GEOPHYSICAL SERVICES AGREEMENT
This Geophysical Services Agreement (the "Agreement") is made this
____ day of ________________, 1997 by and between National Energy Group, Inc.
("NEG") and Acadian Geophysical Services, Inc. ("ACADIAN") concerning our mutual
understanding concerning Land and Transition Zone Seismic Services to be
performed by ACADIAN for the benefit of NEG:
WITNESSETH:
WHEREAS, NEG owns or has acquired the rights to certain lands and
leases comprising an approximately fifty-four (54) square mile area located in
Iberville Parish, Louisiana for which it desires certain geophysical services,
including a three dimensional seismic survey; and
WHEREAS, ACADIAN is engaged in the business of conducting geophysical
services and has experience conducting seismic surveys of a nature required by
NEG; and
WHEREAS, NEG desires to engage ACADIAN to conduct a three dimensional
seismic survey and other certain geophysical services in Iberville Parish,
Louisiana (the "3D Survey") under the terms and conditions contained herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other valuable consideration, the sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Definitions. The following terms as used in this Agreement and any
amendments or schedules hereto shall be defined and have the meanings
specified or referred to in this Paragraph 1:
"3D Survey" shall mean Three dimensional seismic survey comprised
of surveying and gathering seismic data by placing Receiver
Stations and Source Points in a series of rectangles as
described in the recitals hereof.
"Bin Size" shall mean a rectangle 110 ft. x 110 ft.
"Charge Size" shall mean the amount (weight) of the Source Type that
is to be placed in the Shot Hole. Charge sizes may vary
throughout the 3D Survey.
"Confidential Information" shall have the meaning described in
Paragraph 12 hereof.
"Data" shall have the meaning described in Paragraph 11 hereof.
"Design Parameters" shall have the meaning described in Paragraph 3
hereof.
"Geophone" shall mean an electronic device placed on the surface of the
earth to record seismic energy.
"Geophones per Group" shall mean the number of Geophones that are
connected together and considered as one Receiver Station.
"Hole Depth" shall mean the total depth of the Shot Hole to be drilled.
"Land and Transition Zone Seismic Services" shall mean services
performed by ACADIAN on dry land, xxxxx lands and on lands
with water depths that do not exceed 20 feet in depth.
"Loss or Losses" shall have the meaning described in Paragraph 13
hereof.
"MS" shall mean milliseconds.
"Pentolite" shall mean a generic term for explosives used as an energy
source for conducting seismic surveys.
"Receiver Line" shall mean Receiver Stations placed along a horizontal
straight line on the surface of the earth.
"Receiver Station Spacing" shall mean the horizontal distance between
two adjacent Receiver Stations.
"ReceiverStation" shall mean a point on the surface of the earth where
a Geophone is placed to record seismic energy (also known as a
"receiver group" or "group.")
"Record" shall mean all seismic data recorded onto digital tape from
all Recording Channels when one Source Point is discharged.
"Record Length" shall mean the time (in seconds) that seismic energy
is recorded on digital tape from one Source Point discharge.
"Recording Channel" shall mean one Receiver Station with Geophones
placed in position to record seismic energy.
"Representatives" shall have the meaning described in Paragraph 12
hereof.
"Sample Rate" shall mean the length of time between two adjacent pieces
of seismic data on one Record.
"Shot Hole" shall mean a vertical hole, drilled into the earth and into
which the Source Type is placed.
"Source Line Interval" shall mean the distance between two adjacent
Source Lines.
"Source Line" shall mean the horizontal line along which Source Points
are located.
"Source Point" shall mean a point, within the outer boundary of the 3D
Survey, at which a Shot Hole is drilled and then loaded with a
Source Type (also known as a Shot Point).
"Source Point Spacing" shall mean the horizontal distance between two
adjacent Source Points (also known as Shot Point Spacing or
Shot Point Interval).
"Source Type" shall mean the type of energy source to be used to
acquire seismic data. Pentolite, defined above, is the Source
Type to be used in this 3D Survey.
"Spread" shall mean a rectangle with dimensions of 11800 ft. x 26180
ft. Within the Spread are 10 parallel Receiver Lines. Each
Receiver Line has 120 Geophone Groups spaced 220 feet apart.
The distance between adjacent Receiver Lines is 1320 feet.
"Survival Period" shall have the meaning described in Paragraph 15
hereof.
"Swath" shall mean one Spread plus the Source Points located between
the two most interior Receiver Lines within the Spread.
