Thank you so much and thank you for moving this. Even this info is a huge help
As far as an oil and gas attorney, is there a good place to find ones who work in Weld?
Also since I was given a template of the lease I figure I’ll share that here in case anyone has any thoughts on if it looks reasonable or not. Obviously not looking for actual legal advice with it (that’s what I’d ask the attorney for) but more the experience with things like the two year extensions where that’s really helpful to get an opinion on
Anyway, thank you again. This means a whole lot to me. Rest of the message is just a copy paste of the lease template I was sent
THIS AGREEMENT, made and entered into this day of , 2024, by and between «OWNER», whose address is «Street», «City», «State» «Zip», hereinafter called Lessor (whether one or more), and Stonebriar Energy, LLC, whose address is PO Box 7733, Edmond, OK 73083, hereinafter called Lessee:
WITNESSETH:
1. That Lessor, for and in consideration of --Ten-- dollars ($ *10.00*) in hand paid, receipt of which is hereby acknowledged, and of the agreements of Lessee hereinafter set forth, hereby grants, demises, leases and lets exclusively unto Lessee the lands described below for the purpose of investigating, prospecting, exploring (by geophysical and other methods), drilling, mining, operating for and producing oil or gas, or both (as defined below), together with the right to construct and maintain pipelines, telephone and electric lines, tanks, ponds, roadways, plants, equipment, and structures thereon to produce, save and take care of said oil and gas (which right shall include specifically a right-of-way and easement for ingress to and egress from said lands by Lessee, or its assignees, agents or permittees, necessary to or associated with the construction and maintenance of such pipelines, telephone and electric lines, tanks, ponds, roadways, plants, equipment, and structures on said lands to produce, save and take care of the oil and gas), and the exclusive right to inject air, gas, water, brine and other fluids from any source into the subsurface strata, and any and all other rights and privileges necessary, incident to, or convenient for the economical operation of said land, alone or conjointly with neighboring land, for the production, saving and taking care of oil and gas and the injection of air, gas, water, brine, and other fluids into the subsurface strata, together with any reversionary rights therein or rights hereafter vested in Lessor; said lands being situated in the County of Weld, State of Colorado, described as follows, to-wit (herein called “leased premises”):
Township «T» North, Range «R» West, 6th P.M.
Section «S»: «Legal»
and containing «TRACT_ACRES» acres, more or less.
In addition to the land described above, the leased premises shall include, and Lessor hereby grants, leases and lets exclusively unto Lessee, to the same extent as if specifically described, lands which are now owned, hereafter acquired, or claimed by Lessor and described as follows: (1) all lands and rights acquired or retained by Lessor by avulsion, accretion, reliction or otherwise as the result of a change in the boundaries or centerline of any river or stream traversing or adjoining the lands described above; (2) all riparian lands and rights which are or may be incident, appurtenant, related or attributed to Lessor in any lake, stream or river traversing or adjoining the lands described above by virtue of Lessor’s ownership of the land described above; (3) all lands included in any road, easement or right-of-way traversing or adjoining the lands described above which are or may be incident, appurtenant, related or attributed to Lessor by virtue of Lessor’s ownership of the land described above; and (4) all strips or tracts of land adjacent or contiguous to the lands described above, including, but not limited to, those strips or tracts of land owned or acquired by Lessor through adverse possession or other similar statutes of the state in which the leased premises are located.
The term oil as used in this lease shall be interpreted to include any liquid hydrocarbon substances which occur naturally in the earth, including drip gasoline or other natural condensate recovered from gas without resort to manufacturing process. The term gas as used in this lease shall be interpreted to include any substance, either combustible or non-combustible, which is produced in a natural state from the earth and which maintains a gaseous or rarified state at ordinary temperature and pressure conditions, including but not limited to natural gas, helium, nitrogen, carbon dioxide, hydrogen sulfide, coal bed methane gas, casinghead gas and Sulphur.
