offset for any bonus or royalty paid by Lessee to Lessor. For the purpose
of determining the amount of any shut-in royalty payments based on acreage hereunder, the number of gross acres above
specified shall be deemed correct, whether actually more or less.
2.
Term of Lease. This lease, which is a “paid-up” lease requiring no rentals, shall be in force for a primary term of Three
(3) years from the date hereof, and for as long thereafter as oil or gas or other substances covered hereby are produced in paying
quantities from the leased premises or from lands pooled therewith or this lease is otherwise maintained in effect pursuant to the
provisions hereof.
3.
Royalty Payment. Royalties on oil, gas and other substances produced and saved hereunder shall be paid by Lessee to
Lessor as follows: (a) For oil and other liquid hydrocarbons separated at Lessee’s separator facilities, the royalty shall be [___] of
such production, to be delivered at Lessee’s option to Lessor at the wellhead or to Lessor’s credit at the oil purchaser’s
transportation facilities, provided that Lessee shall have the continuing right to sell such production to itself or an affiliate at the
wellhead market price then prevailing in the same field (or if there is no such price then prevailing in the same field, then in the
nearest field in which there is such a prevailing price) for production of similar grade and gravity; (b) for gas (including
casinghead gas) and all other substances covered hereby, the royalty shall be [____] of the proceeds realized by Lessee from the
sale thereof, provided that Lessee shall have the continuing right to sell such production to itself or an affiliate at the prevailing
wellhead market price paid for production of similar quality in the same field (or if there is no such price then prevailing in the
same field, then in the nearest field in which there is such a prevailing price) pursuant to comparable purchase arrangements
entered into on the same or nearest preceding date as the date on which Lessee or its affiliate commences its purchases hereunder;
and (c) in calculating royalties on production hereunder, Lessee may deduct Lessor’s proportionate part of any ad valorem,
production and excise taxes, and any costs incurred by Lessee in treating, processing, delivering and otherwise marketing such
production. If at the end of the primary term or any time thereafter one or more wells on the leased premises or lands pooled
therewith are capable of producing oil or gas or other substances covered hereby in paying quantities, but such well or wells are
either shut in or production therefrom is not being sold by Lessee, such well or wells shall nevertheless be deemed to be
producing in paying quantities for the purpose of maintaining this lease. If for a period of 90 consecutive days such well or wells
are shut in or production therefrom is not being sold by Lessee, then Lessee shall pay an aggregate shut-in royalty of Twenty Five
and No/100 Dollars ($25.00) per acre then covered by this lease, such payment to be made to Lessor, on or before the end of said
90-day period and thereafter on or before each anniversary of the end of said 90-day period while the well or wells are shut in or
production therefrom is not being sold by Lessee; provided that if this lease is otherwise being maintained by operations, or if
production is being sold by Lessee from another well or wells on the leased premises or lands pooled therewith, no shut-in
royalty shall be due until the end of the 90-day period next following cessation of such operations or production. Lessee’s failure
to properly pay shut-in royalty shall render Lessee liable for the amount due, but shall not operate to terminate this lease.
4.
Shut-in Payment. All shut-in royalty payments under this lease shall be paid or tendered directly to Lessor at the above
address, or its successors, regardless of changes in the ownership of said land. All payments or tenders may be made in currency,
or by check or by draft and such payments or tenders to Lessor by deposit in the U.S. Mails in a stamped envelope addressed to
the Lessor at the last address known to Lessee shall constitute proper payment.
5.
Operations. If Lessee drills a well which is incapable of producing in paying quantities (hereinafter called “dry hole”)
on the leased premises or lands pooled therewith, or if all production (whether or not in paying quantities) permanently ceases
from any cause, including a revision of unit boundaries pursuant to the provisions of Paragraph 6 or the action of any
governmental authority, then in the event this lease is not otherwise being maintained in force it shall nevertheless remain in
force if Lessee commences operations for reworking an existing well or for drilling an additional well or for otherwise obtaining
or restoring production on the leased premises or lands pooled therewith within 90 days after completion of operations on such
dry hole or within 90 days after such cessation of all production. If at the end of the primary term, or at any time thereafter, this
lease is not otherwise being maintained in force but Lessee is then engaged in drilling, reworking or any other operations
reasonably calculated to obtain or restore production therefrom, this lease shall remain in force so long as any one or more of
such operations are prosecuted with no interruption of more than 90 consecutive days, and if any such operations result in the
Paid up Oil and Gas Lease Page 1 of 7
production of oil or gas or other substances covered hereby, as long thereafter as there is production in paying quantities from the
leased premises or lands pooled therewith. After completion of a well capable of producing in paying quantities hereunder,
Lessee shall drill such additional wells on the leased premises or lands pooled therewith as a reasonably prudent operator would
drill under the same or similar circumstances to (a) develop the leased premises as to reservoirs then capable of producing in
paying quantities on the leased premises or land pooled therewith, or (b) protect the leased premises from uncompensated
drainage by any well or wells located on other lands not pooled therewith. There shall be no covenant to drill exploratory wells or
any additional wells except as expressly provided herein.
