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SHELL WESTERN E & P, INC - subsidiary of Shell Oil Company - 1990-11-19
$. it, CITY OF HUNTINGTON BEACH =� 2000 MAIN.STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK January 7, 1991 • Allen S. Kennedy, Land Department Shell Western E & P, Inc. P. 0. Box 11164 Bakersfield, CA 93389 Enclosed is an executed copy of an Agreement between the City of Huntington Beach and Shell Western E & P, Inc. , to close well sites and remove equipment on the lease commonly known as Pacific Electric Lease Site which was approved by the City Council on November 19, 1990. Connie Brockway City Clerk CB:bt Enc. (Telephone:714-536.5 227) c 6,b U, REQUEST FOR CITY COUNCIL ACTION Date November 19, 1990 Submitted to: Honorable Mayor and City Council • Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Louis F. Sandoval, Director of Public Works VED BY CITY COUNCIL Subject: SHELL AGREEMENT / 19_20 .>� • Consistent with Council Policy? [Ji Yes [ ] New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: The City has reached agreement with Shell Western E & P, Incorporated, to close and remove equipment from four (4) well sites north of the pier. RECOMMENDATION: 1. Approve the attached agreement to eliminate the wells at a cost not to exceed $100,000. 2. Reappropriate $100,000 from the Capital Improvement Fund for this purpose. ANALYSIS: 1. Pursuant to City Council direction, the Director of Public Works entered into protracted negotiations with Shell Western E & P, Incorporated (SWEPI) with the objective of eliminating oil operations on the beach front near the junction of Golden West Street and Pacific Coast Highway. To this end, SWEPI has agreed to close and remove equipment from four (4) low production wells for a fee not to exceed $100,000. This agreement is similar in form and substance to the one entered into last March with Chevron U.S.A., and requires the payment of $30,000 to SWEPI within ten days of execution. The City has also agreed to provide SWEPI with an original copy of the contract. 2. This project was budgeted in fiscal 1989-90, but was not encumbered by June 30, 1990. As a result, the funds were withdrawn at the end of the fiscal year and deposited into the unappropriated Capital Improvement Fund Balance. It is now necessary for Council to reappropriate these funds. FUNDING SOURCE: Unappropriated Capital Improvement funds now on deposit in account number G-CP-00-000-3-01-01 to be reappropriated and transferred into expenditure account number E-CP-AS-157-6-35-00 for this purpose. Request for Council Action Shell Agreement November 19, 1990 Page 2 ALTERNATIVE ACTION: Reject the agreement and advise staff on how to proceed. ATTACHMENTS: Agreement with Exhibit A. F.I.S. LFS:JS:lb 2599g/2 Shell Western E&P Inc. An Affiliate of Shell Oil Company P 0 Box 11164 Bakersfield, CA 93389 November 29, 1990 Mr. James L. Sankey City of Huntington Beach P. 0. Box 190 Huntington Beach, CA 92648 Dear Mr. Sankey: SUBJECT: OS-07007.1 (PRC 91.1) HUNTINGTON BEACH FIELD ORANGE COUNTY, CALIFORNIA WELL ABANDONMENT AGREEMENT. POWER OF ATTORNEY As requested, enclosed is a certified copy of the General Power of Attorney, dated June 26, 1987, which authorizes T. L. Marshall to sign documents on behalf of Shell Western E&P Inc. If I can be of further assistance, please call me at (805) 336-5343. Very truly yours, Allen S. Kennedy / Land Department California Division ASK:bal Enclosure AK03301.C19--1 _-;:�RY'p ..n-.t••:,s. .z- :.:+:'» :it - .'+, tc „, ..5; .,_++. 1.., -n•• a i= .t., e .e'�k�r. "��:r,t. fn,.,.�. <,x-. .('ram-- .y,< .Cp-�•.,i, . .: ''6`'t -�.b R_ :"'w'+.�• 4. 