Subject to the other provisions herein contained, this lease shall remain in force for a term of three (3) years from the date hereof (herein called “primary term”) and as long thereafter as oil and gas, or either of them, is produced from the leased premises or lands pooled or unitized therewith or this lease is otherwise maintained in effect pursuant to the provisions hereof. For purposes of this lease, a well completed for the production of coalbed methane gas shall be deemed to be producing gas under this lease at all times when dewatering of the coal seams from which the coalbed methane gas will be produced is occurring. For purposes of this lease, “operations” shall include operations for the drilling of a new well and operations for the reworking, deepening or plugging back of a well or hole or other operations conducted in an effort to establish, resume or re-establish production of oil and gas; operations shall be considered to be “continuously prosecuted” if such operations are prosecuted with no interruption of more than one hundred twenty (120) days; operations shall be deemed to be commenced for a new well at such time as Lessee has begun the construction of the wellsite location or the road which provides access to the wellsite location; and operations shall be deemed to be commenced with respect to reworking, deepening, plugging back or other operations conducted in an effort to resume or re-establish production of oil and gas at such times as Lessee has the requisite equipment for such operations.
2. For all oil and gas substances that are physically produced from the leased premises, or lands pooled, unitized or communitized therewith, and sold, Lessor shall receive as its royalty Three-Sixteenths (3/16th) of the sales proceeds actually received by Lessee or, if applicable, its affiliate, as a result of the first sale of the affected production to an unaffiliated party. Lessor’s royalty shall be subject to Post Production Costs and will bear its proportionate share of: (i) all production, severance and ad valorem taxes, and (ii) applicable charges after oil and gas substances are in a marketable condition and have reached a recognized market for same including transportation charges, if any. As used in this provision, Post Production Costs shall mean all costs actually incurred by Lessee or its affiliate from and after the wellhead until the oil and gas substances are in a marketable condition and have reached a recognized market for same. For the purposes of this leases, “a recognized market” means that location at which Lessee could sell oil and/or gas substances in an arm’s length transaction. Post Production Costs include without limitation, all costs of gathering, marketing, compression, dehydration, transportation, removal of liquid or gaseous substances or impurities from the affected production, prior to the time oil and gas substances produced from the leased premises or from land pooled therewith are in a marketable condition and have reached a recognized market for same, and any other treatment or processing required by the first unaffiliated party who purchases the affected production. For royalty calculation purposes, Lessee shall never be required to adjust the sales proceeds to account for the purchaser’s costs or charges downstream of the point of sale. Lessee or its affiliate shall have the right to construct, maintain and operate any facilities providing some or all of the services identified as Post Production Costs. If Lessee uses the oil and gas substances (other than as fuel in connection with the production and sale thereof) in lieu or receiving sale proceeds, the price to be used under this provision shall be based upon the weighted average sales price in an arm’s-length sale(s) to unaffiliated parties for the applicable month that are obtainable, comparable in terms of quality and quantity, and in closest proximity to the leased premises. Such comparable arm’s-length sales price shall allow deduction of any Post Production Costs applicable to the specific arms-length transaction that is utilized.
3. This is a paid-up lease and all cash consideration first recited above and annual rentals have been paid to Lessor in advance to keep this lease in full force and effect throughout the primary term. In consideration of the payment of such cash consideration and advance of annual rentals, Lessor agrees that Lessee shall not be obligated to commence or continue any operations during the primary term. Lessee may at any time or times during or after the primary term surrender this lease as to all or any portion of the leased premises, and as to any strata or stratum, by delivering to Lessor or by filing of record a release or releases, and be relieved of all obligations thereafter accruing to the acreage surrendered.
