Contract
Exhibit
10.4
The
Partnership has redacted certain confidential information in this agreement in
reliance upon its confidential treatment request that it has filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, In this agreement, we indicate each redaction by use of an
asterisk *.
BETWEEN
NATURAL
GAS ASSOCIATES, A COLORADO PARTNERSHIP
AND
ACEITE
ENERGY CORPORATION
XXXXXX
EXPLORATORY PROGRAM 0000-X XXXXXXX
XXXXX
XXXXXX COMPANY
INDEX
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I.
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DEFINITIONS
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Page
2
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II.
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PRELIMINARY
ACTS OF PARTIES
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Page
4
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III.
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DEDICATION
OF ACREAGE
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Page
4
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IV.
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DEDICATION
OF PLANT CAPACITY AND PIPELINE GATHERING SYSTEM .
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Page
5
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V.
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RESERVATIONS
OF SELLER
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Page
5
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VI.
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QUANTITY
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Page
6
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VII.
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POINT(S)
OF DELIVERY, PRESSURE AND OWNERSHIP
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Page
7
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VIII.
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GAS
MEASUREMENT AND QUALITY
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Page
9
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IX.
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ALLOCATION
OF RESIDUE GAS AND PLANT PRODUCTS
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Page
11
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X.
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PRICE
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Page
11
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XI.
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BILLING
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Page
14
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XII.
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REGULATORY
BODIES
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Page
14
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XIII.
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FORCE
MAJEURE
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Page
15
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XIV.
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WARRANTY
OF TITLE TO GAS
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Page
15
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XV.
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SELLER’S
REPRESENTATIVE
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Page
16
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XVI.
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NOTICES
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Page
17
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XVII.
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EASEMENTS
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Page
17
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XVIII.
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TERM
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Page
18
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XIX.
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DEFAULTS
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Page
18
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XX.
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UNECONOMIC
WELL CONNECTIONS AND UNECONOMIC OPERATIONS OF PLANT
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Page
19
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XXI.
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OPTIONS
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Page
21
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XXII.
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SHRINKAGE
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Page
22
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XXIII.
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SPECIAL
PROVISIONS
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Page
22
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XXIV.
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MISCELLANEOUS
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Page
23
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THIS
AGREEMENT, entered into this 14th day of October 1983, by and between Natural
Gas Associates, a Colorado partnership, with offices at 0000 Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000, hereinafter referred to as "Buyer/Processor", and Aceite
Energy Corporation, a Colorado corporation, with offices at 0000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000; Xxxxxx Exploratory Program 1982-A
Limited, a New York limited partnership, with offices at 00 Xxxxxxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and Creek Cattle Company, a Texas
corporation, whose address is X.X. Xxx 0000, Xxxxxxxx, Xxxxx 00000, hereinafter
collectively referred to as "Seller".
WITNESSETH
THAT:
WHEREAS,
Buyer/Processor has constructed or proposes to construct or' cause to be
constructed and to operate and maintain a natural gas gathering system,
compression facilities and natural gas processing facilities, all such
facilities in the aggregate hereinafter referred to as the "Facilities", said
Facilities to be located in Weld County, Colorado, to enable Buyer/Processor to
purchase and accept delivery of Seller's natural gas (including natural gasoline
and other liquefiable hydrocarbons) hereinafter referred to as "Gas", produced
and saved from the leases committed and dedicated hereunder at the Point(s) of
Delivery defined herein; and,
WHEREAS,
Seller owns and holds, or has an interest or interests in certain oil and gas
leases {the "Leases") located in Weld County, Colorado, which Leases are
described and listed in Exhibits "A" (Acreage Earned and Dedicated) and "A-l"
(Acreage to be Earned and Dedicated), respectively, attached hereto and
incorporated herein by reference; and
WHEREAS,
Seller desires to sell to Buyer/Processor all of the Gas owned or controlled by
Seller produced and saved from the Leases dedicated hereunder, as well as to
contract with Buyer/Processor to process all of said volumes of Gas upon the
terms and for the consideration expressed herein; and,
WHEREAS,
Buyer/Processor desires to purchase and gather all of the Gas owned or
controlled by Seller saved and produced from the Leases and process such Gas
utilizing the gas processing plant (the "Plant") to be constructed and operated
by Buyer/Processor for the consideration herein expressed; and,
WHEREAS,
Buyer/Processor has entered into certain third-party Residue Gas Sales and
Purchase Agreement(s), which Agreement(s) (is) (are) currently in full force and
effect, and pursuant to which Buyer/Processor shall sell all of the Residue
Gas resulting from Seller's Gas production dedicated and purchased
hereunder.
NOW
THEREFORE, in consideration of the premises, mutual covenants and other good and
valuable consideration expressed herein, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS
For the
purpose of this Agreement, unless the context of the instrument requires
otherwise, the following terms and expressions used herein shall be defined as
follows:
1.
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"Accounting
Period", except the initial "Accounting Period", shall mean a period of
one calendar month, commencing at 8:00 a.m. local time on the first day of
each month, and ending at 8:00 a.m. local time on the first day of the
succeeding calendar month. The initial "Accounting Period" shall commence
at 8:00 a.m. local time on the date of initial deliveries of Gas
hereunder, continuing for a period of consecutive calendar days until 8:00
a.m. local time on the first day of the succeeding calendar
month.
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2.
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"BTU"
shall mean British Thermal Unit.
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3.
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"Commence
Operations", whether in reference to Seller's original well(s), or to
Seller's additional tie-in well(s), shall include, but not be limited to,
any of the following acts undertaken by Seller and Buyer/Processor:
Negotiations for the purchase of rights-of-way or easements, surveying or
staking the course of pipeline(s), ditching and excavation, and such other
acts not listed above which demonstrate Buyer/Processor's bona fide effort
to tie-in Seller's well(s).
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4.
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"Cubic
Foot of Gas" shall mean the amount of Gas required to fill a cubic foot of
space when the Gas is at a base pressure of 14.65 pounds Psia and at a
base temperature of 60°F.
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5.
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"Day"
shall mean the 24-hour period commencing at 8:00 a.m. Local Time on one
calendar day and ending at 8:00 a.m. Local Time on the following calendar
date.
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6.
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"Point(s)
of Delivery " shall mean the point(s) at which Seller delivers Gas to
Buyer/Processor at the well-site or other mutually agreeable points on the
Buyer/Processor's Gathering System,
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7.
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"Gas"
shall mean the effluent vapor stream including all of the constituents
thereof, entrained liquids as produced from each lease or well, whether a
gas well or an oil well dedicated hereunder and delivered by Seller to
Buyer/Processor at the Point(s) of Delivery specified
herein.
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8.
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"Mcf"
shall mean one thousand (1,000) cubic
feet.
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9.
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"Month"
shall mean the period beginning at 8:00 a.m. local time on the first day
of a calendar month and ending at 8:00 a.m. local time on the first day of
the next succeeding calendar month.
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10.
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"Psia"
shall mean pounds per square inch
absolute.
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11.
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"Psig"
shall mean pounds per square inch
gauge.
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12.
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"Seller's
Gas Reserves" shall mean the total quantity of Gas attributable to
Seller's present or future interest in, and/or which Seller has or may
earn the right to market from the Leases described in Exhibits "A" and
"A-l" attached hereto, as they now exist or may be hereafter
amended.
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13.
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"Plant
Products" means all liquefiable hydrocarbons extracted and saved at the
Plant from Gas delivered by Seller to Buyer/Processor. These liquefiables
shall include, but not be limited to, ethane, propane, butane, and natural
gasoline, individually or as a mixture, as determined by the latest GPA
Publication 2145.
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14.
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"Plant"
shall mean Buyer/Processor's gas processing plant located in XX/0 xx Xxx.