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F*- +.r .;1 ' OF.NERAL •POWER OF ATTOR..0EY iw1 a t,.i '! a 11�' "'t c 1 fit is ,r ,t ,flry+` , ; y ! 4. ^i}G) ty4.r , 4Y5 .r*vy 'r .Jnif SHELL WESTERN ECP 1NC., a corporatior. o[ganized and existing ;� R��",� Y y4$ ,,,, -.,.f t�'±+,°a t, V. �r + under the laws of the State cf Delaware (hereinafter called ,..rv'','..-I ¢y,-;:. l;t p s v'p _4\ •Shell'Western•) with its principal executive offices at 200 N. ....i, gr ',4 �z1�rtX„e ,�. at i 4 �..# ,�, ` .t Dairy Ashford, Houston, Texas 77075, hereby nomiratea, appoints. ,5"�'+'"'ryn,Y+t ,�re�' gxs��`°'`' . _ and'authorizes T. L. MARSHALL as its Attorney-in-Fact to execute, a'' 'tr`t� ��+ �i^y�t'I�u4• x * y •' dItietA "a deliver, accept, assign, amend, extend, ratify, verify, terminate,' ' , # r'.,h ,., "r 1 ` ,, ''Sy ss, q a r r. r ` c `th �,,�„ ;fr release and our:ender, !n the name of Stiell Western snd on ice st: k.,r,-.,a R �, .7,4, '' h '+; • behalf, the following described lnaeru+nenta and documents in the , $', i,.• �F n:6,;. Y4f''k�� 'jx . `^, .', usual course of Shell Western's buaineses '• _. ` f q.ryt'7¢ �,. i`' ,�`^ ,+ Mgr . (1) Agreements, p lone and other instrumenea for ,I d' t ` n' a ^ i'''s'''i + �'�"+`•tAexchan e, ,-kLy3rja�"rjGx 1 't ,:. Ctry", xp ;f. eegttisieior. or disposition (whether by purehese, sale, 9 l 4,1''''5e.:`, a �t� ,t t 0 r L<t or ; otherwise), Y ) ,H'1 '` l' y tr .s�R,�,, ��,,{ or conve ante of real or persona' property ± Rq'+ r`x1 1F y t§ "� !tl; ^• � >s'-'d (including leasehold, royalty and ocher interests in oil, gee or •x r, '0 ' }ti5:,n,:i.c,,tFa r ""sC'' a ''^ haw "` '( 4'. other minerals) as well as broker agreements for the acquisition, ;• '" <t)�t ,, n - .,r'7r x'tx >i�t, "C ;. k'.� q disposition or conveyance of real or personal property; i )�i, ?�;`,,i"L,gx 'ii'1.-t1 `' 'r l• r ?4;.[a �} (2) Leases for oil, gas or other minerals, end other leases s; .`(��yj , F, °� w •+•• t .s• €r, of reel or ersonal ro ert (includin surface leases( whothar k+nV., '' h" emu"'°` s r %' P P y 9 ,•ti r s 5.. itr tr r qx C �'+�+ She'll Western is lessor or lessee and aubl'eoses under such leneesl y� q< + aS.A ;•,a, � 4 ' `rdk t' s u t (3) Easements, permits, rights-of-way, surface use agree- r.,, %.0 s '` ,r '"` 5 ' manta and licenses, who tbar Shell Wes torn Ss grantor or granteer ,r'y,q f • d£) t+''� f y,',.,,,., s 3 �i Y -'`a~<'S61�rl. >-s•.-ti,&..r` •• 11) Agreements, powers end decls[etione releting to pooling y x �� '--Pfi Yr e ,. or'unitization of leasehold, royalty or other .interenu in o11, ` '4 z)"'i*1 ,, t,r j u r, i h ' gas, or other minerals, or relating to dissolution of pooled or ?' • 4 5� - .y,,.,4, ''.4,1,:, !. 92 r,j r{ unitized units (including such instruments by Shell Western both • M i t s-.�t r w ''' �j .,i - - as principal and as agent of others, with full power of },` '$`•"+. iy t" - '}� vitas � �S� tr 4. h Q ,, ,. 't 4.• - &L eutietltutlon)i ` ` s x •'� i`�* 1^ t `< ^i-��" '`,r'.s�x 'r :;r IS) Agreements relating to overriding royalty and production y. `"`�r�a dxt•*:'+--'�"f �n.�` �,�- r(r.iy fDr, tG. Yt- it t,�'{ "p s c` ? rx:0o',:;t'1, '�tr a ,.,,f# Y" .ti ^Ya,,. t t3h .tvi� G payments: rpt' �r.,)}r,. r r+•• ' , e If Acres e�or money contribution agreements: '+^ Y,q 'i a• a >u r'3?• a sd5 v "K ,p •t (7) farmout, farmia and joint operating agreements; ; +'rti x a., li+ ".;d (i^ r-" i a (8) Division orders and transfer orders; r ' ;,�Sr ky _;. 1 °• '.ins'J tag (9( Agreements for, or incident to, waterflooding or other • �ry;n° J 3 9• <a* , ' ,_*: t,,t secondary or tertiary recovery operations; $;' �- fit '.