6.
Pooling. Lessee shall have the right but not the obligation to pool all or any part of the leased premises or interest
therein with any other lands or interests, as to any or all depths or zones, and as to any or all substances covered by this lease,
either before or after the commencement of drilling or production, whenever Lessee deems it necessary or proper to do so in
order to prudently develop or operate the leased premises, whether or not similar pooling authority exists with respect to such
other lands or interests. The creation of a unit by such pooling shall be based on the following criteria (hereinafter called “pooling
criteria”): A unit for an oil well (other than a horizontal completion) shall not exceed 40 acres plus a maximum acreage tolerance
of 10%, and for a gas well or a horizontal completion shall not exceed 640 acres plus a maximum acreage tolerance of 10%;
provided that a larger unit may be formed for an oil well or gas well or horizontal completion to conform to any well spacing or
density pattern that may be prescribed or permitted by any governmental authority having jurisdiction to do so. For the purpose
of the forgoing, the terms “oil well” and “gas well” shall have the meanings prescribed by applicable law or the appropriate
governmental authority, or, if no definition is so prescribed, “oil well” means a well with an initial gas-oil ratio of less than
100,000 cubic feet per barrel and “gas well” means a well with an initial gas-oil ratio of 100,000 cubic feet or more per barrel,
based on a 24-hour production test conducted under normal producing conditions using standard lease separator facilities or
equivalent testing equipment; and the term “horizontal completion” means an oil or gas well in which the horizontal component
of the gross completion interval in the reservoir exceeds the vertical component thereof. In exercising its pooling rights
hereunder, Lessee shall file of record a written declaration describing the unit and stating the effective date of pooling.
Production, drilling or reworking operations anywhere on a unit which includes all or any part of the leased premises shall be
treated as if it were production, drilling or reworking operations on the leased premises, except that the production on which
Lessor’s royalty is calculated shall be that proportion of the total unit production which the net acreage covered by this lease and
included in the unit bears to the total gross acreage in the unit, but only to the extent such proportion of unit production is sold by
Lessee. In the event a unit is formed hereunder before the unit well is drilled and completed, so that the applicable pooling
criteria are not yet known, the unit shall be based on the pooling criteria Lessee expects in good faith to apply upon completion of
the well; provided that within a reasonable time after completion of the well, the unit shall be revised if necessary to conform to
the pooling criteria that actually exist. Pooling in one or more instances shall not exhaust Lessee’s pooling rights hereunder, and
Lessee shall have the recurring right but not the obligation to revise any unit formed hereunder by expansion or contraction or
both, either before or after commencement of production, in order to conform to the well spacing or density pattern prescribed or
permitted by the governmental authority having jurisdiction, or to conform to any productive acreage determination made by
such governmental authority. To revise a unit hereunder, Lessee shall file of record a written declaration describing the revised
unit and stating the effective date of revision. To the extent any portion of the leased premises is included in or excluded from the
unit by virtue of such revision, the proportion of unit production on which royalties are payable hereunder shall thereafter be
adjusted accordingly. In the absence of production in paying quantities from a unit, or upon permanent cessation thereof, Lessee
may terminate the unit by filing of record a written declaration describing the unit and stating the date of termination. Pooling
hereunder shall not constitute a cross-conveyance of interests.
7.
Payment Reductions. If Lessor owns less than the full mineral estate in all or any part of the leased premises, the
royalties and shut-in royalties payable hereunder for any well on any part of the leased premises or lands pooled therewith shall
be reduced to the proportion that Lessor’s interest in such part of the leased premises bears to the full mineral estate in such part
of the leased premises. To the extent any royalty or other payment attributable to the mineral estate covered by this lease is
payable to someone other than Lessor, such royalty or other payment shall be deducted from the corresponding amount otherwise
payable to Lessor hereunder.
8.