00, X0X, X00X of 6th PM, Weld County, Colorado, more particularly
described in Exhibit "B" attached
hereto.
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15.
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"Residue
Gas" shall mean that portion of the Gas remaining after the extraction
therefrom of Plant Products, Plant fuel requirements, and Plant
losses or uses.
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16.
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"Buyer/Processor's
Gathering System" shall mean the pipelines (including field compression)
and appurtenances constructed by Buyer/Processor for the purpose of
accepting delivery and transmitting Seller's Gas from the Point(s) of
Delivery to Buyer/Processor's
Plant.
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17.
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"Shrinkage"
shall mean that reduction in total volumes of the Gas which results from
the extraction of Plant Products, but exclusive of fuel
gas.
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18.
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"System"
shall mean in the aggregate that portion of Buyer/Processor's Gathering
System constructed by Buyer/Processor for the benefit of Seller to connect
Seller's xxxxx to Buyer/Processor's Gathering System, together with that
portion of the Plant capacity dedicated to Seller, as the same may be
extended and/or expanded from time to
time.
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ARTICLE
II
PRELIMINARY ACTS OF
PARTIES
Seller
represents and warrants to Buyer/Processor, its successors and assigns, that
Seller owns or may earn an interest in, or has or may earn the right to market
Seller's portion of the Gas underlying the Leases described in Exhibits "A" and
"A-l" attached hereto and that Seller intends to construct, or cause to be
constructed, the facilities necessary, if any, to enable Seller to sell and
deliver to Buyer/Processor at the Point(s) of Delivery, as hereinafter set
forth, all Gas attributable to such interest, all in accordance with the
provisions of this Agreement.
ARTICLE
III
DEDICATION OF
ACREAGE
1.
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Subject
to the terms and conditions contained herein, Seller hereby commits and
dedicates to the performance of this Agreement all of Seller's Gas
Reserves from the Leases described in Exhibit "A" (as it now exists, or
may be amended hereafter), and all of Seller's Gas Reserves attributable
to the Leases or portions thereof described in Exhibit A-l (as it now
exists or may be amended hereafter) and earned by Seller, and to
insure the faithful performance of the provisions of this Agreement,
covenants to sell and deliver to Buyer/Processor at the Point(s) of
Delivery all of Seller's Gas Reserves without other disposition except as
herein otherwise provided.
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2.
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Seller
shall operate the Leases dedicated hereunder free of any control by
Buyer/Processor and shall not be required to produce any well or xxxxx in
any manner which in its sole judgment and discretion would not constitute
good operating practice, including without limitation the right to make
farmouts of any dedicated lease, subject to this Agreement, nor shall
Seller be obligated to drill additional xxxxx or to deepen, repair or
rework any existing xxxxx, to abandon any well and surrender any lease
dedicated hereunder when Seller deems the same no longer capable of
producing Gas in commercial quantities under normal methods of operation
when in its sole judgment it would not be prudent or profitable to do
so.
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ARTICLE
IV
DEDICATION OF PLANT CAPACITY
AND PIPELINE GATHERING SYSTEM
1.
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In
consideration of the sale of Gas by Seller to Buyer/Processor hereunder
and based upon Buyer/Processor's Plant capacity of fifteen thousand
(15,000) MCF per day, buyer/Processor agrees to dedicate to
Seller seven thousand (7,000) MCF per day of such Plant
capacity.
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2.
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In
addition, Buyer/Processor agrees to construct and install, or have
constructed and installed, for the benefit of Seller seven (7) miles of
pipeline gathering system, specifically to connect the initial xxxxx of
Seller drilled and produced on Seller's acreage dedicated
hereunder.
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3.
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The
cost of construction of the System, as the same may be expanded and/or
extended from time to time, plus interest on said capital investment at
the rate per annum of one and one-half percent (1½%) over the
prime rate charged from time to time by Continental Illinois National Bank
and Trust Company of Chicago and paid by Buyer/Processor on any borrowed
funds which comprise all or a portion of said capital investment incurred
by Buyer/Processor, shall be utilized in determining payout, as defined
herein, for the appropriate calculation and distribution of revenues to
Seller as provided hereunder.
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ARTICLE
V
RESERVATIONS OF
SELLER
1.
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Seller,
as a reasonable and prudent operator, hereby expressly reserves the
following rights with respect to Seller's Gas Reserves and the Leases
subject hereto:
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A.
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The
right to use the Gas produced from the Leases prior to delivery to
Buyer/Processor for the following
purposes:
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1)
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For
fuel in the development and operation of the well from which the Gas was
produced.
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2)
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For
delivery to the lessors of the Leases of the Gas if such lessors are
entitled to use or take such Gas in kind under the terms of the
Leases;
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3)
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For
fuel in the operation of the facilities which Seller may install in order
to deliver Gas hereunder in accordance with the terms
thereof.
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B.
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The
right to pool or unitize the Leases (or any portion thereof) with other
lands or Leases so long as such action does not reduce Seller's Gas
Reserves. In the event of any such pooling or unitization, the Agreement
will cover Seller's Interest in the pool or unit and the Gas attributable
thereto to the extent that such interest is derived from Seller's Gas
Reserves.
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2.
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Seller
shall provide to Buyer/Processor all necessary information whereby
Buyer/Processor can make the proper allocation herein called for or
required by Buyer/Processor's normal and customary accounting practices or
required by Buyer/Processor's normal and customary contract administration
practices, when different vintages of Gas are being delivered through a
single Point of Delivery.
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ARTICLE
VI
QUANTITY
1.
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Commencing
on the date Buyer/Processor first takes delivery of Gas hereunder and
continuing thereafter for the term hereof, Buyer/Processor agrees to
receive and purchase and Seller agrees to deliver and sell to
Buyer/Processor from Seller's Gas Reserves, subject to the limitations and
conditions herein elsewhere provided, during each Accounting Period,
all of the Gas available from Seller's Gas
Reserves.
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2.
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Buyer/Processor
shall receive and purchase Seller's Gas subject to the following
limitations;
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A.
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Buyer/
Process or shall be required to Receive and purchase Seller's Gas up
to seven thousand (7,000) MCF per
day.
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B.
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Buyer/Processor
shall receive and purchase Seller's Gas over and above the dedicated
capacity on a capacity available
basis.
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C.
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All
other quantity limitations shall be in accordance with the terms and
provisions of the Residue Gas Sales and Purchase Agreement(s) entered into
by and between Buyer/Processor and Western Slope Gas Company dated
December 17, 1982, including any payments required to be made to
Buyer/Processor thereunder in the event the purchaser fails to take the
required minimum volumes of Gas, which payments shall be passed through
and distributed proportionately to Seller by Buyer/Processor in accordance
with the pricing provisions contained in Article X
hereof.
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D.
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During
periods that Buyer/Processor is unable to receive the total volumes of Gas
delivered to Buyer/Processor from all of Seller's xxxxx and Leases
dedicated hereunder, Buyer/Processor shall receive and purchase only that
portion of such Gas from the xxxxx and Leases of Seller covered hereby
which is ratable on a volumetric basis with the total volumes historically
delivered to Buyer/Processor from all of Seller's xxxxx and Leases
dedicated hereunder. Buyer/Processor shall reduce or eliminate Gas
deliveries from those xxxxx and Leases of Seller from which Gas is being
received on a capacity available basis prior to ratably reducing
deliveries from Seller's producing xxxxx whose volumes were originally
covered by the Plant capacity dedicated to Seller
hereunder.
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E.
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Seller
acknowledges and understands that Buyer/Processor will receive and
purchase the Gas gathered from Seller's xxxxx and Leases dedicated
hereunder utilizing the Facilities which also receive, transmit and
process Gas purchased by Buyer/Processor from other xxxxx and leases
dedicated to Buyer/Processor by other
Sellers.
