Presenter: Kathy Boydston

Commission Agenda Item No. 13
Nomination for Oil and Gas Lease
Sheldon Lake State Park
Harris County
January 2001

I. DISCUSSION: The Department has been requested to nominate the tract of land known as the Sheldon Lake State Park, for oil and gas leasing. The Department owns all the minerals, approximately 2,219 mineral acres, under the tract. All seven tracts (2,219 acres) have been nominated.

The staff recommends the Commission continue its policy of requiring a minimum cash bonus bid of $150 per acre and a fixed royalty of 25 percent, with a $10 per acre delay rental for a 3-year lease. It is also recommended that the lease be subject to the restrictions shown in Exhibit A.

II. RECOMMENDATION: The staff recommends the Parks and Wildlife Commission adopt the following motion:

"The Executive Director is authorized to nominate for oil and gas lease to the Board for Lease for Parks and Wildlife Lands, the Department's mineral interest in the Sheldon Lake State Park, at $150 per acre with a 25 percent royalty, $10 per acre rental, and a 3-year term, incorporating the restrictions set out in Exhibit A."

Attachments - 2

1. Exhibit A - Conditions
2. Exhibit B - Fiscal Note (Available upon request)

Commission Agenda Item No. 13
Exhibit A

Restrictions on Drilling

The lease shall contain the following provision:

Any provision herein to the contrary notwithstanding, it is agreed and understood that no entry shall be permitted on the surface of the leased land. Any development of the land shall be by means of directional wells located off the leased land, or by pooling of said land with other land or leases as provided by Subchapter E, Chapter 52, Natural Resources Code.