Ownership Changes. The interest of either Lessor or Lessee hereunder may be assigned, devised or otherwise
transferred in whole or in part, by area and/or by depth or zone, and the rights and obligations of the parties hereunder shall
extend to their respective heirs, devisees, executors, administrators, successors and assigns. No change in Lessor’s ownership
shall have the effect of reducing the rights or enlarging the obligations of Lessee hereunder, and no change in ownership shall be
binding on Lessee until 60 days after Lessee has been furnished the original or duly authenticated copies of the documents
establishing such change of ownership to the satisfaction of Lessee or until Lessor has satisfied the notification requirements
contained in Lessee’s usual form of division order. In the event of the death of any person entitled to shut-in royalties hereunder,
Lessee may pay or tender such shut-in royalties to the credit of decedent or decedent’s estate at the address designated above. If
at any time two or more persons are entitled to shut-in royalties hereunder. Lessee may pay or tender such shut-in royalties to
such persons, either jointly, or separately in proportion to the interest which each owns. If Lessee transfers its interest hereunder
in whole or in part Lessee shall be relieved of all obligations thereafter arising with respect to the transferred interest, and failure
of the transferee to satisfy such obligations with respect to the transferred interest shall not affect the rights of Lessee with respect
to any interest not so transferred. If Lessee transfers a full or undivided interest in all or any portion of the area covered by this
lease, the obligation to pay or tender shut-in royalties hereunder shall be divided between Lessee and the transferee in proportion
to the net acreage interest in this lease then held by each.
9.
Release of Lease. Lessee may, at any time and from time to time, deliver to Lessor or file of record a written release of
this lease as to a full or undivided interest in all or any portion of the area covered by this lease or any depths or zones thereunder,
and shall thereupon be relieved of all obligations thereafter arising with respect to the interest so released. If Lessee releases less
than all of the interest or area covered hereby, Lessee’s obligation to pay or tender shut-in royalties shall be proportionately
reduced in accordance with the net acreage interest retained hereunder.
10.
Ancillary Rights. In exploring for, developing, producing and marketing oil, gas and other substances covered hereby
on the leased premises or lands pooled or unitized therewith, in primary and/or enhanced recovery, Lessee shall have the right of
ingress and egress along with the right to conduct such operations on the leased premises as may be reasonably necessary for
such purposes, including but not limited to geophysical operations, the drilling of wells, and the construction and use of roads,
canals, pipelines, tanks, water wells, disposal wells, injection wells, pits, electric and telephone lines, power stations, and other
facilities deemed necessary by Lessee to discover, produce, store, treat and/or transport production. Lessee may use in such
operations, free of cost, any oil, gas, water and/or other substances produced on the leased premises, except water from Lessor’s
wells or ponds. In exploring, developing, producing or marketing from the leased premises or lands pooled or unitized therewith,
the ancillary rights granted herein shall apply (a) to the entire leased premises described in Paragraph 1 above, notwithstanding
any partial release or other partial termination of this lease; and (b) to any other lands in which Lessor now or hereafter has
authority to grant such rights in the vicinity of the leased premises or lands pooled therewith. When requested by Lessor in
writing, Lessee shall bury its pipelines below ordinary plow depth on cultivated lands. No well shall be located less than 200 feet
Paid up Oil and Gas Lease Page 2 of 7
from any house or barn now on the leased premises or other lands of Lessor used by Lessee hereunder, without Lessor’s consent,
and Lessee shall pay for damage caused by its operations to buildings and other improvements now on the leased premises or
such other lands, and to commercial timber and growing crops thereon. Lessee shall have the right at any time to remove its
fixtures, equipment and materials, including well casing, from the leased premises or such other lands during the term of this
lease or within a reasonable time thereafter.
11.
Regulation and Delay. Lessee’s obligations under this lease, whether express or implied, shall be subject to all
applicable laws, rules, regulations and orders of any governmental authority having jurisdiction, including restrictions on the
drilling and production of wells, and regulation of the price or transportation of oil, gas and other substances covered hereby.
When drilling, reworking, production or other operations are prevented or delayed by such laws, rules, regulations or orders, or
by inability to obtain necessary permits, equipment, services, material, water, electricity, fuel, access or easements, or by fire,
flood, adverse weather conditions, war, sabotage, rebellion, insurrection, riot, strike or labor disputes, or by inability to obtain a
satisfactory market for production or failure of purchasers or carriers to take or transport such production, or by any other cause
not reasonably within Lessee’s control, this lease shall not terminate because of such prevention or delay, and, at Lessee’s option,
the period of such prevention or delay shall be added to the term hereof. Lessee shall not be liable for breach of any provisions or
implied covenants of this lease when drilling, production or other operations are so prevented or delayed.
12.
Breach or Default. No litigation shall be initiated by Lessor for damages, forfeiture or cancellation with respect to any
breach or default by Lessee hereunder, for a period of at least 60 days after Lessor has given Lessee written notice fully
describing the breach or default, and then only if Lessee fails to remedy the breach or default within such period.
