EXHIBIT 10.9
GAS PURCHASE AGREEMENT
DATED JULY 31, 1997
BY AND BETWEEN
DOMINION PIPELINE COMPANY, MANAGER
BBS-LEGS JOINT VENTURE
("BUYER")
AND
MOOSE OPERATING CO., INC.
("SELLER")
GAS PURCHASE AGREEMENT
THIS AGREEMENT; made and entered into as of this _____ day of July, 1997,
by and between DOMINION PIPELINE COMPANY, a Texas corporation, as Manager of the
BBS-LEGS Joint Venture, hereinafter referred to as "BUYER", and MOOSE OPERATING
CO, INC., a Texas corporation, hereinafter referred to as "SELLER," whereby
BUYER and SELLER have agreed, and in consideration of the premises hereof do
hereby agree, to the sale by SELLER and purchase by BUYER of all gas owned or
controlled by SELLER and attributable to the xxxxx with receipt point(s) as
described in Exhibit "A" and located on those lands and leases described in
Exhibit "B" attached hereto and incorporated herein, using commercially
reasonable efforts, subject to the general terms and conditions as follows:
I. DEFINITIONS
The following terms and expressions, when used in these general terms and
conditions and in this Agreement have the following meanings:
1.1 Day - A period of twenty-four (24) consecutive hours commencing at
seven (7:00) a.m., Central Time, or such other period as the parties may agree
upon.
1.2 Month - A period commencing on the first day of each calendar month and
ending on the first day of the next following calendar month.
1.3 Year - A period of three hundred sixty-five (365) consecutive days,
provided that any such year which contains the date of February 29 shall consist
of three hundred sixty-six (366) consecutive days.
1.4 British thermal unit ("Btu") - One (1) Btu shall mean the quantity of
heat required to raise the temperature of one (1) pound of water from fifty-nine
degrees Fahrenheit (59 degrees F) to sixty degrees Fahrenheit (60 degrees F) at
a constant pressure of fourteen and sixty-five hundredths pounds per square inch
absolute (14.65 psia). Total Btu's shall be determined by multiplying the total
volume of natural gas delivered times the gas heating value expressed in Btu's
per cubic foot of gas adjusted on a dry basis.
1.5 Heating value - The quantity of heat, measured in Btu's, produced by
combustion in air on one (1) cubic foot of anhydrous gas at a temperature of
sixty degrees Fahrenheit (60 degrees F) at a constant pressure of fourteen and
sixty-five hundredths pounds per square inch absolute (14.65 psia), the air
being at the same temperature and pressure as the gas, after the products of
combustion are cooled to the initial temperature of the gas and air, and after
condensation of the water formed by combustion.
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1.6 Gas - Natural gas, including gas-well gas, casinghead gas, and/or
residue gas resulting from processing both casinghead gas and gas-well gas, and
shall include liquefied natural gas and synthetic gas in a vaporized state.
1.7 Mcf - The quantity of natural gas occupying a volume of one thousand
(1,000) cubic feet at a temperature of sixty degrees Fahrenheit (60 degrees F)
and at a pressure of fourteen and sixty-five hundredths pounds per square inch
absolute (14.65 psia).
1.8 BUYER's Transporter - A third-party natural gas transmission pipeline
system which accepts deliveries of natural gas from BUYER at the first point
downstream of BUYER's pipeline facilities; such third-party system may change
from time to time at BUYER's election to make first deliveries to an alternate
third-party pipeline.
1.9 GPM - the quantity of natural gas liquids, ethane and heaviers, which
are contained in an Mcf of natural gas, measured as gallons.
1.10 High CO\\2\\ Gas - Gas otherwise of pipeline quality that is delivered
by SELLER and received by BUYER pursuant to this contract which contains in
excess of 5.5% CO\\2\\ by volume.
