December 31, 1997
Swift Energy Pension Partners 1995-B, Ltd.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Swift Energy Operating Partners 1995-B, Ltd. ("Operating Partnership")
purchased a 70.0% interest of the interests purchased by Swift Energy Company
("Swift") under the terms and provisions of that certain Purchase and Sale
Agreement dated December 22, 1997, between OXY USA, Inc. ("OXY") and Xxxxx.
Attached hereto and made a part hereof as Exhibit "A" is a copy of said Purchase
and Sale Agreement for identification of the interests conveyed by OXY to Swift.
In accordance with the provisions of Article IV of that certain Net
Profits Agreement dated December 14, 1995, ("Net Profits Agreement") by and
between Operating Partnership and Swift Energy Pension Partners 1995-B, Ltd.,
("Pension Partnership"), Operating Partnership hereby offers to Pension
Partnership effective as of 7:00 a.m., September 1, 1997 (Pension Partnership
acquisition effective date), a net profits interest in and to the net profits
depth underlying the net profits surface acreage equal to 53.4183% of the
interest purchased by Operating Partnership. The net profits interest shall be
calculated and paid in the manner set forth in Article IV of the Net Profits
Agreement.
Operating Partnership, in addition to the net profits interest herein
offered, and in accordance with the provisions of Article V of the Net Profits
Agreement, hereby offers to Pension Partnership, effective as of Pension
Partnership acquisition effective date, an overriding royalty interest in and to
the overriding royalty depth underlying the overriding royalty surface acreage
in and to the interest purchased by Operating Partnership, which shall be
calculated and paid in the manner set forth in Article V of the Net Profits
Agreement.
Conveyance to Pension Partnership of the herein offered net profits
interest and overriding royalty interest shall be in accordance with the
provisions of Article VI of the Net Profits Agreement. The meaning of the terms
"net profits interest", "net profits depth" and "net profits surface acreage"
shall be those appearing in Section 4.02 of the Net Profits Agreement. The
meaning of the terms "overriding royalty depth", "overriding royalty interest"
and "overriding royalty surface acreage" shall be those appearing respectively
in Sections 1.18, 1.19 and 1.20 of the Net Profits Agreement.
Notwithstanding the terms of this offer and acceptance, it is
understood that the purchasing terms, conveyances, revenue and expense sharing
will be in accordance with the applicable partnership agreement and the Net
Profits Agreement.
Please indicate your acceptance on behalf of Pension Partnership in the
space provided below. Upon acceptance, Operating Partnership agrees to assign to
Pension Partnership the interests described herein, effective as of Pension
Partnership acquisition effective date.
Yours very truly,
SWIFT ENERGY OPERATING PARTNERS
1995-B, LTD.
BY: SWIFT ENERGY COMPANY
Managing General Partner
BY: -------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
Attachment
ACCEPTED AND AGREED TO THIS 31ST DAY
OF DECEMBER, 1997, ON BEHALF OF:
SWIFT ENERGY PENSION PARTNERS 1995-B, LTD.
BY: SWIFT ENERGY COMPANY
Managing General Partner
BY: ----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President
Funds Management
December 22, 1997
OXY USA Inc.
P.O. Box 27570
Houston, Texas 77227-7570
Attn: Xxxx Xxxx
RE: Notice of Title Defect
X. X. Xxxxxxx 42-5 #1 (BP)
Gentlemen:
Reference is here made for all purposes, including a description of the
leases and well referred to herein, to that certain Purchase and Sale Agreement
dated December 22, 1997, by and between OXY USA Inc. ("OXY") and Swift Energy
Company ("Swift"), hereinafter referred to as ("the Agreement").
Pursuant to Paragraph 7(c) of the Agreement, Xxxxx hereby notifies you
that title has failed as to the X.X. Xxxxxxx 42-5 #1 (BP), leases associated
therewith, working interest (.9753190) and net revenue interest (.7870977). Said
interest covers the Upper Tuscaloosa as seen in the X. X. Xxxxxxx 42-5 #1 Phasor
Induction - SFL Compensated Nutron Litho - Density Log between the depths of
12,554 feet and 12,564 feet ("the Title Failure Zone"). It appears that the
Title Failure Zone is owned by Unocal. Swift hereby requests an adjustment to
the Purchase Price in the amount of $407,000.00. Pursuant to Paragraph 7(d) of
the Agreement, OXY shall have sixty (60) days beyond the Closing Date to obtain
good title (which includes the leases, working interest and net revenue
interests as set forth in The Agreement) to the Title Failure Zone in which
event, Swift shall purchase the same for the amount of the Purchase Price
adjustment, $407,000.00, pursuant to all the terms and conditions of the
Agreement. If OXY has not acquired good title to the Title Failure Zone within
sixty (60) days after Closing, Xxxxx will no longer be under any obligation to
purchase said Title Failure Zone from OXY.
If the foregoing is acceptable to you, please so indicate by executing
one copy of this letter in the space provided below.
Very truly yours,
Xxxxx X. Xxxxx
President
OXY USA Inc.
By:----------------
Title:-------------
1
PURCHASE AND SALE AGREEMENT
OXY USA Inc., a Delaware corporation, P.O. Box 27570, Houston, Texas
77227-7570 (herein referred to as "OXY"), and SWIFT ENERGY COMPANY, a Texas
Corporation, 00000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (herein
referred to as "Buyer"), enter into this Purchase and Sale Agreement (herein
referred to as "Agreement"), in consideration of OXY's agreement to sell and
Buyer's agreement to purchase the oil, gas and mineral leases and the xxxxx more
particularly described in Exhibit "A" (herein referred to as the "Leases"), all
pursuant to the terms and conditions of this Agreement.