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F.
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Seller
acknowledges and understands that Buyer/Processor reserves the right to
receive and purchase such third-party Gas over and above the dedicated
capacity of the Plant on a capacity available basis. Plant capacity
priority shall be given to Seller's Gas up to the limit defined in Article
IV.1 and Article VI.2.A.
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ARTICLE
VII
POINT(S) OF DELIVERY,
PRESSURE AND OWNERSHIP
1.
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The
Point{s) of Delivery of all Gas delivered hereunder shall be at the inlet
of Buyer/Processor's metering facilities located at Seller's lease
separation facilities or at such other Point(s) of Delivery as may be
mutally agreed upon in writing by the parties hereto from time to time,
and title to said Gas (including such hydrocarbons from the Gas that have
not been or cannot be recovered through the use of conventional mechanical
wellhead gas-oil separators) shall pass from Seller to
Buyer/Processor at said Point(s) of
Delivery.
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2.
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Seller,
at its own expense, shall equip, maintain and operate all lease facilities
to deliver Seller's Gas to Buyer/Processor at the Point(s) of Delivery,
including, but not limited to, Installation and maintenance of separation
equipment.
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3.
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Buyer/Processor
shall construct, maintain, own and operate all necessary facilities to
accept Seller's Gas from Seller at the Point(s) of
Delivery.
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4.
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Seller
will deliver Gas at the required pressure at the Point(s) of Delivery
sufficient to enter Buyer/Processor's Gathering System at a maximum
working pressure of Two Hundred and Fifty (250) pounds Psig.
However, in the event seller determines that such working pressure
excessively limits the production of Seller's xxxxx, Seller shall provide
written notice thereof to Buyer/Processor, Upon receipt of such notice,
Buyer/Processor, as soon a practicable, shall present to Seller a
written proposal pursuant to which Buyer/Processor shall construct, own
and operate such field compression facilities as may be necessary to
reduce such pressure to a mutually acceptable level and shall disclose the
charges to be assessed Seller therefore together with a schedule of
payment. Once such proposal has been accepted by Seller in writing,
Buyer/Processor shall utilize its best efforts to construct or cause
to be constructed and placed in operation the required field compression
facilities within ninety (90) days of receipt of such written acceptance.
In the event Seller rejects the proposal of Buyer/Processor, Seller, at
its option and sole expense, may construct, own and operate such field
compression facilities as Seller deems necessary to reduce wellhead
pressure to an acceptable level subject to receipt of written approval of
Buyer/Processor with respect to the location and design of such field
compression facilities and the manner of operation thereof, which approval
shall not be unreasonably withheld.
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5.
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As
between the parties hereto, Seller shall be in possession and control of
the Gas deliverable hereunder and responsible for any injury or damage
caused thereby until the same shall have been delivered to
Buyer/Processor, after which delivery Buyer/Processor shall be deemed to
be in exclusive possession and control thereof and responsible for any
injury or damage caused
thereby.
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ARTICLE
VIII
GAS MEASUREMENT AND
QUALITY
1.
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Buyer/Processor
shall furnish and install a suitable orifice meter at the Point(s) of
Delivery of the Gas produced and saved from the Leases described herein.
Each meter installed by Buyer/Processor shall be a meter acceptable in the
industry and each meter shall be installed and operated in accordance with
the physical requirements of American Gas Association Gas Measurement
Committee Report No. 3, dated April, 1955, of the Natural Gas Department
of the American Gas Association as amended from time to time, or by any
other method commonly used in the industry and mutually acceptable to the
parties. Any meter installed hereunder shall be open to inspection by
Seller at all reasonable times. The charts and records pertaining to
measurement hereunder shall be kept on file by Buyer/Processor for a
period of two (2) years for the mutual use of the parties. In the
event any question arises as to the accuracy of the measurement, the meter
or meters shall be tested upon the demand of either party. The expense of
any such special test shall be borne by the party demanding same if the
meter registration is found to be correct, and by Buyer/Processor if found
to be incorrect.
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At least
semi-annually Buyer/Processor shall calibrate all meters installed hereunder and
make adjustments as necessary. Should Seller so desire, Buyer/Processor shall
give notice to Seller of the time of such calibrations sufficiently in advance
of holding same in order that Seller may have its representative present. With
respect to any test made hereunder, a registration within two percent (2%) of
correct shall be considered correct. However, the meter or meters, when found to
be incorrect, shall be adjusted to one hundred percent (100%) accuracy as soon
as possible. Settlement for any period during which the meter registration
deviates by more than two percent (2%) of correct shall be corrected at the rate
of inaccuracy for any period of inaccuracy which is definitely known or agreed
upon; but in case the period is not definitely known or agreed upon, then either
for a period of fifteen (15) days prior to the date of said test, or for a
period calculated from the beginning of the Accounting Period in which the test
was conducted, whichever is longer. The rate of the inaccuracy shall be
estimated and agreed upon by the parties hereto on the basis of the best
available data, using the first of the following methods which is
feasible:
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A.
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By
calibration, test, or mathematical
calculation.
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B.
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By
estimation based on comparison of the quantity of deliveries with
deliveries during preceding periods under similar conditions when the
meter was registering
accurately.
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- 9
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All
fundamental constants, observations, records and procedures involved in the
determination and/or verification of the quantity and other characteristics of
Gas measured hereunder, unless otherwise specified herein, shall be in
accordance with the standards prescribed in American Gas Association Gas
Measurement Committee Report No. 3, dated April, 1955, of the Natural Gas
Department of the American Gas Association, as amended from time to time, or by
any other method commonly used in the industry and mutually acceptable to
the parties. The average atmospheric pressure shall be assumed to be 12.3 pounds
Psia. The temperature of Gas flowing through each meter shall be determined by a
recording thermometer, installed by Buyer/Processor at its sole cost and expense
to properly record the temperature of the flowing Gas and the arithmetical
average of the temperature recorded while the Gas is flowing during each meter
chart interval shall be used in correcting volumes delivered hereunder to a
temperature base of sixty degrees Fahrenheit (60F) and to a pressure base of
14.65 pounds Psia.
2.
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Seller
agrees that all Gas delivered to Buyer/Processor hereunder
shall:
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A.
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Contain
not more than one grain of hydrogen sulfide per one hundred (100} cubic
feet of Gas, or more than five (5) grains of total sulfur per one hundred
(100) cubic feet of Gas;
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B.
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Not
have a maximum temperature greater than one hundred twenty degrees
Fahrenheit (120°F), or a minimum temperature less than forty degrees
Fahrenheit (40F); and
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C.
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Be
commercially free of all objectionable dust or other solid or liquid or
gaseous matters which might interfere with its merchantability or cause
injury to or interference with proper operations of Buyer/Processor's
Facilities through which the Gas flows;
and
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D.
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Shall
not deviate significantly from the Gas Analysis set forth in Exhibit C
attached hereto and incorporated herein by reference. In the event
Seller's Gas contains levels of C02 in excess of that set forth in Exhibit
C, Buyer/Processor, before rejecting acceptance thereof, first agrees to
work with Seller on a best efforts basis to alleviate any adverse
consequences which may be attributable
thereto.
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Buyer/Processor
may test the Gas for adherence to the specifications above set forth, such
testing to be in accordance with generally accepted industry standards and
procedures. If the Gas so delivered by Seller does not meet the specifications
set forth in Exhibit C above referenced, with the exception of C02 content above
provided for, Buyer/Processor, at its option, may refuse to accept delivery of
said Gas into its Facilities.