II. POINT(S) OF RECEIPT AND BUYER'S FACILITIES
2.1 The Point(s) of Receipt of all gas purchased hereunder shall be at a
mutually agreeable point as described in Exhibit "A" attached hereto and
incorporated herein and title to said gas shall pass from SELLER to BUYER at
said Point(s) of Receipt.
2.2 SELLER, at its own expense, shall construct, maintain and operate all
facilities reasonable and necessary to deliver SELLER's gas to BUYER at the
Point(s) of Receipt.
2.3 BUYER, shall construct, or cause to be constructed, all facilities
reasonable and necessary to accept SELLER's gas from SELLER at the Point(s) of
Receipt.
2.4 SELLER shall be in control and possession of the gas sold and purchased
hereunder and responsible for any damage or injury caused thereby until the same
shall have been delivered to BUYER at the Point(s) of Receipt.
2.5 BUYER, or BUYER's agent, shall be in control and possession of the gas
sold and purchased hereunder and responsible for any damage or injury caused
thereby after the same shall have been delivered at the Point(s) of Receipt.
III. QUANTITY
Beginning on the date of initial delivery of gas hereunder, and for the
term hereof, SELLER agrees to make available to BUYER 100% of all gas owned or
controlled by SELLER and attributable to those certain leases and lands
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described in Exhibit "B" attached hereto, and limited thereby. In the event
such volumes available to BUYER from SELLER are less than 250 MCF per day for
more than thirty (30) consecutive days, then BUYER may elect to terminate its
gas purchase obligation hereunder upon giving thirty (30) days prior written
notice to BUYER. During the primary term hereof, SELLER agrees to deliver to
BUYER a total volume of gas covered by this agreement of not less than 800,000
MMBtu. In the event that SELLER fails to deliver said volume prior to the
expiration of the primary term of this agreement, then SELLER and BUYER shall in
good faith endeavor to negotiate a mutually agreeable solution to make up the
volume commitment shortfall by SELLER, and in the event BUYER and SELLER are
unable to mutually agree on a solution within thirty (30) days after the
expiration of the primary term hereof, then SELLER shall pay to BUYER a volume
commitment shortfall penalty of an amount equal to the difference between
800,000 MMBtu and the actual MMBtus delivered, multiplied by ten cents ($0.10).
IV. MEASUREMENT, QUALITY AND PRESSURE
4.1 BUYER is not obligated to take any gas unless such gas is economically
merchantable gas which meets all specifications and pressures required by BUYER
or BUYER's Transporter(s). SELLER also agrees that BUYER, at its option, (which
BUYER may exercise at any time and from time to time in its sole discretion) may
either (a) refuse to construct facilities to or accept delivery of any gas that
is not merchantable gas which meets all of the quality specifications of BUYER
or BUYER's Transporter, or (b) waive the provisions of this Article IV by
accepting delivery of such gas. Any such waiver or waivers by BUYER from time to
time shall not be deemed to establish a course of performance or otherwise be
construed as obligating BUYER to continue such waiver or waivers in effect when,
in BUYER's sole judgment, then existing business circumstances indicate to BUYER
that BUYER's best interests would be served by not continuing such waiver or
waivers.
4.2 Notwithstanding any of the foregoing provisions of Article II and
Paragraph 4.1, SELLER may from time to time deliver gas volumes to BUYER at the
Receipt Point(s) which contain carbon dioxide (CO\\2\\) in excess of two percent
(2%) by volume, but with such CO\\2\\ content not to exceed five and one-half
percent (5.5%) (High CO\\2\\ Gas) at any time. Should SELLER deliver gas volumes
to BUYER that are High CO\\2\\ Gas volumes as defined herein and BUYER agrees to
accept such volumes, then SELLER agrees to pay all reasonable direct charges
incurred by BUYER for treating of such High CO\\2\\ Gas as may be charged by a
third-party treater or the actual costs incurred by BUYER. Such direct charges
shall include fees, fuel and shrinkage paid by BUYER on a dollar for dollar
basis, and shall be deducted from the gross proceeds payable to SELLER under
Articles V and IX hereof. Using standard oilfield operating
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practices for corrosion control, Seller shall provide for the regular injection
of chemical inhibitors at the wellhead or at SELLER's production facilities as a
precaution to protect BUYER's pipeline and measurement facilities from the High
CO\\2\\ Gas produced by SELLER.