13.
Warranty of Title. Lessor hereby warrants and agrees to defend title conveyed to Lessee hereunder, and agrees that
Lessee at Lessee’s option may pay and discharge any taxes, mortgages or liens existing, levied or assessed on or against the
leased premises. If Lessee exercises such option, Lessee shall be subrogated to the rights of the party to whom payment is made,
and, in addition to its other rights, may reimburse itself out of any royalties or shut-in royalties otherwise payable to Lessor
hereunder. In the event Lessee is made aware of any claim inconsistent with Lessor’s title, Lessee may suspend the payment of
royalties and shut-in royalties hereunder, without interest, until Lessee has been furnished satisfactory evidence that such claim
has been resolved.
IN WITNESS WHEREOF, this lease is executed to be effective as of the date first written above, but upon execution shall be
binding on the signatory and the signatory’s heirs, devisees, executors, administrators, successors and assigns, whether or not this
lease has been executed by all parties hereinabove named as Lessor. This instrument may be executed as one document signed by
all of the undersigned, or the undersigned may execute a counter-part, but all shall have the same effect as if all of the
undersigned executed this instrument. Executed signature pages from different originals of this instrument may be combined to
form a single original instrument for recording purposes.
Lessor:
THE BRYAN INDEPENDENT SCHOOL DISTRICT
_________________________________________________
By: Dr. Douglas Wunneburger, Board President
ACKNOWLEDGMENTS
STATE OF TEXAS
§
COUNTY OF ______________________
§
This instrument was acknowledged before me this _____ day of _____________, 2014, by Dr. Douglas
Wunneburger on behalf of THE BRYAN INDEPENDENT SCHOOL DISTRICT.
Notary Public, State of Texas
Paid up Oil and Gas Lease Page 3 of 7
EXHIBIT “A”
ADDENDUM
Attached to and made a part of that certain oil, gas and mineral lease dated May _____, 2014 by and between THE
BRYAN INDEPENDENT SCHOOL DISTRICT and HALCÓN ENERGY PROPERTIES, INC., as Lessee.
A.1.
CONFLICT
In the event that any of the terms and provisions of any of the following paragraphs shall conflict with any
of the terms and provisions of any of the preceding paragraphs of this Lease, then the terms and provisions of these
following paragraphs shall control and take precedence. Lessor and Lessee agree that this Exhibit “A” was drafted
by both Lessee and Lessor.
A.2.
EXCLUDED MINERALS
This Lease covers only oil and gas of whatsoever nature or kind, including coal bed methane gas and other
associated liquid and gaseous hydrocarbons, and sulphur, as well as such other minerals or substances as may be
produced incidental to and as a part of or mixed with oil, gas and other associated liquid and gaseous hydrocarbons,
but this Lease does not cover gravel, uranium, fissionable materials, coal, lignite or any hard minerals or substance
of any type which shall be produced from the leased premises separate and apart from, or independently of, oil, gas,
sulphur, coal bed methane gas or other liquid and gaseous hydrocarbons.
A.3.
CONTINUOUS OPERATIONS
In addition to and notwithstanding any other provision herein, this Lease shall not terminate in whole or in
part, regardless of whether production of oil or gas has been established from the leased premises at the end of the
primary term, so long as Lessee is engaged in Continuous Drilling Operations on the leased premises and, except as
provided in this paragraph so long thereafter as oil or gas is produced in paying quantities from the leased premises.
