Common use of Surface Use Clause in Contracts

Surface Use. As to the leased premises on which Lessor owns the surface estate, the following provisions shall apply: (a) Lessee shall use its best efforts to minimize surface use and surface disturbance resulting from its operations. If and when Lessee has production facilities, power stations and/or structures above ground of a permanent nature which are used in connection in the production and/or transmission of oil and/or gas, on the lease premises and said facilities lie and are visible within one-half mile of surface development by Lessor or paved road leading thereto, Lessee agrees that it will enter into good faith negotiations with Lessor in order to determine the best way to camouflage said facilities in a way that is both aesthetically pleasing to Lessor while being economically feasible to Lessee. In the event that the parties cannot come up with a mutually acceptable plan, then said dispute shall be submitted to binding arbitration. The arbitrator shall be a retired Federal or State of New Mexico district or appellate judge mutually agreed to by the parties. Arbitration shall be conducted pursuant to the New Mexico Arbitration Act, except to the extent mutually modified by the parties in writing. The hearing shall be held within forty-five (45) days of the appointment of the arbitrator. The arbitrator may award attorney’s fees to the prevailing party and allocate the costs of arbitration as he sees fit. Discovery shall be conducted as provided by the arbitrator, and his decision may be reduced to judgement as provided in the New Mexico Arbitration Act. No act by either party shall constitute a waiver of this agreement to arbitrate. Nothing herein shall prevent any party from applying to a court of competent jurisdiction for equitable relief in the form of injunction or other equitable remedy. This arbitration clause applies only to this paragraph being the camouflaging of facilities. (b) Prior to commencing drilling operations, Lessee shall select a “Drilling Block” comprised of no more than three sections (640 acres each) and shall select a proposed drillsite within the Drilling Block. Lessee shall submit this information, together with a proposed drillsite within the Drilling Block and access road location to Lessor in writing. Lessor shall have 30 days from date of receipt of the proposal to review the drillsite and road access location and respond to same. If Lessee does not receive a written objection within said 30 days, then the drillsite and access road are approved. If Lessor objects to the drillsite and/or access road location, then, within said 30 day period it shall submit to Lessee, in writing, its objection together with its reasons therefore, and shall also propose a new drillsite and/or access road. Lessor’s consent shall not be unreasonably withheld, and a drillsite and access road cannot be prohibited by Lessor. An objection without a statement of reasons and without proposing an alternative location shall not be valid. The new drillsite location and access road shall not be more than 500 feet from the site proposed by Lessee. In the event Lessee disagrees with the drillsite and/or access road location proposed by Lessor, the parties shall meet within 30 days of Lessor’s objection and mutually agree on a drillsite location and/or access road. Once a drillsite and/or access road is approved, it shall remain an approved drillsite and access road for the life of the Lease subject to paragraph (17i) herein. (c) Lessee shall pay to Lessor a cash sum equal to $3,000 per acre for the number of acres of the leased premises to be utilized by Lessee in connection with the placement of permanent production facilities associated with a well capable of producing oil and/or gas. Lessor shall retain ownership of the surface of said land so used by Lessee. Lessee shall furnish Lessor with a survey plat outlining the acreage utilized in said operations. Permanent production facilities shall include the following items which are constructed by Lessee: compressor station sites, power stations and tank farms. Lessee agrees to pay Lessor the sum of $5.00 per rod for the following permanent items constructed by Lessee and used in its operations which lie on the leased premises; pipelines, power lines, roads and telephone lines and other items of a similar and permanent nature which would require an easement or right-of-way. (d) Lessor shall endeavor to regularly provide Lessee with copies of its surface leases, agreements, current maps or development plans to assist Lessee in choosing placement of its drillsites. Lessor reserves the right to sell, lease or convey all of any part of the surface estate of the leased premises. Lessor also reserves the right to develop the surface of the leased premises by constructing, or causing to be constructed, residential, recreational, commercial, or industrial structures or sites. If said lands lie within a Drilling Block, Lessor shall first obtain the permission of Lessee for said sale or lease which said permission shall not be unreasonably withheld and only with good reason which is documented. In the event Lessor sells, leases or conveys a portion of the leased premises, Lessee shall execute such documents as are reasonably necessary for the sale or lease to occur, except that Lessee shall not be obligated to release all or any portion of the Lease or rights to use the surface for its existing operations and permanent production facilities, roads, power line, telephone lines or pipelines unless Lessor relocates any of Lessor’s permanent facilities, roads, power lines, telephone lines or pipelines, at Lessor’s sole cost, risk, expense and liability for such move or unless mutually agreed to by Lessor and Lessee, nor shall it be obligated to execute any documents for title exceptions having to do with the mineral estate and in the event said sale or lease by Lessor pertains to a tract of land greater than 160 acres, Lessor and Lessee shall mutually agree to a five acre square designated drillsite location and access, with nor more than one drillsite per 80 acres. Said sale or lease of the surface by Lessor subsequent to the date of