1. SALE AND PURCHASE. Subject to the terms and conditions herein set
forth, OXY shall sell, transfer, assign, convey and deliver to Buyer and Buyer
shall purchase and acquire all of OXY's right, title and interest in the Leases
described in Exhibit "A", including all of OXY's right, title and interest in
and to all permits, licenses, servitudes, rights-of-way, division orders, gas
purchase and sale agreements (wherein OXY is a selling party), crude oil
purchase and sale agreements (wherein OXY is a selling party, but excluding that
certain Agreement for the Purchase and Sale of Domestic Crude Oil executed the
31st day of August, 1983, by and between Occidental Petroleum Corporation, et
al., and CITGO Petroleum Corporation, the "CITGO Contract"), surface leases,
farmin agreements, farmout agreements, bottom hole agreements, acreage
contribution agreements, operating agreements, unit agreements, processing
agreements, options, leases of equipment or facilities, and all other contracts
and agreements that are appurtenant to the Properties or used or held for use in
connection with the ownership or operation of the Properties (the "Related
Agreements"); and all of OXY's right, title and interest in and to all of the
real, personal and mixed property located on and used solely in the operation of
the Properties, including, but not limited to (i) all xxxxx, wellhead equipment,
fixtures (including, but not limited to, field separators and liquid
extractors), pipe, casing and tubing, (ii) all production, gathering, treating,
processing, compression, dehydration, salt water disposal, and injection
equipment and facilities, (iii) all tanks, machines, equipment, vessels and
other facilities (collectively called the "Facilities").
All of the above collectively referred to as the "Properties".
2. PURCHASE PRICE. The Purchase Price shall be Four Million Five
Hundred Thousand Dollars ($4,500,000.00). Buyer has allocated the Purchase Price
(the "Allocated Value") among the Properties as shown on Exhibit "B" for the
purpose of (i) giving notices of value to the owners of any preferential rights
to purchase, and (ii) determining the value of a Title Failure and handling
those instances where the Purchase Price is to be adjusted.
3. CLOSING AND EFFECTIVE DATE. The closing of the sale of the
Properties (herein referred to as the "Closing") shall be held on December 22,
1997 (herein referred to as the "Closing Date"), in the offices of OXY, located
at 0 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, unless extended by mutual
agreement of the parties hereto. The effective date of the sale of the
Properties (herein referred to as the "Effective Date") shall be at 7:00 a.m. on
September 1, 1997. At Closing, Buyer shall transfer available funds by wire the
Purchase Price, as the same may be adjusted pursuant to the provisions hereof,
to the credit of OXY USA Inc. in the Chemical Bank, New York, New York, ABA
Number 000000000, Account Number 000-0-00000. If Closing does not occur on or
before the Closing Date, this Agreement shall be null and void.
2
4. DELIVERY OF DOCUMENTS. At Closing OXY shall execute and deliver to
Buyer an Assignment and Bill of Sale without warranty of title except by,
through and under OXY in the form of that attached hereto as Exhibit "C", along
with other instruments as appropriate to convey the Properties, the Related
Agreements and the Facilities purchased hereunder. OXY shall deliver to Buyer on
or before ten (10) days following Closing, all pertinent operating files and
records, including, but not limited to, all joint operating agreements, lease
files, land files, well files (including but not limited to well histories, well
logs, environmental files and technical data), gas and oil sales contract files,
permit and regulatory files, pooling and unit agreements, all seismic,
geological, geochemical, accounting, reservoir and geophysical information and
any other information or data which are in existence on the Closing Date and
applicable to the Properties, to the extent the transfer of such geophysical and
seismic data, material and information is not prohibited by the terms of any
third-party license or other agreement and to the extent that such transfer does
not require payment of any transfer fee, and provided further, that OXY may keep
copies of all such records or the originals of such files as may be required for
tax, accounting and auditing purposes as determined necessary by OXY. If OXY
retains any original records, copies of such originals will be provided to
Buyer.
5. TRANSFER OF OPERATIONS. OXY shall continue to be responsible for the
operation of the Properties until January 1, 1998, at which time Buyer shall
assume operation of the Properties. The risk of casualty loss relating to the
Properties shall pass from OXY to Buyer as of the Closing Date. OXY shall also
maintain accounting and disbursement responsibilities for production from the
Properties until the Closing Date. Any expenses incurred by OXY in the operation
of the Properties after the date of this Agreement which are out of the ordinary
course of business as the Properties are currently operated or which requires a
single expenditure in excess of Twenty Five Thousand Dollars ($25,000) shall,
except in case of an emergency, be submitted to Buyer for its approval.
6. FINAL ADJUSTMENT. Within ninety (90) days after the Closing Date,
Buyer and OXY will effect a final adjustment whereby proceeds received by OXY
with respect to sale of production produced from the Properties after the
Effective Date shall be paid to Buyer and proceeds received by Buyer with
respect to sale of production produced from the Properties prior to the
Effective Date shall be paid to OXY. Payments of expenses by OXY which relate to
operations after the Effective Date shall be invoiced to Buyer by OXY and
payment of expenses by Buyer which relate to OXY-approved operations and
expenditures actually incurred prior to the Effective Date shall be invoiced to
OXY by Buyer. Any amount not known at the time of the final adjustment shall be
settled between Buyer and OXY when such amounts become known. As to those
Properties operated by OXY, Buyer shall be charged overhead at the rates
specified for such Properties in existing operating agreements and, as to those
Properties not covered by an operating agreement, Buyer shall be charged
overhead at the rate of $1,000.00 a month per well, prorated daily, from the
Effective Date to the date that Buyer assumes operations of the Properties.
Proceeds received or payment of invoices which cover periods of time or
operations before and after the Effective Date shall be prorated.
3
7. TITLE.
(a) OXY will make available for examination at OXY's offices
in Houston, such title information, abstract coverage and production
data as OXY has in its possession. Existing abstracts will not be
brought up to date by XXX. The furnishing of any such title information
or production data shall create no liability or responsibility on the
part of OXY or on the writer of any title opinion, and OXY makes no
warranty or representation as to the title of either the real or
personal property described except by, through and under OXY, or the
correctness of title information or production data furnished by OXY.
