O-1988-1622 - Laserfiche WebLink

Browse Search

270fl . 'e 3. ANNUAL RENTALS: This lease shall terminate one (1). year from this date as to all the leased premises lying outside of a well tract or unit on which there is located a well which is producing or which is capable of producing oil, gas, or other liquid hydrocarbons, unless on or before such anniversary date Lessee shall payor tender to Lessor at BAYSHORE NATIONAL BANK OF LA PORTE, P.O. Box 998, La Porte, Texas 77572-0998, the sum of Fiftv & 00/100------- . Dollars ($ 50.00 ) per acre (herein called Rentals) for all the leased premises lying outside of such well tracts or units, which payment or tender shall continue this lease in force and effect as to all such land for a period of twelve (12) months. In like manner and upon like payment or tender annually, such termination of all the leased premises lying outside of such well tracts or units may be further deferred for successive periods of twelve (12) months each during the primary term. For purposes of determining rental payable hereunder, such well tracts or units shall be deemed to consist of 40 acres for each oil well or 160 acres for each gas well, as the case may be. Lessee shall not be held in default for failure to make such payment or tender of rental until thirty (30) days after Lessor shall deliver to Lessee written notice designating another address at which to receive the payments or tenders. The cash down payment is consideration for this lease according to its terms and shall not be allocated as a mere rental for a period. 4. ROYALTY: The royalties to be paid by Lessee are: (a) On oil and condensate or other liquid hydrocarbons produced at the well or at any oil and gas separator of the conventional type, ~ of the entire eight-eighths (8/8) of that produced and saved from the land described herein, free of any expense to Lessor, to be, at Lessor's option, either (1) delivered into the pipelines, tanks or other receptacles to which Lessee may connect Lessee's well or wells for the purpose of storage andlor sale of the oil produced, (2) delivered at the well into tanks or other receptacles provided by Lessor, at Lessor's own expense, (3) purchased by Lessee or any affiliate of Lessee, at the market price being paid on the date of purchase, or (4) sold by Lessee (for Lessor's account) to the purchaser of Lessee's oil if sold by Lessee at the well or on the lease, for the price received by Lessee, or any affiliate of Lessee, for its own oil produced from said land. In no event shall the price paid be less than the market value on the date produced or the price received by Lessee or an affiliate of Lessee, whichever is greater. Provided, however, if the oil and condensate or other liquid hydrocarbons be run through or processed in a plant of the type authorized in sub-paragraph (d) below, the royalty thereon shall be calculated and paid under the terms and provisions of such sub-paragraph (d). (b) Lessee agrees that before any gas containing recoverable liquid hydrocarbons (except gas run through an absorption plant or other type plant for the extraction of hydrocarbon products as . .authorized in sub-paragraph (d) below) produced from said land is sold or used, if practical and economical, it will be run through an adequate oil and gas separator of the conventional type or other equipment at least as efficient, to the end that as much of such liquid hydrocarbons as can be reasonabl~ recovered from the gas b~ such means will be recovered, without diminishing the BTU rating below the prevailing minimums of the industry for the sale of gas in the area. 2