2. General Scope of Geophysical Services. It is the intention of the
parties hereto that ACADIAN shall conduct the 3D Survey over the lands
and leases located in Iberville Parish, Louisiana as requested by NEG.
ACADIAN shall be responsible for the direction and supervision of all
activities related to the 3D Survey including, but not limited to,
survey crews, seismic drilling activities and recording of Data.
ACADIAN further agrees that it shall deliver the field tapes of the 3D
Survey Data to NEG or NEG's designee at least once each week, together
with all notes of the survey crew and observer related thereto.
3. Survey Design Parameters. ACADIAN agrees that it shall, for the benefit
of NEG, conduct the 3D Survey and provide other related services as
described herein pursuant to the following design parameters,
consistent with commonly accepted industry standards (the "Design
Parameters"):
(i) No. of Channels Recording
(10 Lines x 120 Channels Max)....................1200
(ii) Source Line Interval (Brick Pattern).............1320 feet
(iii) Receiver Line Intervals..........................1320 feet
(iv) Source Point Spacing............................. 220 feet
(v) Receiver Station Spacing ........................ 220 feet
(vi) Total No. of Source Points.......................2520
(vii) Bin Size..........................................110 x 110
(viii) Source Type......................................Pentolite
(ix) Shot Hole Depth...................................100 feet
(x) Charge Size .......................................11 #
(xi) Record Length ......................................8 Sec.
(xii) No of Geophones per Group...........................6
(xiii) Sample Rate.........................................2 MS
NEG shall retain the right at all times, upon written notice to
ACADIAN, to amend or modify such Design Parameters to include
additional Receiver Lines into the Spread; provided that any such
increase shall be invoiced to NEG at ACADIAN's actual cost plus thirty
percent (30%) and added to each Swath for which the increase is
requested. ACADIAN shall be responsible for advising NEG that land and
weather conditions are not suitable for performing the geophysical
services to be provided hereunder, at which time NEG shall make the
final decision as to whether ACADIAN shall proceed. Notwithstanding the
foregoing, in the event ACADIAN determines weather, land or any other
condition to be unsafe, it may suspend operations until such time that
the unsafe condition no longer exists.
4. Additional Services. In addition to the 3D Survey, ACADIAN shall
perform other related services as directed in writing from time to time
by NEG including, but not limited to, securing various municipal,
leasehold and governmental agency permits; provided that NEG agrees to
pay the expenses, costs and fees associated with such services
requested by NEG. It is further agreed that NEG shall pay or reimburse
ACADIAN for the following costs and expenses:
(i) standby survey crews requested by NEG shall be invoiced at a
rate of $ 650.00 per day/per crew;
(ii) additional survey Shot Holes or Shot Holes in excess of
Design Parameters shall be invoiced at a rate of $457.00 per
Shot Hole; and
(iii) applicable local, state and federal taxes on equipment, goods
and services provided by ACADIAN.
5. ACADIAN's Execution Statement. "Acadian Geophysical Services, Inc.
proposes to begin recording on/or before December 1, 1997, and surveying as
soon as permits are returned and conditions are approved by NEG. Recording
operations will begin when sufficient lead time has been obtained by the
drilling crew. We anticipate two (2) months to complete the recording,
depending on option chosen and/or any permit and/or weather days." "Prior
to the startup of each operation phase, the Health, Safety and
Environmental engineer assigned to the crew will conduct a complete
operation safety and environmental review session. The purpose of these
orientation sessions is to assure that all personnel are fully apprised of
the specific safety requirements of their assigned task, and the proper use
of equipment to minimize the environmental impact caused by this survey.
These sessions will continue on a regular basis to insure that our
employees and subcontractors place the highest priority on health, safety
and environment."
"Acadian Geophysical Services, Inc. has employed quality geophysical
personnel whom have many years of combined experience."
"PROTECTION OF THE ENVIRONMENT WILL BE A TOP PRIORITY. Party 100 will be
supervised by Xx. Xxxxx Xxxxxxxx. Xx. Xxxxxx XxXxxxx, President of Domestic
Acquisition Services, will also play a directional role in overall
positions."
"Acadian Geophysical Services, Inc. includes safety as an integral part of
its overall business philosophy and its daily field operations. Since the
Company's objective is to fulfill each contract productively while
generating the highest quality data, it is imperative that accidents which
injure persons, damage equipment or otherwise impair Company operations be
avoided. In this way, safe job performance and the attendant safety,
welfare and health of each employee are keys to efficient, cost-effective
production."
