calendar item c01 - california

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CALENDAR ITEM C01 A 74 07/12/13 G 09-02 S 37 S. Guerrieri CONSIDER APPROVAL OF THE PROPOSED RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH PURSUANT TO PUBLIC RESOURCES CODE SECTION 7060 AND 7061, TO ENTER INTO AN OPERATING AGREEMENT FOR THE MANAGEMENT OF OIL, GAS AND OTHER HYDROCARBONS IN THE CITY OF NEWPORT BEACH, ORANGE COUNTY APPLICANT: City of Newport Beach 3300 Newport Boulevard PO Box 1768 Newport Beach, CA 92658 The City of Newport Beach (City) is a trustee of sovereign tide and submerged lands granted to it by the Legislature pursuant to Chapter 74, Statutes of 1978, as amended (Statutory Grant). BACKGROUND: Pursuant to the provisions of sections 7060 and 7061 of the Public Resources Code, the City, acting by and through its City Council, has submitted for approval by the State Lands Commission (Commission) a proposed resolution of its intent to enter into an operating agreement with a third party operator for the management of oil, gas, and other hydrocarbons, from tide and submerged lands in the City of Newport Beach, as shown in Exhibit A. Section 7058.5 of the Public Resources Code provides in pertinent part: “Before a lease or any operating agreement or other type of agreement for the production of oil, gas, or other hydrocarbons is entered into…the governing body of a city shall in open meeting adopt a resolution declaring its intention to take such action. The resolution shall describe the property involved in such manner as to identify it, specify the minimum rental, royalty, or other consideration, and the term of the lease or agreement, the form of the lease or agreement, and one variable, biddable factor, on which bids will be received, and fix a time not less than 30 days thereafter and place for a public meeting of said governing body, at -1-

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Page 1: CALENDAR ITEM C01 - California

CALENDAR ITEM C01

A 74 07/12/13 G 09-02

S 37 S. Guerrieri

CONSIDER APPROVAL OF THE PROPOSED RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH PURSUANT TO PUBLIC RESOURCES CODE

SECTION 7060 AND 7061, TO ENTER INTO AN OPERATING AGREEMENT FOR THE MANAGEMENT OF OIL, GAS AND OTHER HYDROCARBONS IN THE CITY OF

NEWPORT BEACH, ORANGE COUNTY

APPLICANT: City of Newport Beach 3300 Newport Boulevard PO Box 1768 Newport Beach, CA 92658

The City of Newport Beach (City) is a trustee of sovereign tide and submerged lands granted to it by the Legislature pursuant to Chapter 74, Statutes of 1978, as amended (Statutory Grant).

BACKGROUND: Pursuant to the provisions of sections 7060 and 7061 of the Public Resources Code, the City, acting by and through its City Council, has submitted for approval by the State Lands Commission (Commission) a proposed resolution of its intent to enter into an operating agreement with a third party operator for the management of oil, gas, and other hydrocarbons, from tide and submerged lands in the City of Newport Beach, as shown in Exhibit A.

Section 7058.5 of the Public Resources Code provides in pertinent part:

“Before a lease or any operating agreement or other type of agreement for the production of oil, gas, or other hydrocarbons is entered into…the governing body of a city shall in open meeting adopt a resolution declaring its intention to take such action. The resolution shall describe the property involved in such manner as to identify it, specify the minimum rental, royalty, or other consideration, and the term of the lease or agreement, the form of the lease or agreement, and one variable, biddable factor, on which bids will be received, and fix a time not less than 30 days thereafter and place for a public meeting of said governing body, at

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Page 2: CALENDAR ITEM C01 - California

CALENDAR ITEM NO. C01 (CONT’D)

which meeting sealed proposals to lease or contract will be received and considered.”

Section 7060, subdivision (a) of the Public Resources Code provides in pertinent part:

“No such lease or agreement shall be effective unless prior to adopting the resolution provided for by Section 7058.5 the city shall have petitioned the State Lands Commission for approval of the proposed resolution, and the proposed resolution shall have been approved by the State Lands Commission.”

STAFF ANALYSIS: The City’s proposed resolution includes the substantive contents required under section 7058.5 of the Public Resources Code.

• The proposed resolution provides maps and legal descriptions that describe and identify the property.

• The minimum consideration for the operating agreement shall not be less than the net revenue derived from oil operations in Fiscal Year 2012, minus any future costs for improvements, operations or maintenance. This revenue may also be adjusted based upon the dwindling availability of, and fluctuating price of, oil, gas, and other hydrocarbon resources.