- 10
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ARTICLE
IX
ALLOCATION OF RESIDUE GAS
AND PLANT PRODUCTS
1.
|
For
purposes of determining Plant Product Revenues attributable to Seller's
Gas, Buyer/Processor shall multiply the volume in MCF's of Gas
attributable to each of Seller's xxxxx by the GPM (Gallons Per MCF) of
each Plant Product contained in the well stream. Said GPM content is shown
on Exhibit C on an estimated basis only and shall be determined by
chromatagraph analysis taken on spot Gas samples from each of Seller's
xxxxx and adjusted on an annual basis. The calculated value will be the
Total Theoretical Plant Product Content of the Seller's Gas. Said Total
Theoretical Plant Product Content shall be divided by the Total
Theoretical Plant Product Content of all Gas received and purchased by
Buyer/Processor to determine the percentage of Total Plant Products
attributable to each of Seller's xxxxx. Division of revenues from Total
Plant Products shall be made per the pricing provisions contained
herein.
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2.
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For
the purpose of determining Residue Gas Revenues attributable to Seller's
Gas, Buyer/Processor shall divide the volume in MCF's of Gas attributable
to each of Seller's xxxxx by the total volume in MCF's of all Gas received
and purchased by Buyer/Processor. This fraction shall be multiplied by the
total Residue Gas Volume to determine the Residue Gas Volume attributable
to each of Seller's xxxxx. Division of Residue Gas Revenues between
Buyer/Processor and Seller shall be determined pursuant to the pricing
provisions contained herein.
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3.
|
Buyer/Processor
will market one hundred percent (100%) of the Plant Products upon terms
which, in Buyer/Processor's sole judgment, are the best terms then
available. Buyer/Processor will furnish Seller on a monthly basis with
reports containing volumes sold by product and the price received
therefore. Seller shall have the right at reasonable times during normal
business hours to review the books and records of Buyer/Processor
pertaining to the sale of Plant Products, Residue Gas and revenues
received therefrom.
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ARTICLE
X
PRICE
1.
|
Seller
shall receive [*] percent ([*]%) of the Residue Gas Revenues attributable
to each of Seller's xxxxx until payout of Buyer/Processor's investment in
the System relating to the gathering and processing of Seller's Gas.
After payout, Seller shall receive [*] percent ([*]%) of the Residue Gas
Revenues attributable to each of Seller's xxxxx. Total Residue Gas Revenue
attributable to each of Seller's xxxxx shall be calculated by multiplying
the Residue Gas Volume attributable to each of Seller's xxxxx by the then
effective price per MCF being received by Buyer/Processor. All
pricing terms and conditions shall be determined pursuant to the terms and
provisions contained 1n the Residue Gas and Sales and Purchase Agreements)
between Buyer/Processor and Western Slope Gas Company, dated December 17,
1982.
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2.
|
For
Plant Products produced and saved at the Plant, Seller shall receive a
percentage of the value thereof calculated as
follows:
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(a) In
the event the GPM of Plant Products content of Seller's Gas is less than that
estimated on Exhibit C, but is equal to or exceeds 5.5 GPM, Seller shall receive
a value equal to [*] percent ([*]%) of the Total plant Product Revenue
attributable to each of seller's xxxxx until payout of Buyer/Processor's
investment in the System. After payout, Seller shall receive [*] percent ([*]%)
of the Total Plant Product Revenue attributable to each of Seller's
xxxxx.
(b) In
the event the GPM content of Seller's Gas is less than 5.5 GPM, Seller shall
receive a value equal [*] percent ([*]%) of the Total Plant Product Revenue
above described before payout, and [*] percent ([*]%) after payout.
As used
above, Total Plant Product Revenue shall be the Plant Product Sales Revenue
received by Buyer/Processor. Total Plant Product Revenue attributable to each of
Seller's xxxxx shall be calculated by multiplying the percentage of Total Plant
Product attributable to each of Seller's xxxxx by the Total Plant Product
Revenue.
3.
|
System
payout shall be that point in time when Buyer/Processor's net operating
income from Seller's Gas equals Buyer/Processor's investment, plus
interest, attributable to the construction of Seller's System. Net
operating income will be comprised of Buy-er/Processor's Residue Gas and
Plant Product Revenues attributable to Seller's Gas, less Plant Operating
Costs attributable to Sell-er's Gas. Plant Operating Costs attributable to
Seller's Gas for the purpose of determining payout, shall be shared
proportionately by Seller by multiplying the total Plant Operating Costs
by the ratio of Seller's Gas delivered thereto to the total volumes of Gas
received and purchased by Buyer/Processor at the
Plant.
|
- 12
-
4.
|
Buyer/Processor's
investment attributable to Seller's System shall be determined pursuant to
the capital account of Seller based upon the components of Seller's System
and Buyer/Processor's investment, plus interest, attributable thereto.
Seller shall receive a quarterly statement of the capital account
identifying the capital costs charged to the account and the revenues
credited thereto, as the same may be amended from time to time to reflect
costs of construction of Plant expansion and/or extensions of
Buyer/Processor's Gathering System to connect additional xxxxx of
Seller and/or accept additional volumes of Gas from
Seller.
|
5.
|
Seller
agrees that it will supply data and information at Buyer/Processor's
reasonable request, and otherwise cooperate with Buyer/Processor in any
regulatory proceeding wherein the price or other provisions set forth
herein may be the subject of
review.
|
6.
|
It
shall be the sole obligation of Seller to prepare, file and diligently
pursue any application required to be filed with applicable state and
federal agencies pursuant to the Natural Gas Policy Act of 1978 or
subsequent legislation or regulation thereunder for a determination of
eligibility for maximum lawful price categories. Seller agrees to provide
Buyer/Processor with copies of such filings within sixty (60) days of
connection of Seller's xxxxx covered
thereby.
|
7.
|
Should
Buyer/Processor make payment to Seller based on the price for any category
of Gas subject to any governmental agency or judicial review of such
determination, and if it is subsequently determined that the Gas for which
payment was made was not eligible for the price upon which payment was
based, or if the price to be paid hereunder for such Gas is determined to
be in excess of the maximum lawful price permitted by applicable NGPA
price categories, or if for any reason Buyer/Processor is not permitted to
receive or retain such prices in its resale rates, then the rate
thereafter to be paid shall be accordingly reduced and Seller will refund
to Buyer/Processor any previous excess payments together with interest at
the rate prescribed in 18 C.F.R. Sec. 273.302 or subsequent
regulation.
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8.
|
Seller
agrees to pay, or cause to be paid, the taxes lawfully levied on the Gas
delivered hereunder prior to its delivery to Buyer/Processor, as well as
its proportionate share of taxes, if any, levied upon the Plant Products
to be marketed by Buyer/Processor
hereunder.
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- 13
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ARTICLE
XI
BILLING
1.
|
After
delivery of Seller's Gas has commenced, Buyer/Processor shall mail payment
together with a statement to Seller indicating the quantity of Gas
delivered during the preceding calendar month; adjustments, if any, made
by Buyer/Processor; and the amount due and paid for all such Gas, such
payment and statement to be mailed either on or before the last day of
each month, for Gas purchased the preceding calendar month, or ten (10)
days after receipt by Buyer/Processor of payment from the purchaser of the
Gas from Buyer/Processor, whichever is later. It shall be the
obligation of the Seller and Seller agrees to cause proper settlement and
accounting to be made to all owners of interest in the proceeds from
the sale of Gas delivered to Buyer/Processor hereunder. Seller hereby
indemnifies and holds Buyer/Processor harmless of and from any and all
claims, demands, actions, causes of action, costs, damages and expenses
related to, arising out of or in any way stemming from such obligation of
Seller. Buyer/Processor, at its election, may deduct from its payment to
Seller, sums, if any, due to Buyer/Processor under the terms of this
Agreement.
|
2.
|
Each
party hereto shall have, at its expense, the right at all times to examine
the books and records of the other party, during normal working hours, to
the extent necessary to verify the accuracy of any statement, charge,
computation, or demand made under or pursuant to the Agreement. Each party
agrees to keep records and books of account in accordance with generally
accepted accounting principles in the industry. Any statement shall be
final as to both parties unless questioned within two (2) years after
payment thereof has been made.