this oil, gas and mineral lease shall be made subject to this Lease. Lessee and Lessor both hereby agree to work together whereby Lessor can meet its objective of developing the surface in conjunction with Lessee’s objective of developing the mineral estate. (e) Lessee shall, to the extent possible or feasible, use existing roadways or rights-of-way for access to its drillsites. Lessee shall not locate a drillsite nearer than 200 feet from an existing or proposed right-of-way for any electric transmission or distribution line, or gas or oil pipeline (except pipelines used in connection with Lessee’s operations). (f) Lessee agrees that is shall not locate, place or construct a drillsite location or any production facilities or otherwise have use of the surface of the area lying within 1,500’ either side of the center line of Interstate 40 and that certain roadway known as “Paseo Del Volcan” which lies north and south of Interstate 40, and the east-west roadway known as “Rio Bravo” Road lying south of Interstate 40 without prior written consent or permission of Lessor. However, Lessee shall have reasonable access across and/or from said roadways, subject to local, state and federal rights and regulations, and shall consult with Lessor to establish routes used in its operations so as to minimize the effect of said access. (g) Lessee shall not locate a drillsite within 1,000 feet of any house, hotel, office building, or proposed paved roadway or permanent structures of same or similar significance without first obtaining Lessor’s written consent. (h) Lessee shall fence all producing well locations. (i) Lessor agrees that in the event that any of its proposed development plans should disturb any of Lessee’s existing production facilities, roads, pipelines, power lines, telephone lines and other items of a similar and permanent nature (“items”), Lessor will have the option to move the portion of said production facility and/or “item” which interferes with its development at Lessor’s sole cost, risk, expense and liability to a location that will not prohibit or prevent Lessee from continuing to utilize said production facility and operating its well(s). (j) Prior to the commencement of any operation for the drilling of a well on the leased premises, Lessee shall conduct its own environmental assessment of the drillsite area, which includes but is not limited to the taking of photos and random soil samples which will be analyzed by an independent third party in order to establish a baseline as to the contents of the soil. Said analysis will be made available to Lessor. Prior to the abandonment of any drillsite or production facility location on said leased premises, Lessee agrees to perform an environmental assessment of the area which shall include the taking of soil samples and their analysis by an independent third party, said analysis being provided to Lessor. Lessee further agrees that said cleanup and restoration shall conform to all of the applicable Federal, State and local regulations covering and affecting same.

Surface Use. As to the leased premises on which Lessor owns the surface estate, the following provisions shall apply: (a) Lessee shall use its best efforts to minimize surface use and surface disturbance resulting from its operations. If and when Lessee has production facilities, power stations and/or structures above ground of a permanent nature which are used in connection in the production and/or transmission of oil and/or gas, on the lease premises and said facilities lie and are visible within one-half mile of surface development by Lessor or paved road leading thereto, Lessee agrees that it will enter into good faith negotiations with Lessor in order to determine the best way to camouflage said facilities in a way that is both aesthetically pleasing to Lessor while being economically feasible to Lessee. In the event that the parties cannot come up with a mutually acceptable plan, then said dispute shall be submitted to binding arbitration. The arbitrator shall be a retired Federal or State of New Mexico district or appellate judge mutually agreed to by the parties. Arbitration shall be conducted pursuant to the New Mexico Arbitration Act, except to the extent mutually modified by the parties in writing. The hearing shall be held within forty-five (45) days of the appointment of the arbitrator. The arbitrator may award attorney’s fees to the prevailing party and allocate the costs of arbitration as he sees fit. Discovery shall be conducted as provided by the arbitrator, and his decision may be reduced to judgement judgment as provided in the New Mexico Arbitration Act. No act by either party shall constitute a waiver of this agreement to arbitrate. Nothing herein shall prevent any party from applying to a court of competent jurisdiction for equitable relief in the form of injunction or other equitable remedy. This arbitration clause applies only to this paragraph being the camouflaging of facilities. (b) Prior to commencing drilling operations, Lessee shall select a “Drilling Block” drilling block comprised of no more than three six sections (640 acres each) and shall select a proposed drillsite within the Drilling Blockdrilling block. Lessee shall submit this information, together with a proposed drillsite within the Drilling Block drilling block and access road location to Lessor in writing. Lessor Lessee shall have 30 days from date of receipt of the proposal to review the drillsite and road access location and respond to same. If Lessee does not receive a written objection within said 30 days, then the drillsite and access road are approved. If Lessor objects to the drillsite and/or access road location, then, then within said 30 day period it shall submit to Lessee, in writing, its objection together with its reasons therefore, and shall also propose a new drillsite and/or access road. Lessor’s consent shall not be unreasonably withheld, and a drillsite and access road cannot be prohibited by Lessor. An objection without a statement of reasons and without proposing an alternative location shall not be valid. The new drillsite location and access road shall not be more than 500 feet from the site proposed by