"The responsibility for maintaining safety working conditions is
distributed throughout the entire Acadian Geophysical Services, Inc.
workforce. Senior Company management is charged with strategic planning
which incorporates the broad issues of a safe working environment, proper
placement of employees, proper employee safety training, proper equipment
provision, and review of all work related accidents. Operational managers
are charged with communicating safety standards to supervisors, monitoring
employee adherence to Company safety policy, investigating accidents,
setting the party level safety example, and implementing procedural changes
recommended by the Corporate Safety manager. The local Safety manager is in
place to help formulate and update site specific policy, provide training,
conduct inspections and report program results to local management and to
the Corporate Safety Manager. Supervisors, due to their close association
with field employees, have the most significant employment training, hazard
recognition and correction, inspection of employee work practices, ensuring
the use of protective equipment, accident investigation, maintaining good
site housekeeping and the immediate presentation of an example of safe
work. Individual field employees, whose population is the most numerous,
are responsible for learning safe work practices, following Company safety
policies, reporting unsafe conditions or near-miss incidents to the
Supervisor, and maintaining themselves fit for work."
6. NEG Obligations. NEG agrees that it shall provide ACADIAN with such
permits, agreements with third parties and rights to conduct the 3D
Survey over the lands and leaseholds requested by NEG not otherwise to
be provided by ACADIAN. Additionally, NEG shall furnish to ACADIAN maps
of suitable scale to allow advance logistical planning, program
assignment, survey tract indemnification and construction of a Shot
Hole point location map by ACADIAN.
7. Costs and Expenses. Each of NEG and ACADIAN shall bear their own costs
and expenses with respect to their respective businesses and
operations, except as otherwise specifically contained herein or in
amendments hereto. NEG, however, agrees to pay, provide or reimburse
ACADIAN for the following costs and expenses; provided that such costs
and expenses have the specific written approval of NEG prior to their
expenditure by ACADIAN:
(i) cost plus ten percent (10%) of any specialized equipment that may
be required to gain access to areas which due to the nature of the
terrain are inaccessible to normal crews and equipment, including but
not limited to, terra floatation tires, airboat drills or other
specialty equipment required by permit restrictions or otherwise
necessary;
(ii) cost plus ten percent (10%) associated with map purchases, map
copies, Data shipments or other special services;
(iii) cost plus ten percent (10%) associated with special services to
satisfy ecological, environmental and governmental mandates, rules and
regulations;
(iv) cost plus ten percent (10%) related to rental of specialized
safety equipment; and
(v) cost plus ten percent (10%) of resurvey; provided that any such
costs due to the negligence of ACADIAN or its Representatives
(hereinafter defined) shall be borne exclusively by ACADIAN.
8. Compensation. In consideration of the services to be provided by
ACADIAN hereunder, NEG agrees to compensate ACADIAN as follows:
(i) 3D Survey and related services, approximately
54 square miles......................$90,940.00 per sq. mile
(ii) Recording crew standby time
per mile (maximum 10 hr. day).........$ 1,900.00 per hour
(Standby will be charged for weather days and/or any permit
delays not caused by any fault of ACADIAN.) *
(iii) Testing experimental per hour ........$ 2,100.00 per hour
(iv) Drilling rig standby time
(per crew)............................$ 1,200.00 per day
(Standby will be charged at the above stated rate if a drill
crew is required to stand by for redrills.) *
(v) Permit Agents
per day/per agent (subject to approval by NEG)$375.00 per day
(Cost of permit agents and vehicle used in securing permits or
related services.)
*First twenty (20) hours per month at ACADIAN's
expense; all other downtime not attributable to the
negligence of ACADIAN shall be at the sole cost and
expense of NEG.
9. Invoicing. ACADIAN shall invoice NEG for services provided hereunder,
and NEG agrees to pay the non-disputed portion of any such invoice
within thirty (30) days thereafter; provided that the following
schedule of payments shall reflect the parties' understanding and
agreement with respect to such invoicing:
(i) Upon execution and delivery of this Agreement..$ 491,076.00
(ii) Upon commencement of surveying operations
in the 3D Survey area..........................$ 736,614.00
(iii) Upon commencement of drilling operations ......$1,227,690.00
(iv) Remaining SD&A costs invoiced on a Swath-by-Swath basis upon
successful completion of every second (2nd) Swath; provided
that the final two (2) Swaths shall be adjusted to reflect any
changes in the overall size or scope of the 3D Survey as
directed by NEG.