4.3 Gas volumes measured by BUYER with the use of orifice meter(s) shall be
determined in accordance with the provisions of the Gas Measurement Committee
Report No. 3 of the American Gas Association, as revised in 1966, as amended
and/or supplemented from time to time, and gas volumes measured by Buyer with
the use of positive meter(s) shall be determined on the basis of Gas Measurement
Committee Report No. 7 of the American Gas Association, as revised in 1981 and
as may be amended and/or supplemented thereafter from time to time. For the
purpose of measurement, a cubic foot of gas is defined as the volume of gas
contained in one cubic foot of space at a standard pressure base of fourteen and
sixty-five one-hundredths (14.65) pounds per square inch absolute and a standard
temperature base of sixty degrees Fahrenheit (60 degrees F.). For the purposes
of measurement, calculations and meter calibration the atmospheric pressure
shall be assumed to be fourteen and seven-tenths (14.7) pounds per square inch
absolute. Temperature shall be determined by a recording thermometer
continuously used and installed by Buyer so as to record properly the
temperature of the gas being metered, and specific gravity shall be determined
by Buyer by use of a gravity balance of standard make, or, at the option of
Buyer, by such other tests and instruments as may be standard for such purposes
in the gas industry.
4.4 At quarterly intervals, or more often if required pursuant to paragraph
5.5; Article V hereof, the meters and instruments shall be calibrated and if in
the aggregate they are found to be inaccurate by more than one percent (1%), the
quantities of gas based on such registration shall be corrected at the rate of
inaccuracy for any period which is known or agreed upon.
4.5 The gross heating value of the gas shall be determined by BUYER or
BUYER's Transporter by taking gas samples and having the British Thermal Unit
content per cubic foot determined in a mutually agreeable laboratory by means of
chromatographic analysis or a calorimeter. The British Thermal Unit content per
cubic foot shall be determined for a cubic foot of gas at a temperature of sixty
degrees Fahrenheit (60 degrees F) at an absolute pressure of fourteen and sixty-
five one hundredths (14.65) pounds per square inch, and corrected to the actual
water vapor content of the gas being delivered.
4.6 SELLER shall deliver Gas hereunder, or cause Gas to be delivered at
pressures sufficient to cause such Gas to enter BUYER's facilities, but not in
excess of the applicable maximum allowable operating pressure specified in
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the transportation agreement between Buyer and Buyer's Transporter, nor in
excess of BUYER's maximum allowable operating pressure, nor more than 1,050
psig. SELLER shall inform BUYER as often as may be necessary of the delivery
rate and pressure of the Gas delivered hereunder.
4.7 The foregoing notwithstanding, BUYER and BUYER's Transporter(s) shall
have no obligation at any time to provide gas treating services including but
not limited to compression, separation, dehydration, or processing.
