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