“Continuous Drilling Operations” as used herein shall mean the drilling of wells without more than one hundred
eighty (180) days elapsing between the completion of one well and the commencement of actual drilling of the next
well. “Completion” means the date the well is either plugged and abandoned as a dry hole or the date the last work is
performed in the hole to make the well ready to produce, provided that in no event shall the date of completion be
later than thirty (30) days after release of the rig used in the drilling of the well. “Commencement” of actual drilling
of a well means spudding with a rig capable of reaching the total depth to be drilled. The actual drilling of the first
such well must be commenced as follows: (1) if at the end of the primary term there is no well capable of producing
oil or gas in paying quantities on the leased premises, then on or before the end of the primary term; (2) if at the end
of the primary term there is a well capable of producing oil or gas in paying quantities on the leased premises, but
completion of the last well drilled during the primary term was more than one hundred eighty (180) days prior to the
end of the primary term, then on or before the end of the primary term; or (3) if at the end of the primary term there
is a well capable of producing oil or gas in paying quantities on the leased premises, but completion of the last well
drilled during the primary term was less than one hundred eighty (180) days prior to the end of the primary term,
then within one hundred eighty (180) days from completion of the last well drilled during the primary term. The
commencement or continuation of Continuous Drilling Operations shall be at Lessee’s option and shall not be
considered an obligation or covenant of Lessee. If the Continuous Drilling Operations are not commenced within the
time hereinbefore specified, or if, at any time after commencement of Continuous Drilling Operations, more than
one hundred eighty (180) days elapse between the completion of one well and the commencement of actual drilling
of the next well, this Lease shall, at the end of the period of time within which Lessee was required to commence a
well, terminate (a) as to all of the lands and depths except those portions included within a production unit
established for a well then capable of producing oil or gas in paying quantities or on which Lessee is then engaged in
bona fide operations to establish or restore production of oil or gas, and (b) as each well ceases to produce and is not
repaired, redrilled or reworked, the production unit or pooled leased premises, as the case may be, shall revert to the
Lessor on a production unit by production unit or pooled unit containing leased premises basis. If this Lease is
continued in force under the immediately preceding sentence as to a production unit on which operations are being
conducted in an effort to establish or restore production but on which there is no well then capable of producing oil
or gas, this Lease shall likewise terminate as to the land within such production unit upon cessation of such
operations for a period of ninety (90) consecutive days unless such operations (on the same or an additional well or
wells in the same production unit) have resulted in the restoration or establishment of a well producing oil or gas in
paying quantities on such production unit. Such production units shall be designated by Lessee in the form of a
square or rectangle as nearly as practical and shall contain 40 acres for each producing vertical oil well and 640
acres for each producing vertical gas well or horizontal oil or gas well plus a tolerance of 10% greater or smaller;
provided that should any governmental authority having jurisdiction promulgate special rules for the field or
reservoir from which such well is producing (either prior to the partial termination of the lease as provided herein or
at any time within 180 days thereafter) that require a greater number of acres or authorize a lesser number of acres to
be assigned as a proration unit for such well, the production unit therefor shall consist of such greater or lesser
number of acres.
A.4.
PUGH
(a) Lessee shall have no right to pool the leased premises with other lands for the production of oil or gas
unless all of the leased premises are included within the pooled unit thereby created. If part of the land is included
in a production unit or units, whether pooled or not, then, at the end of the primary term, only the land from the
surface of the earth down to and including the base of the formation from which actual production is being obtained
or it’s stratigraphic equivalent in the event the well(s) are located on a tract other than the leased premises that is
included in pooled units or production unit(s) shall continue to be held by this Lease. The balance of the leased
premises and depths shall revert to Lessor except as to those lands which are included within the geographical
boundaries of a pooled unit or if a lease well a producing unit. As to all lands not then included in a pooled unit or
producing unit this Lease shall terminate as to all depths and lands as herein provided; and Lessee shall execute and
file of record in the County in which the leased premises are located, a release of this Lease within sixty (60) days as
to the balance of the land covered hereby as well as formations at depths below the respective producing units.
Paid up Oil and Gas Lease Page 4 of 7
Lessee shall have the right but not the obligation to utilize an additional 100’ below the formation from which actual
production is being obtained for mechanical or operational purposes, but not for completion or production purposes.
At the end of the primary term, each production unit, whether pooled or not, shall thereafter be viewed and treated as
a separate and distinct lease. Operations or production on one unit shall not be construed as operations or production
on another. All or any portion of the leased premises included in a unit for oil, a unit for gas, or a unit for oil and gas
shall share in the production of oil and gas from each and every producing horizon, zone, strata or formation from
the date of first production to the date that production ceases to maintain such unit in force and effect. This Lease
creates a fee simple determinable. The only interest that Lessee is permitted to pool is the fee simple determinable
created in Lessee by this Lease. It is hereby stipulated and agreed that Lessee is expressly denied the right to pool
Lessor’s possibility of reverter, it being the stated agreement and intent of this provision to be to negate the holding
of Wagner & Brown v. Sheppard, 282 SW3d 419 (2008) with respect to pooling Lessor’s possibility of reverter. The
term “producing unit” as used herein means the following number of acres, depending on the depth to which the
well has been drilled, and whether the well is an oil or gas well (excluding horizontal wells):
i.
40 acres for an oil well completed at any depth, except for a horizontal oil well;
ii.
(i) 80 acres for a gas well completed at a depth of less than 2,000 feet subsurface;
(ii) 160 acres for a gas well completed at a depth of 2,000 feet subsurface to 6,000 feet
subsurface;
(iii) 320 acres for a gas well completed at a depth of 6,000 feet subsurface to 9,000 feet
subsurface;
(iv) 640 acres for a gas well completed at a depth greater than 9,000 feet subsurface; and
iii.