V. PRICE
5.1 For all gas delivered to BUYER at the Point(s) of Receipt, subject to
all applicable provisions of this Agreement and corrected to the measurement
basis set forth herein, BUYER and SELLER agree that beginning on the date of
initial delivery hereunder and continuing thereafter until redetermined as
provided herein, the price per MMBtu (dry) paid to SELLER shall be as follows:
(i) if the commingled stream of SELLER'S gas volumes delivered to BUYER
contains an average gas liquids content of greater than 4.5 GPM, as
measured at the Point(s) of Receipt, BUYER shall pay SELLER a price
equal to the TET Index plus seven (7) cents per MMBtu;
(ii) if the commingled stream of SELLER'S gas volumes delivered to BUYER
contains an average gas liquids content of between 3.51 GPM and 4.5
GPM, as measured at the Point(s) of Receipt, BUYER shall pay SELLER a
price equal to the TET Index plus four (4) cents per MMBtu;
(iii) if the commingled stream of SELLER'S gas volumes delivered to BUYER
contains an average gas liquids content of between 2.51 and 3.5 GPM,
as measured at the Point(s) of Receipt, BUYER shall pay SELLER a
price equal to the TET Index plus two (2) cents per MMBtu;
(iv) if the commingled stream of SELLER'S gas volumes delivered to BUYER
contains an average gas liquids content of between 2.00 and 2.5 GPM,
as measured at the Point(s) of Receipt, BUYER shall pay SELLER a
price equal to the TET Index less one (1) cents per MMBtu;
(v) if the commingled stream of SELLER'S gas volumes delivered to BUYER
contains an average gas liquids content of less than 2.00 GPM, then
SELLER has the right to market to a third party, provided, however,
BUYER shall have the right to match such third party offers.
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5.2 The TET Index as referred to hereinabove shall mean the Index Price as
published in the first issue of each production month of Inside FERC's Gas
Market Report under "Prices of Spot Gas Delivered to Pipelines", Texas Eastern
Transmission Corporation (TET, South Texas). If the Inside FERC Price ceases to
exist, the parties shall mutually agree upon a price to be paid hereunder.
5.3 The price paid hereunder shall be inclusive of and shall not be
increased for all royalties, excess royalties, production or severance taxes, or
any other taxes imposed upon the gas prior to delivery or otherwise borne by
SELLER, and any other costs or charges for which SELLER is liable.
5.4 For purposes of accounting and determination of the price payable and
total amounts due SELLER hereunder, BUYER and SELLER agree to accept the MCF
volumes as measured at the Point(s) of Receipt and attributable to SELLER and
the Btu and GPM values determined at this point.
5.5 Notwithstanding any of the foregoing provisions of this Article V, the
price to be paid by BUYER to SELLER as provided herein shall be reduced by fees,
fuel, and shrinkage incurred by BUYER for treating of High CO\\2\\ Gas pursuant
to the foregoing paragraph 4.2 Article IV; the price paid by BUYER shall be
further reduced by any pro rata losses and gas unaccounted for, if any, except
in the case where losses exceed two percent (2%) of all volumes received from
SELLER, as measured on a Btu basis. For purposes of determining pro rata MMBtu
losses and gas unaccounted for if any, BUYER may allocate back to the Point(s)
of Receipt all such losses based on BUYER's total MMBtu deliveries to BUYER's
Transporter of SELLER's gas, as measured at the point of interconnect of BUYER
with BUYER's Transporter. In the event that such losses exceed two percent (2%)
and BUYER or BUYER's Transporter is unable to correct the cause of loss and
BUYER continues to accept deliveries of Gas, then BUYER shall be liable for all
continuing losses exceeding two percent (2%) of the total volumes received from
SELLER. In the event losses of gas exceed one and one-half percent (1.5%) for
two consecutive months, BUYER agrees to undertake audits of all measurement
charts and conduct additional calibrating tests of the measurement facilities in
an effort to identify and correct the causes of such losses. BUYER agrees to
diligently maintain and regularly perform tests on its measurement facilities
and to take all reasonable steps to ensure the accuracy and integrity of its
measurement.
5.6 SELLER agrees that it shall pay all production and severance taxes and
ad valorem taxes due and payable on the gas produced from the respective
properties covered hereby and does hereby agree to indemnify and hold harmless
BUYER from any liability or obligations pertaining thereto.
