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Item 7ACity of Southlake Department of Planning MEMORANDUM September 29, 2004 TO: Honorable Mayor and City Council FROM: Ken Baker, AICP, Interim Planning Director SUBJECT: Ordinance No. 880 — 2nd Reading Amendment to Chapter 9.5 — Southlake City Code — Add Article IV "Gas and Oil Well Permits." REQUESTED ACTION: Conduct a public hearing and consider approval of Ordinance No. 880. BACKGROUND: Recently, interest in natural gas and oil exploration, drilling, and production has increased in the area. As such, the city has recognized the need to develop and provide ordinance regulations to govern such possible future activities. Ordinance 480 -YY On September 7, 2004, the City Council approved Ordinance 480 - YY which permits gas and oil well drilling by Special Use Permit in the "1-2" district and added standards for approval of such requests. Proposed Ordinance 880 Proposed ordinance 880 will regulate the technical, operation and maintenance activities throughout the drilling and operation process. Overview of the Oil & Gas Application Process The proposed application process for gas or oil drilling is shown on the next page. Proposed Application Process for Oil & Gas Production Specific Use Permit Public Hearing at l'c4rZ and City Council Road Repair Agreement C itx Attorney and Stall 11 Oil and [Jas Well Permit Oil and Gas Well Inspector BACKGROUND: Highlights of the Proposed Ordinance 880 (Continued) • Requires a Road Repair agreement to be submitted in conjuction with a SUP. (A road repair agreement is a written agreement obligating the operator to repair damage streets in city as a result of any oil or gas drilling or production in the city). • Requires both inspections throughout different stages of drilling and completion process and annually. • Requires an emergency action plan. • Requires that drill site be located 600' from any residential structure and 1,000' from any abutting property with a public building, hospital, institution, school or daycare. • Requires noise levels not to exceed seventy (70) decibels at any point three hundred (300) feet from the drill site. • Requires lighting to be shielded and directed downward and all operations must meet the city's lighting ordinance. • Requires all facilities used for parking, loading, unloading, driveways and all other vehicular access shall be constructed of Ordinance No. 880 September 27, 2004 concrete or asphalt and shall comply with all Fire Code standards. • Requires screening of equipment and facilities. • Requires access to all drilling sites and operational wells shall be limited to state or federal highways such as SH 114 and SH 26. Changes to the Ordinance from 1 s t Reading The following changes to the ordinance were made to the proposed ordinance. • Provided a regulation which states that each individual well must obtain a gas & oil well permit (Section E.2). • Increased the inspection fee from $5,000 to $7,500 (Section F.2). FINANCIAL CONSIDERATIONS: None LEGAL REVIEW: Ordinance has been reviewed by the City Attorney. CITY COUNCIL ACTION: On September 21, 2004, the City Council approved this item (7 -0) on consent. SUPPORTING DOCUMENTS: Attachment A -Draft Ordinance No. 880 Attachment B -Road Repair Agreement Ordinance No. 880 3 September 27, 2004 ATTACHMENT A ORDINANCE NO. 880 AN ORDINANCE OF THE CITY OF SOUTHLAKE, TEXAS, REGULATING THE DRILLING AND PRODUCTION OF GAS AND OIL WELLS WITHIN THE CITY; PROVIDING A PENALTY; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR PUBLICATION; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL OF CONFLICTING PROVISIONS; PROVIDING A CUMULATIVE CLAUSE; PROVIDING A PENALTY OF A FINE NOT TO EXCEED THE SUM OF TWO THOUSAND DOLLARS ($2,000.00) FOR EACH OFFENSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Southlake, Texas, is a Home Rule Municipality located in Tarrant County, Texas, created in accordance with the provisions of the Texas Local Government Code and operating pursuant to the enabling legislation of the State of Texas; and WHEREAS, the City Council of Southlake, Texas, finds that the drilling and production of gas and oil without proper regulations, may affect the health, safety, and general welfare of the public and may cause imminent destruction of property or injury to persons; and WHEREAS, the City Council of Southlake, Texas, deems it necessary to enact an ordinance to govern the drilling and production of gas and oil within the corporate limits of the City of Southlake. WHEREAS Any person, firm or corporation violating any of the provisions of this ordinance, as amended hereby, shall be deemed guilty of a misdemeanor and, upon conviction in the Municipal Court of the City of Southlake, Texas, shall be punished by a fine not to exceed the sum of Two Thousand Dollars ($2,000.00) for each offense, and each and every day any such violation shall continue shall be deemed to constitute a separate offense. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: Section 1: THAT, the above findings are hereby found to be true and correct and are incorporated herein in their entirety. Section 2: THAT, Chapter 9.5, of the City of Southlake City Code be hereby amended by adding a new Article IV, Gas and Oil Well Drilling and Production, comprising of new Sections A through T, which reads as follows: Ordinance No. 880 4 September 27, 2004 ARTICLE IV. Gas and Oil Well Drilling & Production A. Purpose and Intent: The exploration, development, and production of gas and oil in the City is an activity which necessitates reasonable regulation to ensure that all property owners, mineral and otherwise, have the right to peaceably enjoy their property and its benefits and revenues. It is hereby declared to be the purpose of this section to establish reasonable and uniform limitations, safeguards and regulations for operations related to the exploring, drilling, developing, producing, transporting and storing of gas and oil and other substances produced in association with gas and oil within the City to protect the health, safety and general welfare of the public, minimize the potential impact to property and mineral rights owners, protect the quality of the environment, and encourage the orderly production of available mineral resources. B. Definitions: All technical industry words or phrases related to the drilling and production of gas and oil wells not specifically defined shall have the meanings customarily attributable thereto by prudent operators in the gas and oil industry. For the purposes of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning. Abandonment: "Abandonment" as defined by the Railroad Commission and includes the plugging of the well and restoration of the drill site as required by this section. Applicant: A person to whom a permit or certificate for the drilling, operation and production of a well, or the installation or operation of a pipeline, is issued under this section, including, but not limited to, his or her heirs, legal representatives, successors or assigns. City: The City of Southlake, Texas. City Council: The City Council of the City of Southlake. Drill Site: The area used for drilling, completing, or re- working a well. Drilling: Any digging or boring of a new well to develop or produce gas and oil or to inject gas and oil, water, or any other fluid or substance into the earth. Drilling means and includes the re -entry of an abandoned well. Drilling does not mean or include the re -entry of a well that has not been abandoned. Environmentally Sensitive Area: An area under the jurisdiction of the U.S. Army Corps of Engineers where scientific, ecological, cultural or aesthetic features have been identified by the Corps of Engineers. Exploration: Geologic or geophysical activities, including, but not limited to, surveying and seismic exploration, related to the search for gas and oil or other sub - surface hydrocarbons. Gas: Gas and or natural gas, as such terms are used in the rules, regulations, or forms of the Railroad Commission. Ordinance No. 880 5 September 27, 2004 Gas and Oil Well: Any well drilled for the production of gas and /or oil or classified as a gas and /or oil Well by the Texas Natural Resources Code or the Railroad Commission. For the purposes of this ordinance, a "well" includes a gas and /or oil well. Gas and Oil Well Inspector (Well