• The form of the agreement will be an operating agreement. The City is seeking an operating agreement with a third party to conduct oil field drilling, development and production operations for the City. Through the operating agreement, the City will seek to guarantee its current level of return on production, adjusted for future investment, operating and maintenance costs, and future oil and gas price changes. The third party will also share with the City the return on production generated by the third party’s additional investment to maximize production.

• The maximum lease term is 35 years or as otherwise allowed by law. • The one biddable factor the City Council will utilize is the ability of the third-party

to maximize oil production. Other variables, including, but not limited to, a combination of financial viability of the third-party, prior urban drilling experience and ability to maximize revenue will be used to determine if the bidder is responsible.

• The date, time, and location for the public opening of the bids will be determined if this proposed resolution is approved. The time for the public meeting to consider the proposals will be not less than 30 days after the adoption of the resolution, but has not been set at this time. Staff believes a reasonable approach is for the Executive Officer of the Commission to approve the time and place of the public meeting in the future and before the City adopts the resolution.

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Page 3: CALENDAR ITEM C01 - California

CALENDAR ITEM NO. C01 (CONT’D)

OTHER PERTINENT INFORMATION: The staff recommends that the Commission find that the subject approval of the proposed resolution does not have a potential for resulting in either a direct or a reasonably foreseeable indirect physical change in the environment, and is, therefore, not a project in accordance with the California Environmental Quality Act (CEQA).

Authority: Public Resources Code section 21065 and California Code of Regulations, Title 14, sections 15060, subdivision (c)(3), and 15378

EXHIBITS: A. Location and Site Map B. Proposed City Council Resolution

RECOMMENDED ACTION: It is recommended that the Commission:

CEQA FINDING: Find that the subject approval of the proposed resolution is not subject to the requirements of CEQA pursuant to California Code of Regulations, Title 14, section 15060, subdivision (c)(3), because the subject activity is not a project as defined by Public Resources Code section 21065 and California Code of Regulations, Title 14, section 15378.

AUTHORIZATION: Approve the proposed resolution of the City Council of the City of Newport Beach, substantially in the form of the attached Exhibit “B,” and by reference made a part hereof, declaring its intent to enter into an operating agreement with a third party operator for the management of oil, gas, and other hydrocarbons from certain legislatively granted tide and submerged lands lying in the City of Newport Beach, Orange County, pursuant to sections 7060 and 7061 of the Public Resources Code.

Delegate to the Executive Officer of the Commission the approval of the time and place for the public meeting to consider the proposals prior to the adoption of the resolution.

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Page 4: CALENDAR ITEM C01 - California

NO SCALE SITE

Exhibit A G09-02

APPROVAL OF PROPOSED RESOLUTION

CITY OF NEWPORT BEACH ORANGE COUNTY

SITE X

Propoked Qu Wel Operational Area

Existing Oh Well Operational Area

140 ACRES

MAP SOURCE: USGS QUAD

This Exhibit is solely for purposes of generally defining the lease premises, is based on unverified information provided by the Lessee or other parties and is

not intended to be, nor shall it be construed as, a waiver or limitation of any State interest in the subject or any other property.

Page 5: CALENDAR ITEM C01 - California

RESOLUTION NO. 2013-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DECLARING ITS INTENTION TO ENTER INTO AN OPERATING AGREEMENT FOR THE MANAGEMENT OF THE CITY'S OIL, GAS AND OTHER HYDROCARBON RESOURCES

WHEREAS, the City of Newport Beach ("City") manages the tidelands within its boundaries on behalf of the State of California pursuant to the provisions of the Beacon Bay Bill (Chapter 74 of the Statutes of 1978, as amended);

WHEREAS, as part of its tidelands management responsibilities and consistent with Charter Section 1401, the City manages oil, gas and other hydrocarbon resources ("Oil Operations");

WHEREAS, the income earned from the City's Oil Operations is deposited into the City's tidelands funds as required by the Beacon Bay Bill to finance the improvement, maintenance and operation of the tidelands;

WHEREAS, the City desires to seek proposals and enter into an operating agreement with a third-party experienced in the management of Oil Operations to further increase efficiency and income derived from the City's Oil Operations;

WHEREAS, prior to entering into an operating agreement with a third-party for the management of the City's Oil Operations, the City is required by California Public Resources Code Section 7058.5 to adopt this resolution declaring its intent to enter into said operating agreement; and

WHEREAS, pursuant to California Public Resources Code Section 7060, the State Lands Commission has reviewed and approved this resolution.

NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows:

Section 1: The City Council declares its intent to enter into an operating agreement to manage the City's Oil Operations. Pursuant to California Public Resources Code Section 7058.5 the City provides the following information:

(1) Consistent with Charter Section 1401, exploration, drilling, production or processing of oil, gas or other hydrocarbon substances by vertical, slant or other drilling method will originate from the land surface within the approximately twenty (20) acres of territory depicted and

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EXHIBIT B
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Page 6: CALENDAR ITEM C01 - California

specifically described in Exhibits "A" and "B", which are attached hereto and incorporated by this reference.

(2) The minimum consideration for an operating agreement shall not be ess than the net revenue derived from Oil Operations in Fiscal Year 2012, minus any future costs for improvements, operations or maintenance. This revenue may also be adjusted based upon the dwindling availability of, and fluctuating price of, oil, gas and other hydrocarbon resources.

(3) The term of the operating agreement shall not exceed thirty-five (35) years, or as otherwise allowed by law.

(4) The City is seeking an operating agreement with a third-party to conduct oil field drilling, development and production operations for the City. Through the operating agreement, the City will seek to guarantee its current level of return on production, adjusted for future investment, operating and maintenance costs, and future oil and gas price changes. The third-party will also share with the City the return on production generated by the third-party's additional investment to maximize production.

(5) The one (1) biddable factor the City Council will utilize is the ability of a third-party to maximize Oil Production. Other variables and factors, including, but not limited to, a combination of financial viability of the third-party, ability to maximize revenue, and prior urban drilling experience will be used to determine if the third-party is qualified.

(6) The date, time and location for the public opening of the proposals will be determined if this resolution is approved. The proposal opening will not occur earlier than thirty (30) calendar days after this resolution is approved. The City Council may reject any and all proposals.

Section 2: Pursuant to California Public Resources Code Section 7058.5, this resolution shall be published once a week for four (4) successive weeks in one (1) or more newspapers.

Section 3: The recitals provided in this resolution are true and correct and are hereby incorporated into the substantive portion of this resolution.

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Page 7: CALENDAR ITEM C01 - California

Section 4: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution.

ADOPTED this _ _ day of 2013.

Keith D. Curry, Mayor

ATTEST:

Leilani I. Brown, City Clerk

Attachments: Exhibits "A" and "B"

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Page 8: CALENDAR ITEM C01 - California

Exhibit "A"

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Page 9: CALENDAR ITEM C01 - California

LATITUDE C

NOTH STEXHIBIT A TO CHARTER

ARK CREST DR

-18TH ST_

COAST HWY S

Proposed Oil Well Operational Area

V/ Approximately 20 ACRES

Existing Oil Well Operational Area

466.16 ACRES

City Oil Wells

fifiiiiiiini Active/Potentially Active Wells

Abandoned Wells

em.= City Boundary 0 075 0 15

Page 10: CALENDAR ITEM C01 - California

EXHIBIT A LEGAL DESCRI

ALL THOSE CERTAIN LANDS SITUATED PARTLY IN THE CITY OF NEWPORT BEACH

AND PARTLY IN THE UNINCORPORATED TERRITORY OF ORANGE COUNTY, STATE OF

CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL 1:

BEGINNING AT A POINT IN THAT CERTAIN COURSE IN THE EXISTING NEWPORT

BEACH CITY BOUNDARY SHOWN AS "SOUTH 6822'45" EAST 756.00 FEET" ON A MAP

FILED IN BOOK 65, PAGES 31 THROUGH 36 OF RECORDS OF SURVEYS IN THE OFFICE

OF THE COUNTY RECORDER OF SAID COUNTY, DISTANT THEREON

SOUTH 68 22'45" EAST 280.00 FEET FROM THE NORTHWESTERLY TERMINUS

THEREOF; THENCE ALONG SAID NEWPORT BEACH CITY BOUNDARY

SOUTH 68 22'45" EAST 476.00 FEET TO AN ANGLE POINT THEREIN;

THENCE CONTINUING ALONG SAID BOUNDARY SOUTH 7651'00" EAST 171.96 FEET;

THENCE LEAVING SAID BOUNDARY NORTH 2317'40" EAST 144.41 FEET;

THENCE NORTH 6642 20" WEST 650.57 FEET TO A LINE WHICH BEARS

NORTH 21 37'15" EAST FROM THE POINT OF BEGINNING;

THENCE SOUTH 2137'15" WEST 188.68 FEET TO THE POINT OF BEGINNING.

CONTAINING 113,953 SQUARE FEET OR 2.616 ACRES MORE OR LESS.