�`�`"' RECORDED 1v )rp+C1At RECORDS t�;`T,Ik;1 1 • xis ` ' °'a M�'. s "' t OF ORANGE COUNTY CALH=ORN,a ?a;a`*'� ,� x 'j' '"!1 , �'�' m" -f f •k #x stirs { i,.. � Ai j °i e� r 80 ( rpp XLW, 0 t. , 3--4')r x f",.,4q ?,,. �}fya��r n, { � CTCD8717505 •s�. PN! 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I I , c 44 4 AX :e i, tTtv , t.rA r 440' "" Z 4 0q4.A 64.04 I4- e 4: t' , A • ' . •1 % 7?a "r4r9, I1 • - E yr,,.^7 ..4,3lS1a.t-4,5,,„,i.$':',„g-l7„'t- .,A . , '.;,.-,. ,..,!/441.,01...A:••,'.1,,,,,..lifrVf:.:*4-,•:' ti-.`-i.V.,s,-1.6,•••• &•!..•••'.•,.-v,v-W A,!•,..-tz,. .•••- -,. .'.,• 88-001710 :. ,..,, :045:„.•.,..„,..,.,,,,,,, .1.,,,,..„, ._...,-{0e,4441:1,o ",, : '' '... ,:' -M4100103WNIllt...' it:'(4'11?:'P .i 4-77,;'''5"t:=1.'77^t,,,'41, • • ; - ' , .'6066 Put 2169 .;,-? tiZ,',11,1i•Mil,"044-w,-,;;;.,..,,..k.1,.:‘,4., " --,,'...ierr-J*;•,.;;:d4t,-:',•1,4,1 • ' • , , i,..>„,,,:,,,7•17:,,g,S97,VWP ,,,174,,71,,,,:11,t-t'• % 7,0t.',,, 42 ,:,t,'";''''',.•;, ..,...f.a. 1(0) Agreements for purchase of gas, water, electricity or il 4;i: 't -. 0N . .,,t„A.. iicp,.,:-.,„b other utiiitiva, and agreements relating to transportation or 4 , t 1 , e..„ . •:,,-:,,,' --, ' ,-, .11 E,a,,Ed-t1,-,,:e, communication: t .;.., '0....',,ix.„;,k?.'4,,,,:',47:::'.4'..' .1.0:.;';PAty,• '. ,,- •,,Ptt•i. *1177/44.,{4.-t'etP.1 ' - ti ,X7-27; `..'t ,P114,;,,,I 177.7,--747'W "7 (II)t ppliCatiOrIG, licenses, permits and all other r rri,„„ „i.V.4„;74,.•,•,, f .re,:,, '.. $r$0..- -474,0,Y,,,,'-'07•":1,:li2.,Ntetf7'-''' . • instrumen's required or allowed by governmental authorities; :: .,,y4y-7,,st.s.,,t1,4,7'.0'•-‘,R;' ' ''''.' I'Z'W'''''A:SliX,'.T4444.:*,,c ; (12) ' Bonds and indemnities, subordination agreements, and „ '1 ,P.A ,-.1 ,,.M,.,,4 .44--!;,T.:44,,,1,7c:.& 41.4,,, V1`;:-'471.,:''.$:Oe fik$111',I . 4 ' ' statutory notices of default or sale under mortgages or deeds of it i 4,,,',VV.e',.6t:',''''...,,',. .Il,r l ,, t 3=V4,,,E i,•-, _, ; , E , kti.112.1/4 ;:1-317E)Ayi,„ ' -: trust) :i r i; %,A0: 3V-1:,"%•.+:,.; (13) 4 ettlements, releases and compromises of demands, causes 'i..8'471,1..''',' 1v-,,$1*.pYQ'r. of action tor claims for damages affecting Shell western's proper- t ,, k's13 ..ri...A1.4,.v.,,_11,4.:1,;:" - 44::::: ,7 , -, , 1 %,,,, • ''',";-..-',-1 r •'„,411 AO- 4 \ '- st.,,:„ ,...t.,.......,,,ezoo••,v.t.h ties, rights or obligations. whether real or personal. and whether t. --''',,. '-'4v.,•,7.1''';?1•,&,,• ••.„,,,,:z.r. 1 or not a bject to litigation, as well as verified complaints, 'i, , 4 4 TK4.•;;Tiii8,.'ctt,i'er'*•.-": .-,t.; ,,lirikr.2.,74., : answers a'd responses to interrogatoriee-and any other document or k;.,";".y“...:',:rir'•'`fer .`-`!, .i..' ...t v,i4;.,1,I.4r.0., 1,44,,-' " , , ,... .44+40%.4-r.z.,er,4. ,,- .-rm-- , . , ... ,,,,, ..' ,i, ite.1.1 ..-il, Alpe4.; " " pleading., ecessary or desirable to defend or pursue a claim j ' ''': :' ' .44'''.." ..` --...:44 fr.41 -• ••• '• a." i affecting Shell Western's properties, rights or obligations: and . =.'•i--:,:::4::''''S'-4154:',C..,=-*-.4---`1.."'''4P•' ',...', / ' fii'I'.-4%`,.'..7.','' t i 's ; `: ..,,,,....3",..,4,,c.,,,_ ,A ,.. (14) ids or offers to lease, at public or private sales by t Ji, 'e•NrA,,,,ii-Se .',04,..:. ,.,!:.3- local or tate governments for any agency thereof) for leases for t '. r--r I. iirl'0".?:E11 ',7.,1,'lEsi'"Vat .41.41EA;''ZIfIlf4.4rT'''I „ ‘4'4'ItY-31`;,'EA17''.4 ) ' on, gas," or other minerals, permits, roaylties, mineral l' interests or surface or fee interests. 4 t ..i.' ',-14".,,,r. ' 4:74'..lx".,;4ti. ,,, .,e.t.'...1 k,'•tt oi.11.-4 ,,,.,-.4 r,-.-5.5A.„,,,,,z,,,,f,I.•' , , '17*,,, This' General Power of Attorney shall be effective as of z:4,74t.::-4.-T4', ,iili'',.= :',APIA,t2 - 12:01 am,',.Central Standard Time on July 1, 1987 and shall 't . ' : 4 .