Inspector): An independent qualified gas, oil, or petroleum consultant familiar with and educated in the gas and oil industry who has been retained by the City. Gas and Oil Well Permit: A permit applied for and issued or denied pursuant to this section authorizing the drilling, production, and operation of one or more gas and /or oil wells. Gathering Station: The site where the gathering lines for all the wells converge. Hazardous Materials Management Plan: The hazardous materials management plan and hazardous materials inventory statements required by the Fire Code. New Well: A new well bore or new hole established at the ground surface and shall not include the re- working of an existing well that has not been abandoned unless the re- working involves drilling to a deeper total depth. Operation Site: The area used for development and production of gas and oil and all related operational activities after drilling activities are complete. Operator: For each well, the person listed on the Railroad Commission Form W -1 or Form P -4 for a well, that is, or will be, actually in charge and in control of drilling, maintaining, operating, pumping or controlling any well including, without limitation, a unit operator. If the operator, as defined herein, for any well is not the lessee of any premises affected by the provisions of this section, then such lessee shall also be deemed to be an operator. In the event that there is no gas and oil lease relating to any premises affected by this section, the owner of the fee mineral estate in the premises shall be deemed the operator. Pipeline Easement Map: A map indicating all gathering line easements. The easements must be located separately from other utility easements. Railroad Commission: The Railroad Commission of Texas. Road Repair Agreement: A written agreement obligating the operator to repair damage, excluding ordinary wear and tear, if any, to public streets, including, but not limited to, bridges, caused by the operator or its employees, agents, contractors, subcontractors or representatives in the performance of drilling or production of any gas and oil wells authorized by the City. Well: A hole or bore to any horizon, formation, or strata for the purpose of producing gas, oil, or other hydrocarbons. C. Specific Use Permit Required: The drilling and production of gas and /or oil within the City shall only be permitted by Specific Use Permit in accordance with Section 45 of Ordinance 480, Comprehensive Zoning Ordinance. A site plan is required with the Specific Use Permit Ordinance No. 880 September 27, 2004 application and must include all information required by Section 40 and Section 45 of Ordinance 480, Comprehensive Zoning Ordinance. D. Road Repair Agreement: A Road Repair Agreement shall be submitted in conjunction with the application for Specific Use Permit. The agreement must be signed by the operator. The City Manager shall have the authority to execute the Road Repair Agreement. E. Gas and Oil Well Permit Required 1. No person shall engage in the drilling and production of gas and oil wells within the City without first obtaining a Gas and Oil Well Permit. 2 2. Each individual well must obtain an oil and gas permit. 3. An application for a gas and oil well permit may be filed with the City concurrently with the application for a Specific Use Permit; provided, however, that the City shall not be required to consider the application for a gas and oil well permit unless and until a Specific Use Permit is approved by the City Council. 4. When a gas and oil well permit has been issued covering a Well, the permit shall constitute authority for the following, so long as conducted in strict accordance with this section: drilling, operation, production, gathering of production, maintenance, repair, re- working, testing, site preparation consisting of rigs or tank batteries, plugging and abandonment, and any other activity authorized by this section associated with drilling or production by the operator or its employees, agents, contractors, subcontractors or representatives. A gas and oil well permit shall also constitute authority for the construction and use of all facilities reasonably necessary or convenient in connection therewith, including gathering lines and discharge lines, by the operator or his employees, agents, contractors, subcontractors or representatives, so long as constructed and used in strict accordance with this section. 5. An original gas and oil well permit shall not, however, constitute authority for the re- entering and drilling of an abandoned well. Re -entry and drilling of an abandoned well shall require a new gas and oil well permit. 6. In addition to obtaining a gas and oil well permit and before establishing a drill site and access road, the operator must obtain all the necessary permits, including an Earth Disturbance permit from the Building Services Department. Other applications including grading permit, storm water pollution prevention, a drainage plan shall be approved by the Public Works Department unless the City Engineer determines that they are not necessary. Ordinance No. 880 September 27, 2004 F. Application and Review of Gas and Oil Well Permit 1. Applications for gas and oil well permits shall be submitted in writing on forms provided by the City and signed by the operator. 2. Applications for gas and oil well permits shall be filed with the Planning Department. The following fees shall be charged for each application: a) an administration fee of $500, and b) a $5,000 $7,500 inspection fee for each well covered by the permit. The administration fee and the inspection fee is not refundable regardless of the outcome of the application. Incomplete applications shall be returned to the applicant. The City shall return any application as incomplete if there is a dispute pending before the Railroad Commission regarding the determination of the operator. 3. No gas and oil well permit shall be issued if the proposed activities are not in conformance with the approved Specific Use Permit and associated site plan, provisions of this section, Building Code, Fire Code and all other applicable City Ordinances. 4. Each gas and oil well permit issued by the City shall: (1) Identify the name of each well and its operator; (2) Specify the date on which the City issued each permit; (3) Specify the date by which drilling must commence on at least one (1) well covered by the permit otherwise the permit expires (such date shall not be less than one (1) year after the date of issuance). A one (1) year extension of time may be granted if existing conditions are the same and an application for extension is made to the Director prior to expiration of initial permit; (4) Specify that if drilling is commenced on at least one (1) well covered by the permit before the permit expires, the permit shall continue until the wells covered by the permit are abandoned and the site restored; (5) Incorporate, by reference, the insurance and security requirements set forth in this ordinance; (6) Incorporate, by reference, the requirement for periodic reports; (7) Incorporate the full text of the release of liability provisions; (8) Incorporate, by reference, the conditions of the applicable Site Plan, and /or Specific Use Permit; (9) Incorporate, by reference, the information contained in the permit application; (10) Incorporate, by reference, the applicable rules, and regulations of the Railroad Commission, including the applicable "field rules "; Ordinance No. 880 8 September 27, 2004 (11) Specify that no drilling operations (including the construction of internal private access roads) shall commence until the operator has provided the security required by this Ordinance; (12) Contain the name, address, and phone number of the person designated to receive notices from the City, which person must be a resident of Texas that can be served in person or by registered or certified mail; and (13) Incorporate, by reference, all permits and fees required by the City. 5. A decision to deny an application for a gas and oil well permit shall be provided to the operator in writing, including the reason for the decision. The operator may appeal any such denial to the City Council. 