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5.7 Other terms, conditions and provisions notwithstanding, it is agreed
that BUYER and SELLER have entered into this exclusive restricted sales
agreement in its entirety for the term hereof, whereby SELLER agrees to sell and
BUYER agrees to buy the described gas from the respective leases and lands set
forth on Exhibit "B" hereof. This shall be construed as a firm commitment to buy
and sell hereunder the respective quantities of economically merchantable gas
produced by SELLER from the respective properties. SELLER shall not market or
commit the gas hereunder to any third parties in contradiction of BUYER's rights
hereunder.
VI. TERM
6.1 This agreement shall continue in full force and effect for a primary
term of eighteen (18) months, effective as of the date of initial deliveries
received by BUYER from SELLER. Thereafter, this agreement will continue in full
force and effect on a calendar month to month basis and may be terminated by
either party giving not less than thirty days prior written notice.
Notwithstanding the above, the primary term hereof will be extended for an
amount of time equal to all periods of force majeure as described in Article
XIII hereof.
6.2 Upon notice of termination of this agreement pursuant to Article 6.1
above, SELLER will convey to Buyer the "right to match" the terms and conditions
of any third-party buyer's bona fide and verifiable offer to purchase the
production covered under this agreement. Such third-party gas purchase offer
shall have a primary term of at least six (6) months. SELLER shall provide BUYER
with a complete and exact copy of such third party offer and BUYER shall have
ten (10) business days from receipt of said offer from SELLER. If BUYER elects
to match the third party offer, BUYER shall continue to gather and purchase
SELLER's gas under such new terms and conditions which shall also incorporate
this paragraph. Should BUYER elect not to match such proposal, or fail to
respond within said ten (10) business day period, then this agreement and the
right to match shall terminate; provided however, should SELLER fail to enter
into a contract with the third party whose offer was basis for the match and
under the terms of such offer, then BUYER's right to match shall be reinstated.
6.3 Notwithstanding the foregoing, at SELLER's election, BUYER's right to
match shall be deemed terminated if one of the following events occurs:
a) the operatorship of SELLER's producing properties changes to a third-
party operator owning 25% or more of the working interest in the
properties; or
b) the sale of more than 50% of the working interests of SELLER's
properties to a third party, or
c) a change of ownership control of Moose Oil & Gas Company.
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VII. NOTICES
Any notice, request, demand or statement provided for in this Agreement
shall be in writing and shall be deemed delivered when mailed to the address of
each of the parties hereto as follows:
BUYER: DOMINION PIPELINE COMPANY
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
FAX: 713/000-0000
Attn: Xxxx X. Xxxxx
SELLER: MOOSE OPERATING CO., INC.
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
FAX: 713/000-0000
Attn: Xxxx X. Xxxxxxxxxxx
or any such other address as SELLER or BUYER shall from time to time designate
by letter properly addressed.
VIII. DEDICATION
8.1 SELLER hereby dedicates to the performance of this Agreement all gas
owned or controlled by SELLER and attributable to lands covered by those leases
and lands designated or described in Exhibit "B" attached hereto, to the depths
described in Exhibit "B", including, without limitation, all additional lands
subsequently pooled or unitized pursuant to the terms of such leases or unit
agreements.
8.2 SELLER shall maintain its leases and units and shall conduct the
operation of its leases and units as a reasonable, prudent operator and shall
maintain production hereunder at such rates, volumes and pressures as SELLER
deems advisable, subject to all engineering, geological and other factors
affecting production of the field and so long as its leases and units are
capable of producing in commercial quantities.
IX. PAYMENT
On or before the twentieth (20th) day of the month following production
BUYER shall provide to SELLER a statement setting forth the volumes and price
for gas received by BUYER during the preceding month. BUYER shall remit to
SELLER all amounts due for the volumes of gas delivered pursuant to this
Agreement no later than the first (1st) day of the second month following
production. SELLER shall earn interest at the lower rate of a) 8% per annum or
b) the highest rate permitted by applicable law on all undisputed dollar amounts
due SELLER from BUYER and not paid timely as provided hereinabove.