The indication of particular fractions of working interests and/or net
revenue interests in Exhibit "B", hereto, in no way implies or creates
a general warranty, covenant or other undertaking regarding any
quantity of interest but is for the purpose of use in adjusting the
Purchase Price as provided for herein.
(b) "Title Failure" shall mean (i) a reduction in OXY's Net
Revenue Interest or an increase in OXY's Working Interest, without a
corresponding increase in OXY's Net Revenue Interest, in a Property
based upon a defect in OXY's title thereto, (ii) the existence of a
lien, assessment or encumbrance, either being of such significance that
a reasonable and prudent person engaged in the business of the
ownership, development and operation of oil and gas properties with
knowledge of all of the facts and their legal significance would be
unwilling to accept the same.
(c) Buyer shall, at its expense, conduct such examinations of
title and data as it sees fit and shall notify OXY upon execution of
this Agreement ,which shall occur no later than December 30, 1997, of
any Title Failure (as hereinabove defined), failing which, Buyer will
be deemed to have approved title and Subparagraph (d) below shall not
apply.
(d) OXY may, at its option, prior to Closing, attempt to
satisfy any and all such title requirements by Xxxxx. In the event of a
Title Failure, the parties shall use reasonable efforts to reach an
agreement to appropriately adjust the Purchase Price based upon a
reduction for the Properties or interest affected by such failure using
the Allocated Value shown on Exhibit B. In the event the parties are
unable to reach an agreement on such adjustment, either party shall
have the right to declare this Agreement null and void. Should the
parties reach an agreement to adjust the Purchase Price, the property,
or portions thereof affected by such failure, shall be excluded from
the Properties or portions thereof to be conveyed to Buyer at Closing
and the Purchase Price reduced accordingly. Xxxxx agrees that OXY shall
have an additional sixty (60) days beyond the Closing Date to satisfy
the Title Failure. If within sixty (60) days after Closing, OXY has
corrected the Title Failure, then Buyer shall purchase the property, or
portions thereof which had previously been affected by the Title
Failure, for the Purchase Price adjustment originally agreed to by the
parties. OXY and Buyer shall, within ten (10) days after notice of the
corrected Title Failure, effectuate a second closing for the property
or portions thereof under the same terms and conditions of this
Agreement. If OXY has not corrected the Title Failure within sixty (60)
days after Closing, the parties agree that the property or portion
thereof shall be deleted from the terms and conditions of this
Agreement.
4
8. EXISTING OBLIGATIONS. The Properties are being conveyed to Buyer
subject to all existing Related Agreements pertaining to the Properties. Except
as otherwise provided in Section 11, Buyer will assume all of OXY's rights and
obligations associated with the Related Agreements pertaining to the Properties
as of the Effective Date. Specifically included are those rights and obligations
relating to OXY's gas imbalances (relative to its proportionate share of the gas
in relation to the other owners in the Properties). Xxxxx acknowledges that it
has been advised of the general status of the gas balancing for the Properties.
OXY makes no representation or warranty regarding the accuracy of such
information.
9. PREFERENTIAL RIGHTS. All reasonable efforts will be made by OXY to
secure a waiver of any preferential purchase right, right of first refusal, or
consent to assign (excluding consents or approvals from governmental agencies
customarily obtained following Closing) covering, in whole or in part, the
Properties (herein referred to as "Preferential Right"). OXY shall promptly
notify Buyer in the event a waiver of the Preferential Right cannot be secured
for the Properties, or any portion(s) thereof. Such portion(s) have been
identified by OXY in the Data Package and the Allocated Value therefor is shown
on the attached Exhibit "B". The inability of OXY to assign or convey applicable
portion(s) of the Properties shall be treated as a Title Failure as provided
herein and will not release Buyer from its obligation to purchase the remaining
portion(s) of the Properties, but the Purchase Price shall be reduced by the
Allocated Value shown on Exhibit "B" for the affected Property. Notwithstanding
the foregoing, in the event portion(s) of the Properties cannot be conveyed such
that the aggregate value thereof exceeds fifty percent (50%) of the Purchase
Price, the Buyer shall have the right to declare this Agreement null and void in
its entirety. All properties for which preferential purchase rights have been
waived, or for which the period to exercise such rights has expired prior to
Closing, shall be sold to Buyer at Closing pursuant to the provisions of this
Agreement.
If any party that elects to exercise a preferential purchase right
fails to consummate the purchase of the affected Properties covered by such
right pursuant to the terms of this Agreement within sixty (60) days following
Closing, then OXY shall so notify Buyer and Buyer shall purchase said Properties
from OXY, under the terms of this Agreement for the Allocated Value of such
property.
10. ENVIRONMENTAL MATTERS.
(a) "Environmental Defect" shall mean a violation (i) of any
Environ-mental Laws (as in effect and as written on the Effective Date)
applicable to the Properties and (ii) to which prompt remedial or
corrective action is or was required under such Laws as enforced on the
Effective Date. An Environmental Defect shall not include the presence
of NORM or minor spills in and/or on the Properties.
5
(b) Prior to Closing, Buyer, or its agent or representative,
shall have the right, at Buyer's sole cost, risk and expense, to enter
upon the Properties (subject to the approval of the Operator thereof)
for the purpose of conducting an environmental review ("Review") of the
Properties, inspect the same, conduct soil and water tests and borings,
and generally conduct such tests, examinations, investigations and
studies as Buyer, in its sole discretion, may deem necessary or
appropriate for the preparation of reports and analyses relating to the
Properties. If Buyer, in its reasonable opinion, determines that there
is an Environmental Defect, then Buyer shall, upon execution of this
Agreement, so notify OXY in writing of (i) the nature and extent of the
Environmental Defect, (ii) the Properties affected, and (iii) the
estimated costs of remediation. Upon receipt of such notice, OXY shall
have the right, but not the obligation, to elect to remediate the
condition. In the event OXY does not elect to remediate the condition,
Buyer and OXY shall meet and use their best efforts to agree on the
validity of the claim of the Environmental Defect and the amount of any
Purchase Price adjustment. In the event the parties cannot mutually
agree on the Purchase Price adjustment for an alleged Environmental
Defect, Buyer shall have the right to (i) proceed to Closing and accept
the Properties with the alleged Environmental Defect with no Purchase
Price adjustment or (ii) terminate this Agreement as to the Properties
affected by the alleged Environmental Defect and receive a Purchase
Price adjustment for such Properties as set forth on Exhibit "B", or,
where feasible, the proportionate Allocated Value. If the alleged
Environmental Defects which have not been cured as of Closing exceed
ten percent (10%) of the Purchase Price, either OXY or Buyer shall have
the option to terminate this Agreement with no further liability
hereunder to the other party. In the event OXY or Buyer so terminates
this Agreement Buyer shall provide to OXY a copy of any environmental
assessment including any reports, data and conclusions.
