GAS PURCHASE AGREEMENT (PRODUCTION)
EXHIBIT
10.1
GAS
PURCHASE AGREEMENT (PRODUCTION)
THIS
GAS
PURCHASE AGREEMENT (“Agreement”) is made and entered into as of the 1st
day of
June,
2007,
by and
between ATMOS ENERGY CORPORATION, a Texas and Virginia corporation, ("Buyer"),
and COG Transmission Corporation ("Seller"), also referred to as a “party” or
the "parties."
W
I T N E
S S E T H:
WHEREAS,
Seller owns or controls certain oil, gas, and mineral interests covering various
lands and leases located in Leavenworth
County, Kansas,
shown
on Exhibit "A," which is attached hereto and made a part of this Agreement
for
all purposes; and
WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to purchase, certain volumes
of natural gas produced from the lands and leases as shown on Exhibit "A" in
accordance with the terms and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
Commitment
and Agreement to Sell and Purchase.
(a)
Seller hereby commits, for the term hereof, to the performance of this Agreement
all gas produced from the lands and leases as shown on Exhibit "A" hereof and
any and all renewals and extensions of any such leases or attributable to
Seller's interest in the production from any xxxxx located thereon. Seller
acknowledges and agrees that the foregoing commitment is applicable to Seller's
current rights, titles, and interests in the gas committed above and to any
future rights, titles, and interests hereafter acquired by Seller to gas
produced from the lands and leases as shown on Exhibit "A."
(b)
Subject to the terms and conditions of this Agreement, including the General
Terms and Conditions attached hereto and made a part hereof for all purposes,
Seller agrees to sell and deliver to Buyer at the Delivery Point(s), as
hereinafter defined, such quantity of gas as Buyer may request from time to
time
if, as, and when needed. Nothing herein is intended to require Seller to operate
any well in order to produce a quantity of gas in excess of the quantity that
such well is permitted to produce under applicable rules or orders issued by
any
regulatory body having jurisdiction over such matter or that such well is
capable of producing under good engineering and gas production
practice.
2.
Delivery
Point(s).
The
Delivery Point(s) of natural gas hereunder shall be at the point of
interconnection of Buyer's pipeline system with Seller's pipeline system at
a
mutually agreeable location in the NE
1/4 of Section 26, Township 10S, Range 22E, Leavenworth County,
Kansas.
3.
Price.
(a)
Subject to the provisions of Subparagraph 3(b) below, the price to be paid
by
Buyer to Seller for initial term of June
1, 2007,
until
June
1, 2012,
shall
be the gas price listed under the column titled “Index” in the first issue of
the month when deliveries of gas are made of INSIDE
FERC’s Gas Market Report, in the table titled “Prices of Spot Gas Delivered to
Pipeline” for Southern Star Central Gas Pipeline minus
$.10 Cents per MMBTU,
and the
price shall be inclusive of all taxes, transportation, charges and other fees
and charges relating to the production, sale and delivery of such gas. In the
event that the Southern Star index does not publish, the Panhandle Eastern
Pipe
Line Co. index from the same publication will be substituted. If term is
extended, price will be renegotiated at that time.
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4.
Billing
and Payment.
(a)
Buyer
shall, on or before the last day of the month after each month in which gas
is
sold hereunder, mail to Seller a statement showing the quantity of gas delivered
and purchased during the preceding month, accompanied by a check made payable
to
Seller in the amount due based on the effective price and quantity of gas
purchased as shown on such statement and any appropriate adjustments
thereto.
(b)
Each
party shall have the right at reasonable hours to examine the books, records,
and charts of the other party to the extent necessary to verify the accuracy
of
any statement, charge, or computation made pursuant to the provisions of this
Contract. If any such examination reveals any inaccuracy in any billing
theretofore made, the necessary adjustment in such billing and payments shall
be
promptly made, provided that no adjustment for any billing or payment shall
be
made after the lapse of twelve (12) months from the rendition
thereof.
5.
Term.
This
Agreement shall become effective on June
1, 2007,
and
shall continue in full force and effect until June
1, 2012
(the
"Primary Term"), and shall be extended for an additional term of five years
if a
price at a mutually agreeable price (“Extended Term”) and shall continue
thereafter on a month to month basis unless terminated by either party upon
written notice thirty (30) days prior to the end of the Primary Term, Extended
Term, or any subsequent calendar month. Such termination shall become effective
at the end of the then current term.
6.
Assignment.
Seller
may not assign this Agreement without the prior written consent of Buyer, which
consent shall not be unreasonably withheld, modified or conditioned. In the
event Seller assigns this Agreement without Buyer's consent, such assignment
shall be null and void and Buyer may, in its sole discretion, immediately
terminate this Agreement without notice to Seller.
7.
Notices.
Any
notice required to be given under this Agreement or any notice which either
party hereto may desire to give the other party shall be in writing and shall
be
considered duly delivered when hand-delivered or when deposited in the United
States mail, postage prepaid, registered or certified, and addressed as
follows:
If
to
Buyer: ATMOS
ENERGY CORPORATION
000
X. Xxxxxxx
Xxxxxxx,
XX
00000
Attention:
Gas Supply (Notices, Correspondence and Invoices)
Phone:
(000) 000-0000 Fax:
(000) 000-0000
If
to
Seller:
COG
TRANSMISSION CORPORATION
0000
X.
Xxxxxx Xx., Xxx. 000
Xxxxxx,
XX 00000
Attention:
X.X. Xxxxx
or
such
other address as Seller, Buyer or their respective successors or permitted
assigns shall designate by written notice given in the manner described above.
Routine communications, including monthly invoices and payments, may be mailed
by ordinary mail and are deemed delivered when hand-delivered or when deposited
in the United States mail, postage prepaid, and addressed to the
above-designated name and address.
8.
Attachments.
The
General Terms and Conditions attached hereto are expressly incorporated herein
and made a part of this Agreement for all purposes, and all references herein
and therein to "this Agreement" include the terms and provisions contained
herein and in such General Terms and Conditions.
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IN
WITNESS WHEREOF, the parties hereto have executed this Gas Purchase Agreement
as
of the date first above written.
BUYER:
ATMOS
ENERGY CORPORATION
By:
/s/
Xxx
Xxxxxxxxx
Xxxxx:
Vice
President of Rates and Regulatory Affairs for The
Colorado-Kansas
Division of ATMOS Energy Corporation
SELLER:
COG
TRANSMISSION CORPORATION
By:
/s/ X.X. Xxxxx
Title:
President
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