4. If, at the expiration of the primary term of this lease, oil or gas is not being produced from the leased premises or lands pooled or unitized therewith, but Lessee is then engaged in operations thereon, this lease shall continue in force so long as operations thereon are continuously prosecuted; and if production of oil or gas results from any such operations, this lease shall continue in force so long as oil or gas shall be produced from the leased premises or lands pooled or unitized therewith. If, after the expiration of the primary term of this lease, all production from the leased premises or lands pooled or unitized therewith should cease for any cause, this lease shall not terminate if Lessee is then engaged in operations thereon, or within one hundred twenty (120) days after each such cessation of production commences or resumes operations thereon, and this lease shall remain in force so long as operations are continuously prosecuted, and if production results therefrom, then as long thereafter as oil or gas is produced from the leased premises or lands pooled or unitized therewith. All operations conducted on a wellsite location located off the leased premises that are intended to result in the completion of or restoration of production from a well or wellbore located on the leased premises or lands pooled or unitized therewith shall be considered operations conducted on the leased premises for purposes of extending or maintaining this lease in effect under any paragraph or provisions hereof.
5. If at any time, either before or after the expiration of the primary term of this lease, there is a well capable of producing oil or gas on the leased premises, or lands pooled or unitized therewith, but the well is shut-in, whether before or after production therefrom, and this lease is not being maintained otherwise as provided herein, this lease shall not terminate (unless released by Lessee) and it shall nevertheless be considered that oil or gas is being produced from the leased premises during all times while the well is so shut-in. Lessee shall use commercially reasonable diligence to market the oil or gas capable of being produced from such shut-in well, but shall be under no obligation to market the oil or gas under terms, conditions or circumstances which, in Lessee’s judgment exercised in good faith, are unsatisfactory. When the lease is continued in force in this manner, Lessee shall pay or tender to the Lessor or Lessor’s successors or assigns, an amount equal to $1.00 per year per net mineral acre covered by the lease. Such payments shall be made on or before the shut-in royalty payment date, as defined below, next occurring after the expiration of one hundred twenty (120) days from the date the well was shut-in, unless prior to such date oil or gas from the well is sold or used or the lease is otherwise maintained as provided herein. In like manner, on or before each succeeding shut-in royalty payment date while such well remains shut-in, Lessee shall make payment of shut-in royalty in the same amount and manner. The term “shut-in royalty payment date” shall mean the anniversary date of this lease. Any shut-in royalty payment may be made by cash, draft or check, mailed or tendered on or before the shut-in royalty date. Lessee’s failure to pay or tender, or properly pay or tender, any such sum shall render Lessee liable for the amount due but it shall not operate to terminate the lease.
6. If Lessor owns a lesser interest in the leased premises other than the entire and undivided fee simple estate therein, then the royalties, including shut-in royalty, herein provided shall be paid to Lessor only in the proportion which Lessor’s interest bears to the whole and undivided fee. 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.
7. Lessee shall have the right to use, free of cost, gas, oil and water produced on the leased premises for its operation thereon, except water from wells and reservoirs of Lessor. Lessee shall have the right (but not the obligation) at any time to remove all improvements, machinery and fixtures placed on the leased premises, including the right to draw and remove casing.
8. Lessee shall pay to Lessor reasonable amounts for damages caused by its operations to growing crops on the leased premises. When requested by Lessor, Lessee shall bury its pipelines which traverse cultivated lands below plow depth. No well shall be drilled nearer than two hundred (200) feet to a house or barn now on said premises, without written consent of Lessor.