(c) There shall be no Purchase Price adjustment for
Environmental Defects unless the aggregate total of all Environmental
Defects exceeds $50,000, it being understood that if the $50,000
threshold is exceeded, Buyer shall be entitled to an adjustment for
amounts in excess of $50,000.
(d) Buyer's access to the Properties to conduct its
environmental assessment is subject to the following conditions: Buyer
waives and releases all claims against OXY, its directors, officers,
employees and agents and parent or subsidiary companies for injury to,
or death of, persons or damage to property arising in any way from the
exercise of rights granted to Buyer hereby or the activities of Buyer
or its employees, agents or contractors on the Properties. Buyer shall
indemnify OXY, its directors, officers, employees, and agents against
and hold each and all of said indemnitees harmless from any and all
loss, cost, damage, expense or liability, including attorney's fees,
whatsoever arising out of or resulting from such exercise or activities
(except for any such injuries or damages caused solely by the active
negligence or willful misconduct of any said indemnitees). The
foregoing obligation of indemnity shall survive Closing or termination
of this Agreement without Closing.
6
(e) Except for Environmental Defects that Xxxxx discovered
during the Review under Paragraph 10(b), and to the extent of OXY's
working interest under an operating or unit agreement applicable to the
Properties covering a production or spacing unit, and subject to
Paragraph 10(f) hereof, on and after the Closing Date OXY shall
indemnify and defend Buyer from any and all Environmental Defects
(hereinafter "Environmental Claims") arising out of OXY's ownership
and/or operation of the Properties prior to the Effective Date.
(f) Limitations on OXY's Environmental Indemnity and
Obligations. OXY's obligations to indemnify Buyer under Paragraph 10(e)
hereof is subject to and limited by the following:
(i) Buyer shall have provided OXY with written notice
of an Environmental Claim on or before one (1) year from the
Closing Date.
(ii) Such written notice shall identify the
Environmental Claim, the affected Property, and the reasonably
estimated cost of remediation thereof.
(iii) The reasonably estimated costs to conduct the
cleanup, remediation or restoration of an Environmental Claim
exceed, in the aggregate for all affected Properties, the
threshold amount of $50,000. Once the threshold is exceeded
amounts recoverable are recoverable from the first dollar.
(IV) Buyer shall have provided OXY with invoices and
xxxxxxxx for work actually done in conducting the cleanup,
remediation or restoration of an Environmental Claim.
11. CALL ON PRODUCTION. This Agreement is specifically made subject to
the provisions and conditions of that certain Agreement of the Purchase and Sale
of Domestic Crude Oil executed the 31st day of August, 1983, and expiring
September 1, 1998 by and between Occidental Petroleum Corporation, et al., and
CITGO Petroleum Corporation, et al. (the "CITGO Contract"), and CITGO's purchase
option thereunder. Oxy agrees that it shall not assign, amend,or modify the
Citgo Contract as it applies to the Properties prior to September 1, 1998
without prior written consent of Buyer. OXY represents and warrants that such
agreement will expire as to the Properties, by its own terms, no later than
September 1, 1998, ("Expiration Date"). XXX has advised Xxxxx of the existence
of that certain lawsuit styled Xxxxxx X. Xxxxxxxx, et al. vs. CITGO Petroleum,
et al., as filed in civil action No. 97-066, in the Chancery Court of Xxxxx
County, Mississippi. OXY represents and warrants that there has been no request
for lease cancellation made in the lawsuit. While Xxxxx agrees to accept the
Properties subject to the CITGO Contract, it does so only until the earlier of
the following occurs: (i) September 1, 1998, or (ii) cancellation or termination
of the CITGO Contract by a court of law or as part of a settlement of the above
lawsuit. OXY agrees to indemnify and hold Buyer harmless from and against any
and all cost, expense, loss, or claim whatsoever, including interest, any fine
or penalty and reasonable attorney's fees and court costs, in connection with
the above lawsuit and/or any other claim that may be brought by a third party
against Buyer for selling crude oil for the price paid pursuant to the terms of
said CITGO Contract or for paying royalties or other leasehold burdens based on
that price, prior to the Expiration Date.
7
12. PRODUCTION PURCHASERS. OXY reserves the right to all payments which
have been or may be made by any gas purchaser and which were or may be
attributable to the sale or production of gas produced prior to the Effective
Date. OXY confirms that there are no reserves for which payment has been
received but production has not been delivered. OXY will provide Buyer with the
names and addresses of all purchasers. Buyer will prepare all letters in lieu
and will assume all responsibility for notifying the purchaser(s) of production
of change of ownership. The parties shall execute such letters in lieu of
transfer orders or such other documents as may be reasonably required by a
purchaser of production.
13. SUSPENSE AND ESCROW ACCOUNTS. All funds held by OXY in suspense for
the account of others and arising out of production from the Properties
(including but not limited to funds withheld from non-participating mineral
owners for plugging and abandonment purposes) shall be transferred to Buyer as
soon as possible after the Effective Date. Buyer shall assume full
responsibility for the payment of all funds arising out of production from the
Properties which have been deposited in accordance with various state escrow
statutes. As soon as reasonably possible after the execution hereof, but in no
event later than Closing, OXY shall furnish a listing of all accounts and funds
so held or deposited. Buyer shall indemnify, defend and hold OXY harmless for
all claims or actions arising out of or in connection with Xxxxx's deposit or
disbursement of said funds.