10. Relationship of the Parties. ACADIAN shall provide its services to NEG
under the terms of this Agreement as an independent contractor. Except upon
the express written consent of the other, ACADIAN has no authority to
execute and/or deliver documents which purport to bind NEG, and NEG has no
authority to execute and/or deliver documents which purport to bind
ACADIAN. Neither party shall function or hold itself out to be the agent of
the other, nor shall this Agreement be deemed to create a partnership or
joint venture of any type; provided, however, that NEG hereby grants to
ACADIAN the limited power and authority to acquire certain permits to
conduct geophysical services as directed by NEG whose land and leases lie
within the area comprising the area of geophysical services to be rendered
by ACADIAN pursuant to this Agreement. All compensation paid to ACADIAN
shall be without any deductions including: withholding for federal or state
income or other taxes, social security, worker's compensation insurance, or
health or accident insurance, for which ACADIAN agrees to be solely
responsible. ACADIAN shall not receive nor be eligible for any employee
benefits made available to others who perform services for NEG.
11. Ownership and Use of Data. ACADIAN is performing its services for the
exclusive benefit of NEG. Accordingly, all data (geological,
geophysical or otherwise) and the compilations, analyses, notes, charts
and interpretations made by ACADIAN or others ("Data") with respect to
the geophysical services performed by ACADIAN on NEG's behalf shall at
all times be the property of NEG. ACADIAN shall have no right to use,
license or otherwise disseminate any portion of the Data for itself or
to any third party without the express written consent of NEG.
12 Confidentiality. This Agreement and the Data shall be deemed to be
confidential and proprietary to NEG ("the "Confidential Information"), the
disclosure of which to unauthorized third parties could result in
irreparable harm to NEG. Accordingly, ACADIAN for itself and for its
affiliates, officers, contractors, consultants, invitees, employees, agents
or advisors (collectively, the "Representatives") warrants and agrees to
maintain the confidentiality of, and not disclose the Confidential
Information to any party without the express written consent of NEG;
provided that this Paragraph 12 shall not restrict
(a) disclosure of any Confidential Information required by applicable
statute, rule or regulation of any court of competent jurisdiction;
provided that NEG is given notice and an adequate opportunity to contest
such disclosure, and
(b) any disclosure of Confidential Information which is available publicly
as of the date of this Agreement or which, after the date of this
Agreement, becomes available publicly through no fault or action on the
part of ACADIAN or its Representatives other than as provided herein.
13. Indemnity by ACADIAN. ACADIAN for itself and for its
Representatives and on behalf of its successors and assigns, agrees to
indemnify and hold NEG harmless from and with respect to any and all
losses, damages, costs, expenses, obligations, liabilities,
deficiencies, taxes, interest on taxes or penalties, including without
limitation the reasonable fees and disbursements of counsel and costs
of responding to any governmental audit, inquiry or investigation and
including without limitation all claims, liabilities or obligations
arising from or related to the actions or failure to act in conducting
the geophysical services requested by NEG, including (without limiting
the generality of the foregoing) environmental and third party claims
related to or arising directly or indirectly out of any of the
following (any of which shall be referred to herein singularly as a
"Loss" and collectively as the "Losses"):
(i) Any and all claims, counterclaims, liabilities and obligations
arising from or related to ACADIAN or its Representatives' negligence
in conducting its operations and geophysical services on behalf of NEG;
(ii) Any claim, counterclaim, liability or obligation arising from or
related to surface or subsurface damages caused by the negligence or
willful misconduct of ACADIAN or its Representatives in conducting its
geophysical services on behalf of NEG; and
(iii) Any claim, counterclaim, liability or obligation arising from or
related to environmental damages caused by the negligence or willful
misconduct of ACADIAN or its Representatives in conducting its
geophysical services on behalf of NEG.
14. Indemnity by NEG. NEG agrees to indemnify and hold ACADIAN and its
Representatives harmless from and with respect to any and all Losses
related to or arising out of any of the following:
(i) Any and all claims, counterclaims, liabilities and obligations
arising from or related to NEG's operations in the area where ACADIAN
is conducting its geophysical services on behalf of NEG;
(ii) Any and all claims, counterclaims, liabilities or obligations
related to surface or subsurface damages caused by the operations of
NEG in the area where ACADIAN is conducting its geophysical services on
behalf of NEG; and
(iii) Any claim, counterclaim, liability or obligation related to
environmental damages caused by NEG in the area where ACADIAN is
conducting its geophysical services on behalf of NEG.