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X. SALE AND PASSAGE OF MIX
Title to the gas shall pass and the sale shall be made from SELLER to BUYER
at the applicable Point(s) of Receipt referred to in Paragraph 2.1 in Article
II.
XI. WARRANTY OF TITLE
SELLER represents and warrants to BUYER that: (i) it has full and
unqualified title and/or authority to sell all gas delivered hereunder, (ii)
such gas is free from all liens and adverse claims attaching prior to its
delivery to BUYER for BUYER's account at the Point(s) of Delivery, and (iii)
SELLER shall, if notified thereof by BUYER, hold BUYER harmless from and against
all claims, suits, actions, damages, losses, costs and expenses of every kind
and character arising from each and every claim of any and all persons against
such gas prior to its delivery for BUYER's account at the Point(s) of Delivery.
XII. FORCE MAJEURE
12.1 The term "force majeure," as employed herein, shall include, without
limitation the following: acts of God and the public enemy, wars, blockades,
civil unrest, rebellion, insurrections, riots, lockouts, strikes or any other
industrial strife, interruption of civil or public service, hurricanes, freezing
of xxxxx or lines of pipe, breakage or failure of xxxxx and equipment or
pipelines, vandalism, inability to obtain, or interruption of, transportation or
necessary gas treatment services, inability to obtain materials, contractors,
supplies, permits or labor and any laws, orders, rules, regulations, acts or
restraints of any governmental authority, whether or not lawfully made, and any
other causes, whether of the kind herein enumerated or within the control of the
party claiming suspension.
12.2 If either party is rendered unable, wholly or in part, by force
majeure to perform or comply with any obligations or conditions of this
Agreement, upon giving notice in writing and providing reasonably full
particulars to the other party, such obligations or conditions, so far as they
are affected by such force majeure, shall be suspended during the continuance of
any inability so caused but for no longer period, and such party shall be
relieved of liability and shall suffer no prejudice for failure to perform the
same during the period; provided however, that BUYER's obligation to make
payments for gas accepted shall not be suspended and further provided that the
dedication of SELLER's leaseholds and/or xxxxx shall not be waived or suspended.
The force majeure condition shall be remedied so far as practicable with
reasonable dispatch. Settlement of strikes and lockouts shall be wholly within
the discretion of the party having the difficulty.
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12.3 If at some future date there is change in any law, rule or regulation,
and by such change, a governmental certificate or authorization is required, or
SELLER is prevented, prohibited or frustrated from carrying out the terms of
this Agreement in the manner contemplated hereunder, then this Agreement, at the
sole discretion of SELLER, may be canceled.
XIII. GOVERNMENTAL AUTHORIZATIONS
13.1 This Agreement shall be subject to all valid and applicable laws of
the United States and of the states wherein it is to be performed, and to the
applicable valid rules, regulation or order of any regulatory agency or
governmental authority having jurisdiction, and the parties shall be entitled to
regard all applicable laws, rules and regulations (federal, state or local) as
valid and may act in accordance therewith until such time as the same may be
declared invalid by final judgment of a court of competent jurisdiction.
13.2 Promptly upon the execution of this Agreement, SELLER and BUYER shall
proceed to obtain such governmental and other regulatory authorizations, if any,
as required for the sale and purchase contemplated herein, provided that each
party reserves the right to file and prosecute applications for such
authorizations, any supplements or amendments thereof, and if necessary, any
court review, in such manner as it deems to be in its best interest, including
the right to withdraw its application.
13.3 Each party will cooperate, with the other and with any third party
transporting the gas sold hereunder for either party, in obtaining and
maintaining whatever authorizations may be required by such governmental
authorities.
13.4 In no event shall the volumes of gas that SELLER shall be obligated to
sell or that BUYER shall be obligated to purchase or that BUYER'S Transporter be
obligated to transport under the terms of this Agreement ever exceed the volumes
of gas which can be legally produced under applicable rules and regulations of
the Railroad Commission of Texas in the course of reasonably prudent operations.
