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EXHIBIT 10.27
[EOTT ENERGY OPERATING LIMITED PARTNERSHIP LETTERHEAD]
CRUDE OIL PURCHASE CONTRACT
March 5, 1999
Coho Marketing & Transportation, Inc.
Attn: Xx. Xxxx Xxxxx X'Xxxxxx
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Re: XXXX Xxxxxxxx Xx. 00000
Xxxx Xxxxxxxx No.____________
Gentlemen:
When accepted by you in the manner hereinafter indicated, this shall evidence
the agreement ("Agreement") between COHO MARKETING & TRANSPORTATION, INC.,
hereinafter referred to as "Coho" and EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
hereinafter referred to as "EOTT", under the terms of which, and for and in
consideration of the promises made hereunder, such parties shall sell and buy
the hereinafter described crude oil and/or condensate as follows:
I. TERM:
Commencing at 7:00 a.m. C.T. on March 1, 1999 through December 31, 1999,
and continuing annually thereafter, until terminated by either party
giving the other party written notice of such cancellation prior to
September 30 for each term.
If at any time during 1999, or any subsequent renewal period, the floor
pricing plan is in effect (meaning the price paid under the Agreement is
the floor price, even if the market did not automatically trigger the floor
price), EOTT, at its option, may extend the Agreement for an additional one
year term at the same terms and conditions.
II. TYPE OF OIL:
Coho shall deliver to EOTT Mississippi Heavy Sour type of crude oil from
leases identified on Exhibit "A" or new lease production acceptable to
EOTT.
III. QUANTITY:
Coho shall deliver to EOTT a mutually agreed minimum quantity of crude oil,
with a total calculated monthly from the expected minimum volumes from each
field, estimated to be approximately 1,185 BPD at 3/1/99. This minimum
monthly volume will be increased by 5% on April 1, 1999, May 1, 1999, June
1, 1999 and July 1, 1999 (1,244 BPD for April 1999, 1,306 BPD for May 1999,
1,371 BPD for June 1999 and 1,440 BPD for July 1999 through end of term).
Coho may revise the minimum quantity of crude oil to be delivered On a
monthly basis for any renewal term by providing data to support a volume
reduction.
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IV. DELIVERY:
Coho shall deliver at the leases through meters and/or tank gauges into
EOTT's designated trucks.
V. PRICE:
For each barrel of crude oil purchased by EOTT, EOTT shall pay the higher
of (A) a mutually agreed floor price of $8.50 per barrel or (B) EOTT's
posted price for West Texas Sour crude oil, gravity delivered, plus $.50
per barrel ("Posted Price"). For pricing purposes, all crude oil delivered
hereunder during any calendar month will be considered to have been
delivered in equal daily quantities during such month.
The floor price will be an option for payment for each barrel purchased by
EOTT in any month in which any field reaches its minimum expected volume
(as set forth on Exhibit "B" attached hereto and made a part hereof). The
monthly volume will be calculated by EOTT based on the total barrels
purchased by EOTT from that field by the number of calendar days in the
month.
For any month in which the floor price is an option for payment and the
minimum monthly volumes have not been met by Coho, before determining which
price is higher, the floor price will be reduced by the percentage of the
under delivery. For example, if the minimum monthly volume is 1,000
barrels, but actual deliveries from that field total 900 barrels, the price
to be paid per barrel shall be the higher of (A) 90% of the floor price or
(B) the Posted Price.
If, for any subsequent renewal period, Coho does not elect to renew the
floor price option of the pricing provision, all crude oil will be paid at
the Posted Price.
VI. PAYMENT:
Payment shall be made pursuant to open division orders, executed by each
party, less taxes, payable by check on the twentieth (20th) day of the
month following the month of delivery. In the event the payment due date
falls on a Saturday or a bank/Federal holiday other than a Monday, payment
shall be due on the last preceding business day. Should the payment due
date fall on a Sunday or a Monday bank/Federal holiday, payment shall be
due on the following business day.
VII. DIVISION ORDERS:
All division orders, division order documents and division order matters
shall be sent to the following addresses:
EOTT Energy Operating Limited Partnership Coho Marketing & Transportation, Inc.
ATTN: Division Order Department ATTN; Division Order Department
P.O. BOX 4666 00000 Xxxxxxx Xxxx, Xxxxx 000
XXXXXXX. XX 00000-0000 Xxxxxx, Xxxxx 00000
If any division orders are executed pursuant to this Agreement, and in the
event of any irreconcilable conflict between the terms of any such division
orders and this Agreement, the terms of this Agreement shall be deemed
controlling, even if the division orders are dated subsequent to this
Agreement.
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VIII. INVOICES:
Invoices and any other invoicing matters/documents shall be mailed to the
following addresses:
EOTT Energy Operating Limited Partnership Coho Marketing & Transportation, Inc.
ATTN: Crude Oil Accounting ATTN:________________________
P.O. Box 4666 00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000 Xxxxxx, Xxxxx 00000
IV. SPECIAL PROVISIONS:
A. All crude oil delivered to EOTT hereunder will be crude oil delivered
in accordance with the quality standards set forth herein [NOTE: We
either have to attach the General Provisions from the first contract
or insert quality standards], and Coho shall fully indemnify EOTT
against and hold EOTT harmless from any loss, damage, harm,
liability, claim, action, suit, demand or complaint of any nature
whatsoever, which EOTT may suffer as a result of receiving
non-standard crude oil from Coho at the point of title transfer set
forth herein as a consequence of Coho's intentional addition in any
such crude oil of any contaminant.
B. Coho represents and warrants to EOTT that it has full right and
authority to enter into this Agreement for all of the crude oil
committed by Coho hereunder and that Coho is violating no duty or
obligation which it may have with any third party by entering into
this Agreement.
C. Coho shall fully defend and indemnify EOTT against, and hold EOTT
fully harmless from, any claim, action, suit, demand or complaint (of
any nature whatsoever) which any governmental entity or any interest
owner in any well or lease from which the crude oil delivered to EOTT
was produced may bring in connection with (i) Coho's ability to enter
into this Agreement with EOTT, or (ii) any production proceeds out by
EOTT pursuant to this Agreement.
D. Neither party shall assign this Agreement to any person or firm
except upon written consent by the other party, including credit
approval, which consent shall not be unreasonably withheld. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, representatives, successors
and assigns.
Please confirm your acceptance of, and agreement with, this transaction
by signing below in the space provided and return facsimile to 000-000-0000
within the next 48 hours, followed by return by regular mail. If we have not
heard from you to the contrary within the foregoing time frame, your acceptance
will be presumed.
Very truly yours,
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT Energy Corp., its General Partner
By: /s/ XXX X. XXXX
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Name: Xxx X. Xxxx
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Title: Regional Business Manager
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Fax: (000) 000-0000
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AGREED TO AND ACCEPTED THIS 1 DAY OF APRIL, 1999 BY:
COHO MARKETING & TRANSPORTATION, INC.
By: /s/ XXXX XXXXX X'XXXXXX
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Name: Xxxx Xxxxx X'Xxxxxx
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Title: Sr. Vice President
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Fax:
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