CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
Exhibit 10.4.4
SBS-10
Original
GEOTHERMAL LEASE
THIS LEASE AND AGREEMENT entered into this 20th day of OCTOBER, 1975 by and
between XXXX XXXXXX XXX, A Married Woman, and XXXXXX X. XXXXX, A Widow,
(hereinafter called "Lessor" whether one or more) and GULF OIL CORPORATION, a
Pennsylvania corporation (hereinafter called "Lessee");
W I T N E S S E T H :
Lessor, in consideration of the sum of Ten Dollars ($10.00) cash in hand
paid, the receipt and sufficiency of which is hereby acknowledged, and of the
covenants and agreements hereinafter contained on the part of the Lessee to be
paid, kept and performed, does hereby grant, demise, lease and let unto the
Lessee the following described land together with any reversionary right therein
(hereinafter called the "Leased Land") situated in the County of WASHOE, State
of NEVADA, and containing approximately 142.71 acres:
For a description of the demised premises, see Exhibit A.
For the purpose of and together with the sole and exclusive right and
privilege of exploring, drilling for, producing, extracting, removing,
utilizing, selling and disposing of Geothermal Resources and of extracting
minerals therefrom (hereinafter called "Extractable Minerals") and artificially
injecting fluids and gases into the Leased Land; and constructing, erecting,
using, operating and maintaining upon the Leased Land any and all Facilities as
the Lessee may deem necessary in order to produce, save, utilize and process
Geothermal Resources and Extractable Minerals and in order to generate
electricity from Geothermal Resources; together with ingress and egress upon the
Leased Land in order to exercise any of the rights granted herein. For the
purpose of this Lease "facilities" shall include but not be limited to, xxxxx,
pumps, pipes, pipelines, buildings, plants, sumps, tanks, brine pits,
reservoirs, watertanks, pumping stations, roads, electric power generation
plants, transmission lines, electric, telegraph and telephone lines.
For the purpose of this Lease: (a) The term "Geothermal Resources" shall
mean all products of geothermal processes, embracing indigenous steam, hot water
and hot brines; steam and other gases, hot water and hot brines resulting from
water, gas, or other fluids artificially introduced into geothermal formations;
and heat or other associated energy found in geothermal formations. (b) The term
"Extractable Minerals" shall mean any mineral or minerals (exclusive of oil and
hydrocarbon gases) which are produced in solution with Geothermal Resources from
any well drilled by Lessee on the Leased Land. Seven (Please Initial) (7) RWC
This Lease shall be for a term of xxxxxx30 years from the date hereof
(herein called "Primary Term") and so long thereafter as Geothermal Resources or
Extractable Minerals are
being produced in commercial quantities or drilling operations are conducted
either on the Leased Land or on land pooled therewith; all subject to the
following terms and conditions:
1. Lessee shall pay to the Lessor on or before the last day of the calendar
month after the month of commencement of production in commercial quantities of
Geothermal Resources or Extractable Minerals or both and thereafter on a monthly
basis: (a) A royalty of ***% of the value of the *** produced from the Leased
Land or allocated thereto; and (b) A royalty of ***% of the value of the ***
produced from the Leased Land or allocated thereto.
It is agreed that "value" shall be deemed to be the gross proceeds from the
sale of the Geothermal Resources or Extractable Minerals, or, if not sold, their
fair market value at the well head if they are used by the Lessee for commercial
purposes other than in the producing or processing of other Geothermal Resources
or Extractable Minerals. If the Lessee elects to process any Extractable
Minerals prior to sale, then the Lessor's royalty shall bear its proportionate
share of the cost of such processing.
2. Lessee has paid to Lessor the rental in full for a period of one (1)
year from the date hereof. Commencing with the second year of the term hereof
and on each anniversary date thereafter during the Primary Term, if during the
preceding year Lessee has not conducted drilling operations on or if there was
no production from the Leased Land or land pooled therewith then, subject to the
provisions of paragraph 4 hereof, Lessee shall pay or tender to Lessor annually,
in advance, as rental, the sum of See Exhibit "B" (Par. 16) Dollars ($RWC).
For the purposes of calculating any payments hereunder based on acreage, Lessee
may act as if the Leased Land contains the number of acres set forth above
unless the Lessor or Lessee shall obtain a final adjudication that the acreage
is different at which time Lessee shall, as of the next due date, adjust his
payments accordingly but without retroactive obligation. Lessee shall make any
payments hereunder by mailing or delivering a check or draft to Lessor at 000 X.
Xxxxxxxxx Xxxxxx, Xxxxxx, Xx. 00000.