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ARTICLE
XII
REGULATORY
BODIES
1.
|
This
Agreement is subject to all present and future valid laws and lawful
orders of all regulatory bodies now or hereafter having jurisdiction of
the parties, or either of them; and should either of the parties, by force
of such law or regulation imposed at any time during the term of this
Agreement, be ordered or required to do any act inconsistent with the
provisions of this Agreement, the Agreement shall continue nevertheless
and shall be deemed modified to conform with the requirements of such law
or regulation.
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- 14
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ARTICLE
XIII
FORCE
MAJEURE
1.
|
Except
for Buyer/Processor's obligations to make payment for Gas delivered
hereunder, neither party hereto shall be liable for any failure to perform
the terms of this Agreement when such failure is due to "force majeure" as
hereinafter defined.
|
The term
"force majeure" as employed in this Agreement shall mean acts of God, strikes,
lockouts or industrial disputes or disturbances, arrests and restraints from
rulers or people, interruptions by government or court orders, present and
future valid orders of any regulatory body having proper jurisdiction, acts of
the public enemy, warss riots, blockades, insurrections, inability to secure
materials, including inability to secure materials by reason of allocations
promulgated by authorized governmental agencies, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, washouts, explosions, breakage or
accident to machinery or lines of pipe, freezing of xxxxx or pipelines,
inability to obtain easements or rights-of-way, the making of repairs or
alterations to pipelines or plants, or any other cause whether of the kind
herein enumerated or otherwise, not reasonably within the control of the party
claiming "force majeure", the same shall, so far as possible, be remedied with
all reasonable dispatch. The settlement of strikes or lockouts or industrial
disputes or disturbances shall be entirely within the discretion of the party
having the difficulty, and the above requirement that any "force majeure" shall
be remedied with all reasonable dispatch, shall not require the settlement
of strikes, lockouts or industrial disputes or disturbances by acceding to the
demands of any opposing party therein when such course is inadvisable in the
discretion of the party having the difficulty.
ARTICLE
XIV
WARRANTY OF TITLE TO
GAS
1.
|
Seller
hereby warrants title to the Gas sold and delivered hereunder and the
right of Seller to sell the same; and the Seller warrants that all such
Gas is owned by Seller, or that Seller has the right to market said Gas
free from all liens and adverse claims, including liens to secure payments
of production taxes, severance taxes, and other taxes. Seller agrees to
indemnify Buyer/Processor and save it harmless from all suits, actions,
debts, accounts, damages, costs, losses and expenses arising from or out
of adverse claims of any and all persons, firms, or corporations to
said Gas or to royalties, overriding royalties, taxes, license fees, or
charges thereon, which are applicable before the title to the Gas passes
to Buyer/Processor. Buyer/Processor, at any time thereafter, when it shall
appear to Buyer/Process or by reason of receipt of written notice of claim
or dispute that the ownership or title to all or part of the Leases, or
the Gas produced therefrom, may be in a party or parties other than
Seller or upon learning of any other claims, liens, taxes, royalties,
fees, expenses or other adverse claims, may retain as security for the
performance of Seller's obligations with respect thereto, the entire
purchase price of the Gas until Buyer/Processor has been satisfied as to
the amount of such claim or ownership claimed, and thereafter up to the
amount of such ownership interest or claim until it has been finally
determined and satisfied or until Seller shall have furnished a bond to
Buyer/Processor in an amount and with sureties satisfactory to
Buyer/Processor, conditioned upon the protection of Buyer/Processor with
respect to such ownership or
claim.
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- 15
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ARTICLE
XV
SELLER'S
REPRESENTATIVE
Seller
hereby appoints Aceite Energy Corporation , the Operator of the xxxxx drilled or
to be drilled upon the Leases dedicated hereunder and in which Seller owns an
interest, as its Representative with respect to all matters under this
Agreement, including but not limited to the following:
1.
|
To
give and receive all notices;
|
2.
|
To
make and witness any tests to be made of the Gas and measuring equipment
and adjustments to such equipment;
|
3.
|
To
deliver the quantities of Gas deliverable
hereunder;
|
4.
|
To
receive payments for such Gas and Plant Products processed therefrom,
allocating, prorating and distributing such payments among the various
parties Seller;
|
5.
|
To
obtain, execute and deliver to Buyer/Processor such division order title
opinions and division orders as may be required by Buyer/Processor
hereunder; and
|
6.
|
To
comply with the requirements, rules and regulations of any duly
constituted authority having
jurisdiction.
|
- 16
-
Buyer/Processor
may act, and shall be fully protected in acting, in reliance upon any and all
acts and things done and performed by or agreements made with respect to all
matters dealt with herein by said Representative on behalf of Seller as fully
and with the same effect as though Seller had done, performed, made or executed
the same, and Buyer/Process or shall not be required to see to the application
of any monies paid to said Representative.
Seller
may change its Representative designated above, or designate a new
Representative from time to time by delivery of written notice of change and
designation of Representative to Buyer/Processor. The Representative so
designated shall have and may exercise all power and authority therein granted
with like effect as though named as such Representative herein in the first
instance.
ARTICLE
XVI
NOTICES
Any
notice or notices, request, demands, statements or payments provided for 1n this
Agreement shall be in writing and deemed to be delivered to Seller when
addressed to Seller's Representative, and to Buyer/Processor when addressed to
Buyer/Processor and deposited in the United States Mail, first class, postage
prepaid at their respective addresses as set out below, or at such address as
either party may from time to time designate as the address for such purpose by
registered or certified Xxxxxx addressed to the other party.
TO:
|
Seller's
Representative
|
Aceite
Energy Corporation
0000
Xxxxx Xxxxxx
Xxxxx
0000
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxxx Xxxxx
TO:
|
BUYER/PROCESSOR
|
Natural
Gas Associates
0000
Xxxxxxx Xxxxx
0000
Xxxxxxxx - X.X. Xxx 0000
Xxxxxx,
Xxxxxxxx 00000
Attn: X.
X. xxXxxxxxxxxxx
ARTICLE
XVII
EASEMENTS
1.
|
To
the extent that it may contractually or lawfully do so under its leasehold
interest without impairing its own similar right, Seller hereby assigns
and transfers to Buyer/Processor any easement across the Seller's
Lease(s), and across any adjoining lands in which Seller may have an
interest, for the purposes of installing, using, inspecting, repairing,
operating, replacing, and/or removing Buyer/Processor's pipe, meters,
lines, and other equipment used or useful in the performance of this
Agreement. It is intended that any property of Buyer/Processor placed in
or upon any of such land shall remain the personal property of
Buyer/Processor, subject to removal by it upon the expiration or
termination of this Agreement for any reason. Buyer/Processor shall have a
reasonable time after the expiration or termination of this Agreement to
remove same. Buyer/Processor shall indemnify and hold Seller harmless of
and from any and all claims and damages for all injuries to persons,
including death, or damage to property arising out of or incident to
Buyer/Processor's use of the easement hereunder transferred, only in the
event said claim or damage shall be the result of negligence legally
imputable to Buyer/Processor; its employees, agents, and
representatives.
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- 17
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ARTICLE
XVIII
TERM
1.
|
This
Agreement shall be effective from the date hereof and shall continue and
remain in full force and effect for the economic life of the Facilities,
unless earlier terminated by mutual Agreement between the parties hereto.