14. AUDITS. OXY retains the sole right to all claims and resolutions
thereof arising as a result of audit whether under previously performed audits
or audits performed by itself or others in the future under operating agreements
relating to charges to the joint accounts prior to the Effective Date. Any
monies received by Buyer which are associated with such claims and resolutions
shall be immediately remitted to OXY by Xxxxx.
15. LIMITATIONS ON AND EXCLUSION OF WARRANTY. THE CONVEYANCE OF THE
PERSONAL PROPERTY SHALL BE MADE "AS IS" AND THE CONVEYANCE OF THE REAL AND
PERSONAL PROPERTY SHALL BE WITHOUT WARRANTIES OF TITLE (EXCEPT BY THROUGH AND
UNDER OXY) OR WARRANTIES OR REPRESENTATIONS OF ANY OTHER NATURE, EXPRESS OR
IMPLIED. OXY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
ACCURACY OR COMPLETENESS OF ANY DATA, INFORMATION OR MATERIALS HERETOFORE OR
HEREAFTER FURNISHED BUYER IN CONNECTION WITH THE PROPERTIES; OR AS TO THE
QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE
PROPERTIES OR THE ABILITY OF THE PROPERTIES TO PRUDUCE HYDROCARBONS INCLUDING
THE COSTS WHICH MAY OR MAY NOT BE REQUIRED TO PRODUCE HYDROCARBONS. ANY AND ALL
SUCH DATA, INFORMATION AND OTHER MATERIALS FURNISHED BY OXY IS PROVIDED BUYER AS
A CONVENIENCE AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT BUYER'S SOLE
RISK. XXXXX HAS MADE AND WILL MAKE PRIOR TO CLOSING SUCH INDEPENDENT
INVESTIGATION AND EVALUATION OF THE PROPERTIES AS IT SHALL DEEM APPROPRIATE.
16. RECORDING. Upon delivery of the Assignments to Buyer as herein
contemplated, Buyer shall file such instrument for recording within ten (10)
days after such delivery with proper authorities in the appropriate counties and
shall furnish OXY with the recording data thereof.
8
17. ASSUMPTION AND INDEMNITY. Except for XXX's indemnities relating to
an Environmental Claim arising out of OXY's ownership or operation of the
Properties prior to the Effective Date which are covered exclusively under
Paragraph 10, on the Closing Date, but as of the Effective Date:
(a) Buyer shall defend, indemnify and hold harmless OXY and
its affiliated companies, its and their officers, directors, agents and
employees, from any and all losses, claims, demands, suits, damages,
expenses, costs, causes of action or judgments of any kind or character
with respect to all liabilities and obligations or alleged or
threatened liabilities and obligations, including claims for personal
injury, illness, disease, wrongful death, damage to property, liability
based on strict liability or condition of the Properties, and claims
(including fines, penalties, and cleanup expenses) resulting from
environmental damage or pollution which arise from, or are attributable
to the ownership or operation of the Properties by Buyer on or after
the Effective Date, including, without limitation any interest,
penalty, reasonable attorney's fees and other costs and expenses
incurred in connection therewith or the defense thereof, even if caused
in whole or in part by the sole or concurrent negligence or strict
liability of OXY, or condition of the Properties.
(b) Notwithstanding any other provision contained herein to
the contrary, Xxxxx agrees to assume any and all responsibility which
OXY may have under applicable governmental laws, rules and regulations
concerning the plugging and abandonment of xxxxx which are part of the
Properties, together with any cleanup and restoration of the surface or
subsurface as may be required under the terms of any lease or
applicable governmental laws, rules and regulations, and Buyer agrees
to defend, indemnify and hold OXY and its affiliated companies, its and
their officers, directors, agents and employees, harmless from any and
all liabilities arising from Buyer's failure, or alleged failure, to
properly plug and abandon such xxxxx and/or complete such cleanup or
restoration of the surface or subsurface as may be required as set
forth above.
(c) Notwithstanding any other provision contained herein to
the contrary, Buyer acknowledges that the Properties have been utilized
for the purpose of exploration, production and development of oil and
gas, and that Buyer has been informed and is aware that oil and gas
producing formations can contain naturally occurring radioactive
material (NORM) and that some oil field production equipment and/or
facilities may contain NORM. On and after the Effective Date, Xxxxx
agrees to assume all responsibility and liability related to NORM on
the Properties and agrees to defend, indemnify and hold OXY and its
affiliated companies, its and their officers, directors, agents, and
employees, harmless from any and all claims arising from the presence
of NORM which may be on the premises or personal property as the result
of oil and gas operations related to the Properties without regard to
when such condition or contamination occurred, or whether based on any
theory of negligence of OXY; PROVIDED, HOWEVER, that Xxxxx's indemnity
hereunder shall not apply to NORM contaminated pipes, valves and other
equipment that the parties agree, in writing, that OXY is to remove
prior to the Closing Date.
9
(d) If OXY is notified in writing by Xxxxx of a Buyer's claim
under this Paragraph 17(d) (except for an Environmental Claim covered
by Paragraph 22 hereof) within one (1) year after the Closing Date, OXY
agrees to indemnify, defend and hold Buyer and its affiliated
companies, its and their officers, directors, agents and employees,
harmless from and against any and all losses, claims, demands, suits,
damages, expenses, costs, causes of action or judgments of any kind or
character with respect to all liabilities and obligations or alleged or
threatened liabilities and obligations, including claims for personal
injury, illness, disease, wrongful death, damage to property,
liability, based on strict liability or condition of the Properties
which arise from, or are attributable to, (A) those claims and/or
litigation shown on Exhibit D, (B) the breach by OXY of the
representations contained in Paragraph 21 hereof, or (C) OXY's
ownership or operation of the Properties prior to the Effective Date
including, without limitation, any interest, penalty, reasonable
attorney's fees and other costs and expenses incurred in connection
therewith or the defense thereof. OXY shall have no obligation to Buyer
under this Paragraph 17(d) for any matter for which it is not notified
by Buyer in writing within one (1) year after the Effective Date;
provided however, there shall be no time limitation for any claims
under subpart (A) above or for any claims related to OXY's proper
payment of (i) taxes, (ii) royalties, overriding royalties and similar
burdens on production prior to the Effective Date, (iii) joint interest
audits for periods prior to the Effective Date or (iv) broker's or
finder's fees.
