* Energy Quest Inc is a company that engages in searching for oil and gas on |
properties. |
* Preliminary testing running east and west on Hamlin Road leads the company to |
believe that there may be an Oil and/or Gas structure located there. |
* Additional testing running north and south on Hamlin Road is needed to verify |
possible existing structure. |
* Energy Quest would like to enter into a lease agreement with the City to conduct |
additional testing on City property. |
* Energy Quest would like to lease 141.77 acres from the City with an option on an |
additional 10 (ten) acres located in Borden Park. |
* Proposed Lease area is zoned light industrial. |
* If the City agrees to the lease, the City would be compensated with a non-refundable |
signing bonus of $14,700 regardless if structure exists or not. |
* Energy Quest will obtain lease agreements from private land owners if necessary. |
* With the exception of Oil and Gas, the lease protects the City and reserves the City's |
mineral rights. |
* If a structure is found with hydro carbons, oil or gas, the City would share in the |
revenue. |
Committee members discussed possible worse case scenarios, such as, un-captured |
gas odor and methane danger. It was noted that the State of Michigan has issued over |
50,000 well drilling permits without incident. |
Committee members viewed and discussed pictures of the proposed facility. |
* Type of facility built depends on whether its Oil or Gas. |
* The lease term is for three (3) years with a two (2) year extension. |
* The lease remains in place until the concentration of Oil and Gas are expended. |
* Usually structures exist from seven (7) to ten (10) years. |
* At the end of agreement, Energy Quest would remove the facility, and restore the |
grounds back to equal or better condition. |
* Shut-In Provision would allow Energy Quest to keep the lease "alive" or extend the |
primary term of lease when/if a structure is found and if there is a problem in bringing |
the Oil and/or Gas to market. Lease term extended until the problem is solved. |
Committee recommended that the Proposed Oil and Gas Lease go to a Council |
Workshop. |
Committee requested that John Staran, City Attorney, be present at Council Workshop. |