Presenter: Kathy Boydston

Commission Agenda Item No. 12
Nomination for Oil and Gas Lease
Gus Engeling Wildlife Management Area
Anderson County
August 2001

I. Discussion: The Department has been requested to nominate a 111 acre tract of land within the Gus Engeling Wildlife Management Area, for oil and gas leasing. The Department owns 50% of the minerals, approximately 111 mineral acres, under the tract.

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: Staff recommends that the Texas 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 Gus Engeling Wildlife Management Area, 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. 12
Exhibit A

Restriction on Drilling

This Exhibit contains terms and conditions staff recommends be included in an oil and gas lease covering a tract of land in the Gus Engeling Wildlife Management Area. These terms and conditions, if approved by the Commission, shall be forwarded to the Board for Lease.

(1) The drilling and production shall be limited to specific upland sites of low ecological value, determined by Texas Parks and Wildlife.

(2) The lessee shall be required to sign a surface use agreement with restrictions on drilling and production operations. These restrictions will be taken from the Department Mineral Recovery Guidelines.

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