(e) The rights of the parties to indemnification hereunder are
contingent on the timely receipt by the indemnifying party of prompt
written notice and documentation of a claim for indemnification from
the party seeking indemnification. In no event shall either party be
liable to the other for loss of profits or consequential damages
hereunder.
18. COMPLIANCE WITH THE LAW. Xxxxx agrees to comply with all laws and
with all rules, regulations and orders of all municipal, state and federal
agencies and regulatory bodies in the conduct of all operations in and on the
lands covered hereby, including, but not by way of limitation, the proper
plugging of all xxxxx on the said lands, and the transfer or assumption of
applicable permits, bonds and licenses.
10
19. TAXES. Ad valorem and other property taxes for the current tax year
will be prorated between Buyer and OXY. Buyer shall also bear all applicable
sales taxes or similar taxes imposed by any state, county, municipality or other
governmental entity as a result of the sale.
20. REPRESENTATIONS AND WARRANTIES OF BUYER. The representations and
warranties of Buyer in this Paragraph 20 (a) through (e) shall survive Closing.
Buyer represents and warrants to and agrees with OXY that:
(a) Binding Obligation. This Agreement constitutes the legal,
valid and binding obligation of Buyer enforceable against Buyer in
accordance with its terms, except as limited by bankruptcy, insolvency
or other laws or general application relating to the enforcement of
creditors' rights.
(b) Government Consent. Except as otherwise provided herein,
no authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary to the valid execution, delivery or performance by
Buyer of this Agreement or any other document contemplated hereby or
referred to herein.
(c) Commission. OXY shall have no responsibility for any
commission or brokerage fees to be paid by Xxxxx or on Xxxxx's behalf
or for any other fees or expenses incurred by Buyer or on Xxxxx's
behalf in connection with the transactions contemplated by this
Agreement.
(d) Reliance. Xxxxx has made an independent investigation
respecting all aspects of the Properties which permitted it to make the
decision to execute this Agreement and has not relied in any manner
upon any statement, representation or warranty expressed by OXY prior
to the date of this Agreement.
(e) Purpose. The Properties covered by the Agreement are being
purchased for investment purposes only and not for the purpose of
resale.
21. REPRESENTATIONS AND WARRANTIES OF OXY. The representations and
warranties of OXY in this Paragraph 21 shall survive Closing for a period of one
(1) year. XXX represents and warrants to and agrees with Xxxxx that:
(a) Binding Obligation. This Agreement constitutes the legal,
valid and binding obligation of OXY enforceable against OXY in
accordance with its terms, except as limited by bankruptcy, insolvency
or other laws of general application relating to the enforcement of
creditors' rights.
11
(b) Government Consent. Except as otherwise provided herein,
no authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary to the valid execution, delivery or performance by
OXY of this Agreement or any other document contemplated hereby or
referred to herein.
(c) Commission. Buyer shall have no responsibility for any
commission or brokerage fees to be paid by OXY or on OXY's behalf or
for any other fees or expenses incurred by OXY or on OXY's behalf in
connection with the transactions contemplated by this Agreement.
(d) Litigation. Other than the litigation shown on Exhibit D,
to the best of OXY's knowledge and belief, at the date of this
Agreement, there are no actions, suits, proceedings or governmental
investigations or inquiries pending against OXY or any Properties (i)
seeking to prevent the consummation of the transactions contemplated
hereby, or (ii) which would singularly or in the aggregate, have a
material adverse effect on the Properties taken as a whole.
(e) Compliance with Laws. To the best of OXY's knowledge and
belief, OXY has operated the Properties, or caused the Properties to be
operated, in compliance with all laws, ordinances, regulations and
orders applicable to the Properties, except where the failure to be in
such compliance would not, singularly or in the aggregate, have a
material adverse effect on the Properties taken as a whole.
(f) Royalties. To the best of OXY's knowledge and belief, all
royalties due under the oil and gas leases described in Exhibit "A"
have been properly paid to the parties entitled thereto or properly
accounted for.
(g) Taxes. To the best of OXY's knowledge and belief, all ad
valorem, property, production, severance, excise and similar taxes and
assessments based on or measured by the ownership of property or the
production of hydrocarbons or the receipt of proceeds therefrom on the
Properties which have become due and payable have been paid.
(h) Tax Partnerships. To the best of OXY's knowledge and
belief, the Properties are not subject to any tax partnership agreement
which would bind Buyer.
22. ASSIGNABILITY. Buyer shall not assign or cause to be assigned any
of the rights or obligations hereunder without the prior written consent of OXY
prior to the Closing Date.
23. FURTHER ASSURANCES. OXY and Xxxxx shall execute and deliver or
cause to be executed and delivered all such other documents which are reasonably
required to give effect to the terms and conditions of this Agreement.
12
24. DUE DILIGENCE REVIEW.
(a) Prior to Closing, OXY, in OXY's offices, will make
available to Buyer and Xxxxx's authorized representatives for
examination as Buyer may reasonably request the Records. Prior to
Closing, Buyer, at Xxxxx's sole cost, may copy any portion of the
Records as Buyer may reasonably request.
(b) OXY shall permit Buyer and Xxxxx's authorized
representatives to consult with OXY's employees during reasonable
business hours and to conduct, at Buyer's sole risk and expense,
wellsite inspections and inventories of the Properties that are
OXY-operated. During such inspections, Buyer shall have the right to
review the Properties to determine the environmental condition of the
Equipment and Lease premises. To the extent Buyer desires similar
access to OXY's non-operated Properties, OXY shall assist Buyer in
obtaining such access.
