HomeMy WebLinkAboutCORD OIL COMPANY - 1950-01-16 (5)AGIREEIMi
THIS AGREEI•MNT made and exeLuted in duplicate this
7 tb day of January y :i9" 7 by and Uetween the
CITE OF HUNTEMTON BEACH, a Municipal orporation, hereinafter
referred to as "C, ty'l, and the CORD OIL COMP0Y, a Nevada Cor-
poi�ation qualified to do business in the State of California,
hereinafter referred to as "Operator";
WIT11ESS ?TH
. I ,REkS Operator j.a the owner of two William Gerard.
Certificates No. 2, Subdivisions 11 and 'L2, issued under the
Act of Congress of February 10, 1855 (1C Stat. 849), which
entitle the owner thereof to select and locate eighty (80)
acres of public land more or less; and
UH&REAS there exists a large bcd,y of public land
lyin4g within and adjacent to the City of Huntington Beach
and oceanwd~d therefrom, which may contain deposits of oil or
has; and
',rxf,S '�A tll e parties hereto desire to ent. into this
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Agreement upon all of the to ,ms and provisions here ina. ter set i
forth coverin' or pertaining to the fullowing described. lands:
All Hof the tidelands and subm� ,-rged lands within
the City limits ot:` the City of Huntington Beach,
excepting therefrom that certain area covered by
an, Agreoment entered i.ntu on the 9th day of May,
19471 by and oetween the P iCIFXC BASIN DEVEL3P-
2'Ma CO,, a Nevada Cor =ati on, as First Party,
and. the C1T"' OF ,=T I.JGTO1 BEACH, a. Municipal
Corporation, as second party; and such other
lands as are hereinafter referred to;
Provided, how ver, and further excerting from this
Agreement that certain, land located iTith n the present limits
of the City of Hu�tington Beach d4;4ar bed as follo �Ts
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Beginning with the intersection of the south-
westerly extension of the center line of Dint'
Street with the line of ordinary high tide of
the Pacific Oceans thence southwesterly along
said center line of said Ninth Street as extended,
one mile; thence southeasterly Ynd parallel with
the line of ordinary high tide and one mile distant
therefrom to the easterly city limits of the City
of Huntington Beach; thence northeasterly along
the southeasterly limits of said city to the
said line of ordinary high tide; thence north-
westerly .alone; the said line of ordinary high
tide to point of beginning.
%COT, THEREFORE, in consideration of the sum of Ten
Dollars ($10.00) and other valuable consideration, the receipt
of which is hereby acknowledged, and in consideration of the
premises and the mutual covenants and conditions hereinafter
set forth, it is mutually understood and agreed as follows;
FIRST Operator will:
(A) Transfer and assign to City said Certificates of
Gerard scrip for the purposes of thin Agreement, and to
transfer and assign to City from time to time such other
Certificates of scrip, either Gerard or other types or kinds
as Operator may elect be used in the sane manner and
for the same purposes as the scrip herein described, and
subject to the terms ant provisions hereof.
(B) Pay all of the expenses of locating said Certifi-
dates, including all filing fees, or any part or portion
thereof as hereinafter provided, and assist the City in
either obtaining a. patent to the lands upon which said
Certificates or other Certif hates are located, or obtain-
ing an oil and gas lease from the United States Govcznment
upon the lands hereinabove described and referred ta,, or
other additional lands surrounding or adjacent thereto
as may be the subject of lease from the United States
Government.
(C) Proceed as seen as it shall be possible and
practical with the drilling, at its own cost and expense,
of an oil well or wells urin or into the lands covered by
any scrip location provided fo_- herein or United Mates
Oil and Gas lease, as the contractor for Cityy,, at or from
such :vocation or locations as shall be selected by Operator
after first notifying the City as to the location thereof,
and will thereafter proceed at its own cost and expense with
the diligent production of oil and gas from any commercial
rroducing wells.
(D) Mare the payments out of the proceeds of pro-
duction from wells drilled by Operator as provided in sub-
division (A) of THIRD hereof. Operator shall be excused
from making any payments hereunder in the event any oil,
gas, casing z=ead gasoline, or other hydrocarbon substances
produced or manufac .cared .from the lands herein referred to
or the proceeds thereof,, shall be impounded or the use or
disposition thereof otherwise prevented or enjoined.