Lessee. In the event Lessee disagrees with the drillsite and/or access road location proposed by Lessor, the parties shall meet within 30 days of Lessor’s objection and mutually agree on a drillsite location and/or access road. Once a drillsite and/or access road is approved, it shall remain an approved drillsite and access road for the life of the Lease lease subject to paragraph (17i) herein. (c) . Lessee shall pay to Lessor a cash sum equal to $3,000 per acre for the number of acres of the leased premises to be so utilized by Lessee in connection with the placement of permanent production facilities associated with a well capable of producing oil and/or gas. Lessor shall retain ownership of the surface of said land so used by the Lessee. Lessee shall furnish Lessor with a survey plat outlining the acreage utilized in said operations. Permanent production facilities shall include the following items which are constructed by Lessee: compressor station sites, power stations and tank farms. Lessee agrees to pay Lessor the sum of $5.00 per rod for the following permanent items constructed by Lessee and used in its operations which lie on the leased premises; pipelines, power lines, roads and telephone lines and other items of a similar and permanent nature which would require an easement or right-of-way. (d) Lessor shall endeavor to regularly provide Lessee with copies of its surface leases, agreements, current maps or development plans to assist Lessee in choosing placement of its drillsites. Lessor reserves the right to sell, lease or convey all of or any part of the surface estate of the leased premises. Lessor also reserves the right to develop the surface of the leased premises by constructing, or causing to be constructed, residential, recreational, commercial, or industrial structures or sites. If said lands lie within a Drilling Blockdrilling block, Lessor shall first obtain the permission of Lessee for said sale or lease which said permission shall not be unreasonably withheld and only with good reason which is documented. In the event Lessor sells, leases leases, or conveys a portion of the leased premises, Lessee shall execute such documents as are reasonably necessary for the sale or lease to occur, except that Lessee shall not be obligated to release all or any portion of the Lease or rights to use the surface for its existing operations and permanent production facilities, roads, power line, telephone lines or pipelines unless Lessor relocates any of LessorLessee’s permanent facilities, roads, power lines, telephone lines or pipelines, at Lessor’s sole cost, risk, expense and liability for such move or unless mutually agreed to by Lessor and Lessee, nor shall it be obligated to execute any documents for title exceptions having to do with the mineral estate and in the event said sale or lease by Lessor pertains to a tract of land greater than 160 acres, Lessor and Lessee shall mutually agree to a five acre square designated drillsite location and access, with nor no more than one drillsite per 80 acres. Said sale or lease of the surface by Lessor subsequent to the date of this oil, gas and mineral lease shall be made subject to this Leaselease. Lessee and Lessor both hereby agree to work together whereby Lessor can meet its objective of developing the surface in conjunction with Lessee’s objective of developing the mineral estate. (e) Lessee shall, to the extent possible or feasible, use existing roadways or rights-of-way for access to its drillsites. Lessee shall not locate a drillsite nearer than 200 feet from an existing or proposed right-of-way for any electric transmission or distribution line, or gas or oil pipeline (except pipelines used in connection with Lessee’s operations). (f) Lessee agrees that is it shall not locate, place place, or construct a drillsite location or any production facilities or otherwise have use of the surface of the area lying within 1,5001500’ either side of the center line of Interstate 40 and that certain roadway known as “Paseo Del Volcan” which lies north and south of Interstate 40, and the east-west roadway known as “Rio Bravo” Road lying south of Interstate 40 without prior written consent or permission of Lessor. However, Lessee shall have reasonable access across and/or from said roadways, subject to to, local, state and federal rights and regulations, and shall consult with Lessor to establish routes used in its operations so as to minimize the effect of said access. (g) Lessee shall not locate a drillsite within 1,000 500 feet of any house, hotel, office building, or proposed paved roadway or permanent structures of same or similar significance without first obtaining Lessor’s written consent. (h) Lessee shall fence all producing well locations. (i) Lessor agrees that in the event that any of its proposed development plans should disturb any of Lessee’s existing production facilities, roads, pipelines, power lines, telephone lines and other items of a similar and permanent nature (“items”), Lessor will have the option to move the portion of said production facility and/or “item” which interferes with its development at Lessor’s sole cost, risk, expense and liability to a location that will not prohibit or prevent Lessee lessee from continuing to utilize said production facility and operating its well(s). (j) Prior to the commencement of any operation for the drilling of a well on the leased premises, Lessee shall conduct its own environmental assessment of the drillsite area, area which includes but is not limited to the taking of photos and random soil samples which will be analyzed by an independent third party in order to establish a baseline as to the contents of the soil. Said analysis will be made available to Lessor. Prior to the abandonment of any drillsite or production facility location on said leased premises, Lessee agrees to perform an environmental assessment of the area which shall include the taking of soil samples and their analysis by an independent third party, said analysis being provided to Lessor. Lessee further agrees that said cleanup and restoration shall conform to all of the applicable Federal, State and local regulations covering and affecting same.