AS SHOWN ON EXHIBIT B-PARCEL 1 ATTACHED HERETO AND BY THIS REFERENCE

MADE A PART HEREOF.

PARCEL 2:

BEGINNING AT THE NORTHERLY TERMINUS OF THAT CERTAIN COURSE IN THE

EXISTING NEWPORT BEACH CITY BOUNDARY SHOWN AS "SOUTH 4 31'33" EAST

439.65 FEET" ON SAID RECORD OF SURVEY, SAID POINT ALSO BEING ON THE

NORTHWESTERLY LINE OF PARCEL "A" AS DESCRIBED IN QUITCLAIM DEED TO THE

CITY OF NEWPORT BEACH, RECORDED APRIL 12, 1983 AS INSTRUMENT NO. 83-151675

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EXHIBIT A LEGAL DESCRIPTION

OF OFFICIAL RECORDS OF ORANGE COUNTY;

THENCE ALONG SAID CITY BOUNDARY SOUTH 4 31'33' EAST 439.65 FEET AND

SOUTH 20 11'42" EAST 233.33 FEET TO A POINT IN THE NORTHERLY LINE OF

PARCEL 73170-1 IN THAT CERTAIN FINAL DECREE OF CONDEMNATION, SUPERIOR

COURT CASE NO. 667539, A CERTIFIED COPY OF WHICH WAS RECORDED

JANUARY 14, 1994 AS INSTRUMENT NO. 94-0032786 OF OFFICIAL RECORDS OF

ORANGE COUNTY; THENCE ALONG SAID NORTHERLY LINE SOUTH 83 25'55" EAST

241.16 FEET, SOUTH 6 42'45" WEST 5.00 FEET AND SOUTH 8317'15" EAST 54.65 FEET

TO THE INTERSECTION WITH THE NORTHEASTERLY LINE OF SAID PARCEL "A";

THENCE ALONG SAID NORTHEASTERLY LINE AND ITS NORTHWESTERLY

PROLONGATION NORTH 1259'57" WEST 770.26 FEET TO ITS INTERSECTION WITH

WITH THE NORTHEASTERLY PROLONGATION OF SAID NORTHWESTERLY LINE OF

PARCEL "A";

THENCE ALONG SAID PROLONGATION AND NORTHWESTERLY LINE

SOUTH 77 00'03" WEST 241.44 FEET TO THE POINT OF BEGINNING.

CONTAINING 200,487 SQUARE FEET OR 4.603 ACRES MORE OR LESS.

AS SHOWN ON EXHIBIT B-PARCEL 2 ATTACHED HERETO AND BY THIS REFERENCE

MADE A PART HEREOF.

PARCEL 3:

COMMENCING AT THE SOUTHEASTERLY TERMINUS OF THAT CERTAIN COURSE IN

THE CENTERLINE OF A 30.00 FOOT EASEMENT FOR SEWER AND ROAD PURPOSES PER

SUPERIOR COURT CASE NO. 24763 SHOWN AS "NORTH 7632"23" WEST 1596.18 FEET"

ON SAID RECORD OF SURVEY;

THENCE NORTH 2840'56" WEST 325.82 FEET TO THE POINT OF BEGINNING;

THENCE SOUTH 82 37'16" EAST 43.30 FEET TO A POINT ON A NON-TANGENT CURVE

CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 231.91 FEET, A RADIAL LINE TO

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Page 12: CALENDAR ITEM C01 - California

EXHIBIT A LEGAL DESCRIPTION

SAID POINT BEARS NORTH 7616'1 1" WEST;

THENCE NORTHEASTERLY ALONG SAID CURVE 118.37 FEET, THROUGH A CENTRAL

ANGLE OF 29 14'39" TO A POINT OF NON-TANGENCY WITH A CURVE CONCAVE

SOUTHEASTERLY, HAVING A RADIUS OF 194.00 FEET, A RADIAL LINE FROM THE

CENTER OF SAID 194.00 FOOT RADIUS CURVE BEARS NORTH 4819'12" WEST;

THENCE NORTHEASTERLY ALONG SAID CURVE 53.36 FEET, THROUGH A CENTRAL

ANGLE OF 15 45'35" TO A POINT OF REVERSE CURVE, HAVING A RADIUS OF 258.00

FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 32 33'37" EAST;

THENCE NORTHEASTERLY 36.46 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 08 05'52" TO THE BEGINNING OF A REVERSE CURVE, HAVING A RADIUS OF

40.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 4039'29" WEST;

THENCE EASTERLY 36.09 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF

51 41'45" TO THE BEGINNING OF A REVERSE CURVE, HAVING A RADIUS OF 73.00

FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 11 02'16" WEST;