Suspension of Plant operations as defined herein shall not constitute or
provide a basis for termination of this
Agreement.
|
ARTICLE
XIX
DEFAULTS
1.
|
It
is covenanted and agreed that if either party shall fail to perform any of
the covenants or obligations imposed upon it under and by virtue of this
Agreement, the other party may terminate this Agreement by proceeding as
follows:
|
|
A.
|
The
party not in default shall cause a written notice to be served on the
other party in default, stating specifically the cause for terminating
this Agreement, and declaring it to be the intention of the party giving
notice to terminate the same; thereupon, the party in default shall have
thirty (30) days after the service of the aforesaid notice in which to
remedy or remove the cause or causes stated in the notice for terminating
the Agreement. If within said thirty (30) days the party in default does
so remove and remedy said cause or causes, and fully indemnifies the party
not in default for any and all consequences of such breach, then such
notice shall be withdrawn and this entire Agreement shall continue in full
force and effect.
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- 18
-
|
B.
|
In
case the party in default does not remedy and remove the cause or causes,
or does not indemnify the party giving the notice for any and all
consequences of such breach, within said period of thirty (30) days, then
this Agreement shall become null and void from and after the expiration of
said period.
|
|
C.
|
Any
cancellation of this Agreement pursuant to the provisions of this Article
shall be without prejudice to the right of Seller to collect any amounts
then due it for Gas delivered and Plant Products processed therefrom to
the time of cancellation, and without waiver of any remedy to which the
party not in default may be entitled for violations of this
Agreement.
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ARTICLE
XX
UNECONOMIC WEIL CONNECTIONS
AND UNECONOMIC OPERATIONS OF PLANT
1.
|
The
Buyer/Processor will either install, or cause to be installed a System to
connect and receive Gas from Seller's xxxxx, which, in Buyer/Processor's
sols opinion, is economically feasible to gather. If in Buyer/Processor's
sole opinion it is uneconomic to connect one of Seller's xxxxx to
Buyer/Processor's Gathering System, Buyer/Processor shall be under no
obligation to do so, or to accept any Gas produced from said well. If
Buyer/Processor elects not to construct a System and connect a well,
Buyer/Processor nevertheless may, upon Seller's request, accept Gas from
any such well or lease if Seller shall acquire and assign without charge
to Buyer/Processor, a measuring station site on Buyer/Processor's
existing Gathering System at a mutually agreeable point, together with all
necessary rights of ingress and egress thereto, and shall bear the cost of
constructing, operating, and maintaining all facilities necessary to
deliver the Gas from such well into Buyer/Processor's Gathering System at
said mutually agreeable point. Should Seller elect not to deliver Gas from
such well, Buyer/Processor shall release from this Agreement such well and
the acreage attributable
thereto.
|
- 19
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Buyer/Processor
will install or cause to be installed a System to receive Seller's Gas from
Seller's xxxxx, which, in Buyer/Processor's opinion are economically
feasible to gather. An economic well shall be defined as a well which will
produce a stabilized flow after six (6) months of two hundred and fifty
(250) MCF per day of Gas per mile of pipeline installed by Buyer/Processor
to receive Seller's Gas. Should Buyer/Processor connect Seller's well and said
well produces a stabilized flow after six (6) months of less than two
hundred and fifty (250) MCF per day per mile of pipeline installed by
Buyer/Processor to receive Seller's Gas, Seller shall indemnify Buyer/Processor
for all costs of said connection, adjusted for actual length of pipeline and
proportional to the ratio of actual stabilized volume at the end of six (6)
months to two hundred and fifty (250) MCF per day. The terms of said
indemnification shall be negotiated between Buyer/Processor and
Seller,
Should
Buyer/Processor and Seller determine prior to connection of Seller's well that
said well will not meet the criteria for an economic well connection,
Buyer/Processor shall install the necessary System required to connect
Seller's well to Buyer/Processor's Gathering System upon receiving a written
indemnification from Seller of Buyer/Processor's actual cost for said System
pursuant to the terms above.
2.
|
If,
in the opinion of Buyer/Processor, the Plant is or becomes uneconomic to
operate due to its volume, quality, plant product content, governmental
regulation or any other cause, Buyer/Processor may either modify or
suspend Plant operations, in which case Buyer/Processor shall not be
obligated to take delivery of, or may cease processing the Gas from
Seller's welIs, so long as such condition exists. For the purposes hereof,
"uneconomic operation" shall be defined as circumstances under which
Buyer/Processor's share of net operating revenues of the Plant is
insufficient to offset actual Plant operating costs. Should said
modification or suspension of operation result in Seller's xxxxx being
shut-in for a period in excess of ninety (90) consecutive days, Seller, at
its option, may elect to terminate this Agreement. Upon receipt of such
written notice of termination from Seller, both parties shall be released
from any further duties and obligations hereunder except for payment for
Gas purchased, sold, processed, and/or transported hereunder prior to the
effective date of such
termination.
|
- 20
-
3.
|
During
periods of uneconomic operation of the Plant and/or suspension of
operation of portions thereof. Buyer/Processor, at the request of the
Seller, shall place back in service and operate such suspended portions of
the Plant as may be necessary to accept and process Seller's Gas. In
consideration thereof, Seller agrees to reimburse Buyer/Processor, in the
same proportion as the ratio of the Gas volumes supplied by Seller bear to
the total Gas volumes supplied to the Plant by other third-party sellers,
for any losses (costs of Plant operations in excess of revenues
attributable to Plant operations after deducting payments to all
contributing producers for Gas delivered to and processed by the Plant)
incurred by Buyer/Processor during such continued uneconomic operations.
Buyer/Processor may, at its option, elect to sell the Plant rather than
operate the same under the terms of this paragraph. In such event, Seller
shall be given notice thereof and first right of refusal to purchase its
proportionate share of the Plant from Buyer/Processor based upon
Seller's then dedicated capacity thereof upon terms to be negotiated
between the parties.
|
ARTICLE
XXI
OPTIONS
1.
|
Crude
Oil Purchase Option: Seller agrees to grant to Associated Natural Gas,
Inc., as an independent contractor, the first right of refusal to purchase
all crude oil and/or condensate produced from xxxxx drilled on the Leases
dedicated hereunder and which Seller owns, has an interest in, or is
authorized to market, such purchase to be at a price equal to the highest
published posted price of a major oil company for the area in
question.
|
Seller
shall notify Associated Natural Gas, Inc. in writing when Seller has crude oil
and/or condensate available on a well by well basis. Upon receipt of such
notice, Associated Natural Gas, Inc. shall have fifteen (15) days within which
to exercise its option to purchase the crude oil and/or condensate. In the event
Associated Natural
Gas, Inc. fails to exercise such option within the fifteen (15) day period,
Seller may market its crude oil and/or condensate production to any other
purchaser.
In the
event Associated Natural Gas, Inc. exercises its option to purchase the crude
oil and/or condensate offered by Seller, the parties agree to enter into a Crude
Oil Purchase Agreement to be provided by Associated Natural Gas, Inc. to
Seller.
- 21
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ARTICLE
XXII
SHRINKAGE
Buyer/Processor
agrees to use ordinary care in transporting the Gas produced by Seller and
purchased and gathered by Buyer/Processor hereunder to its point of
delivery at the Plant, and after processing such Gas, deliver the Gas to its
purchaser at the tailgate of said Plant. However, the parties understand and
agree that certain volumetric gains and losses in the Gas will occur and shall
be shared by and among Seller and other third-party sellers, whose Gas is also
being purchased by Buyer/Processor and transported to the Plant, in the
proportion that each party delivers Gas into Buyer/Processor's Gathering System
at their respective Point(s) of Delivery.