The maximum authorized size of pooled units and production units for horizontal wells (either
oil or gas) shall be calculated according to the following formula: A (acreage) = [L
(Horizontal Drainhole Displacement) x .11488 + 160] x 1.5; then A is rounded up to the
nearest number evenly divisible by 40. EXAMPLE: A = [2,000' X .11488 + 160] x 1.5 =
584.64 acres (rounded up to the nearest number evenly divisible by 40 = 600 acres). If
multiple horizontal wells are drilled from a single drillsite location (a “pad”), the relevant
production unit size will be determined by the following formula: (40 x N) + .05B, where N
= number of horizontal wells on the pad; and B = the combined length of all the Horizontal
Drainhole Displacements, of the wells on the pad.
(b) At the expiration of the Primary Term hereof, or at the expiration of any drilling operations in progress
at the end of the Primary Term, this Lease shall terminate as to all of the land covered hereby except as to those
lands which are included within the designated geographical boundaries of a pooled unit or production unit
containing the acreage required (a) to obtain the maximum allowable production established in conformity with the
field rules or spacing laws prescribed by the State of Texas Railroad Commission on which there is located a well
capable of producing oil and/or gas, and (b) any allowed tolerance acreage attributable to acreage under (a). If said
lands are not then included in a pooled unit or production unit, then this Lease shall terminate as to all depths and
lands not so included as herein provided. At the end of the primary term, each production unit, whether pooled or
not, shall thereafter be viewed and treated as a separate and distinct lease. Operations or production on one unit shall
not be construed as operations or production on another. As each well ceases to produce, the unit shall revert to the
mineral owner on a unit-by-unit basis.
A.5.
NO SURFACE OPERATIONS
Lessee shall not have the right to use the surface of the leased premises or any part thereof nor have the
right of ingress and egress upon or across the surface of all or any part of the leased premises. This prohibition with
respect to the use of the surface of the leased premises shall in no way impair the right of Lessee to produce oil, gas
or other minerals from the leased premises, either by directional drilling from a well located on adjacent land or by
some other method which will not require entry upon the surface of the leased premises or by including the leased
premises or a portion thereof within a pooled unit or units pursuant to the terms hereof.
A.6.
SHUT IN
After the end of the primary term, this Lease may not be maintained in force solely by reason of shut-in
royalty payments, as provided herein, for any one or more shut-in periods of more than two (2) years in the
aggregate.
A.7.
MINIMUM ROYALTY
Notwithstanding anything to the contrary contained herein, it is specifically agreed that the minimum
royalty payment to Lessor herein due to production under this Lease shall never be less than the amount of THIRTY
DOLLARS ($30.00) per net mineral acre per year for the acreage maintained by this Lease. The anniversary date for
the payment of the minimum royalty payment to Lessor herein shall be within ninety (90) days after one (1) year
from the date on which the first well is placed in production. Payment of minimum royalty shall not substitute or
replace the requirement that any well or wells produce in paying quantities.
A.8.
TIMELY PAYMENT OF PROCEEDS
Lessee or the purchaser of oil and/or gas or other products produced from the leased premises will pay to
Lessor the royalties provided for herein within the time provided in §91.402 of the Natural Resources Code of the
State of Texas and upon failure to pay within the stated time to pay interest thereon as provided in §91.403 of the
Natural Resources Code of the State of Texas and shall be subject to §91.404 of the Natural Resources Code of the
Paid up Oil and Gas Lease Page 5 of 7
State of Texas. Furthermore, Lessee agrees not to withhold any royalty due Lessor under this Lease because of title
problems which may exist under acreage in which Lessor does not own an interest.
A.9.
DEDUCTIONS
Royalties tendered to the Lessor under this Lease shall be made without deductions for producing,
gathering, storing, separating, dehydrating, compressing, transporting, pipelining or any other costs or expenses
needed to make the product saleable or to transport it to market. If this Lease uses the terms “market value at the
well or wellhead”, or “market price at the well or wellhead” or similar language, then in the event a net-back or
reproduction approach is used to determine market price or market value at the well or wellhead, once such market
value is determined, any post-production costs factored into such determination shall be added back in prior to
payment of lessor's royalty. However, the Lessor’s royalty shall bear its proportionate share of ad valorem and
severance taxes. It is the intent of the parties that the foregoing provisions of this paragraph are to be fully
enforceable and effective and are not to be construed as “surplusage” under the opinion in Heritage Resources, Inc.
v. NationsBank, 939 S.W.2d 118 (Tex. 1997).
A.10.