`433.1i.:04S'ii:, ; , ;&f:1,,,AI.14::; continue n full force and effect until revoked in writing. t , ,: 7,..,,yogir,,z0,4,..,., , ,A r5.4W,,:-1,10; IN if TNESS WHEREOF this General Power of Attorney has been i -. . ; j' 0 4.11,33 .47';*slt,4414;Ple‘ ' ,,, signed b r the President of Shell Western and sealed with its t :),, ' .0, "4-v•-• - -- i*:,,X,f,"7,:rsr,,•::''kti'‘.,,',le - corporate 'seal and attested by its Secretary, on June 26, 1987: ::‘, .'.''• i,' V!,,i',,i.:4/A 5 •'..,,423,!.,:f:t' .15-1,11nr ,''hi.10* ' . ,,,,, g-mfmW,-!-4,1,,,z,..,...,..:77,2, ,,-.1,-, ,, --w ,- . " 'however, 1 ffective as of lk:01 a.m. Central Standard Time on . 'b.-A:04,M:,-,--(;•-,,,,,,., ,...-;4'‘fi, '. „1,4 54,,t ,y.7-. ,,,,.„,' ., July 1,,I. 87. 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It� ' •''=.r''`•'+ ;`r a.,,• y4': € K •,•L1;, "k F -T-07 k4. ,,,x,- f '!i, Y ,,, .1'i§.5'.* , d. *-� " - �a,-0 L,^ a'`''�,<:+-. �` i •\.# r<f}.,.+ i e." ��C ;7? ,*I`* .,� '� , ;a_ Yr n r`�`~e,'`b z'r�,j rYi F» F„t , ,{ i, - i ,i� .s :�.N;;tJ��'c�,.: f til'•i�"�� �•'.r.-.. .•°' @ d 4k �( ;'. K y V.- k i 74 t »r i'n•;' 3r 3r r y .� ,rr 7 t i a 3 y .'k t r r �.� � 0._ �'t +. d»t r y.tr ��5 ti rnt �.� � ) t y 'S. �S r <. 'ih, �. •t`.� a ,.�.V. "::'. t��' ' 1.J t sy 1�^ e "" °Y r�'d�Avnt'r.ytiW 3' s • .'ii i ,�F w+ � !z5 pry, • r kris d r +"4',ayM f,+r'p( 4 YV V-00 •, 1 . - IT.10 ,� F . y µt � 7 t r 3Y �. y::.(j t182/70 '+lY N� STATE OF TEXAS S 'a?'b ' COUNTY OF HARRIS S J This instrument was acknowledged betoro se this t6th day 3�i Lt$ k.» �4 W, '.y • of June, 1987 by C. N. WILSON, President of Shell Nelapstarn EiP ' d"., .,+ ,tt�' inc., a Delaware corporation, on beh�j of said corporation. • ,. • Hy Cosaniasion Expirairl� /�/.r� f/ 7: ,x•,. .�,i `*, PATRICIA N.PHEIPS Notary Publ a n n f a ,• x. Mr�rA.yranra�.e+rnw State of Texas y t } Iy taw rYn w+aw inn x+a%` i "'' nt 1x +y .G " ; ., , '--- _� x N'.ti i:'ff:x4!.:1 '+F t ±, V�.„,_„.«._.y :1qti` 1, t ., .S',1' tFe • C, ay .\ .....:A-e 1 ; ! t ':t: ° :f ht%i!�S4 ���tl V, : • ' - •`'..` - '•,.�, tJsui 56,,f'iM«f:vA • t k '� • CI'CDB717505 3 - 'Nj- - - - 4S r I • r•V •y • 2 1 f SS' µµ'}^''� w ' , • r ^ > t ,'". ,�f ','f �2 :., 'L.'L �v-.qp *"'. r 1- a �y�a� 4 n`, .7.-"d y' ,�`'+ 'wi"7' : 5:: •" �� A try.„ %� a`9',.� • -• d -'�' ` '`3 LYE':R�'4` `�krF.'".s��d trrd•,k`�S dR( h,: ��5",�' r^n''N� $ '� i2,,, i\ ."!•„;'Nr,. ' .+r... r,;"�. ,:-'s" :...Ah. ,, 'Y .y .f ."r¢ �itT r.,:1, -.4,,A ...s.. • • wr > y � � " Y e • at t� $ p .Y ..4. . :"j ;;t rr • r f- i"t s''. t ai�a t` .r 5 . • • ciks; - - r. -+w ' _ .. "ram/ r+} ti.{^�rf.�• yr ir. ,'' 88-001710 �� r • • l7r S S ' A f l�T y ' Mk yf . { y 4T • 1 z' ,, This i;a true carlil l rnry cf!ha 4 F a • record if R hears the:^;'.i' aii_J �,t �E00, 44 t at ' in purple ink Of the Recor .ltr p/ 6613 p , U , . Nov 25 1987 ' m * >~7. GoaS.ENSTA4 Cl• Yk•�1ecor cr �\ o~ �"�+.`_ • Kam f;erMtly GaAbrrMa ,, / tic�\C ' t+i."qua `Qp� d -` �lY1 Oe:u1y . (11i-2.1 4- l':::';iir.::',t. . .. ,' 4' l E >1 ` r • ` yr w > ^. . • • DIY .-' .:Y - • • • CERTIFY THAT,IF THIS SEAL IS AFFIXED ONj� REC�9p t I• i IN PURPLE INK,THIS IS A TRUE AND v� 1� COUNTY RECORDER CORRECT COPY OF THE PERMANENT RECORD , P � FLED OR RECORDED IN THIS OFFICE fiT:d, ',,'l��� pp_� r r DATfOV 2 �_ EE .3' ����. f,r,.4 ORANGE COUNTY STATE OF CALIFORNI•. dT 1 • CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To MICHAEL T. UBERUAGA From ROBERT J. FRANZ City Administrator Deputy City Administrator Subject REQUEST FOR THE Date NOVEMBER 5, 1990 REAPPROPRIATION OF FUNDS TO ACCOMMODATE CITY'S AGREEMENT WITH SHELL OIL FIS 90-43 As requested under the authority of Resolution 4832, a Fiscal Impact