13.5 The performance of this Agreement is conditioned upon the continuing
receipt, by SELLER, BUYER, and any third party providing transportation to
SELLER or BUYER, of all regulatory or other governmental authorizations
necessary for the transportation and sale and purchase hereunder, on terms
acceptable to the party receiving such authorizations.
XIV. INDEMNIFICATION
14.1 BUYER and SELLER shall indemnify, defend and save harmless each other
from and against any and all loss, damage, injury, liability, and claims for
injury to or death of persons (including any employee of BUYER or
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SELLER), or for loss or damage to property (including the property of BUYER or
SELLER, resulting directly or indirectly from either party's performance of its
respective obligations arising pursuant to this Agreement (including the
installation, maintenance and operation of property, equipment and facilities)
or any other operations under this Agreement.
14.2 Other provisions of this Agreement notwithstanding, neither BUYER or
SELLER shall be liable for any indirect, special, incidental or consequential
damages arising out of or related to this Agreement.
XV. ASSIGNMENTS
15.1 Any successor, representative or assignee which shall succeed by
purchase, merger or consolidation to the properties, substantially as an
entirety, of SELLER or BUYER, as the case may be, shall be entitled to the
rights and shall be subject to the obligations of its predecessor in title under
this Agreement. Either party may assign or pledge this Agreement, in whole or in
part effective the first day of the month in which written notice of assignment
is given to the other party. This Agreement shall be binding on successors and
assigns of the parties.
15.2 Should SELLER assign this Agreement to another (Assignee), BUYER may
suspend payments for gas hereunder upon notice of such assignment until
execution by Assignee of an agreement under which Assignee assumes SELLER'S
obligations under the contract, and sets out instructions for payment and
indemnifies BUYER against claims resulting from payment to Assignee or any agent
designated by Assignee.
15.3 Except for the parties hereto, their successors and assigns, no person
shall have the rights as a third party beneficiary or otherwise under this
Agreement.
XVI. GOVERNING LAW
16.1 The interpretation and performance of this Agreement shall be in
accordance with the laws of the State of Texas. Should any legal disputes arise
hereunder, the parties do hereby agree and stipulate that this Agreement was
made and entered into in Xxxxxx County, Texas, which shall be the situs of venue
hereunder.
16.2 BUYER and SELLER hereby agree that any controversy arising between the
parties to this Agreement shall be submitted to non-binding arbitration. The
arbitrator shall be chosen by mutual consent of BUYER and SELLER. In the event
that the parties cannot timely agree upon the selection of an arbitrator, then
BUYER and SELLER shall each promptly select an arbitrator, who shall then
promptly select a third arbitrator. The decision of the majority of the three
(3) arbitrators shall not be binding upon BUYER or SELLER.
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16.3 Each party hereto shall be responsible for and shall pay its own costs
and expenses arising from arbitration, including attorneys fees, administrative
fees, and arbitration fees.
XVII. MISCELLANEOUS
17.1 No waiver by either party of any one or more defaults by the other in
the performance of any provisions of this Agreement shall operate or be
construed as a waiver of any other default or defaults, whether of a like or of
a different character.
17.2 This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof; supersedes all prior agreements and
understandings, whether oral or written, which the parties may have in
connection herewith and may not be modified except by written agreement of the
parties. The parties and their legal counsel have cooperated in the drafting of
this Agreement and it shall therefore be deemed their joint work product and
shall not be construed against either party by reason of its preparation.
17.3 Each party shall do all necessary acts and make, execute and deliver
such written instruments as shall from time to time be reasonably required to
carry out the terms of this Agreement.
17.4 If any provision of this Agreement shall be held invalid, illegal or
unenforceable to any extent and for any reason by a court of competent
jurisdiction, the remainder of this Agreement shall not be affected thereby and
shall be enforceable to the full extent permitted by law.