(c) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
BUYER ACKNOWLEDGES THAT OXY HAS MADE NO REPRESENTATIONS, VERBAL OR
OTHERWISE, OR WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF THE
RECORDS, OTHER INFORMATION, OR AS TO OXY'S TITLE TO THE PURCHASED
PROPERITES, AND IN ENTERING INTO AND PERFORMING THIS AGREEMENT, BUYER
HAS RELIED AND WILL RELY SOLELY UPON ITS INDEPENDENT INVESTIGATION OF,
AND JUDGMENT WITH RESPECT TO, THE PROPERTIES, THEIR VALUE AND OXY'S
TITLE THEREOF.
25. NOTICES. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, or to the extent
receipt is confirmed by the party charged with notice, sent by documented
overnight delivery service, by United States Mail, telecopy, telefax or other
electronic transmission service to the appropriate address or number as set
forth below. Notices to OXY or Buyer shall be addressed to:
OXY BUYER
OXY USA INC. SWIFT ENERGY COMPANY
-------------------------- 00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
-------------------------- Houston, Texas 77060
Attn: -------------------- Attn: Xxxxxx X. Xxxxx
Fax: (713) ----------- Fax: (000) 000-0000
13
26. ENTIRE AGREEMENT. This instrument states the entire agreement and
supersedes all prior agreements (except any prior Confidentiality Agreement
between the Buyer and OXY) between the parties concerning the subject matter
hereof. This Agreement may be supplemented, altered, amended, modified or
revoked by writing only, signed by both parties.
27. OCCASIONAL SALE. OXY and Buyer believe that this purchase and sale
of the Properties constitutes an isolated or occasional sale and is not subject
to sales tax; provided, however, if any sales, transfers, use taxes or other
similar taxes are due or should hereafter become due (including penalty and
interest thereon) by reason of this transaction, Buyer shall timely pay and
solely bear all such taxes.
28. COUNTERPART. This Agreement may be executed by Xxxxx and OXY in any
number of counterparts, each of which shall be deemed an original instrument,
but all of which together shall constitute one and the same instrument.
29. WAIVER. Any of the terms, provisions, covenants, representations,
warranties or conditions hereof may be waived only by a written instrument
executed by the party waiving compliance. The failure of any party at any time
or times to require performance of any provisions hereof shall in no manner
affect such party's right to enforce the same. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
30. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed, and enforced in accordance with the
laws of the State of Mississippi.
IN WITNESS WHEREOF, this Purchase and Sale Agreement has been executed
this ----- day of December, 1997.
OXY USA Inc.
By -----------------------------
Name: X. X. Xxxxxx
Title: Attorney-In-Fact
SWIFT ENERGY COMPANY
By -----------------------------
Name: Xxxxx X. Xxxxx
Title: President
14
EXHIBIT "A"
'AVAILABLE UPON REQUEST'
Attached to and made a part of that certain Purchase and Sale Agreement
betweenOXY USA Inc. and SWIFT ENERGY COMPANY,
effective September 1, 1997.
SCHEDULE OF LEASE
Lease Number:
Date:
Lessor:
Lessee:
Recording Data:
Description:
NRI:
WI:
15
EXHIBIT "B" - Attached to and made a part of that certain Purchase and Sale
Agreement between OXY USA Inc. and SWIFT ENERGY COMPANY,
effective September 1, 1997.
ALLOCATION OF VALUE
FIELD WELL GWI NRI ALLOCATION
----- ---- --- --- ----------
Xxxxxxx Xxxxxxx A-1 N/A .0042614 0
Xxxxx A-1 .5998736q .4908013 9,598
Xxxxxxxx Cent. Battery .5998736 N/A 0
Holiday BOE D-1 1.00000 .8125000 2,079,216
Luxor Xxxx A-1 1.00000 .8026912 53,983
Xxxxxxx A-1 1.00000 .8075956 759
S. Centreville X.X. Xxxxxxx 42-5 #1 .9753190 .7870977 199,198
X.X. Xxxxxxx 42-5 #1 (BP) .9753190 .7870977 407,000
PUD 43-1 .9753190 .7870977 1,737,531
Xxxxxxx 42-1 N/A .0567768 12,715
---------
TOTAL 4,500,000
---------
16
EXHIBIT "C"
Attached to and made a part of that certain Purchase and Sale Agreement between
OXY USA Inc. and SWIFT ENERGY COMPANY, effective September 1,1997.
ASSIGNMENT AND BILL OF SALE
---------------------------
KNOW ALL MEN BY THESE PRESENTS, that OXY USA INC., a Delaware
corporation, whose address is P. O. Box 27570, Houston, Texas 77227-7570,
hereinafter referred to as "Assignor", for and in consideration of the sum of
Ten Dollars ($10.00) and other valuable considerations paid, receipt of which is
hereby acknowledged, does hereby, subject to the exceptions and reservations
hereinafter contained, grant, convey, sell, assign, transfer and deliver unto
Swift Energy Company, whose address is 00000 Xxxxxxxxxx Xxxxx, Xxxxx 000,
hereinafter referred to as "Assignee", all of Assignor's right, title and
interest in the Oil and Gas Lease(s) and the xxxxx described in Exhibit "A",
which is attached hereto and made a part hereof (hereinafter called the
"Properties").