6. If an application for a gas and oil well permit is denied, nothing herein contained shall prevent a new application from being submitted to the City for the same well. A new application fee shall accompany each new application. G. Insurance and Indemnification: The operator shall provide or cause to be provided the insurance described below for each well for which a gas and oil well permit is issued, such insurance to continue until the well is abandoned and the site restored. The operator may provide the required coverage on a "blanket" basis for multiple wells if the site of each well is sufficiently identified, the limits of coverage are sufficient as determined by the City within its sole discretion, and the blanket policy is otherwise approved by the City. The operator must provide to the City sufficient documentation that the operator's insurance complies with the requirements of this section before the issuance of the gas and oil well permit. 1. General Requirements: Indemnification and Express Negligence Provisions a. Each Gas and oil Well Permit issued by the City shall include the following language and regardless of whether such language is actually included in the gas and oil well permit it shall be deemed to be included therein: OPERATOR DOES HEREBY EXPRESSLY AND IRREVOCABLY RELEASE AND DISCHARGE ALL CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, AND EXECUTIONS OF ANY AND ALL KINDS WHICH IT OR ITS SUCCESSORS OR ASSIGNS EVER HAD, OR NOW HAS OR MAY HAVE, OR CLAIMS TO HAVE, AGAINST THE CITY OF SOUTHLAKE, TEXAS, ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, EMPLOYEES, SPONSORS, OR VOLUNTEERS, THE GAS AND OIL WELL INSPECTOR, AND EACH OF THEIR RESPECTIVE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS, AND ASSIGNS (THE CITY OF SOUTHLAKE, TEXAS AND ALL OTHER FOREGOING PARTIES BEING HEREIN REFERRED TO COLLECTIVELY AS THE "INDEMNIFIED PARTIES ") CREATED BY OR ARISING OUT OF PERSONAL INJURIES, KNOWN OR UNKNOWN, OR INJURIES TO PROPERTY, REAL OR PERSONAL, OR IN ANY Ordinance No. 880 9 September 27, 2004 WAY INCIDENTAL TO OR IN CONNECTION WITH THE PERFORMANCE OF THE WORK PERFORMED BY THE OPERATOR UNDER A GAS AND OIL WELL PERMIT. OPERATOR AGREES TO FULLY DEFEND, PROTECT, INDEMNIFY, AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM AND AGAINST EACH AND EVERY CLAIM, DEMAND, OR CAUSE OF ACTION AND ANY AND ALL LIABILITY, DAMAGES, OBLIGATIONS, JUDGMENTS, LOSSES, FINES, PENALTIES, COSTS, FEES, AND EXPENSES INCURRED BY THE INDEMNIFIED PARTIES CAUSED BY OR ARISING OUT OF, INCIDENTAL TO, OR OTHERWISE IN CONNECTION WITH ANY WORK PERFORMED BY OPERATOR UNDER A GAS AND OIL WELL PERMIT, INCLUDING, WITHOUT LIMITATION, PERSONAL INJURIES AND DEATH IN CONNECTION THEREWITH WHICH MAY BE MADE OR ASSERTED BY OPERATOR, HIS AGENTS, ASSIGNS, OR ANY THIRD PARTIES. OPERATOR AGREES TO FULLY DEFEND, PROTECT, INDEMNIFY, AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM ANY CLAIMS, LIABILITIES, OR DAMAGES SUFFERED AS A RESULT OF CLAIMS, DEMANDS, COSTS, OR JUDGMENTS AGAINST THE INDEMNIFIED PARTIES, CREATED BY OR ARISING OUT OF THE ACTS OR OMISSIONS OF THE CITY OF SOUTHLAKE OR ANY OF THE OTHER INDEMNIFIED PARTIES, OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COURSE AND SCOPE OF INSPECTING AND PERMITTING THE GAS AND OIL WELLS INCLUDING, BUT NOT LIMITED TO, CLAIMS, LIABILITIES, AND DAMAGES ARISING IN WHOLE OR IN PART FROM THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, INCLUDING THE SOLE NEGLIGENCE OF ANY INDEMNIFIED PARTY, OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COURSE AND SCOPE OF INSPECTING AND PERMITTING THE GAS AND OIL WELLS. IT IS UNDERSTOOD AND AGREED THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN INDEMNITY EXTENDED BY THE OPERATOR TO INDEMNIFY AND PROTECT THE CITY OF SOUTHLAKE, TEXAS AND THE OTHER INDEMNIFIED PARTIES FROM THE CONSEQUENCES OF THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE RESULTANT INJURY, DEATH, AND /OR DAMAGE. THE FOREGOING IS NOT INTENDED TO REQUIRE THE OPERATOR TO INDEMNIFY THE INDEMNIFIED PARTIES FROM THE INDEMNIFIED PARTIES' GROSS NEGLIGENCE OR INTENTIONAL HARM, IRRESPECTIVE OF WHETHER THAT GROSS NEGLIGENCE OR INTENTIONAL HARM IS THE SOLE OR CONTRIBUTING CAUSE OF THE RESULTANT INJURY, DEATH, AND /OR DAMAGE. b. All policies shall be endorsed to read "This policy will not be cancelled or non - renewed without thirty (30) days advanced written notice to the owner and the City of Southlake, Texas, except when this policy is being cancelled for nonpayment of premium, in which case ten (10) days advance written notice is required ". Ordinance No. 880 10 September 27, 2004 c. Liability policies shall be written by: (i) carriers licensed to do business in Texas and with companies with A: VIII or better rating in accordance with the current Best Key Rating Guide, or (ii) non - admitted carriers that have a financial rating comparable to carriers licensed to do business in Texas and which are approved by the City. d. Liability policies shall name as "Additional Insured" the City and other Indemnified Parties. Waivers of subrogation shall be provided in favor of all Indemnified Parties. e. Copies of the pertinent portion of the insurance policies evidencing all coverages and endorsements required by this section must be presented to the City before the issuance of the gas and oil well permit, and the acceptance of a policy without the required limits and /or coverages shall not be deemed a waiver of these requirements. The City may, in its sole discretion, accept a certificate of insurance in lieu of a copy of the pertinent portion of the policy pending receipt of such document by the City. After the issuance of the gas and oil well permit, the City may require the operator to provide a copy of the most current insurance coverages and endorsements for review at any time. An administration fee of $150 will be charged to cover the cost of such review. f. Claims -made policies shall not be accepted except for excess policies and Environmental Impairment (or Seepage and Pollution) policies. 2. Required Insurance Coverage: a. Commercial or Comprehensive General Liability Insurance: 1. Coverage should be a minimum Combined Single Limit of Ten Million Dollars ($10,000,000) per occurrence for Bodily Injury and Property Damage, with a Twenty Million Dollar ($20,000,000) annual general aggregate. This coverage must include premises, operations, blowout or explosion, products, completed operations, blanket contractual liability, underground property damage, underground reservoir (or resources) damage, broad form property damage, independent contractors protective liability and personal injury. 2. Underground Reservoir (or Resources) Damage shall be on an occurrence basis, shall not be limited to sudden and accidental occurrences, shall not have a discovery or reporting limitation and shall not exclude damage to water tables, formation or strata. 3. Environmental Impairment (or Seepage and Pollution) shall be either included in the coverage or written as separate coverage. Such coverage shall not exclude damage to the lease site. If Environmental Impairment (or Seepage and Pollution) Coverage is written on a "claims made" basis, the policy must provide that any retroactive date applicable precedes the effective date of the issuance of the permit. Coverage shall apply to sudden and accidental pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids, Gas and oiles, waste material, or other irritants, contaminants Ordinance No. 880 11 September 27, 2004 or pollutants. Coverage shall be a minimum combined single limit of Ten Million Dollars ($10,000,000), per occurrence. A discovery period for such peril shall not be less that 30 days after the occurrence. b. Automobile Liability Insurance: Minimum Combined Single Limit of Ten Million Dollars ($10,000,000) per occurrence for Bodily Injury and Property Damage. Such coverage shall include owned, non - owned, and hired vehicles. c. Worker's Compensation Insurance: In addition to the minimum statutory requirements, coverage shall include Employer's Liability limits of at least One Million Dollars ($1,000,000) for each accident, One Million Dollars ($1,000,000) for each employee, and a One Million Dollars ($1,000,000) policy limit for occupational disease, and the insurer agrees to waive rights of subrogation against any of the Indemnified Parties for any work performed for the City by the Operator. d. Excess (or Umbrella) Liability Insurance: Minimum limit of Ten Million Dollars ($10,000,000) covering in excess of the preceding liability insurance policies. e. Control of Well Insurance: 1. Minimum limit of Ten Million Dollars ($10,000,000) per occurrence, with a maximum deductible of Two Hundred and Fifty Thousand ($250,000) per occurrence. 