Presenter: Ronnie Ray

Commission Agenda Item No. 16
Nomination for Oil and Gas Lease – Harris County
August 2002

I. Discussion: (TPWD) may be leased by the Board for Lease for Parks and Wildlife Lands under Natural Resources Code § 34.051 for the purpose of prospecting or exploring for and mining, producing, storing, caring for, transporting, preserving, selling, and disposing of the oil, gas, or other minerals. State lands are typically offered for lease sale at scheduled intervals. The Board for Lease has traditionally respected recommendations of the Texas Parks and Wildlife Commission (Commission) relative to leasing minerals owned by TPWD. The Board for Lease has received a nomination at the Sheldon Lake State Park for a lease-sale offering. The purpose of this Commission Item is to alert the Commission to this nomination and seek recommendations for the Board for Lease.

The Department owns all the minerals under the four tracts totaling 1303.31 acres surface and mineral acres.

Staff recommends minimum terms of a cash bonus of $150.00 per acre and a fixed royalty of 25 percent, with a $10.00 per acre delay rental for a 3-year lease will apply. The lease will also be subject to the conditions shown in Exhibit A.

III. Recommendation: The staff recommends 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, four tracts of property consisting of 1303.31 mineral acres out of the Sheldon Lake State Park, at $150.00 per acre with a 25 percent royalty, $10.00 per acre rental, and a 3-year term, incorporating the restrictions set out in Exhibit A.”

Attachments – 3
1. Exhibit A – Restrictions on Drilling
2. Exhibit B – Locator Map
3. Exhibit C – Fiscal Note (Available upon request)

Commission Agenda Item No. 16
Exhibit A

Restrictions on Drilling

This Exhibit contains terms and conditions staff recommends be included in an oil and gas lease covering certain areas in the Sheldon Lake State Park. These terms and conditions, if approved by the Commission, shall be forwarded to the Board for Lease:

The lease shall contain the following provision:

1. 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.

Commission Agenda Item No. 16
Exhibit B

Locator Map

Locator Map for Sheldon Lake State Park Oil and Gas Lease Nominations

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