Presenter: Corky Kuhlmann

Commission Agenda Item No. 13
Action
Nomination for Oil and Gas Lease – Harris County
Sheldon Lake State Park
April 2006

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 Sheldon Lake State Park & Environmental Learning Center 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 Sheldon Lake State Park & Environmental Learning Center 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 is for 54.57 acres of land being a portion of Sheldon Lake State Park & Environmental Learning Center.

Staff recommends the Commission recommend 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 as 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 make recommendations for oil and gas lease to the Board for Lease for Parks and Wildlife Lands, this nomination for lease being approximately 54.57 acres, a portion of Sheldon Lake State Park & Environmental Learning Center, 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."

Attachments - 2

  1. Exhibit A - Restrictions
  2. Exhibit B - Locator Map

Commission Agenda Item No. 13
Exhibit A

Restrictions on Activities

This Exhibit contains terms and conditions staff recommends be included in an oil and gas lease covering 54.57 acres of Sheldon Lake State Park. These terms and conditions, if approved by the Commission, shall be forwarded to the Board for Lease of Parks and Wildlife Lands:

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.


Commission Agenda Item No. 13
Exhibit B

Locator Map

This image is a representation for where the nominated 54.57 acres lies in relation to Sheldon Lake State Park

For help in interpreting this map, please contact Jack Bauer.


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