ARTICLE
XXIII
SPECIAL
PROVISIONS
After
initial start-up of the Plant referenced herein, Buyer/Processor agrees to
construct or cause to be constructed such additions to Seller's System as
may be necessary to connect each of Seller's xxxxx drilled thereafter, such
connection to be made and completed on a best efforts basis within sixty
(60) days of receipt of written notice from Seller that Seller has
completed logging said xxxxx. Seller agrees to have said xxxxx operational and
ready for production within ten (10) days of Buyer/Processor's
completion of connection thereof. In the event Buyer/Processor is unable to
connect said xxxxx within the time period referenced, Seller, at its option,
pursuant to written notice to Buyer/Processor, may request Buyer/Processor to
release the acreage attributable to said xxxxx from this Agreement, in which
event Buyer/Processor shall utilize its best efforts to cause such acreage to be
released from the Residue Gas Sales and Purchase Agreement referenced herein.
The acreage attributable to any of Seller's xxxxx to be released under this
provision shall be determined in accordance with the State of Colorado approved
well spacing in effect at the time of Seller's request for the particular
area and production zone completed.
- 22
-
ARTICLE
XXIV
MISCELLANEOUS
1.
|
No
waiver by either Seller or Buyer/Processor of any default of the other
under this Agreement shall operate as a waiver of any future default,
whether of like or different character or nature, nor shall any failure to
exercise any right hereunder be considered as a waiver of such right in
the future.
|
2.
|
The
parties hereto assume full responsibility and liability for the
maintenance and operation of their respective properties and agree to
indemnify and save harmless the other party from all liability and expense
on account of any damages, claims or actions arising from any act or
accident in connection with the installation, presence, maintenance or
operation of the property or equipment of the indemnifying party;
provided, however, that neither party shall be indemnified against damages
resulting from its own negligence.
|
3.
|
Respecting
the rights of third parties
hereunder:
|
|
A.
|
This
Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors, assigns, heirs, administrators and/or executors.
Either party may assign his or its right, title, and interest in, to and
under this Agreement, including, without limitation, any and all renewals,
extensions, amendments, and/or supplements hereto; provided, however, that
no such assignment shall in any way operate to enlarge, alter, or change
any obligation of the other party or parties hereto. No assignment shall
be effective or binding until a copy of same has been furnished to the
other party,
|
|
B.
|
Nothing
in this Agreement, expressed or implied, confers any rights or remedies on
any person or entity not a party hereto other than successors and assigns,
or heirs, administrators or executors of the parties
hereto.
|
- 23
-
4.
|
Seller
agrees that Buyer/Processor, its successors and assigns, shall have the
right, but not the obligation, at any time to redeem for Seller, its
successors and assigns, by payment of any taxes, deeds of trust, judgments
or other liens on the Leases described in Exhibit "A" hereto, on Seller's
Gas Reserves or the production therefrom, in the event of default of
payment by Seller, and be subrogated to the rights of the holder or
holders thereof. Seller further agrees that any such redemption and
payment by Buyer/Processor for Seller's account shall be applied by
way of a set-off against the purchase price which Buyer/Processor would
otherwise pay to Seller under Article X of this Agreement, such set-off to
continue until all payments by Buyer/Processor under this Agreement,
plus interest, have been fully recouped by
Buyer/Processor.
|
5.
|
Seller
expressly does not by the terms of this Agreement, sell, transfer or
assign unto Buyer/Processor any title or interest whatsoever in the Leases
or any pipe, meters, lines or other equipment of any nature owned or
used by Seller in the operation of its xxxxx and the
Leases.
|
6.
|
Any
notice, request, demand, statement, or payment provided for in this
Agreement, except as otherwise herein provided, shall be given in writing,
delivered in person or sent by U. S. Mail, postage prepaid to the parties
at the respective addresses herein referenced, or at such other
addresses as may be hereafter furnished by one party to the other party in
writing.
|
7.
|
It
is agreed that this Agreement may be ratified and adopted by any owner of
an interest in the Leases subject hereto, or any leases with which the
Leases subject hereto may be pooled or unitized, by execution and delivery
to Buyer/Processor of a separate instrument in writing, ratifying and
adopting this Agreement insofar as said owner's interest in any such lands
or leases is concerned, whereupon such owner shall become a party
Seller under this Agreement with like force and effect and to the same
extent as though such owner had executed this Agreement at the time of its
original execution and delivery; and all the terms and provisions of this
Agreement shall thereupon become binding upon Buyer/Processor and any such
interest owner.
|
8.
|
Each
Seller executing or ratifying this Agreement makes and enters into this
Agreement severally and not jointly with other sellers, and they are not
acting as partners, joint venturers, or otherwise jointly in this
transaction, and nothing herein contained or provided shall operate to
create, or be construed as creating, any such relationship. It is
essentially provided that there shall never be any joint liability against
the parties designated herein as Seller and that no single party Seller
shall be liable for the acts or omissions of any other single party
Seller.
|
- 24
-
9.
|
This
Agreement constitutes the entire agreement and understanding between the
parties hereto and supersedes and renders null and void and of no further
force and effect any prior understandings, negotiations or agreements
between the parties relating to the subject matter hereof. No provision of
this Agreement may be changed, modified, waived or discharged orally, and
no change, modification, waiver or amendment of any provision will be
effective except by written instrument to be executed and approved by the
parties hereto.
|
10.
|
This
Agreement shall be construed and governed by the laws of the State of
Colorado.
|
- 25
-
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
BUYER/PROCESSOR
- NATURAL GAS ASSOCIATES,, A PARTNERSHIP BY: ASSOCIATED NATURAL GAS, INC.,
MANAGING PARTNER
BY:
|
/s/ X.X. xxXxxxxxxxxxx | |||
X.X.
xxXxxxxxxxxxx, President
|
||||
ATTEST:
|
SELLER
(Corporation):
|
|||
ACEITE
ENERGY CORPORATION
|
||||
BY:
|
/s/ Xxxxxxx Xxxxx |
BY:
|
/s/ Xxxxxx Xxxxx | |
XXXXXXX
XXXXX, SECRETARY
|
XXXXXX
XXXXX, PRESIDENT
|
|||
SELLER
(Limited Partnership):
|
||||
XXXXXX
EXPLORATORY PROGRAM 1982-A LIMITED
|
||||
BY:
|
/s/
Xxxxxx Xxxxxxx
|
|||
Vice
President, GENERAL PARTNER
|
||||
Xxxxxx
X. Xxxxxxx, III
Xxxxxx
Energy Group
V.P.
Oil & Gas Operations
|
||||
SELLER
(Corporation)
|
||||
ATTEST:
|
CREEK
CATTLE COMPANY
|
|||
BY:
|
/s/ Xxxx Xxxxxxxxxxx |
BY:
|
/s/
Bart E Lalkf
|
|
ASSISTANT
SECRETARY
|
PRESIDENT
|
|||
STATE
OF COLORADO
|
)
|
)
SS.
|
|
CITY
AND COUNTY OF DENVER
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)
|
Before
me, Xxxxxxx
Xxxxx, a Notary Public in and for said County and State, on this 17th day of Nov., 1983,
personally appeared X.X. xxXxxxxxxxxxx,
known to me to be the President of Associated Natural Gas, Inc., a Colorado
corporation, the Managing Partner of Natural Gas Associates, a Colorado
partnership, on behalf of said partnership and acknowledged to me that he
executed this Agreement for the uses and purposes therein set
forth.