3. If Geothermal Resources or Extractable Minerals are found in commercial
quantities in any well or xxxxx drilled on the Leased Land or land pooled
therewith, Lessee may, at any time and from time to time, either before or after
production, suspend or shut-in the operations of such well or xxxxx and
production therefrom. If operations are not being conducted hereunder or if
there is no paying production attributable to this Lease, then commencing with
the first day of the calendar month following the expiration of thirty (30) days
from the date of such suspension or shut-in and on each Lease anniversary date
thereafter, Lessee shall pay Lessor annually an amount equal to the rental
provided for in paragraph 2 above, based upon the number of acres then covered
by this Lease in absence of pooling or unitization, as shut-in royalty until
such time as the operation of one such well is resumed or operations or paying
production attributable to this Lease take place, whichever shall first occur.
The maximum payment for such shut-in royalty in any Lease year shall in no event
be greater than the amount computed for rental in paragraph 2 above regardless
of the number of xxxxx shut-in or suspended in any Lease year. Such shut-in
royalty shall be deemed to be an advance royalty to be repaid to Lessee from
royalties thereafter payable to Lessor hereunder. Any shut-in well for which the
foregoing payment is being paid shall be considered under all the provisions of
this Lease as a producing well.
*** Confidential material redacted and filed separately with the Commission.
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4. Lessee may at any time release or surrender this Lease in whole or in
part or as to any zone, strata or depth, by placing of record a release or
quitclaim deed in the county office where this Lease is recorded, and thereupon
Lessee shall be released of all further obligations and duties as to the portion
of the Leased Land so surrendered or released; and thereafter all payments to
Lessor provided for herein, except royalties on actual production, shall be
reduced in the same proportion that the acreage covered hereby is reduced. All
land so surrendered or released shall remain subject to rights-of-way and
easements for facilities necessary or convenient for Lessee's operations on the
Leased Land retained or on land pooled therewith.
5. No well shall be drilled nearer than 300 feet to any house, barn or
structure now existing on the Leased Land, without the prior written consent of
Lessor. Lessee shall pay for damages caused by its operation to growing crops
and presently existing buildings and roads on the Leased Land. Lessee shall have
the right at any time to remove all facilities placed on the Leased Land
including the right to draw and remove casing. In addition to the right to
produce Geothermal Resources and Extractable Minerals, Lessee shall have the
right to use such water or water rights in, on, produced from or appurtenant to
or crossing the Leased Land as Lessee may reasonably require in connection with
its operations, provided that such use by Lessee of any water or water rights,
as aforesaid, existing as of the date hereof, shall not interfere with Lessor's
requirements for Lessor's own use thereof for domestic or agricultural purposes
on the Leased Land and shall not be in violation of any applicable governmental
law or regulation. Any brine, fluid or surplus water resulting from Lessee's
activities or operations may be disposed of by reinjection or may be utilized or
dealt with by Lessee in such lawful manner as Lessee shall deem appropriate.
6. Lessee shall pay all taxes levied against its improvements on the Leased
Land. All Taxes assessed against the Geothermal Resources and Extractable
Minerals covered by this Lease, and all taxes, assessments or charges of
whatever kind now or hereafter assessed, levied or collected by reason of the
production, sale or removal of Geothermal Resources or Extractable Minerals from
the Leased Land shall be borne by the parties hereto in the proportion of the
royalty share by Lessor and the remainder by Lessee. Lessor shall pay, before
delinquency, all other taxes and assessments on the Leased Land and improvements
thereon.
7. Lessee may, at any time and from time to time during the Primary Term
hereof, pool and combine the Leased Land, or any portion thereof, into an
operating unit with other lands in the vicinity, another lease or other leases,
or any portion thereof, when, in the Lessee's judgment, it is necessary or
advisable to do so in order to properly explore or develop or operate the Leased
Land or to prevent waste or to avoid drilling unnecessary xxxxx or to comply
with applicable governmental laws, regulations or orders, provided that the
total acreage in such pooled unit shall not exceed 2,560 acres. Such pooling
shall be effected by Lessee executing and filing in the office where this Lease
is recorded an instrument describing and identifying the pooled acreage. The
production of Geothermal Resources or Extractable Minerals so pooled, and the
development of and operation on any portion of the pooled unit shall be
considered and construed and shall have the same effect, except for the payment
of royalties, as production, development and operation on the Leased Land under
the terms of this Lease. The royalties herein provided shall accrue and be paid
to Lessor on pooled substances produced from any unit in the proportion that
Lessor's interest in the land covered hereby and placed in the unit bears to the
total acreage placed in each unit.
