Presenter: Ronnie Ray

Commission Agenda Item No. 12
Action
Nomination for Oil and Gas Lease
Tyler State Park
Smith County
April 2002

I. Discussion: Minerals owned by or held in trust for Texas Parks and Wildlife (TPW) 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 TPW. The Board for Lease has received a nomination at the Tyler 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 two of the tracts, totaling 45.12 mineral acres, and 50% of the minerals under a third tract totaling approximately 5.52 mineral acres. The total mineral acres will be 50.64 acres. The tracts to be nominated consist of 56.16 surface acres.

The Commission’s policy requiring a minimum cash bonus bid 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 would also be subject to the conditions shown in Exhibit A.

II. Recommendation: Staff recommends that the Parks and Wildlife Commission adopt the following motions:

"The Executive Director is authorized to nominate for oil and gas lease to the Board for Lease for Parks and Wildlife Lands, three tracts of land consisting of 50.96 mineral acres out of the Tyler State Park, with minimums of $150 per acre bonus, 25 percent royalty, $10 per acre delay rental, and a 3-year term, incorporating the restrictions set out in Exhibit A."

Attachments – 2

1. Exhibit A – Conditions
2. Exhibit B – Map (Available upon request)
2. Exhibit C – Fiscal Note (Available upon request)


Commission Agenda Item No. 12
Exhibit A

Restriction 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.

Recommendations

It will be recommended to the successful bidder that the visual and aesthetic integrity of the Tyler State Park be protected and that incidental damage/impacts to the environment be avoided by any and all of their operations.


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