Statement has been prepared and submitted relative to the City's Agreement with Shell Western E & P, Incorporated which calls for a one—time fee in the amount of $100,000 for their removal of oil operations on the Beach Front near Golden West Street and Pacific Coast Highway. An affirmative response by the City Council would reduce the Glance of the City's undesignated, unreserved Capital Improvement Fund to $1,841,000. ROBERT J. FRAN Deputy City Admini trator RJF:sd 5525j JRN-ye 'S1 U7:Ub 1 L: WLF 1 LHNU-L-H ll 1 Y ILL NU:UUUJ S4bU,'JU 44np.J.r'Elz Di c--31'-•Sa NON 11:©S ID:SOC INSURANCE DEPT. TEL NO;?13--241-•6164 14165 P02 • • - 1 1100 Mi1am klegraff==:_,.....„ / 1' : ,,,I, ,lui to 4000 Houston, Tawas • 77002 CERTirZCATf OF INSURANCE This.csrtifioete of insurance is issued as a matter of information only and confers no rights upon the ' certifieete holder. This certificate does not emend, extend or *Ater the coverage afforded by the policies below. -the policies of iniuranas listed below her* been issued to the insured named below for-the policy period a�lfdt CERTIFICATE BOLDER: INSURED'S NAME i ADDRESS: ' City of Huntington Beech Shell ail cowpony and/or its Subsidiary Companies * 2000,Main Strain One Shill Plata Huntington Beach, CA 92648 root Office Box Z45S Attn: James Sankey Houston, Texts 77001 *Including Shell Western E&P Inc. type of ro era+9e — Mel;ev Numiber — Policy Tam--__._�,itnit• nF L4obil.i_4xy�... '' Comprehensive Seneral Liability ISO 1077-09 07-01-89 Bodily Injury Liability i Property • to Damao* Li abi 1 i ter.. . W O7-011-Ot Combined Single Limit; $ 1,000,000 each eeeurrenee $ 1,000,000 annual aggregate . Where applicable Insurance Comouw re Flbrth Americo - tomprehen$1Va Automobile 180 1077-•99 07401-es Ondily Injury Liability rt Property Liability including Hired to pweaaa,Liability a Nan-Owned Automobiles 07-01-92 . Combined Single Limit: $ each occurrence __.. insurance Corny of North Ameri.cl► — _ Workers Cemrpensiriwlan a PERMISSIVELY SELF-INSURED IN THE Statutory .STATE OF CALIFORNIA • Empioyers Liability s5Q0,O00 each accident EMPLOYERS LxABZLITY $500•,000 disease policy limit 500,000 dl eeaae-each employee Insurance Comoanv.of l.oimarita Special Clause or Condition: The City of Huntington Beech, its Agents, Officers and Employees are included as additional insureds, but only to the extent as required by written agreement. CANCE. ATION: Should any of the above described policies be cancelled before the expiration date thereof, the issuing company, will endeavor to mail 30 days written notice to the certificate holder named &bevel but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives. Issue Rite:ji larP.I 31.FI 990 Authorised Representatives Harsh a McLennan. Int. ji Iiiki itb As TO 1P0RM 11 ' GAIL HUTTONT Z ' "y , Sy: T1 ,,. 1Th1v1ch4t 1 Si06I-7 - -. • r, - 4:1' firfte0'' AN AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND SHELL WESTERN E&P, INC. OIL TO CLOSE WELL SITES AND REMOVE EQUIPMENT ON THE LEASE COMMONLY KNOWN AS PACIFIC ELECTRIC LEASE SITE TABLE OF CONTENTS # TITLE PAGE(S) 1. ABANDONMENT OF WELLS 1 & 2 2 . CITY' S FINANCIAL PARTICIPATION 2 3 . CONTINGENCIES 2 4 . COMMENCEMENT OF WORK 3 5 . TIME OF THE ESSENCE 3 6 . INDEPENDENT CONTRACTOR 3 7 . TIMING OF PAYMENT 3 & 4 8 . WITHHELD CONTRACT FUNDS, SUBSTITUTION OF SECURITIES 4 9 . AFFIDAVITS OF SATISFACTION OF CLAIMS 4 10 . WAIVER OF CLAIMS 4 11. INDEMNIFICATION, DEFENSE, HOLD HARMLESS 4 & 5 12 . WORKERS ' COMPENSATION INSURANCE 5 13 . INSURANCE 5 14 . FORCE MAJEURE 6 15 . DEFAULT AND TERMINATION 6 16 . NON-ASSIGNABILITY 6 17 . CITY EMPLOYEES AND OFFICIALS 7 18 . IMMIGRATION 7 19 . NOTICES 7 20 . CAPTIONS 7 21. ENTIRETY 7 AN AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND SHELL WESTERN E&P, INC. OIL TO CLOSE WELL SITES AND REMOVE EQUIPMENT ON THE LEASE COMMONLY KNOWN AS PACIFIC ELECTRIC LEASE SITE THIS AGREEMENT is made and entered into on this /9A// day of /Jovevn ber , 1990, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, hereinafter referred to as "CITY, " and SHELL WESTERN E&P, INC. , a subsidiary of SHELL OIL COMPANY, hereinafter referred to as "SWEPI . " WHEREAS, the CITY is desirous of having the well sites located on the property commonly referred to as the Pacific Electric Lease closed and all equipment removed. The Pacific Electric Lease is located on the beach area at approximately Goldenwest Street and Pacific Coast Highway (more specifically defined in Exhibit "A" and referred to herein as the "PROPERTY") and contains four well sites operated by SWEPI (identified in Exhibit "A" as wells numbered 23, 31, 32, and 33 collectively referred to herein as the "WELLS") . CITY is the lessee of a lease with the State of California of the surface rights to the PROPERTY where the wells are located and desires the unencumbered use of the PROPERTY. SWEPI is agreeable to plug and abandon the WELLS and terminate its surface rights in the appurtenant well sites in order to enable such unencumbered use of the PROPERTY by CITY under the following terms and conditions specified in this Agreement. NOW, THEREFORE, in consideration of the promises and agreements hereinafter made and exchanged, the parties covenant and agree as follows : 1. ABANDONMENT OF WELLS SWEPI, subject to the terms and conditions herein, shall plug and abandon the WELLS and remove from the sites upon which the WELLS -1- are located all oil and gas well related facilities appurtenant to th WELLS as mutually agreed upon by the CITY and SWEPI . (Such plugging, abandoning, and removal as described above shall be referred to herein as the "PROJECT") . SWEPI will select and contract with an independent contractor or contractors to undertake and complete the PROJECT. 2 . CITY' S FINANCIAL PARTICIPATION The CITY' S participation in the PROJECT shall be limited to a financial contribution only and CITY assumes no responsibility or liability other than such financial contribution for any work to be performed on the PROJECT under this agreement. CITY shall pay to SWEPI, as its financial contribution to the PROJECT, a sum not to exceed One Hundred Thousand Dollars ($100, 000 . 00) to be applied toward the costs of plugging and abandoning WELLS and removal of the appurtenant facilities. For purposes of this Paragraph 2, such cost of plugging and abandoning of the WELLS and removing the appurtenant facilities shall be limited to the actual amount charged by the contractor(s) for such, work plus an amount equal to fifteen percent (15%) of such amount charged by the contractor(s) to compensate SWEPI for administering the PROJECT. 3 . CONTINGENCIES The obligations of CITY and SWEPI under this agreement are contingent upon the written approval of the State of California for abandonment of the WELLS which will be obtained by CITY and the written consent or approval which will be obtained by SWEPI of all parties having a beneficial interest in the PROPERTY, the WELLS or production of oil and gas from the WELLS. -2- 4 . COMMENCEMENT OF WORK SWEPI shall, within thirty (30) days from the date that the last of the required written approvals specified in Paragraph 3 above has been obtained, provide CITY with the written notice of the date the PROJECT operations are to commence ("Start Date") . Such Start Date shall be within three (3) months from the date of receipt of said notice, unless the Start Date is delayed due to the securing of necessary permits beyond SWEPI 'S control . 