2. Policy shall cover the cost of controlling a Well that is out of control, re- drilling or restoration expenses, and seepage and pollution damage. Damage to property in the Operator's care, custody, and control with a sub -limit of Five Hundred Thousand Dollars ($500,000) may be added. H. Security: A security instrument that covers each well must be delivered to the City before the issuance of the gas and oil well permit for the well. The instrument must provide that it cannot be cancelled without at least thirty (30) days prior written notice to the City. 1. As to each well, the instrument shall secure the obligations of the operator to: a. Comply with the Road Repair Agreement and the insurance provisions set forth in this section; and b. Pay fines and penalties imposed upon the operator by the City for any breach of the gas and oil well permit or Zoning Ordinance. 2. The security instrument may be in the form of an irrevocable letter of credit issued by a bank located in the City of Southlake, Texas and approved by the City or a payment bond issued by a surety approved by the City. The instrument shall run to the City for the benefit of the City, shall become effective on or before the date the gas and oil well permit is issued, and shall remain in force and effect for a period not less than six (6) months after the expiration or termination of the gas and oil well permit or after the well is plugged and abandoned and the site restored. Ordinance No. 880 12 September 27, 2004 3. A certificate of deposit may be substituted for the letter of credit or payment bond. The certificate shall be issued by a bank located in the City of Southlake, Texas and approved by the City, shall be payable to the order of the City to secure the obligations of the operator described above, and shall be pledged to the City with evidence of delivery provided to the City and an appropriate control agreement signed by the issuing bank sufficient to perfect the City's interest in the deposit. Interest on the certificate of deposit shall be payable to the operator. 4. The amount of the security shall be One Hundred Thousand Dollars ($100,000) for any single Well and Two Hundred Thousand Dollars ($200,000) for multiple Wells on a "blanket" basis under the same gas and oil well permit. 5. The form and substance of the documents evidencing the security instruments described above must be acceptable to the City within its sole discretion. L Periodic Reports /Annual Inspections 1. The operator shall notify the City of any change to the following information within one (1) business day after the change occurs. a. The name, address, or phone number of the operator; b. The name, address, or twenty -four (24) hour phone number of the person(s) with supervisory authority over drilling, production, or operations activities; c. The name, address, or phone number of the person designated to receive notices from the City, which person must be a resident of Texas that can be served in person or by registered or certified mail; or d. The operator's Emergency Action Response Plan including "drive -to maps" from public rights -of -way to each area covered by the applicable Specific Use Permit and associated site plan. 2. The operator shall provide a copy of any "incident reports" or written complaints submitted to the Railroad Commission or any other state or federal agency within thirty (30) days after the operator has notice of the existence of such reports or complaints. 3. Beginning on December 31 after each Well is completed, and continuing on each December 31 thereafter until the operator notifies the City that the well has been abandoned and the site restored, the operator shall prepare a written report to the City identifying any changes to the information that was included in the application for the applicable gas and oil well permit that have not been previously reported to the City. 4. Annual inspections of the site will be conducted by the city's gas and oil inspector. The cost of the annual inspection will be paid by the oil and gas operator within 30 days of the annual inspection. Ordinance No. 880 13 September 27, 2004 J. Amended Gas and Oil Well Permits 1. An operator must submit an application to the City (Planning Department) to amend an existing gas and oil well permit, to commence drilling from a new drill Site that is not shown on (or incorporated by reference as part of) the existing permit, to relocate a drill site or operation site that is shown on (or incorporated by reference as part of) the existing permit, or to otherwise amend the existing permit. 2. Applications for Amended Gas and Oil Well Permits shall be in writing on forms provided by the City and signed by the operator, and shall include the following: a. An application fee in the amount of $500. The application fee is not refundable regardless of the outcome of the application; b. A description of the proposed amendments; c. Any changes to the information submitted with the application for the current gas and oil well permit (if such information has not previously been provided to the City); d. Such additional information as is reasonably required by the gas and oil well inspector or City Staff to demonstrate compliance with the applicable Specific Use Permit and associated site plan and the provisions of this section; and e. Such additional information as is reasonably required by the gas and oil well inspector or City Staff to prevent imminent destruction of property or injury to persons. 3. If, in the judgment of the City or the gas and oil well inspector, the activities proposed by the amendment require an inspection, an inspection fee of $1,200 shall be charged. The operator must pay the fee before the amended gas and oil well permit will be issued. 4. Incomplete applications shall be returned to the Applicant. The City shall return any application as incomplete if there is a dispute pending before the Railroad Commission regarding the determination of the operator. 5. If the activities proposed by the amendment are materially different and, in the judgment of the City or the gas and oil well inspector, might create a risk of imminent destruction of property or injury to persons that was not associated with the activities covered by the existing permit or that was not otherwise taken into consideration by the current permit, the amendment must be processed as a new gas and oil well permit application. 6. A decision to deny an amendment to a gas and oil well permit shall be provided to the operator in writing, including an explanation of the basis for the decision. The operator may appeal any such denial to the City Council. 7. No amended gas and oil well permit shall be issued if the proposed activities are not in conformance with the approved Specific Use Permit and associated site plan, provisions of this Article, Building Code, Fire Code and all other applicable City ordinances. Ordinance No. 880 14 September 27, 2004 K. Transfer of Gas and oil Well Permits: 1. A gas and oil well permit may be transferred upon written request by the operator with the consent of the City: a. If the transferee agrees to be bound by the terms and conditions of the current gas and oil well permit and Road Repair Agreement; b. If all information previously provided to the City as part of the current gas and oil well permit application is updated to reflect any changes; and c. If the transferee provides the insurance and security required by this section. 2. The insurance and security provided by the transferor shall be released if a copy of the written transfer is provided to the City. The transfer shall not relieve the transferor from any liability to the City arising out of any activities conducted prior to the transfer. L. On -site Operation Requirements 1. No drill site shall be permitted within six hundred (600) feet of the boundary of any residentially zoned or residentially designated property according to the adopted City Future Land Use Plan, and no drill Site shall be permitted within: a. One thousand (1,000) feet of the boundary line of any abutting property with a public building, hospital, institution, school, day care center, or b. Six hundred (600) feet from any residential structure or commercial building. Notwithstanding any provisions of this subparagraph (L)(1) to the contrary, a drill site shall be permitted as close as three hundred (300) feet to any boundary line if all affected property owners agree in writing. 