(3) Operator will hold City and its employees and
officers harmless of and from any loss, cost, or damage re-
sulting in any manner from Operator's operations under this
Agreement,, and co.mpiny will defend with due diligence any
action or suit arising hereunder or in connection therewith,
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including but not in limitation therec,f, any action or suit
either in law or equity filed against City and Operator,
either jointly or severally. Operator may institute and
prosecute to final judgment at its election and expense,
any and all actions or suits, either in law or in equity,
in the name of City as may be necessary or required in the
opinion of Operator to protect the interest of the parties
in and to this Agreement.
SECOND City will:
(A) within ten (10) days after receiving notification
from Operato„�, cause said Certificates of Gerard scrip or
any other scrip to be located upon such portion or portions
of t .: lands the subject matter of this Agreement as shall
hereafter be selected and designated by Operator, and them: --
after City will cooperate fully in prosecuting said location
or Locations, and in prosecuting and negotiating for an
oil and gas lease from the United States of America on the
lands referred to in Subdi-ision (3) of FIRST hereof, and
upon receipt of any such oil and gas lease from the Unite.
States of America to ?promptly execute the same.
(B) In the event a lease shall be executed by the
United States of ,America with City covering any land upon
which scrip shall be located, or in the event said scrip
Certificates or any of them shall be withdrawa from filing
with the United States of America by mutual Preement of
the parties hereto, or in- the event the filing and loca:11on
of said scrip or any scrip should be .finally rejected by the
United States of America, then in any of said events said:.
q including but not in limitation thereof, any action or suit
either in law or equity filed against City and Operator,
either jointly or severally, Operator may institute and
prosecute to final judgment- at its election and expense,
any and all acticns or suits, either in law or in equity,
in the name of City as mail be necessary or required in the
opinion of Operator to protect; the interest of the parties
in and to this Agreement.
S�''COIN!D i City ity will:
(A) within ten (10) days after -receiving notification
from Operator, cause said Certificates of. Gerard scv p or
any other scrip to be located upon such portion or ,or -I. -ions
of the lands the subject matter of this Agreement, as shall
hereafter be selected and designated by Operator, and there-
after City will cooperate fully in prosecuting said location
or locations, and in prosecuting and negotiating for an
oil and gas lease from the united States of America on the
lands referred to in Subdivision (B) of FIRST hereof, and
upon receipt of any such oil and gas ,lease from the United
States of America to Drornptly execute the same.
(B) In the event a lease shall be executed by the
United States of America with City covering any land upon
whieb scrip shall be located, or in the event said scrip
Certificates or any of them shall be withdrawn from filing
with the United States of America by mu-cual agreement of
the parties hereto, or in the event the filing and location
of said scrip or any scrip should be finally rejected by the
United States of America, then in any of said events said
Certificates c'- any of them, shall be promptly transferred
and re -assigned by City to Operator, and all scrip and
evidence of title attached thereto shall be redelivered
to Operator.
CC) Authorize, and City Goes here?°y authorize Operator
as soon as it deems possible and practical - as its contractor,
to drill a well or wells for the production of oil and gas
upon any land covered by scrip locations, and in the event
of an execution of an oil and gas lease by the United States
of America to City, to tL en also drill upon or into such
portions of the lend so leased to City as Operator shall
deem advisable. Operator is heresy granted the right and
is hereby authorized to construct any and all necessary works,
structures and improvements as may be necessary, required,
or convenient to carry on dv illiug and production operations
hereunder, and City does hc_ iy ,gran-c to Op,sxator any and
all easements or right-of-m,ays as may be necessary, and to
use such streets, highways, or other public property belong-
ing to City as may be necessary, requ7reds or convenient
for th,a mutual benefit of the parties hereto but without
substExtial interference with any public use, and Operator
agrees to do everything possible to minimize any inter-
ference.