17.5 BUYER and SELLER shall have the right, at its sole expenses and during
normal working hours, to audit the accounts and records of the other party to
the extent necessary to verify the volumes and charges pursuant hereto. Such
rights to audit shall be in force during the term of this Agreement and one (1)
year hereafter. No change to any payment or to the volumes or heating values
underlying such payment shall be made more than one (1) years after the making
of such payment, nor shall any suit, action or proceeding be commenced with
respect to any payment of the volumes or heating value underlying such payment
more than one (1) years after the making of such payment, provided that fraud by
either party shall not be waived under any circumstances.
17.6 The terms of this Agreement, including, but not limited to the price
paid for gas, the identified transporting pipelines (if any) and cost of
transportation, the volumes of gas purchased or sold or to be purchased and
sold, and all other material terms of this Agreement shall be kept confidential
by the parties hereto, except to the extent that any information must be
disclosed to a non-signatory as required by law or for the purpose of
effectuating transportation of the gas subject to this Agreement.
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17.7 This Agreement may be executed in multiple counterparts, each of which
shall constitute an original but all of such counterparts taken together shall
constitute only one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
BUYER: SELLER:
DOMINION PIPELINE COMPANY, MOOSE OPERATING CO., INC.
MANAGER, BBS-LEGS JOINT VENTURE
/s/ Xxxx X. Xxxxx /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------- ------------------------------
Xxxx X. Xxxxx Xxxx X. Xxxxxxxxxxx
President President
13
STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
BEFORE ME, the undersigned authority, on this day personally appeared, Xxxx
X. Xxxxxxxxxxx, President of MOOSE OPERATING CO., INC., a Texas corporation,
known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same as the act and deed
of said corporation for the purposes and consideration therein expressed and in
the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, on this 31st day of July, 1997.
/s/ Xxxx Xxxxxxx
-------------------------
Notary Public in and for
The State of Texas
My Commission Expires: 10/9/2000
STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
BEFORE ME, the undersigned authority, on this day personally appeared, XXXX
X. XXXXX, President of DOMINION PIPELINE COMPANY, a Texas corporation, Manager,
BBS-LEGS Joint Venture, known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he executed the same as the
act and deed of said corporation for the purposes and consideration therein
expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, on this 31st day of July, 1997.
/s/ Xxxx Xxxxxxx
----------------------------
Notary Public in and for
The State of Texas
My Commission Expires:10/9/2000
14
EXHIBIT "A"
POINT(S) OF RECEIPT
Attached to and made part of that certain Natural Gas Purchase Agreement
between DOMINION PIPELINE COMPANY (BUYER) and MOOSE OPERATING CO., INC.,
(SELLER), dated July __, 1997.
Each of the Point(s) of Receipt will be designated as mutually agreed upon
by the parties hereto. Such Point(s) of Receipt will be at the production
facilities of SELLER's xxxxx.
A-i
EXHIBIT "B"
Lands and leases in Lavaca County, Texas, affected by and included within
the provisions of the attached contract dated July __, 1997 by and between
DOMINION PIPELINE COMPANY (BUYER) and MOOSE OPERATING CO., INC. (SELLER) and
encompassing the Dedication as referred to in Article IX of this Agreement, and
as described below:
Those lands and leases lying under the following existing xxxxx owned and
operated by SELLER.
i) Xxxxxxxx #1
ii) Xxxxxx Gas Unit #1
iii) Renger Gas Unit #1
Plus
all xxxxx subsequently drilled by SELLER during the term hereof and are drilled
to a depth which reaches the lower Xxxxxx formations on lands within a radius
of 2 miles of the Xxxxxxxx #1;
Plus
any other xxxxx which Moose elects to tie into BUYER's existing system servicing
the above-referenced xxxxx, including the Xxxxxx #1 well.
B-i