THENCE EASTERLY 39.00 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF

30 36'35" TO THE BEGINNING OF A REVERSE CURVE, HAVING A RADIUS OF 432.00

FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 19 34'19" WEST;

THENCE EASTERLY 161.89 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE

OF 21 28'18" TO THE BEGINNING OF A REVERSE CURVE, HAVING A RADIUS OF 245.00

FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 01 53'59" WEST;

THENCE EASTERLY 52.80 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF

12 20'51" TO THE BEGINNING OF A COMPOUND CURVE, HAVING A RADIUS OF 54.00

FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 10 26'52" EAST;

THENCE NORTHEASTERLY 60.21 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 63 53'17" TO THE BEGINNING OF A REVERSE CURVE, HAVING A RADIUS OF

170.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 74 20'09" WEST;

THENCE NORTHEASTERLY 89.85 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 3016'57";

THENCE NORTH 45 56'48" EAST 203.87 FEET TO THE BEGINNING OF A CURVE

CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 740.00 FEET;

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EXHIBIT A LEGAL DESCRIPTION

THENCE NORTHEASTERLY 70.14 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 0525'51" TO THE BEGINNING OF A REVERSE CURVE, HAVING A RADIUS OF

86.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 49 29'03" WEST;

THENCE NORTHEASTERLY 39.86 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 26 33'32";

THENCE NORTH 6704'29" EAST 61.05 FEET TO THE BEGINNING OF A CURVE CONCAVE

NORTHWESTERLY, HAVING A RADIUS OF 211.00 FEET;

THENCE NORTHEASTERLY 191.51 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 52 00'1 1";

THENCE NORTH 15 04'18" EAST 50.45 FEET;

THENCE NORTH 75 09'09" WEST 274.42 FEET TO A POINT ON A NON-TANGENT CURVE

CONCAVE WESTERLY, HAVING A RADIUS OF 475.00 FEET, A RADIAL LINE TO SAID

POINT BEARS NORTH 8735'07" EAST;

THENCE SOUTHERLY 159.68 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE

OF 1915'41" TO THE BEGINNING OF A COMPOUND CURVE, HAVING A RADIUS OF

21 1.00 FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 7309'12" EAST;

THENCE SOUTHWESTERLY 261.71 FEET ALONG SAID CURVE THROUGH A CENTRAL

ANGLE OF 71 03'58" TO THE BEGINNING OF A COMPOUND CURVE, HAVING A RADIUS

OF 615.00 FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 02 05'14" EAST;

THENCE WESTERLY 258.77 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE

OF 24 06'29";

THENCE NORTH 67 58'45" WEST 85.44 FEET;

THENCE NORTH 14 50'32" EAST 165.94 FEET;

THENCE NORTH 75 09'09" WEST 204.52 FEET;

THENCE SOUTH 1518'26" WEST 640.52 FEET;

THENCE SOUTH 3459'06" EAST 199.12 FEET;

THENCE SOUTH 82 37'16" EAST 65.32 FEET TO THE POINT OF BEGINNING.

CONTAINING 400,572 SQUARE FEET OR 9.196 ACRES MORE OR LESS.

AS SHOWN ON EXHIBIT B-PARCEL 3 ATTACHED HERETO AND BY THIS REFERENCE

MADE A PART HEREOF.

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Page 14: CALENDAR ITEM C01 - California

EXHIBIT A LEGAL DESCRIPTION

PARCEL 4:

STRIP 1:

A STRIP OF LAND 30.00 FEET IN WIDTH, THE CENTERLINE OF SAID STRIP BEING

DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THAT CERTAIN COURSE IN THE CENTERLINE OF A 30.00

FOOT EASEMENT FOR SEWER AND ROAD PURPOSES PER SUPERIOR COURT CASE NO.

24769 SHOWN AS "NORTH 76'32'23" WEST, 1596.18 FEET" ON SAID RECORD OF

SURVEY, DISTANT THEREON SOUTH 76'32'23" EAST 148.00 FEET FROM THE

NORTHWESTERLY TERMINUS THEREOF;

THENCE ALONG SAID CENTERLINE SOUTH 76'32'23" EAST 20.16 FEET TO A POINT

HEREINAFTER REFERRED TO AS POINT "A";

THENCE CONTINUING ALONG SAID CENTERLINE THE FOLLOWING COURSES:

SOUTH 76'32'23" EAST 1428.02 FEET,

SOUTH 32'55'45" EAST 521.40 FEET,

SOUTH 27'15'15" EAST 595.00 FEET,

SOUTH 14 36'45" EAST 264.00 FEET,

SOUTH 5'33'45" WEST 217.00 FEET AND

SOUTH 12' 59' 57" EAST 585.03 FEET TO THE NORTHWESTERLY LINE OF THE

HEREINABOVE DESCRIBED PARCEL 2.