(D) Subject to the provisions hereof, to sell to
Operator all royalty Pail derived by it from any source at
the prevailing posted market price of the Standard Oil
Company of Californial, Shell Oil Company, Union Oil Company,
The Texas Co. Tide stater Associated Gil Company, and
General Petroleum Company in the -immediate area or
adjacent to the lands covered by this .agreement, for oil
of a like kinds gravity, quality, and/or content the day the
oil is run into pipe line or storage tanks, after makkin
the customary corrections and deductions for temperature,
water, and oth<* impurities. In the event the said oil
companies aforementicned shall have different posted market
prices for said area or adjacent thereto, cash settlement
of the oil royalty hereunder shall be based on the highest
of such pries. In the event there shall be no posted
price by the aforesaid oil companies or Operator is unable
to sell the oil at any posted price, cash settlement shall
be based on the price Operator receives for said oil. No
royalty shall be paid on oil used by Operator for operations
hereunder.
THIRD This Agreement is intended to be and shall be
construed'ia part as a drilling and operating agreement by
and between City and Operators and it is mutually agreed
as follows
(A) That in consideration of Operator providing said
Gerard Certificates and other Certificates as it may elect
to provide, end 'gearing all of the expenses and costs men-
tioned in this Agreement, Operator shall be the sole and
exclusive drilling contractor of City and Operator is
hereby given and shall have the exclusive right and priv1:1ege
to drill for, praduce, extract, and remove oil, gas, and other
hydrocarbon substances'in and from the lands herein. referred
to, and shall have the 'exclusive right to enter upon the
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lands as herein provided for such purposes. Operator
shah, haves the right to retain as its interest all of
the production from the wells drilled by Operator, by
making payments as follows
(1) By paying to City Sixteen and Tito -Thirds
percent ( 6-2/3%) of the market -m ice determined
as orovided in Subdivision (D) of SECGI%D hereof of
all of the production produced and sold from any well
bottomed within the boundaries of ar,,r patented sex ip
lands and not up -der lease from the United States of
s
America.
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(2) By paying; to City five percent (f) of the
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market price determined as provided in Subdivision
xt.
(D) of SECC ll hereofof the production produced from
any well bottomed within the boundaries of any ease
obtained from the United States of America covering
any lands referred to hese:.n and the subject of this
Agreement, and in addition pay to City or to the United
Staten of America as may be agreed the amount of
money necessary to pay the royalty provided for in any
such ,rase :on the production from wells drilled by
Lperator on or ante the lepsed area.
P11 payments due by Operator shall be made on or before
the 15th day of each month for the preceding calendar ntc ith.
Nothing herein contained shall permit or allow
Operator to use any'scrip or leased lands as a drilling
site for the drilling and production of oil or gas f-rom
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any property not covered by this Agree -cent. it being the
intent hereof that City shall receive 'he payments here
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provided for from all production produced "y Operator
under the terms and provisions hereof.
At City's option exercised not oftener than once a
year upon sixty (60) days previous vrritten notice,
Operator shall deliver into City's tanks adjacent to any
receiving or storage tanks of Operator, or at the motuit
of the well or wells to a pipe line designated or construct-
ed by City, free of any cost to Operator, in lieu of the
payments hereinabove provi ;.d to be paid to City, either
sixteen and two-thirds .percent (16-2/3%) or five percent
( 5) of the coil produced by Operator hereunder, as the case
may be.
(B) The word "oil" and "production" as used herein,
each include oJI, gas, and other hydrocarbon substances.
(C) No compromise or settlement of any suit or
contract relating to the tidelands or submerged ';ends which
are the subject matter- of this Agreement shall be made or
entered into by City without first obtaining the written
consent and approval of Operator.
(D) Each of the parties hereby agree to duly execute
promptly upon demand of the other, any and all papers,
instruments or documents necessary or converxient to the
consummation of the program or purpose or purposes con-
templated by this Agreement and to make this Agreement
fully effective, including applications for oil and gas
leases, scrip :selections, notices and permits, and the
Mayor or City Attorney of City is hereby 'authorized to
execute any and all such instruments or documents as may
be hereinafter required on behalf of the City under the
provisions of 'G."As iigreertient, and to be attested
by the City Clerk.