2. No drill site or operation site shall be located within two hundred (200) feet of a railroad right -of -way. 3. Erosion control shall comply with the storm water pollution prevention plan approved by the Public Works Department. 4. A drill site or operation site may only be allowed in a floodplain with the approval of the City or, where applicable, the U.S. Army Corps of Engineers. 5. There shall be a locked entrance gate to the drill, production, and operation site 6. Permanent weatherproof signs reading 'DANGER NO SMOKING ALLOWED" in a minimum of six inch (6 ") lettering shall be posted at the entrance of each drill site and operation site. The sign shall also include the phone number for emergency services (9 -1- 1), the name and phone number for the operator, and the well designation required by the Railroad Commission in two inch (2 ") lettering. The information on the sign shall be in English and Spanish. The sign shall be reflective. Ordinance No. 880 15 September 27, 2004 7. All facilities used for parking, loading, unloading, driveways and all other vehicular access shall be constructed of concrete or asphalt which complies with all Fire Code standards. The surface for such facilities and drive approach must always be maintained in good condition and repair. 8. A temporary six -foot chain link or approved alternative fence with a minimum height of six (6) feet shall be required around a drill site, and any gate to the site shall be locked when no operations personnel are present. 9. The equipment or facilities on an operation site must be enclosed, individually or collectively, by eight (8) foot high screening. Low - profile equipment or facilities must be used on the operation site and must not exceed the height of the screening. Any gates in the screening enclosure shall remain locked at all times when no operations personnel are present. The operator must provide the City Fire Marshal with a knox box with a key to access the operation site in case of an emergency. The screening may only be constructed of the following materials: a. Brick, stone or split -face concrete masonry unit; b. Pre -cast concrete wall or pour -in -place concrete wall with a similar appearance as brick, stone or split -face concrete masonry unit; c. Earthen berm, appropriately landscaped; or d. A combination of landscaped earthen berm and one of the construction materials listed above. 10. No refining process, or any process for the extraction of hydrocarbon products shall be carried on at a drill site or operation site, except that a dehydrator and separator may be maintained for the separation of liquids from gas and oil. Any such dehydrator or separator may serve more than one well. All production equipment on an operation site shall be maintained at all times. 11. No person shall place, deposit, or discharge or cause or permit to be placed, deposited, or discharged any oil, naphtha, petroleum, asphalt, tar, hydrocarbon substance, refuse, wastewater, brine or hazardous substance from any production operation or the contents of any container used in connection with any production operation in, into, or upon any public right -of -way, storm drain, ditch or sewer, sanitary drain or sewer, any body of water, or any private property. 12. Electric lines to the drill site or operation site shall be located underground. 13. All fire suppression and prevention equipment required by any applicable federal, state, or local law shall be provided by the operator, at the operator's cost, and the maintenance and upkeep of such equipment shall be the responsibility of the operator. 14. No operator shall excavate or construct any lines for the conveyance of fuel, water, oil, gas and oil or petroleum liquids on, under, or through the streets, alleys or other Ordinance No. 880 16 September 27, 2004 properties owned by the City without an easement or right -of -way license from the City, at a price to be agreed upon, and then only in strict compliance with this section, other City ordinances, and the specifications established by the Department of Public Works. 15. The digging up, breaking, excavating, tunneling, undermining, breaking up, or damaging of any public street or leaving upon any public street any earth or other material or obstruction, is prohibited unless the operator has first obtained written permission from the City, and then only in compliance with specifications established by the City. 16. No gas and oil well permit shall be issued for any well to be drilled within any of the public street or alley rights -of -way of the City and /or future streets shown on the Master Thoroughfare Plan. No street shall be blocked or encumbered or closed due to any exploration, drilling, or production activities unless prior consent is obtained from the City, and then only temporarily. M. Operations and Equipment Practices and Standards: 1. Adequate nuisance prevention measures shall be taken to prevent or control offensive odor, fumes, dust, noise and vibration. 2. No person shall permit any lights located on any drill site or operation site to be directed in such a manner so that they shine directly on public streets, adjacent property or property in the general vicinity of the drill site or operation site. Site lighting shall be shielded and directed downward and internally so as to avoid glare on public streets and buildings within three hundred (300) feet. In addition, all operations shall meet the city's Lighting Ordinance 693 -B as amended. 3. The operator shall at all times comply with the rules and regulations of the Railroad Commission including but not limited to all applicable Field Rules. 4. Noise levels must not exceed seventy (70) decibels at any point three hundred (300) feet from the drill site. All internal combustion engines used on a drill site must be equipped with mufflers that will reduce noise to no more than the maximum decibel level set forth herein. If noise levels at a distance of three hundred (300) feet from a drill site exceed seventy (70) decibels, a sound reduction enclosure shall be required around a drilling rig and any internal combustion engines. The noise level during fracturing operations must not exceed the maximum decibel levels set forth herein. 5. Noise levels must not exceed sixty (60) decibels beyond the boundaries of an operation site as defined in the Specific Use Permit and associated site plan. All internal combustion engines used on an operation site must be equipped with mufflers that will reduce noise to no more than the maximum decibel level set forth herein. 6. An operator is allowed to construct, use, and operate such storage equipment and separation equipment as shown on the applicable Specific Use Permit and associated site plan and gas and oil well permit. The use of centralized tank batteries is permitted only as shown on the applicable Specific Use Permit and associated site plan and gas and oil Ordinance No. 880 17 September 27, 2004 well permit. However, all facilities and operations shall be landscaped to limit any visibility from adjoing properties or from public rights -of -way. 7. All gas and oil wells located within 300 feet of a city street, county road, or state highway shall be protected from accidents by the installation of steel and /or concrete barriers. 8. No open surface pits shall be allowed for storing or disposal of fluids used or produced in the operations. 9. In parallel to gas and oil gathering pipeline, a flow back line may be installed to handle water and gas and oil flow back following well fracture treatment. 10. Vehicles, equipment, and machinery shall not be placed or located on a drill site or operation site or on any public street, alley, driveway, or other public right -of -way in such a way as to constitute a fire hazard or to unreasonably obstruct or interfere with fighting or controlling fires. 