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8. Lessee shall have the right at any time to commingle for the purpose of
utilizing, storing, selling or processing Geothermal Resources or Extractable
Minerals produced from the Leased Land or land pooled therewith with like
substances produced from other lands or units.
9. Upon the violation of any of the terms or conditions of this Lease, by
Lessee and the failure to begin to remedy the same with due diligence within
ninety (90) days after written notice from Lessor so to do, then, at the option
of Lessor, this Lease shall forthwith cease and terminate, and all rights of
Lessee in and to the Leased Land shall be at an end, saving and excepting the
drill site for each producing well in respect of which Lessee is not in default,
and saving and excepting rights-of-way necessary for Lessee's operations The
drill site referred to shall consist of a tract, designated by Lessee, of forty
(40) acres, if there be so much, surrounding each producing well.
10. The obligations of Lessee hereunder shall be suspended while Lessee is
prevented from complying therewith, in whole or in part, by strike, lockout,
action of the elements, accidents, rules and regulations of the federal, state,
municipal, or other governmental agencies, inability to obtain materials or
supplies in the open market, or other matters or conditions beyond the control
of Lessee, whether similar to matters or conditions herein specifically
enumerated or not.
11. If Lessor owns less than the entire and undivided fee simple interest
in the Leased Land or the Geothermal Resources and Extractable Minerals, then
royalties and rentals shall be paid to Lessor only in the proportion that his
interest bears to the whole and undivided fee. If Lessor hereafter acquires any
additional interest in the Leased Land, then this Lease shall cover such
after-acquired interest, provided that Lessor's share of rentals shall be
increased to cover the interest so acquired at the next succeeding rental paying
date after Lessee has been notified of such after-acquired interest or of any
reversion having occurred. Any interest in the production from the Leased Land
to which the interest of Lessor may be subject shall be deducted from the
royalties provided for herein.
12. Lessor hereby warrants and agrees to defend the title to the Leased
Land and agrees that Lessee may at its option pay and discharge any mortgage,
taxes, assessments, or liens or encumbrances existing, levied or assessed upon
the Leased Land and be subrogated to the rights of the holder thereof, and
Lessee shall have the right to apply to Lessee's repayment any rentals or
royalties accruing to the Lessor hereunder.
13. Any notice from Lessor to Lessee shall be given by sending the same by
registered or certified mail, addressed to Lessee at Gulf Building, 1730 So.
Bellaire St., Denver, Colo. 80222, Attn: Geothermal Operations and any notice
from Lessee to Lessor shall be given by sending the same by registered or
certified mail, addressed to Lessor at 000 X. Xxxxxxxxx, Xxxxxx, Xxx. 00000. The
address of either party may be changed by written notice as provided for above.
14. If the estate of either party hereto is assigned, and the privilege of
assigning in whole or in part or as to any zone, strata or to any depth is
expressly allowed, the covenants hereof shall extend to such assignee, his
heirs, devisees, executors, administrators, successors, and assigns, but no
change in the ownership of the Leased Land or assignment of rentals or
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royalties shall be binding on the Lessee until thirty (30) days after Lessee has
been furnished with a written transfer or assignment or certified copy thereof.
Rentals hereunder shall not be apportioned upon an assignment as to a particular
zone, strata or depth, but shall continue as a single obligation to be paid by
either party. In the event of any partial assignment, production in commercial
quantities on any portion of the Leased Land shall continue the Lease in force
as a whole to the same extent as if no assignment had been made. Any assignment
shall, as to the extent of the assignment, relieve and discharge Lessee of all
obligations hereunder and, should the assignee default in any of the obligations
of this Lease, such default shall not operate to invalidate or affect this Lease
insofar as it covers any part of the Leased Land or interest therein not
included in the assignment.
15. This Lease shall be binding upon the parties hereto, their heirs,
devisees, executors, administrators, successors and assigns, and may be executed
in any number of counterparts with the same force and effect as if all parties
had executed the same instrument. The failure of any person owning an interest
in the Leased Land to execute a geothermal lease covering all or a portion of
the Leased Land or the failure of any person named as a Lessor herein to execute
a counterpart hereof, shall not affect the binding force of this Lease as to
those who have executed or shall execute a counterpart hereof.
IN WITNESS WHEREOF, this Lease and Agreement is executed as of the date
first above written.
/s/ XXXX XXXXXX COX /s/ XXXXXX X. XXXXX
----------------------------------- -----------------------------------
XXXX XXXXXX XXX, A Married Woman, XXXXXX X. XXXXX, A Widow.
[Notary Seal]
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