City of Brighton - File #: ID-52-18

• File #: ID-52-18
• Version: 1
• Type: Ordinance
• Status: Agenda Ready
• File created: 2/12/2018
• In control: City Council
• On agenda: 3/6/2018
• Title: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BRIGHTON, COLORADO APPROVING AN OIL AND GAS LEASE (NO SURFACE OCCUPANCY) WITH PETRO OPERATING COMPANY, LLC +/- 61.1902 NET MINERAL ACRES IN CERTAIN PORTIONS OF SECTION 10 TOWNSHIP 1 SOUTH, RANGE 66 WEST OF THE 6TH P.M. ADAMS COUNTY, COLORADO; FINDING THAT THE TERMS OF SAID LEASE, INCLUDING A 21% ROYALTY RATE AND A FIVE THOUSAND DOLLAR ($5,000) PER MINERAL ACRE BONUS PAYMENT, ARE REASONABLE AND THAT IT IS IN THE BEST INTEREST OF THE CITY TO ENTER INTO SAID LEASE; AUTHORIZING THE MAYOR TO EXECUTE SAID LEASE ON BEHALF OF THE CITY; AUTHORIZING THE CITY MANAGER TO UNDERTAKE SUCH TASKS AND EXECUTE SUCH DOCUMENTS AS MAY BE REQUIRED TO IMPLEMENT SAID LEASE; AND SETTING FORTH OTHER DETAILS RELATED THERETO

Date	Ver.	Action By	Action	Result
3/6/2018	1	City Council

City Attorney
STAFF REPORT

Reference: Ordinance to approve the leasing of City-owned mineral rights in Section 10, Township 1 South, Range 66 West. (Adams County)

To: Mayor Ken Kreutzer and Members of City Council
Through: Philip Rodriguez, City Manager


? Study Session Date:__________________
? City Attorney Approval_______________


? Finance Director Approval:__________
? Regular Council Agenda Date:___________
? City Manager Approval:_____________

Prepared By: Matthew Sura Esq., Oil and Gas Special Counsel

Date Prepared: February 09, 2018


PURPOSE

Consider an ordinance to lease City-owned minerals in Section 10 Township 1 South, Range 66 West (Adams County) to Petro-Operating Company, LLC. Ordinance will allow the Mayor to execute the lease on behalf of the City and the City Manager to execute other documents and take other actions necessary for the implementation of the lease.

BACKGROUND

1. The City owns an estimated 1,400 acres of surface lands within and near the City of Brighton. For most of these lands, the City owns at least some portion of the mineral rights.
2. In March 2015, the City passed amendments to its Municipal Code that would facilitate the development of oil and gas resources within the City of Brighton, while mitigating potential impacts to the City's groundwater resources as well as potential land use conflicts between such development and other land uses.
3. In June of 2015, Petro Operating Company, LLC met with City staff to request to develop oil and gas resources from within the city limits of Brighton.
4. Over the next year, Petro Operating submitted an application to the City of Brighton and negotiated a Memorandum of Understanding as allowed under Brighton Code Section 17-64. The City of Brighton and Petro Operating entered into the Memorandum of Understanding on March 1st, 2017 and received permits to conduct oil and gas operations within the city limits of Brighton from a well pad in Section 34, Township ...