11. Except in the case of an emergency, well servicing operations and any deliveries to the site shall be scheduled to occur between the hours of 7:00 a.m. to 7:00 p.m., Monday through Friday, and 9:00 a.m. to 6:00 p.m., Saturday and Sunday, only. The time limits set forth herein do not apply during the well drilling and well completion process. 12. Air, gas, or pneumatic drilling shall not be permitted. 13. The operator shall immediately notify the City of any substantial accumulations of dirt, dust, mud or other debris deposited on City thoroughfares by vehicles involved in the well drilling or servicing or pipeline installation process. If for safety or other reasons, the City elects to perform the removal, the cost of such removal shall be paid by the operator. 14. Within 60 days of the completion of the well or within 60 days of re- working a well, the area around the well shall be cleaned up and cleared of all material and equipment, holes or excavations filled, and the land graded and returned to its original condition including replanting of vegetation to match the surrounding area. N. Flow Lines and Gathering Lines 1. An operator shall place an identifying sign, in English and Spanish, at each point where the operator has constructed or caused to be constructed a flow line or gathering line across a public street or road. 2. An operator shall place a warning sign, in English and Spanish, for lines carrying Hydrogen Sulfide (1 - 12S) gas as required by the Railroad Commission. 3. All flow lines and gathering lines within the City (excluding City utility lines and franchise distribution systems) that are used to transport oil, gas, and /or water shall be limited to the maximum allowable operating pressure of 100 psi and shall be installed Ordinance No. 880 18 September 27, 2004 with at least the minimum cover or backfill specified by the American National Safety Institute Code, as amended. 4. All flowing lines located within the city must be equipped with a down -hole valve (storm choke) to close the well in the event the wellhead is knocked off as a result of an accident. 5. No open testing of gas and oil wells shall be permitted within the city. All testing must be done in a closed system. 6. Easements must be acquired for all flow lines, gathering lines and flow back lines. The location of easements shall be shown in a Pipeline Easement Map. 7. Structures shall not be built over flow lines or gathering pipelines. 8. All pipelines shall be located underground at a minimum of six (6) feet depth. The location of all pipelines must be marked with warning signs in accordance with industry standards. Within the City of Southlake, the distance between such signs shall not exceed five hundred (500) feet. In addition, during backfill of pipeline excavations, "Buried Pipeline" warning tape shall be buried one (1) foot above the pipeline to warn future excavators of the presence of buried pipeline. O. Additional Safety and Environmental Requirements: 1. The drilling and production of gas and oil and accessing the drill site or operation site shall be in compliance with all State and Federal environmental regulations and shall not occur within environmentally sensitive areas. 2. Access to all operational wells and drill sites shall be limited to state or federal highways within the city (SH 26, SH 114) and as approved as part of the Special Use Permit. In addition, access within the well site shall be on paved driveways and wells shall be located on concrete pads. 3. Gas and oil wells may have a target location or bottom -hole location that is under an Environmentally Sensitive Area when the well is drilled directionally from a location outside the Environmentally Sensitive Area. 4. Each producing well, flowline, and production facility shall be equipped with automated valves that close the well in and safely shuts down the system in the event of an abnormal change in operating pressure. 5. Each storage tank shall be equipped with a level control device that will automatically activate a valve to close the well or automatically call the operator's response personnel to manually close the well in the event of excess liquid accumulation in the tank. 6. Storage tank facilities shall be equipped with a secondary containment system including lining with an impervious material. The secondary containment system shall be of a sufficient height to contain one and one -half (1 1 /2) times the contents of the largest tank, Ordinance No. 880 19 September 27, 2004 and the impervious liner shall be covered with at least one (1) foot of sand. Drip pots shall be provided at pump out connections to contain the liquids from the storage tank. 7. Tank battery facilities shall be equipped with a remote foam line utilizing a two and one - half (2.5) inch National Standard Hose Thread female inlet connection in locations approved by the Fire Department. A lightning arrestor system shall be installed according to the most current edition of the National Electrical Code. 8. An approved Hazardous Materials Management Plan shall be on file with the Fire Department. The costs of cleanup operations due to hazards associated with a well site shall be the responsibility of the operator. 9. No salt -water disposal wells shall be located within the City. 10. All pits must have an impervious lining. 11. The following inspections shall be required: a. Surface Casing: An operator must set and cement sufficient surface casing to protect all usable - quality water strata, as defined by state law. The operator shall notify the well inspector in writing at least seventy -two (72) hours prior to setting and cementing surface casing. In addition, the following shall be required: 1. Centralizers must be used at an interval of one (1) centralizer per one hundred (100) feet, or ten (10) centralizers per one thousand (1,000) feet. 2. New surface casing is required. 3. Proper floating equipment shall be used. 4. Class "H" or Class "C" cement with accelerators shall be used. 5. The operator shall circulate cement to surface; if not, the operator shall cement with one (1) inch tubing and top off. 6. The operator shall wait on cement a minimum of eight (8) to twelve (12) hours prior to commencing further drilling operations. 7. The operator shall test the blowout preventer before drilling out of surface casing to one thousand (1,000) psi. (2) Completion: The operator shall notify the well inspector in writing at least seventy - two (72) hours prior to starting completion procedures such as fracturing and perforating. The Well must be equipped with a blowout preventer or x -mas tree in place before this operation is commenced. If a bridge plug is set over a producing formation prior to additional completion, it must be pressure- tested to a sufficient pressure to ensure that it is not leaking. Ordinance No. 880 20 September 27, 2004 (3) Pipeline: The operator shall notify the well inspector in writing at least seventy -two (72) hours prior to the first sale. (4) Final Inspection: After the site has been cleaned up and screened, the operator shall notify the well inspector for a final inspection. Prior to the final inspection, the operator must provide the City with geographic coordinates of the well bore, using the North American Datum 1983 (NAD 83), Texas State Plane - North Central Zone (4202), in United States feet. 12. The well inspector shall conduct periodic inspections at least once a year of all permitted wells in the City to determine that the wells are operating in accordance with the requirements of this section and all regulations of the Railroad Commission. If a violation of the applicable Specific Use Permit and associated site plan or the gas and oil well permit is found during an annual inspection, a reinspection fee of $1,200 shall be charged. 13. If a gas or oil field in the City is identified as a Hydrogen Sulfide (H field, the operator shall immediately cease operation. 