Presenter: Corky Kuhlmann

Commission Agenda Item No. 18
Action
Nomination for Oil and Gas Lease – Caldwell County
Lockhart State Park
August 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 regarding the nomination for lease of TPWD mineral interest at Lockhart State Park at 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 Lockhart 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 lease request is for 264 acres of land being Lockhart State Park.

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 condition of the lease will also include 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 264 acres, being Lockhart State Park, 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. 18
Exhibit A

Restrictions on Activities

This Exhibit contains terms and conditions staff recommends be included in an oil and gas lease covering 264 acres of Lockhart 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. Otherwise, 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. 18
Exhibit B

Locator Map

This image is a representation of where the proposed lease property lies within the city of Lockhart.

For help in interpreting this map, please contact Corky Kuhlmann.


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