Presenter: Jack Bauer

Commission Agenda Item No. 13
Action
Nomination for Oil and Gas Lease – Nacogdoches County
January 2005

I. Executive Summary: This item is a request for the recommendation by the Texas Parks and Wildlife Commission (Commission) to the Board for Lease for Parks and Wildlife Lands for the nomination of TPWD mineral interest for lease at Alazan Bayou Wildlife Management Area at the minimum standard fees or greater.

II. Discussion: Minerals owned by or held in trust for Texas Parks and Wildlife Department (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 Alazan Bayou WMA 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 lease request includes one tract totaling approximately 101.6-acres within the WMA.

Staff recommends the Commission approve the lease to the Board for Lease of Parks and Wildlife Lands at 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. The lease will also include the conditions no surface occupancy and off site directional drilling only.

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, approximately 101.6-acres out of Alazan Bayou WMA, at a minimum of $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."


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