5 . TIME OF THE ESSENCE The parties hereto recognize and agree that unless otherwise specified herein time is of the essence in the performance of this Agreement. 6 . INDEPENDENT CONTRACTOR It is understood and agreed that SWEPI is, and shall be, acting at all times hereunder as an independent contractor and not as an agent of CITY. SWEPI shall secure, at its expense, and be responsible for any and all payments of income tax, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for SWEPI and its officers, agents and employees, as applicable, and all business licenses, if any, in connection with the PROJECT. 7. TIMING OF PAYMENT CITY will pay to SWEPI the amount specified in Paragraph 2 according to the following schedule: (a) The sum of Thirty Thousand Dollars ($30, 000 . 00) within ten (10) days from the execution of this Agreement. (b) The balance of the amount due from the CITY under Paragraph 2 within thirty (30) days from the completion of the last well abandonment as mutually agreed by SWEPI; provided an amount -3- equal to ten (10%) percent of the total amount due pursuant to Paragraph 2 will be withheld by CITY and paid to SWEPI within five (5) days after the approval of the abandonment by the California Division of Oil and Gas of the plugging and abandonment of the WELLS. 8 . WITHHELD CONTRACT FUNDS, SUBSTITUTION OF SECURITIES At the request and expense of SWEPI, who shall retain beneficial ownership and receive interest, if any thereon, CITY shall permit the substitution and deposit therewith of securities equivalent to the amount of any monies withheld by CITY to ensure performance under Paragraph 2 of this Agreement. 9 . AFFIDAVITS OF SATISFACTION OF CLAIMS After the completion of the work contemplated by this Agreement, SWEPI shall file with the Director of Public Works for CITY SWEPI ' S affidavit stating that all workers and persons employed, all firms supplying materials and all subcontractors upon the PROJECT have been paid in full and that there are no claims outstanding against the PROJECT for either labor or material, except certain items, if any, to be set forth in an affidavit covering disputed claims, or items in connection with Notices to Withhold which have been filed under the provisions of the statutes of the State of California. 10 . WAIVER OF CLAIMS The acceptance by SWEPI of the final payment as specified in Paragraph 2 shall constitute a waiver of all claims against CITY under or arising out of this Agreement. ' 11. INDEMNIFICATION, DEFENSE, HOLD HARMLESS SWEPI hereby agrees to protect, defend, indemnify and hold and save harmless CITY, its officers, and employees against any and all liability, claims, judgments, costs and demands, however caused, including those resulting from death or injury to SWEPI 'S employees -4- and damage to SWEPI ' S property, arising directly or indirectly out of the obligations or operations herein undertaken by SWEPI , including those arising from the passive concurrent negligence of CITY, but save and except those which arise out of the active concurrent negligence, sole negligence, or the sole willful misconduct of CITY. SWEPI will conduct all defense pursuant to this indemnification at its sole cost and expense. CITY shall be reimbursed by SWEPI for all costs or attorney' s fees incurred by CITY in enforcing this obligation. 12 . WORKERS ' COMPENSATION INSURANCE Pursuant to California Labor Code §1861, SWEPI acknowledges awareness of §3700 et seq. of said code, which requires every employer to be insured against liability for workers ' compensation; SWEPI covenants that it will comply with such provisions prior to commencing performance of the work hereunder . 