Given
under my hand and seal of office this 17th day of November, 1983
s/ Xxxxxxx
Xxxxx
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||
NOTARY
PUBLIC
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||
00000
Xxxxx Xxx
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||
MY
COMMISSION EXPIRES:
|
Xxxxxxxxxxx,
Xx 00000
|
|
March
21, 0000
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- 00
-
XXXXX
XX XXXXXXXX
|
)
|
)
SS.
|
|
CITY
AND COUNTY OF DENVER
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)
|
Before
me, Xxxxxxx
Shanbacher, a .Notary Public in and for said County and State, on this
14th day of
October, 1983,
personally appeared Xxxxxx Xxxxx and
Xxxxxxx Xxxxx,
known to me to be the President and Secretary, respectively, of Aceite Energy
Corporation, a Colorado corporation, on behalf of said corporation and
acknowledged to me that they executed this Agreement for the considerations
end purposes therein set forth.
Given
under my hand and seal of office this 14th day of October, 1983
/s/ Xxxxxxx Shanbacher
|
||
NOTARY
PUBLIC
|
||
MY
COMMISSION EXPIRES:
|
||
0-00-00
|
XXXXX
XX XXX XXXX
|
)
|
)
SS.
|
|
CITY
AND COUNTY OF (illegible)
|
)
|
Before
me, Xxxxx
Xxxxxx, a Notary Public, in and for said County and State, on
this 7th day
of Nov. 1983, personally appeared Xxxxxx X. Undent,
known to me to be the general partner of Xxxxxx Exploratory Program 1982-A
Limited, a New York limited partnership, on behalf of said limited partnership,
and acknowledged to me that he executed the same as his free act and deed and
for considerations and purposes therein expressed, and as the act and deed
of said partnership and in the capacity therein stated.
Given
under my hand and seal of office this 7th day of November,
/s/ Xxxxx Xxxxxx
|
||
NOTARY
PUBLIC
|
||
Xxxxx
Xxxxxx
|
||
MY
COMMISSION EXPIRES:
|
Notary
Public, State of New York
|
|
No.
00-0000000
|
||
(illegible)
|
||
Commission
Expires March 30, 198(illegible)
|
STATE
OF TEXAS
|
)
|
)
SS.
|
|
CITY
AND COUNTY OF POTTER
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)
|
Before
me, Xxxxx X.
XxXxxxxxx, a Notary Public in and for said County and State, on this
14th day of
November, 1983,
personally appeared Xxxxx X. Xxxxxx, Xx.,
and Xxxx
Xxxxxxxxxxx known to me to be the
President and Secretary, respectively, of Creek Cattle Company, a Texas
corporation, on behalf of said corporation and acknowledged to me that they
executed this Agreement for the considerations and purposes therein set
forth.
Given
under my hand and seal of office this 14th day of November
/s/
Xxxxx X. XxXxxxxxx
|
||
NOTARY
PUBLIC
|
||
MY
COMMISSION EXPIRES:
|
||
June 1, 1985
|
- 27
-
LEASE
SCHEDULE
EXHIBIT
“A" PAGE 1
STATE OF Colorado COUNTY OF
Weld
RECORDED
|
||||||||||||||||
LEASE
NO.
|
LESSOR
|
LESSEE
|
DATE
|
DESCRIPTION
|
ACRES
|
BOOK
|
PAGE
|
REC
|
||||||||
L.F.
Ranch Co.
|
Xxx
X. Xxxxxxxx
|
7/02/64
|
T3N,
R64W
Section
2: S1/2
Section
12: S1/2
Section
13: All
Section
24: S1/2, NW1/4
Section
25: All
|
320
320
640
480
640
|
518
|
1440221
|
||||||||||
T3N,
R63W
Section
6: 5E 0/0, X0/0 XX 0/0, XX 1/2 NE1/4 SE1/4 NW1/4
Section
30: W1/2
|
320
320
|
|||||||||||||||
Two
E Ranch
|
Xxx
X. Xxxxxxxx
|
9/08/64
|
T3N,
R64W
Section
4: All
Section
10: N1/2
Section
22: NW1/4 T4N, R64W
Section
33: All
Section
34: S1/2 (No "J" Sand) NW 1/4
|
320
320
280
320
|
523
|
1444837
|
||||||||||
Xxxxxx
X. Xxxxx & Xxxx X. Xxxxxx husband & wife
|
Caribou
Energy Inc.
|
1/21/83
|
T3N,
R64W
Section
26: NE1/4
|
160
|
988
|
1917128
1560586
|
||||||||||
|
||||||||||||||||
Two
E Ranches, Inc.
|
X.X.
Xxxx
|
2/16/70
|
T3N,
R64W
Section
26: NW1/4
|
160
|
639
|
|||||||||||
1511-A
|
Xxxxxxx
X. & Xxxxxx X. Xxxxxxx
|
Xxxxx
Xxxxx
|
12/03/79
|
T3N,
R64W
Section
24: NE1/4
|
160
|
897
|
1819261
|
|||||||||
1511-B
|
Xxxxx
X. & Xxxxxxxx xxx Xxxxxxxxxx
|
Xxxxx
Xxxxx
|
2/12/80
|
T3N,
R64W
Section
24: NE1/4
|
160
|
898
|
1819859
|
- 28
-
LEASE
SCHEDULE
EXHIBIT
“A-1” (Leases to be earned) PAGE 1 STATE OF Colorado COUNTY OF
Weld
RECORDED
|
||||||||||||||||
LEASE
NO.
|
LESSOR
|
LESSEE
|
DATE
|
DESCRIPTION
|
ACRES
|
BOOK
|
PAGE
|
REC
#
|
||||||||
L.F.
Ranch Col.
|
Xxx
X. Xxxxxxxx
|
7/02/64
|
T3N,
R63W
Section 8 : E1/2
Section
18 : SW1/4, N1/2 SE1/4
|
320
240
|
518
|
1440221
|
||||||||||
State
of Colorado
|
Xxxxxx
C- Xxxxxxx
|
3/1679
|
T3N,
R63W
Section
18 : S1/2 SE1/4
|
80
|
863
|
1784595
|
||||||||||
|
||||||||||||||||
Two
E Ranch
|
Xxx
X. Xxxxxxxx
|
9/08/64
|
T3N,
R64W
Section:
11: N1/2, except for 40 acres in the NE1/4 NE 1/4
Section
19: SW1/2
Section
20: SW1/4, E1/2
|
280
160
480
|
523
|
1444837
|
||||||||||
L.F.
Ranch CO.
|
Aceite
Energy Corp
|
6/09/83
|
T3N,
R64W
Section
11: 40 acres in the NE1/4 NE 1/4
|
40
|
Unrecorded
at this
time
|
|||||||||||
61375
|
Xxxxxxxx
Petroleum Company
|
Amoco
Production Company
|
3/08/77
|
T3N,
R64W
Section
23: S1/2
|
320
|
794
|
1716303
|
- 29
-
RECORDED
EXEMPTION NO. ________
- 30
-
EXHIBIT "C"
INLET GAS ANALYSIS
XXXXXX PLANT
|
Mole
%
|
GPM
|
||||
Hydrogen
Sulfide
|
(H2S)
|
0.00
|
—
|
|||
Nitrogen
|
[N2)
|
0.21
|
—
|
|||
Carbon
Dioxide
|
(C02)
|
2.50
|
—
|
|||
Methane
|
(C1)
|
74.08
|
—
|
|||
Ethane
|
(C2)
|
14.07
|
3.739
|
|||
Propane
|
(C3)
|
5.74
|
1.570
|
|||
Iso-Butane
|
(iC4)
|
0.80
|
.261
|
|||
Normal-Butane
|
(nC4)
|
1.64
|
.513
|
|||
Iso-Pentane
|
(iC5)
|
0.38
|
.137
|
|||
Normal-Pentane
|
{nC5)
|
0.35
|
.126
|
|||
Hexanes
plus
|
(C6+)
|
0.23
|
.098
|
|||
|
100.00
|
6.444
|
- 31 -