INFORMATION
Lessee shall furnish Lessor, upon written request, copies of all title opinions covering the leased premises,
and copies of all filings made by Lessee with the Railroad Commission of Texas pertinent to drilling and completing
wells on the leased premises and property pooled therewith.
A.11.
WARRANTY
It is expressly agreed between the parties hereto that no warranty or covenant of title to the land covered
hereby or to the oil and gas therein or produced therefrom is made by Lessor, and that no warranty, covenant, or
guarantee of title shall be created or arise from this Lease except by, through and under Lessor, but not otherwise.
A.12.
BINDING EFFECT
The covenants, conditions, and agreements contained in this Lease shall be binding upon the heirs,
executors, administrators, successors, trustees and assigns of Lessee as to all or any part of Lessee’s interests, rights
or obligations in this Lease.
A.13.
SEVERABILITY
If any clause or provision of this Lease is invalid or unenforceable at any time under then current laws, the
remainder of this Lease shall not be affected thereby, and this Lease shall be modified so that in place of each such
clause or provision of this there will be added as a part of this Lease a legal, valid, and enforceable clause or
provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible.
A.14.
NON-PARTICIPATING ROYALTY INTERESTS
If there are royalty interests in oil and gas in the leased premises now owned by parties other than Lessor,
Lessor makes no warranty or representation that this Lease grants Lessee the power or authority to pool such royalty
interests, but in the event of pooling hereunder Lessor’s royalty on production from the pooled unit shall be
calculated and paid as if Lessee had the power, and had exercised the power, to pool such royalty interests, whether
or not Lessee in fact has such authority.
A.15.
ADDITIONAL LEASING
Lessor shall, at all times, have the right to give leases, drilling contracts or other instruments (including coextensive use easements) covering any minerals in and on such Property which are not covered by or included in this
Lease, provided that any such lease shall not unreasonably interfere with the rights and authority given to Lessee by
this Lease.
A.16.
PLACE OF PERFORMANCE
All obligations of Lessee other than the payment of money shall be performable in the county or counties in
which the leased premises are situated. All obligations of Lessee for the payment of money shall be performable in
the county of residence of each Lessor.
A.17.
MULTIPLE COUNTERPARTS
This Lease may be executed in counterparts, each of which when so executed shall be given the effect of
the execution of the original instrument. This Lease shall not be valid until all parties hereto have executed and
properly acknowledged the original document or a counterpart thereof. If counterparts of this instrument are
executed, for recording purposes, the pages containing the signatures and acknowledgments of all the parties, as
affixed hereto, may be combined, and treated and given effect for all purposes, as a single instrument.
A.18.
MEMORANDUM
This Lease shall not be recorded. A memorandum of this Lease shall be prepared and executed by the
parties hereto, and only it shall be filed with the County Clerk’s office evidencing this Lease agreement.
A.19.
RECORDATION AND EXECUTION
Recordation of this Lease or recordation of a memorandum of this Lease shall serve as conclusive evidence
of Lessee’s execution, acceptance and adoption of all of the covenants, conditions and agreements in this Lease.
Paid up Oil and Gas Lease Page 6 of 7
A.20.
RESOLUTION
This Lease is made under the authority of a Resolution signed by the President of the Board of Trustees for
the Bryan Independent School District. Section 11.153 of the Education Code requires the board of trustees of an
independent school district to adopt a resolution which authorizes the president of the board of trustees to execute an
oil and gas lease.
SIGNED FOR IDENTIFICATION:
_________________________________________________
THE BRYAN INDEPENDENT SCHOOL DISTRICT
By: Dr. Douglas Wunneburger, Board President
Paid up Oil and Gas Lease Page 7 of 7
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL
PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE
FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT
TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS
FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL
SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.
MEMORANDUM OF OIL AND GAS LEASE
STATE OF TEXAS
COUNTY OF BRAZOS
§
§
§
WHEREAS, THE BRYAN INDEPENDENT SCHOOL DISTRICT, whose address is 101 North Texas Avenue,
Bryan, Brazos County, Texas 77803, as Lessor, whether one or more, and [], whose address is [], as Lessee, entered into an Oil
and Gas Lease dated June ____, 2014 covering the following described land situated in Brazos County, State of Texas, to wit (the
“Lease”):
[].
WHEREAS, Lessor and Lessee desire to give public notice of the execution and delivery of the lease by the recordation
of this Memorandum of Oil and Gas Lease:
NOW, THEREFORE, for the purposes aforesaid, Lessor and Lessee hereby state as follows:
The Lease under which Lessor has leased the land to Lessee is for a primary term of Three (3) years from
June ____, 2014 and so long thereafter as oil or gas is produced in paying quantities from the land, or the Lease is otherwise
maintained, all as more particularly set out in the Lease of even date herewith to which reference is here made for all purposes,
including further description of the terms and provisions of the Lease. Both Lessor and Lessee have possession of a fully
executed copy of the Lease. This instrument is executed and recorded solely for the purpose of affording notice of the existence
of the Lease and shall not amend, alter or otherwise affect the terms, provisions and conditions of the Lease.
