EXHIBIT 10.2
AMENDMENT TO GAS SALES AGREEMENT
This Amendment made and entered into this 30th day of January, 1998,
between Colorado Power Partners (a/k/a Colorado Power Partnership), a
Colorado general partnership, with its principal place of business located at
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 ("Buyer") and
Prima Oil & Gas Company ("Prima"), a Colorado corporation, with its principal
place of business at 0000 Xxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
Recitals:
A. Buyer, Prima, and KN Marketing, Inc., a Colorado corporation, successor
in interest to KN Production Company, a Delaware corporation which was in
turn successor in interest to Fuel Resources Development Co., a Colorado
corporation, entered into that certain Gas Sales Agreement dated May 24,
1989, as amended October 12, 1990, December 17, 1992, February 1, 1994 and
December 31, 1997, providing for the sale of gas from Prima and KN Marketing,
Inc. to Buyer for consumption in Phase I at Buyer's co-generation facility
located near Brush, Colorado (the "Agreement").
B. KN Marketing, Inc., by amendment to the Agreement dated December 31,
1997, terminated its obligations under the Agreement as mutually agreed by
Prima and Buyer.
C. Buyer and Prima desire to enter into this Amendment to provide for an
early termination of Buyer's and Prima's rights, responsibilities and
obligations under the Agreement and to modify certain terms and provisions
relating to purposes and pricing as well as other matters related to the
Agreement.
Now therefore, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. Article I, PURPOSE AND COMMITMENTS, shall be modified by deleting
paragraph (d) and replacing it with the following new paragraph (d):
"(d) The parties agree that the sale of natural gas by Prima to Buyer shall
primarily be for consumption in Phase I at Buyer's co-generation
facility located near Brush, Colorado. Nothing however, shall be
construed to limit Buyer's ability to resell or otherwise dispose of
gas purchased hereunder at its sole option for those purchases on and
after March 31, 1998.
2. Article III, QUANTITY, shall be modified by adding a new
subparagraph (e), the intent of the parties to establish the quantities to be
delivered by Seller from January 1, 1998 through October 31, 1998 as follows:
"(e) Notwithstanding the preceding subparagraphs, the quantities of gas to
be delivered shall be all of the requirements of Buyer from January 1,
1998 through October 31, 1998".
3. Article VI, TERM, shall be modified by deleting paragraph (a) and
replacing it with the following new paragraph (a):
"(a) The parties agree that this Agreement, and the obligations to sell and
purchase gas, shall terminate as of October 31, 1998. This
termination date my be extended upon mutual consent of the parties.
4. Article XI, PRICE AND BILLING, shall be amended by deleting the
first sentence of paragraph (a) in its entirety and replacing it with the
following:
"(a) The price of gas sold hereunder for the period from January 1,
1998 through March 31, 1998 shall be Two Dollars and Seventy Two
Cents ($2.72) per MMBTU. The price of the gas sold hereunder for
the period from April 1, 1998 through October 31, 1998 (and any
extension mutually consented to) shall be the price per MMBTU as
reported in the Denver Julesburg Basin Index as published by the
Gas Daily, plus $.07 per MMBTU gross heating value at the Receipt
Point. Notwithstanding the preceding, the price of gas sold
hereunder shall in no event be less than $1.35 per MMBTU (lower
collar) nor greater than $1.85 MMBTU (upper collar) gross heating
value at the Receipt Point.
5. On February 2, 1998, Prima shall be paid in good funds the amount of
Three Million Eight Hundred Fifty Thousand Dollars ($3,850,000) in
consideration of the elimination of its obligation to provide gas to the
Buyer for the original Agreement term.
6. On or before October 31, 1998, Prima and Buyer shall execute a mutual
release releasing each other and Prima Oil & Gas Company from any and all
liability arising out of the Agreement.
7. Prima and Buyer agree to negotiate in good faith a replacement gas
supply agreement on or before October 31, 1998, but are not obligated to
enter into such an agreement.
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Except for the foregoing, all of the terms and provisions of the Gas Sales
Agreement dated May 24, 1989, as previously amended, shall remain in full
force and effect.
In witness whereof, the parties have executed this Amendment the date and
year first written above.
COLORADO POWER PARTNERS
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Management Committee Member
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PRIMA OIL & GAS COMPANY
By: /s/ Xxxxxxx X. Xxxxx Attest: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
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Title: President Title: Secretary
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