9. Lessee is hereby given the right and power at any time and from time to time as a recurring right, either before or after production, as to all or any part of the leased premises and as to any one or more of the formations hereunder, to pool or unitize the leasehold estate and the mineral estate covered by this lease with other land, lease or leases in the immediate vicinity for the production of oil and gas, or separately for the production of either, when in Lessee’s judgment it is necessary or advisable to do so, and irrespective of whether authority similar to this exists with respect to such other land, lease or leases. Likewise, units previously formed to include formations not producing oil or gas may be reformed to exclude such non-producing formations. The forming or reforming of any unit shall be accomplished by Lessee executing and filing of record a declaration of such unitization or reformation, which declaration shall describe the unit. Any unit may include land upon which a well has heretofore been completed or upon which operations have been commenced. Production, drilling or reworking operations or a well shut-in for any reason anywhere on a unit which includes all or a part of the leased premises shall be treated as if it were production, drilling or reworking operations or a well shut-in under this lease. In lieu of the royalties elsewhere herein specified, Lessor shall receive on production from the unit so pooled royalties only on the portion of such production allocated to this lease; such allocation shall be that proportion of the unit production that the total number of net mineral acres covered by this lease and included in the unit bears to the total number of surface acres in such unit.
10. Lessee shall have the right to unitize, pool, or combine all or any part of the leased premises as to one or more of the formations thereunder with other lands in the same general area by entering into a cooperative or unit plan of development or operation approved by any governmental authority and, from time to time, with like approval, to modify, change or terminate any such plan or agreement and, in such event, the terms, conditions, and provisions of this lease shall be deemed modified to conform to the terms, conditions, and provisions of such approved cooperative or unit plan of development or operation and particularly, all drilling and development requirements of this lease, express or implied, shall be satisfied by compliance with the drilling and development requirements of such plan or agreement, and this lease shall not terminate or expire during the life of such plan or agreement. In the event that the leased premises or any part thereof shall hereafter be operated under any such cooperative or unit plan of development or operation whereby the production therefrom is allocated to different portions of the leased premises covered by said plan, then the production allocated to any particular tract of land shall, for the purpose of computing the royalties to be paid hereunder to Lessor, be regarded as having been produced from the particular tract of land to which it is allocated and not to any other tract of land; and the royalty payments to be made hereunder to Lessor shall be based upon production only as so allocated.
11. If the estate of either party hereto is assigned or sublet, and the privilege of assigning or subletting in whole or in part is expressly allowed, the express and implied covenants hereof shall extend to the sub lessees, successors and assigns of the parties; and in the event of an assignment or subletting by Lessee, Lessee shall be relieved and discharged as to the leasehold rights so assigned or sublet from any liability to Lessor thereafter accruing upon any of the covenants or conditions of this lease, either express or implied. No change in ownership of the leased premises, royalties, or other payments, however accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee or require separate measuring or installation of separate tanks by Lessee. Notwithstanding any actual or constructive knowledge of or notice to Lessee, no change in ownership of the leased premises or of the right to receive royalties or other payments hereunder, or of any interest therein, whether by reason of death, conveyance or any other matter, shall be binding on Lessee (except at Lessee’s option in any particular case) until one hundred twenty (120) days after Lessee has been furnished written notice thereof, and the supporting information hereinafter referred to, by the party claiming as a result of such change in ownership or interest. Such notice shall be supported by original and certified copies of all documents and other instruments or proceedings necessary in Lessee’s opinion to establish the ownership of the claiming party.
12. In the interest of conservation, the protection of reservoir pressures and recovery of the greatest ultimate yield of oil and/or gas, Lessee shall have the right to combine the leased premises with other premises in the same general area for the purpose of operating and maintaining repressuring and recycling facilities, and for such purpose may locate such facilities, including input wells, upon leased premises, and no royalties shall be payable hereunder upon any gas used for repressuring and recycling operations benefiting the leased premises.