15. Survival of Indemnities. The obligation of indemnification set out in
Paragraphs 13 and 14 hereof shall survive for a period of three (3) years
following the execution and delivery of this Agreement (the "Survival Period").
Any claim for any Loss or Losses must be asserted in writing prior to the end of
the Survival Period, and if asserted in writing during the Survival Period, such
claims shall survive until resolved; and if such claims are not so asserted, the
party asserting such claim shall be forever estopped and prohibited from
asserting any such claim hereunder.
16. Miscellaneous.
16.1 Notices. All notices, demands and other communications to the
parties hereto as may be required hereunder shall be in writing or by
written telecommunication, and shall be deemed to have been duly given
if delivered personally or if mailed by certified mail, return receipt
requested, postage prepaid, or if sent by overnight courier, or sent by
written telecommunication, as follows:
IF TO NEG: IF TO ACADIAN:
National Energy Group, Inc. Acadian Geophysical Services, Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000 0000 X Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000-0000 St. Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Attn: Mr. Miles X. Xxxxxx, President Attn: Xxxxxx XxXxxxx, President
16.2 Successors and Assigns. All provisions of this Agreement, whether
or not such provisions shall specifically so provide, shall be binding
upon and inure to the benefit of ACADIAN and NEG and their respective
successors and assigns. ACADIAN shall not assign any portion of this
Agreement without the express written consent of NEG, which consent
will not be unreasonably withheld.
16.3 Entire Agreement. This Agreement constitutes the entire agreement
of ACADIAN and NEG with respect to the matters governed herein and
supersedes all prior agreements, arrangements, statements, promises,
information, understandings, representations and warranties, whether
oral or written, express or implied, with respect to the subject matter
hereof.
16.4 GOVERNING LAW. THE VALIDITY AND CONSTRUCTION OF THIS AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS (AND NOT THE CHOICE-OF-LAW
RULES) OF THE STATE OF TEXAS.
16.5 No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm or
corporation, except NEG and ACADIAN, any rights or remedies under or by
reason of this Agreement.
16.6 Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any
party.
16.7 MEDIATION, ARBITRATION. IN THE EVENT OF A DISPUTE BETWEEN THE
PARTIES TO THIS AGREEMENT, THE PARTIES AGREE TO PARTICIPATE IN GOOD
FAITH IN A MINIMUM OF FOUR (4) HOURS OF MEDIATION IN DALLAS, TEXAS WITH
AN ATTORNEY-MEDIATOR TRAINED AND CERTIFIED BY THE AMERICAN ARBITRATION
ASSOCIATION, THE UNITED STATES ARBITRATION AND MEDIATION SERVICE, OR
ANY COMPARABLE ORGANIZATION, AND TO ABIDE BY THE MEDIATION PROCEDURES
AND DECISION OF SUCH ORGANIZATION. THE PARTIES AGREE TO EQUALLY BEAR
THE COSTS OF THE MEDIATION. IN THE EVENT THE PARTIES CANNOT RESOLVE
THEIR DISPUTE THROUGH MEDIATION AS DESCRIBED HEREIN, THE PARTIES AGREE
TO PARTICIPATE IN BINDING ARBITRATION PURSUANT TO THE RULES OF THE
AMERICAN ARBITRATION ASSOCIATION OR MUTUALLY AGREEABLE SIMILAR
ORGANIZATION. SUCH ARBITRATION SHALL BE HELD IN DALLAS, TEXAS, SHALL BE
BINDING AND NONAPPEALABLE AND A JUDGMENT ON THE AWARD TO THE PREVAILING
PARTY (INCLUSIVE OF REASONABLE ATTORNEY=S FEES AND COSTS) MAY BE
ENTERED IN ANY COURT HAVING COMPETENT JURISDICTION.
IN WITNESS WHEREOF, and intending to be legally bound hereby, ACADIAN
and NEG have caused this Agreement to be duly executed and delivered as of the
date and year first hereinabove written.
"ACADIAN"
ACADIAN GEOPHYSICAL
ATTEST: _______________________ SERVICES INC.
TITLE: _________________________ By:__________________________
Name: Xxxxxx XxXxxxx
Title: President
"NEG"
NATIONAL ENERGY GROUP, INC.
ATTEST:______________________
TITLE:______________________ By:______________________________
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President Operations