THE SIDELINES OF SAID STRIP SHALL BE LENGTHENED OR SHORTENED TO

TERMINATE SOUTHERLY ON SAID NORTHWESTERLY LINE OF PARCEL 2.

CONTAINING 108,918 SQUARE FEET OR 2.500 ACRES MORE OR LESS.

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EXHIBIT A LEGAL DESCRIPTION

STRIP 2:

A STRIP OF LAND 30.00 FEET IN WIDTH, THE CENTERLINE OF SAID STRIP BEING

DESCRIBED AS FOLLOWS:

BEGINNING AT HEREINBEFORE MENTIONED POINT "A";

THENCE SOUTH 03' 18'27" EAST 303.61 FEET TO THE BEGINNING OF A CURVE

CONCAVE WESTERLY, HAVING A RADIUS OF 515.00 FEET;

THENCE SOUTHERLY ALONG SAID CURVE 202.03 FEET THROUGH A CENTRAL ANGLE

OF 22' 28' 37";

THENCE SOUTH 19' 10' 10" WEST 507.25 FEET TO THE NORTHEASTERLY LINE OF

HEREINBEFORE DESCRIBED PARCEL 1.

THE SIDELINES OF SAID STRIP OF LAND SHALL BE LENGTHENED OR SHORTENED TO

TERMINATE NORTHERLY IN THE SOUTHWESTERLY LINE OF SAID 30.00 FOOT

EASEMENT FOR SEWER, AND SOUTHERLY IN THE NORTHEASTERLY LINE OF SAID

PARCEL 1.

CONTAINING 29,917 SQUARE FEET OR 0.687 ACRES, MORE OR LESS.

AS SHOWN ON EXHIBIT B-PARCEL 4 ATTACHED HERETO AND BY THIS REFERENCE

MADE A PART HEREOF.

PARCEL 5:

STRIP 1:

A STRIP OF LAND 20.00 FEET IN WIDTH, THE SOUTHWESTERLY LINE OF SAID STRIP

LYING 15.00 FEET NORTHEASTERLY OF THE FOLLOWING DESCRIBED LINE:

BEGINNING AT THE INTERSECTION OF THE NORTHWESTERLY LINE OF PARCEL "A"

AS DESCRIBED IN QUITCLAIM DEED TO THE CITY OF NEWPORT BEACH RECORDED

APRIL 12, 1983 AS INSTRUMENT NO. 83-151675, OF OFFICIAL RECORDS OF ORANGE

COUNTY, WITH THE CENTERLINE OF A 30.00 FOOT EASEMENT FOR SEWER AND ROAD M:\Mapping\82 1\01\Legals\CNB Charter\Oil Well Consolidation Legal.doc 7/6/2010

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EXHIBIT A LEGAL DESCRIPTION

PURPOSES PER SUPERIOR COURT CASE NO. 24763 AS SHOWN ON SAID RECORD OF

SURVEY;

THENCE ALONG SAID CENTERLINE THE FOLLOWING COURSES:

NORTH 12 59'57" WEST 585.03 FEET,

NORTH 5 33'45" EAST 217.00 FEET,

NORTH 14 36'45" WEST 264.00 FEET,

NORTH 2715'15" WEST 595.00 FEET AND

NORTH 32 55'45" WEST 521.40 FEET TO A POINT HEREINAFTER REFERRED TO AS

POINT "B".

THE SIDELINES OF SAID STRIP SHALL BE LENGTHENED OR SHORTENED TO

TERMINATE SOUTHERLY IN THE NORTHWESTERLY LINE AND THE NORTHEASTERLY

PROLONGATION OF THE NORTHWESTERLY LINE OF SAID PARCEL "A" AND

NORTHERLY IN A LINE HAVING A BEARING OF

NORTH 57 04'15" EAST AND PASSING THROUGH SAID POINT "B".

CONTAINING 43,823 SQUARE FEET OR 1.006 ACRES MORE OR LESS.

STRIP 2:

A STRIP OF LAND 30.00 FEET IN WIDTH, THE SOUTHWESTERLY LINE OF SAID STRIP

LYING 5.00 FEET NORTHEASTERLY FROM THE FOLLOWING DESCRIBED LINE:

BEGINNING AT HEREINBEFORE MENTIONED POINT "B";

THENCE NORTH 28 40'56" WEST 325.82 FEET TO A POINT HEREINAFTER REFERRED TO

AS POINT "C".