13. If Lessor, during the primary term of this lease, receives a bona fide offer from a third party to purchase from Lessor a lease covering any or all of the substances covered by this lease and covering all or a portion of the leased premises, with such lease to become effective upon expiration of this lease, which Lessor is willing to accept from the offering party, Lessor hereby agrees to notify Lessee in writing of said offer immediately, including in the notice the name and address of the offeror, the price offered and all other pertinent terms and conditions of the offer. Lessee, for a period of fifteen (15) days after the receipt of the notice, shall have the prior and preferred right and option to purchase the lease or part thereof or interest therein covered by the offer at the price and on the terms and conditions specified in the offer. All offers made up to and including the last day of the primary term of this lease shall be subject to the terms and conditions of this paragraph. Should Lessee elect to extend and/or renew the lease pursuant to the terms offered, it shall so notify Lessor in writing by mail, telefax, or telegram prior to expiration of said fifteen (15) day period. Lessee shall promptly thereafter furnish to Lessor the extension and/or renewal lease for execution by Lessor along with Lessee’s sight draft payable to Lessor in payment of the specified amount as consideration for the new extension and/or renewal lease, such draft being subject to approval of title according to the terms thereof. Upon receipt thereof, Lessor shall promptly execute said extension and/or renewal lease and return same along with the draft through Lessor’s bank of record for payment.
14. In the event Lessor considers that Lessee has not complied with all its obligations hereunder, either express or implied, Lessor shall notify Lessee in writing, setting out specifically in what respects Lessee has breached this lease. Lessee shall then have sixty (60) days after receipt of said notice within which to meet or commence to meet all or any part of the breaches alleged by Lessor. The service of said notice shall be precedent to the bringing of any action by Lessor on said lease for any cause, and no such action shall be brought until the lapse of sixty (60) days after service of such notice on Lessee. Neither the service of said notice nor the doing of any acts by Lessee aimed to meet all or any of the alleged breaches shall be deemed an admission or presumption that Lessee has failed to perform all its obligations hereunder. This lease shall never be forfeited or cancelled for failure to perform in whole or in part any of its implied covenants, conditions, or stipulations until a judicial determination is made that such failure exists and Lessee fails within a reasonable time to satisfy any such covenants, conditions, or stipulations.
15. All express and implied covenants of this lease shall be subject to all federal, state, county or municipal laws, executive orders, rules and regulations, and Lessee’s obligations and covenants hereunder, whether express or implied, shall be suspended at the time or from time to time as compliance with such obligations and covenants is prevented or hindered by or is in conflict with federal, state, county, or municipal laws, rules, regulations or executive orders asserted as official by or under public authority claiming jurisdiction, or Act of God, adverse field, weather, or market conditions, lack of market, inability to obtain materials in the open market or transportation thereof, wars, strikes, lockouts, riots, pandemic, fracking bans and/or moratoriums upon well completions and/or production restrictions, or other conditions or circumstances not wholly controlled by Lessee, and this lease shall not be terminated in whole or in part, nor Lessee held liable in damages for failure to comply with any such obligations or covenants if compliance therewith is prevented or hindered by or is in conflict with any of the foregoing eventualities. The time during which Lessee shall be prevented from conducting drilling, completion, reworking, and/or production operations during the primary term, or extended term, of this lease, under the contingencies above stated, shall be added to the primary term, or extended term, of this lease.
16. Lessor hereby warrants and agrees to defend the title to the leased premises and covenants that Lessee shall have quiet enjoyment hereunder and shall have benefit of the doctrine of after acquired title. Lessor agrees that Lessee, at its option, shall have the right at any time to pay for Lessor, any mortgage, taxes or other liens existing, levied or assessed on or against the leased premises in the event of default of payment by Lessor and be subrogated to the rights of the holder thereof, and Lessor hereby agrees that any such payments made by Lessee for the Lessor may be deducted from any amounts of money which may become due the Lessor under the terms of this lease.
17. At Lessee’s option the primary term of this lease may be extended for an additional two (2) years from the original expiration date by paying or tendering to Lessor on or before the original expiration date an amount equal to 100% of the bonus consideration originally paid for this lease.
18. This lease and all its terms, conditions, and stipulations shall extend to and be binding on all successors in interest, in whole or in part, of said Lessor or Lessee.
19. With respect to and for the purpose of this lease, Lessor, and each of them if there be more than one, hereby release and waive the right of homestead.
WHEREOF witness our hands as of the day and year first above written.