This Memorandum may be executed in counterparts, each of which when so executed shall be given the effect of the
execution of the original instrument. If counterparts of this instrument are executed, for recording purposes, the pages containing
the signatures and acknowledgments of all the parties, as affixed hereto, may be combined, and treated and given effect for all
purposes, as a single instrument. Recordation of this Memorandum shall serve as conclusive evidence of Lessee’s execution,
acceptance and adoption of all of the covenants, conditions and agreements in the Lease.
Lessor:
THE BRYAN INDEPENDENT SCHOOL DISTRICT
_________________________________________________
By: Dr. Douglas Wunneburger, Board President
ACKNOWLEDGMENTS
STATE OF TEXAS
§
COUNTY OF BRAZOS
§
This instrument was acknowledged before me this _____ day of _____________, 2014, by Dr. Douglas
Wunneburger on behalf of THE BRYAN INDEPENDENT SCHOOL DISTRICT.
Notary Public, State of Texas
Memorandum of Oil and Gas Lease Page 1 of 1
W-9
Request for Taxpayer
Identification Number and Certification
Form
(Rev. October 2007)
Department of the Treasury
Internal Revenue Service
Give form to the
requester. Do not
send to the IRS.
Print or type
See Specific Instructions on page 2.
Name (as shown on your income tax return)
Business name, if different from above
Bryan Independent School District
Check appropriate box:
Individual/Sole proprietor
Corporation
Partnership
Limited liability company. Enter the tax classification (D=disregarded entity, C=corporation, P=partnership)
✔
Other (see instructions)
©
©
✔
Exempt
payee
School District
Address (number, street, and apt. or suite no.)
Requester’s name and address (optional)
101 North Texas Avenue
City, state, and ZIP code
Bryan, Texas 77803
List account number(s) here (optional)
Part I
Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. The TIN provided must match the name given on Line 1 to avoid
backup withholding. For individuals, this is your social security number (SSN). However, for a resident
alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is
your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3.
Social security number
Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose
number to enter.
Employer identification number
Part II
or
Certification
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal
Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup withholding, and
3. I am a U.S. citizen or other U.S. person (defined below).
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup
withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply.
For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement
arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must
provide your correct TIN. See the instructions on page 4.
Sign
Here
Signature of
U.S. person ©
Date ©
General Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.
Purpose of Form
A person who is required to file an information return with the
IRS must obtain your correct taxpayer identification number (TIN)
to report, for example, income paid to you, real estate
transactions, mortgage interest you paid, acquisition or
abandonment of secured property, cancellation of debt, or
contributions you made to an IRA.
Use Form W-9 only if you are a U.S. person (including a
resident alien), to provide your correct TIN to the person
requesting it (the requester) and, when applicable, to:
1. Certify that the TIN you are giving is correct (or you are
waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S.
exempt payee. If applicable, you are also certifying that as a
U.S. person, your allocable share of any partnership income from
a U.S. trade or business is not subject to the withholding tax on
foreign partners’ share of effectively connected income.
Note. If a requester gives you a form other than Form W-9 to
request your TIN, you must use the requester’s form if it is
substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you are
considered a U.S. person if you are:
● An individual who is a U.S. citizen or U.S. resident alien,
● A partnership, corporation, company, or association created or
organized in the United States or under the laws of the United
States,
● An estate (other than a foreign estate), or
● A domestic trust (as defined in Regulations section
301.7701-7).
Special rules for partnerships. Partnerships that conduct a
trade or business in the United States are generally required to
pay a withholding tax on any foreign partners’ share of income
from such business. Further, in certain cases where a Form W-9
has not been received, a partnership is required to presume that
a partner is a foreign person, and pay the withholding tax.
Therefore, if you are a U.S. person that is a partner in a
partnership conducting a trade or business in the United States,
provide Form W-9 to the partnership to establish your U.S.
status and avoid withholding on your share of partnership
income.
The person who gives Form W-9 to the partnership for
purposes of establishing its U.S. status and avoiding withholding
on its allocable share of net income from the partnership
conducting a trade or business in the United States is in the
following cases:
● The U.S. owner of a disregarded entity and not the entity,
Cat. No. 10231X
Form
W-9
(Rev. 10-2007)