THE SIDE LINES OF SAID STRIP SHALL BE LENGTHENED OR SHORTENED TO

TERMINATE NORTHWESTERLY IN A LINE HAVING A BEARING OF

SOUTH 82 37'16" EAST AND PASSING THROUGH SAID POINT "C", AND

SOUTHEASTERLY IN A LINE HAVING A BEARING OF NORTH 57 04'15" EAST AND

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EXHIBIT A LEGAL DESCRIPTION

PASSING THROUGH SAID POINT "B".

EXCEPT THEREFROM THAT PORTION LYING WITHIN PARCEL 4, STRIP 1 AS

DESCRIBED ABOVE.

CONTAINING 9,190 SQUARE FEET OR 0.211 ACRES MORE OR LESS.

AS SHOWN ON EXHIBIT B-PARCEL 5 ATTACHED HERETO AND BY THIS REFERENCE

MADE A PART HEREOF.

SURVE YOU

INCENSED LAND, 2010. JERRY L USELTONCHDAY OF July EXP. 12/31/11

45 5347 STATE OF CALIFORNIA

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Exhibit "B"

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Page 19: CALENDAR ITEM C01 - California

PARCEL 4

P.O.C. PARCEL 1

280.00'

N213715'E

188.69-T.P.O.B. PARCEL 1

_N654220 R.8.B. 86 / 81 - 38

N68 22'45 W PARCEL 1 2.616 ACR.

HITY OF NEWPORT BEACH BOUNDARY756.00

N2317 40'E

22532-N7651'00"W

SCALE T - 120'

DENOTES PARCEL 1 AREA

EXHIBIT B-PARCEL 1 DATE: 07/01/10 OIL WELL OPERATIONAL AREA SCALE: 1"=120'FUSCOE

CITY OF NEWPORT BEACH & JN: 821.0102CIMBERING UNINCORPORATED TERRITORY OF ORANGE COUNTY,

Korman, Suite 100, Irvine, California 92605al 949.474.1960 . fox 949.474.5315 . www.fuscoe.com CALIFORNIA 1 OF 5

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Page 20: CALENDAR ITEM C01 - California

PARCEL 5 CITY OF NEWPORT BEACH PARCEL 4

BOUNDARY

P.O.B.

N77 00'03"E 241.44"

NWLY LINE PARCEL "A" INST. NO. 83-151675, O.R. SCALE T - 120'

EX,ICION

BANNING TRACT

TRACT NO. 772

PARCEL 2 4.603 ACR.

R.8.B. 86 / 81 - 36

DRILLING ESMTM.M. 28 / 5 - 6 PARCEL A

83-151675 OR

AGREEMENT LINE PER

INST. NO. 89-486419 O.R. PORTION LOT D

M Z1 LLOZN

NO6 42'45'E

(8317'15 WN83 25'55 W

54.65 2456

CITY OF NEWPORT BEACH BOUNDARY

N'LY LINE OF PARCEL 73170-1 PER INST.

NO. 94-0032788 O.R.

WEST COAST HWY.

DENOTES PARCEL 2 AREA

EXHIBIT B-PARCEL 2 DATE: 07/01/10 OIL WELL OPERATIONAL AREA SCALE: 1"=120'FUSCOE CITY OF NEWPORT BEACH & JN: 821.0102

UNINCORPORATED TERRITORY OF ORANGE COUNTY,16795 Von Karman, Suite 100, Irvine, California 92606

tol 949.474.1960 . fox 949.474.5315 . www.fuscoe.com CALIFORNIA 2 OF 5 M:\MAPPING\821\01\LEGALS\CNB CHARTER\ 82101 OIL WELL CONSOLIDATION.DWG (07-06-10)

Page 21: CALENDAR ITEM C01 - California

DENOTES PARCEL 3 AREA N75 09'09"W

N87 35'07 E (R)R.B.B. 86 / 31 - 38

$73 09'12"E (PCC)

$75 09'09"E

20452

471 03'58"R 211.00' N19 29'03 W (PRC)-24'06'29" L=261.71'

R=615.00' (59) 3.+1 SQ.ZOS165.94- L-258.77'

& N1450'32'E

640.52

PARCEL 3 203.87 2 SCALE -200'N45 56'48'E9.196 ACR.