14. The surface locations of all dry wells and /or abandoned operations must be restored as nearly as possible to its original condition. The city may require the operator to submit a performance bond to cover the costs of any clean -up necessary. P. Supplemental Drilling: 1. Supplemental drilling to deepen or directionally drill a well that has not been abandoned shall be conducted in accordance with the conditions of the applicable Specific Use Permit and associated site plan and the gas and oil well permit for the well. 2. The operator shall provide the City with a copy of additional Railroad Commission permits that allow drilling to a deeper depth. Q. Re- working of Well; Notice: Any person who intends to re -work a well using a drilling rig, to fracture stimulate a well after initial completion, or to conduct seismic exploration involving explosive charges shall give written notice to the City at least twenty (20) days before the activities begin. The notice shall identify where the activities will be conducted and shall describe the activities in reasonable detail, including but not limited to the duration of the activities and the time of day they will be conducted. The notice must also provide the address and twenty -four (24) hour phone number of the person conducting the activities. The person conducting the activities shall post a sign, in English and Spanish, on the property giving the public notice of the activities, including the name, address, and twenty -four (24) hour phone number of the person conducting the activities. No well shall be re- worked without the approval of the well inspector. If the well inspector determines that an inspection is necessary, the operator must pay an inspection fee of $1,200 prior to the inspection. Ordinance No. 880 21 September 27, 2004 R. Abandonment of Wells and Pipelines 1. Upon abandonment of a well or well site, within sixty (60) days, the well shall be plugged in accordance with Railroad Commission standards, the site shall be cleaned and cleared of all material and equipment, holes or excavations filled, and the land graded and returned to its original condition including replanting of vegetation to match the surrounding area. All well casings shall be cut and removed to a depth of at least ten (10) feet below the surface. 2. No structures shall be built within ten (10) feet of an abandoned well. 3. Upon abandonment of a pipeline, within sixty (60) days of abandonment, a pipeline must be purged and plugged in accordance with the rules and regulations of the State of Texas in effect at that time. S. Remedies of the City 1. If an operator or his /her officers, employees, agents, contractors, subcontractors or representatives fails to comply with the conditions of the applicable Specific Use Permit and associated site plan or any requirement of a gas and oil well permit (including any requirement incorporated by reference as part of the permit), or any applicable provisions of this section or any other City ordinances, the City shall endeavor to give written notice to the operator specifying the nature of the alleged failure and giving the operator a specified time to cure, taking into consideration the nature and extent of the alleged failure, the extent of the efforts required to cure, and the potential impact on the health, safety, and welfare of the community. If circumstances warrant proceeding without notice, no notice shall be required. In any case, failure to give such notice shall not prohibit the City from pursuing any available remedy. 2. If the operator does not cure the alleged failure within the time specified by the City, the City may notify the Railroad Commission and request that the Railroad Commission take appropriate action. In addition, the City may pursue all other remedies allowed by law, including but not limited to the following: a. The City Manager may suspend the gas and oil well permit until the alleged failure is cured; and b. The City Manager may revoke the gas and oil well permit if the operator fails to initiate and diligently pursue a cure; and c. The City Manager may seek recourse against the security delivered pursuant to this section. 3. The operator may appeal a decision to suspend or revoke the gas and oil well permit to the City Council. T. Enforcement, Right of Entry: City Staff and the well inspector are authorized and directed to enforce this section and the provisions of any gas and oil well permit. Whenever Ordinance No. 880 22 September 27, 2004 necessary to enforce any provision of this section or a gas and oil well permit, or whenever there is reasonable cause to believe there has been a violation of this section or a gas and oil well permit, City Staff and /or the well inspector may enter upon any property covered by this section or a gas and oil well permit at any reasonable time to inspect or perform any duty or requirement imposed by this section. If entry is refused, the City shall have recourse to every remedy provided by law and equity to gain entry. Ordinance No. 880 23 September 27, 2004 ATTACHMENT B MASTER ROAD REPAIR AGREEMENT STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF TARRANT § This Road Repair Agreement, ( "Agreement "), is made and entered into on this the day of , 2004 by and between the City of Southlake, Texas ( "City "), a Texas home rule municipality, and CORPORATION NAME, ( "CORPORATION NAME") for the repair of certain streets and /or roadways maintained by the City of Southlake, Texas as more fully described herein. WHEREAS, CORPORATION NAME is in the business of drilling gas and oil wells and, in connection therewith, shall be engaged in gas and oil well drilling and production activities within the City and will use a truck route or truck routes on roadways maintained by the City of Southlake; and WHEREAS, use of the roadways by CORPORATION NAME for the purpose of performing the activities described hereinabove may cause damage to the roadways; and WHERAS, the City of Southlake and CORPORATION NAME, for the mutual consideration hereinafter stated, desire to enter into an Agreement for CORPORATION NAME to temporarily repair said roadways for the duration of the term of this Agreement in consideration of CORPORATION NAME's use of said roadways for the purpose of the activities described hereinabove. NOW, THEREFORE, IT IS AGREED THAT: ARTICLE 1. REPAIR OBLIGATION 1. CORPORATION NAME agrees to repair damages, excluding ordinary wear and tear, on truck routes as identified on the approved Specific Use Permit and associated site plan submitted by CORPORATION NAME, its contractors, subcontractors, employees, agents, or representatives in connection with gas well activities authorized by an approved Gas and Oil Well Permit. This obligation shall continue during the term of this Agreement and shall include any site plans, Gas and Oil Well Permits, or other associated matters approved after the date of this Agreement. Prior to the termination of this Agreement, CORPORATION NAME shall pay for the repair of the damages to the roadways to restore them to the condition in which they existed, excluding ordinary wear and tear prior to the execution of this Agreement. CORPORATION NAME shall make a videotape of the roadways within one (1) mile of the drill site prior to the start of CORPORATION NAME's drilling and operation of its gas wells. CORPORATION NAME shall provide a copy of the videotape to the City's Public Works Department. CORPORATION NAME shall notify the City's Public Works Department when Ordinance No. 880 24 September 27, 2004 gas and oil well drilling, fracing or reworking operations are complete so that the City's Public Works Department can determine if repairs are required. Upon inspection, City's Public Works Department shall notify CORPORATION NAME of what repairs, and their associated costs, if any, are required or shall notify CORPORATION NAME that repairs are not required. 2. CORPORATION NAME shall be responsible for the costs associated with the repair of roadways damaged by CORPORATION NAME's use in accordance with the provisions contained herein. Upon determination by the City of the cost to repair damage to the roadways caused by CORPORATION NAME, City shall invoice CORPORATION NAME for the full amount. CORPORATION NAME agrees to remit payment in full within 30 days of the date of the invoice. City shall be responsible for contracting the roadway repair services and, where required by State law, shall employ a competitive bidding process to ensure that the roadway repairs are performed in the most cost effective manner possible. Should payment be insufficient to fully repair the damage caused to the roadways by CORPORATION NAME, City may invoice CORPORATION NAME for the balance and payment shall be due within 30 days of the date thereof. Conversely, the City agrees to reimburse CORPORATION NAME the balance of any funds not used in the repair of the roadways. 