(E) The zerm of this agreement shall continue for
and during a period of twenty-five (25) years from and
after the effective date hereof, and so long? -I thereafter as
oil, gas or other hydrocarbon substances is or are produced
from the lands .referred to herein or hereinabove described.
in N o t I-L i ng - - 0
., this ligreerient shall prevent scrip selections
or lease applications from being filed or leases being
acquired on tide and submeTged land outside t,l,-e present
limits of the City pursuant to the terms of this kgree-
ment and in the event such scrip, filings or lease
applications are made, or in the event the -Lgrepment
beti,,Teen City and Pacific Eas-.',Ixi Development Co. shall be
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cancelled or term-irlated or not effective as to the land
covered thereby, then, such land c., lands shall be included
with and added to the lands specifically descrited herein
for a-'1_ of the DuTposes of this agreement- as fully in every
respect as though said lands were originally included within
the terms of, and described in this agreement.
(F) All personal property including derricks, materials,
apparatus, equipment, improvements, tanks, and o-t-,he-.- usual
and necessary drilling and production property attached or
affixed to, or placed u-pon land by Operator, o.- being loc-
ated thereon, shall be and remin the sole property of
Operator, removable by Operator at its discretion during
the term of this Agxeement or upon the termination thereof
for any reason.
(G) If any section, sub- r3ct i cn, sentence, clause, or
phrase in th? s Agreement is or may be for ariy reason held
to be void, invalid, or unconstitutional, such decis1-an
shall not a2fect the validity of Vie remaining portions of
this Agreement. The parties laereto do hereby deczare that
they would have entered into t�'ais Agreement and each section,
sub -section, senten e, clause end phrase thereof irrespective
of the fact that oie or more sections, sub -sections, senten-
ces, clauses, or -.erases thereof may be declared void,
invalid, or unconstitutional.
(xi) In the event scrip flings and lease applications
are finally determined or adjudicated and as a result thereof
are finally rejected by the United States of, America and the
City does not acquire any of the lands or leases described
in this Agreement, then and in that eve It this Agreement
shall be deemed terminated and cancelled. In the event of
partial final rejection either of scrip or leases after final
determination or adjudication thereof that in so far as the
lands in which sa_d rejections are final this Agreement shall
be deemed terminated and cancelled as to the lands covered
by the rejected scrip or leases.
(I) This Agreement shall inure to the benefit of and
shall be binding upon the pai-�-ies hereto and their success-
ors and assigns
Di WENESS WHEREOF the parties hereto have executed
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this Agreement the day and year -first above written by their
officers duly authorized and their seals affixed hereto.
CT-L'Y OF h-U!7-, -T:,,GI O'L'* BEkcH
a.
ATTEST'
City Clerg
A".
• o t
STATE OF CAL-LFOT--IdIA )
r ss
COUNTY OF ORa'NGE
On th y : JL day of , 1950, before
me, the undersigned Notzry Fubl- i.i and for said County and
Skate, residing therein, duly commissioned and sworn, personally
appeared JACK GREEIRI, kno�-m to me to be the Mayors and JOHN L.
HE14-RICKSEN, known to rae to be the City Clerk of the City of
Huntington Beach, a municipal Corporation, described in and that
executed the within instrument on behalf of said municipal cor-
poration, and acknowledged to me that such municipal corporation
executed the same,
C -III TW.E.SS "ITIErEREOF1 I have hereunto set ray nand and
affixed my official sea!, the day and year in this certificate
first above written.
(SEAL)
Notar- lid in and for said
County and State.
MY _Cam setvi A� J*n-. of $
STATE OF GALIrOPIdIA
Es
COYNTY OF LOS ANGELES
On this day of , 1950,
before the LUCY MACUNZIE a 3 tary Public
in and for said County and State, personally appeared
A P .- SCOTT , known to me to be the President , and ED IARI D D .
WEDHOEF, known to me to be the Assistant Secretary of the
CORD OIL COMPAI Y, the Corporation that executed tl e within
instrument, known to me to be the persons who executed the
within instrument on behalf of the Corporation herein named,
and acknowledged to me that such Corporation executed the same.
UJ WITNESS WHE' EOF, I have hereunto set .:y hand and
affixed my official seal the day and year first above written.
Notary Public in and for i d.
County nd State.
(SEAL) JUG$ NaAiXNEZIS
MY C0Tnrdjrdjon E:cPzres Oct, 3, 1M
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