N40 39'29"W (PRC) $01 5359 W (PRC N74 20'09"W (PRC)

- C8 $10 26'52'E (PCC)

N1518 26 E $1102'16 W (PRC)CIO N4819'12 W (R) C8R-154.00"

C11- LINE TABLEN4701-32"W (R) LINE BEARING LENGTHR=231.91 $3233 37 E_(PRC)

41 N82 37 16'W 108.62 N82:37 16 W 65.321199.12

N87 58 45 W |85.44'N3459'06"W N150418 E 50.45'

N76 161LW (R)_ N87 04'29 E 61.05 BANNING TRACT N82 37 16 W 43.30'

N28 40 56

LOT B CURVE TABLEP.O.B. 5 8 13 8 8 5 8 8 CURVE DELTA RADIUS LENGTH

325.82 P.O.C. 1915'41" 475.00' 159.68

$ 30' EASEMENT 5200'11 211.00'191.51' PER R.S.B. 65/31-36

26 33 32" 86,00 39.88 PARCEL 5 525'51 740.00 70.14'

N76 32 25 W 1596.18' 30 18'57 170.00' 39.85'

635317" 54.00' 80.21 PARCEL 4 12 20'51" 245.00' 52.80

TRACT 100 21 28'18' 432.00' 161.89' 73.00 39.00'30-36'35"

01-465838 0.A. C10 512125' 40.00' 38.09 C11 805'52" 258.00' 38,48

15'45'35 194.00' 53.36' 294'39" 231.91' 118.37

- CITY OF NEWPORT BEACH BOUNDARY

EXHIBIT B-PARCEL 3 DATE: 07/01/10 OIL WELL OPERATIONAL AREA SCALE: 1"=200'FUSCOE

CITY OF NEWPORT BEACH & JN: 821.0102 UNINCORPORATED TERRITORY OF ORANGE COUNTY,16795 Ven Kerman, Suite 100, Irvine, California 92606

tel 949.474.1960 . fox 949.474.5315 . www.fuscos.com CALIFORNIA 3 OF 5 M:\MAPPING\821\01\ LEGALS\ CNB CHARTER\ 82101 CURVE TEXT.DWG (07-06-10)

Page 22: CALENDAR ITEM C01 - California

BANNING

POR PARCEL 4 PARCEL 3 STRIP 1

POINT 'A

PARCEL 4STRIP 2

TRACT 148 00'

20.16' 1596.18' NO3 18 27 W

303.61' PARCEL 4

8-22 28'37"STRIP 2 TRACT 100 R-515.00' 0.687 ACR. 81-456838, O.R.L-202.03 M.ST.SS.ZEN

PARCEL 5 507.25N19'10'10'E R.8.B. 65 / 31 - 38

M.SI,SLIZPARCEL 1

30' N14 36'45"W 264.00'

NO5 33'45 E 217.00

PARCEL 4 STRIP 1

2.500 ACR.

SCALE f - 500' PARCEL 2-

DENOTES PARCEL 4 AREA

EXHIBIT B-PARCEL 4 DATE: 07/01/10 OIL WELL OPERATIONAL AREA SCALE: 1"=120'FUSCOE

CITY OF NEWPORT BEACH & JN: 821.0102JOINFIRING UNINCORPORATED TERRITORY OF ORANGE COUNTY,

16795 Von Karman, Suite 100, trying, California 92606 tel 949.474.1960 . fox 949.474.5315 . www.fuscoe.com CALIFORNIA 4 OF 5

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Page 23: CALENDAR ITEM C01 - California

N82 37'16"W 43.30

POINT "C" II 30

PARCEL 5 30' EASEMENT STRIP 2 SEE DETAIL

0.211 ACR 325.82'

TRACT 100 N32 55'45 W N57 04'15 E 91-455338 O.R.

521.40' 35,00

2 30' ESMT. PER POINT B

DETAIL SCALE -100'

N27 15'15 W 595.00

PARCEL 5 20' EASEMENT STRIP 1

1.006 ACR.

N14 36'45 W 264.00

NO5 33'45'E

217.00'

SCALET-400'

15' 1 20N12'59'57"W

585.03'

POB

DENOTES PARCEL 5 AREA

EXHIBIT B-PARCEL 5 DATE: 07/01/10 OIL WELL OPERATIONAL AREA SCALE: 1"=400'FUSCOE

CITY OF NEWPORT BEACH &BINSININ JN: 821.0102

UNINCORPORATED TERRITORY OF ORANGE,16795 Von Karman, Suits 100, Irving, Califemia 92606 el 949.474.1960 . fax 949.474.5315 . www.fuscoo.com CALIFORNIA 5 OF 5

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