3. Not withstanding the foregoing, if, in the City's sole discretion, the damage to the roadways affects the immediate health and safety of individuals, the City may take immediate remedial action to repair the roads at its own expense and invoice the CORPORATION NAME for the full amount thereafter. 4. During the term of this Agreement, CORPORATION NAME shall periodically inspect said roadways during drilling, fracture stimulation or reworking of the gas well to determine whether or not any damage has occurred as a result of CORPORATION NAME's activities. Within 48 hours of discovering the existence of any such damage to the roadways, CORPORATION NAME shall notify the City's Director of Public Works of the need for repair. City shall then invoice CORPORATION NAME in accordance with Section 3, above. ARTICLE 2. TERM OF AGREEMENT This Agreement shall commence upon the date indicated above and shall continue in full force and effect until all damage caused to the roadways by CORPORATION NAME's activities have been repaired, CORPORATION NAME has paid all invoice amounts in full and the CORPORATION NAME has permanently discontinued the activities upon the roadways, as described hereinabove. ARTICLE 3. BLANKET INSURANCE AND INDEMNITY 1. CORPORATION NAME shall provide or cause to be provided insurance that meets the requirements of Chapter 9.5, Article IV, "Gas & Oil Well Drilling and Production," of the Southlake City Code. Such insurance shall continue until the well is abandoned and the site restored. Ordinance No. 880 25 September 27, 2004 2. CORPORATION NAME shall and hereby does indemnify, defend and save harmless the City, its officers, agents and employees from all suits, actions or claims of any character, name and description brought for or on account of any injuries or damages received or sustained by any person, persons or property on account of the operations of the CORPORATION NAME, its agents, employees, contractors, subcontractors or representatives; or on account of any negligent act of fault of CORPORATION NAME, its agents, employees, contractors, subcontractors or representatives in connection with the obligations of the CORPORATION NAME under this Agreement; and shall pay any judgment, with costs, which may be obtained against the City growing out of such injury or damage. ARTICLE 4. BLANKET PERFORMANCE BOND CORPORATION NAME shall provide or cause to be provided a security instrument in the form of a performance bond, irrevocable letter of credit or certificate of deposit that meets the requirements of Chapter 9.5, Article IV, "Gas & Oil Well Drilling and Production," of the Southlake City Code to secure the obligation of CORPORATION NAME to pay for the repair of damages, excluding ordinary wear and tear, to public streets, including but not limited to bridges. Such bond shall continue until the well is abandoned and the site restored. ARTICLE 5. MISCELLANEOUS PROVISIONS 1. CORPORATION NAME understands and agrees that CORPORATION NAME, its employees, agents, contractors, subcontractors or representatives shall at no time represent themselves to be employees, agents, contractors, subcontractors or representatives of the City. 2. By entering into this Agreement, the City does not waive, nor shall it be deemed to waive, any immunity or defense that would otherwise be available to it against claims arising by third parties. ARTICLE 6. FORCE MAJEURE The performance of this Agreement shall be subject to events of Force Majeure. Events of Force Majeure shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, government or de facto government action (unless caused by acts or omissions of the party), fires, explosions, rain or other weather delays, floods, strikes, slowdowns or work stoppages. ARTICLE 7. ASSIGNABILITY /CONSENT Except as otherwise provided herein, or except as may be hereafter determined by the parties, no party to this Agreement may sell, assign, partially assign or transfer its interest in this Agreement, or any of its right, duties, or obligations hereunder, without the prior written consent of the other party. Whenever the consent or the approval of a party is required herein, such party shall not unreasonably withhold, delay, or deny such consent or approval. Notwithstanding the foregoing, the CORPORATION NAME may assign this Agreement if the Gas and Oil Well Ordinance No. 880 26 September 27, 2004 Permit has been assigned in accordance with Chapter 9.5, Article IV, "Gas & Oil Well Drilling and Production," of the Southlake City Code. ARTICLE 8. NOTICE Any notice given by one parry to the other in connection with this Agreement shall be in writing and shall be by personal delivery; sent by registered mail or certified mail; or by U.S. Mail, return receipt requested, postage prepaid; to: CITY: Office of the City Manager City of Southlake, 1400 Main Street, Southlake, Texas 76092 OPERATOR: CORPORATION NAME ADDRESS Notice shall be deemed to have been received on the date of receipt as shown on the return receipt or other written evidence of receipt. ARTICLE 9. MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, limitation herein contained shall be valid unless in writing and duly executed by the parry to be charged therewith. No evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, unless such waiver or modification is in writing, duly executed. The parties further agree that the provisions of this Article will not be waived unless as herein set forth. ARTICLE 10. SAVINGS /SEVERABIL,ITY In the event that any one or more of the provisions hereof contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not effect the other provisions, and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in this Agreement. ARTICLE 11. GOVERNING LAW AND VENUE This Agreement shall be construed under and governed by, and in accordance with the laws of the State of Texas, and all obligations of the parties hereto, created by this Agreement are performable in Tarrant County, Texas. Venue of any suit or cause of action under this Agreement shall lie exclusively in Tarrant County, Texas. ARTICLE 12. ENTIRE AGREEMENT Ordinance No. 880 2 September 27, 2004 This Agreement and the exhibits attached thereto, constitute the entire agreement among the parties hereto with respect to the subject matter hereof, and supersede any prior understandings or written or oral agreements between the parties with respect to the subject matter of this Agreement. No amendment, modification, cancellation or alteration of the terms of this Agreement shall be binding on any party hereto unless the same is in writing, dated subsequent to the date hereof, and is duly authorized and executed by the parties hereto. ARTICLE 13. WAIVER OF TERMS AND CONDITIONS The failure of either party to enforce or insist upon compliance with any of the terms or conditions of this Agreement shall not constitute a general waiver or relinquishment of any such terms or conditions, but the same shall be and remain at all times in full force and effect. ARTICLE 14. CAPTIONS The captions contained in this Agreement are for informational purposes only and shall not in any way affect the substantive terms or conditions of this Agreement. ARTICLE 15. COUNTERPARTS This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and constitute one and the same instrument. IN WITNESS WHEREOF, the parties do hereby affix their signatures and enter into this Agreement as of the day of , 20 CITY OF SOUTHLAKE, TEXAS By: Billy Campbell, City Manager ATTEST: Lori A. Farwell, City Secretary APPROVED AS TO FORM AND LEGALITY Allen Taylor, City Attorney STATE OF TEXAS § Ordinance No. 880 28 September 27, 2004 COUNTYOF TARRANT § Before me, the undersigned notary public, on this day personally appeared Billy Campbell of the City of Southlake, Texas, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said City of Southlake, Texas. Given under my hand and seal of office this day of , 2004. Notary Public CORPORATION NAME (Name and Title) Texas Rail Road Commission Operator Number: STATE OF TEXAS § COUNTYOF TARRANT § Before me, the undersigned notary public, on this day personally appeared of CORPORATION NAME, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said CORPORATION NAME. Given under my hand and seal of office this day of , 2004. Notary Public Ordinance No. 880 29 September 27, 2004