13 . INSURANCE SWEPI shall carry at all times incident hereto, on all operations to be performed hereunder, general liability insurance, including coverage for bodily injury, property damage, products/completed operations, and blanket contractual liability. Said insurance shall also include automotive bodily injury and property damage liability insurance. SWEPI shall subscribe for and maintain said insurance in full force and effect during the life of this Agreement, in an amount of not less than One Million Dollars ($1, 000, 000) combined single limit coverage. If coverage is provided under a form which includes a designated aggregate limit, such limit shall be no less than One Million Dollars ($1, 000, 000) . -5- 14 . FORCE MAJEURE If SWEPI is prevented or hindered from plugging and abandoning the WELLS or removing the appurtenant facilities hereunder because of fire, flood, storm, act of God, or any cause beyond SWEPI 'S control (including but not limited to governmental law, order or regulation, labor dispute, war, inability to secure personnel, materials or transportation or the securement of necessary permits) then the performance of the abandonment operations shall be suspended during the period of such prevention or hindrance. 15 . DEFAULT AND TERMINATION If SWEPI fails or refuses to prosecute the work hereunder with diligence, or fails to complete the work within the time specified, or is adjudged a bankrupt or makes an assignment for the benefit of creditors or becomes insolvent, or violates any provision of this Agreement, CITY may give notice in writing of its intention to terminate this Agreement. Unless the violation is cured within thirty (30) days after such Notice of Intention has been served on SWEPI, SWEPI shall be considered to be in default under this Agreement and CITY may upon such default, without prejudice to any other remedy it may have, terminate this Agreement upon the expiration of said thirty (30) day period. If SWEPI is in default hereunder as specified above, CITY may elect not to terminate this Agreement and in such event CITY may make good the violation or other deficiency comprising the default and deduct the resulting costs from the payments then or to become due to SWEPI . 16 . NON-ASSIGNABILITY Neither SWEPI nor CITY shall sell, assign, transfer, convey or encumber this Agreement, or any part hereof, or any right or duty created herein, without the prior written consent of the other party. -6- 17 . CITY EMPLOYEES AND OFFICIALS SWEPI shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement . No officer or employee of CITY shall have any financial interest in this Agreement in violation of California Government Code §1090 et seq. 18 . IMMIGRATION SWEPI shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of 8 U.S.C. §1324a regarding employment verification. 19 . NOTICES All notices required or permitted hereunder shall be delivered in person or by registered or certified mail to an authorized representative of the party to whom delivery is to be made, at the place of business of such party, or to any other place designated in writing by such party and shall be considered given when actually received by the authorized representative of the party to whom the notice is intended to be delivered. 20 . CAPTIONS Captions of the Sections of this Agreement are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement. 21. ENTIRETY The foregoing represents the entire Agreement between the parties . -7- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. 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