For the same consideration as first hereinabove recited, the Assignor
does hereby bargain, grant, sell convey and transfer unto Assignee all of
Assignor's right, title and interest in and to the well(s) located on the lands
described in Exhibit "A", including all of OXY's right, title and interest in
and to all permits, licenses, servitudes, rights-of-way, division orders, gas
purchase and sale agreements (wherein OXY is a selling party), crude oil
purchase and sale agreements (wherein OXY is a selling party, but excluding that
certain Agreement for the Purchase and Sale of Domestic Crude Oil executed the
31st day of August, 1983, by and between Occidental Petroleum Corporation, et
al., and CITGO Petroleum Corporation, the "CITGO Contract"), surface leases,
farmin agreements, farmout agreements, bottom hole agreements, acreage
contribution agreements, operating agreements, unit agreements, processing
agreements, options, leases of equipment or facilities, and all other contracts
and agreements that are appurtenant to the Properties or used or held for use in
connection with the ownership or operation of the Properties (the "Related
Agreements"); and all of OXY's right, title and interest in and to all of the
real, personal and mixed property located on and used solely in the operation of
the Properties, including, but not limited to (i) all xxxxx, wellhead equipment,
fixtures (including, but not limited to, field separators and liquid
extractors), pipe, casing and tubing, (ii) all production, gathering, treating,
processing, compression, dehydration, salt water disposal, and injection
equipment and facilities, (iii) all tanks, machines, equipment, vessels and
other facilities (collectively called the "Facilities").
Assignee acknowledges and represents that prior to accepting this
Assignment and Bill of Sale, it conducted such inspection of the Properties as
it deemed reasonably prudent, made itself familiar with the operations
previously conducted thereon and satisfied itself as to the risks and
obligations assumed hereunder.
17
Assignee agrees to comply with all laws and with all rules, regulations
and orders of all municipal, state and federal agencies and regulatory bodies in
the conduct of all operations by Assignee in and on the lands covered hereby.
This Assignment and Bill of Sale is made subject to the provisions and
conditions of that certain Agreement for the Purchase and Sale of Domestic Crude
Oil executed the 31st day of August, 1983, by and between Occidental Petroleum
Corporation, et al., and CITGO Petroleum Corporation, et al. (the "CITGO
Contract"), and CITGO's purchase option thereunder.
This Assignment and Bill of Sale is made in accordance with and subject
to the provisions and conditions contained in that certain Purchase and Sale
Agreement with OXY USA Inc., dated December 22, 1997, which is made a part
hereof by reference. In the event of a conflict between the terms and conditions
of this Agreement and the Purchase and Sale Agreement the terms of the latter
shall control.
Assignor reserves the right to retain the originals of and/or have
access, and at Assignor's expense, the right to copy, excerpt from or reproduce
any records to the extent necessary for:
(a) federal, local or state regulatory or tax matters affecting Assignor,
(b) the resolution of any existing disputes or contract compliance issues
affecting Assignor and related to the properties, or
(c) other matters or disputes relating to Assignor's prior ownership of or
liability with respect to the said lease and lands.
The reservations herein made and the provisions and covenants contained
therein shall attach to and run with the lease(s) assigned and the lands herein
described or referred to and shall be binding upon and inure to the benefit of
Assignor and Assignee and their respective heirs, administrators, executors,
devisees, trustees, successors and assigns.
This Assignment and Bill of Sale shall be effective for all purposes as
of the September 1, 1997, at 7:00 A.M., Central Daylight Time.
TO HAVE AND TO HOLD the same unto the said Assignee, its successors and
assigns according to the terms and conditions of the Oil and Gas Leases, the
said Assignee to perform all of the conditions, obligations and covenants
thereof and the terms hereof.
EXCEPT AS TO ALL THOSE LAWFULLY CLAIMING OR TO CLAIM THE SAME OR ANY
PART THEREOF, BY, THROUGH OR UNDER ASSIGNOR, THIS ASSIGNMENT AND BILL OF SALE IS
MADE WITHOUT WARRANTY OF TITLE, EITHER EXPRESS OR IMPLIED AND, AS SAME PERTAINS
TO ALL XXXXX, MATERIALS AND EQUIPMENT COVERED HEREBY, THIS ASSIGNMENT IS MADE
WITHOUT WARRANTY, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY AND FITNESS FOR
PARTICULAR PURPOSE, AND ASSIGNEE ACCEPTS SUCH XXXXX, MATERIALS AND EQUIPMENT "AS
IS".
IN WITNESS WHEREOF, the said OXY USA Inc., as Assignor, and SWIFT
ENERGY COMPANY, as Assignee, have caused their names to be affixed as of this
22nd day of December, 1997, and this Assignment shall be effective as of the
effective date herein stated.
18
ASSIGNOR
OXY USA INC.
By: ----------------------------------
Name: X. X. Xxxxxx
Title: Attorney-In-Fact
XXXXXXXX
SWIFT ENERGY COMPANY
By: ----------------------------------
Name: Xxxxx X. Xxxxx
Title: President
THE STATE OF TEXAS S
S SS:
COUNTY OF XXXXXX
This instrument was acknowledged before me on the 22nd day of December,
1997, on behalf of OXY USA Inc., a Texas corporation, by X. X. Xxxxxx as
Attorney-In-Fact, on behalf of said corporation.
(SEAL) ------------------------------------
Notary Public in and for the
State of Texas
THE STATE OF TEXAS S
S SS:
COUNTY OF XXXXXX S
This instrument was acknowledged before me on the 22nd day of December,
1997, on behalf of Swift Energy Company, a Texas corporation by Xxxxx X. Xxxxx
as President of Swift Energy Company, on behalf of said corporation.
(SEAL) ------------------------------------
Notary Public in and for the
State of Texas
19
EXHIBIT "D" - Attached to and made a part of that certain Purchase and Sale
Agreement between OXY USA Inc. and SWIFT ENERGY COMPANY,
effective September 1, 1997.
LITIGATION AND CLAIMS
1. Xxxxxx X. Xxxxxxxx, et al. vs. CITGO Petroleum Corp., et al., Case
#97-066, Chancery Court, Xxxxx County, Mississippi
Plaintiffs allege antitrust, combination and conspiracy to fix, depress
and maintain artificially low prices for crude oil in violation of
Mississippi antitrust laws.
2. Various litigations seeking "class certification" for royalty
payments based on "posted price".
a) Xxxx Xxxx Xxxxxx, et al vs. Occidental Petroleum Corp., et
al., as filed in the County Court of Panola County, Texas.
b) Cameron Parish School Board vs. Texaco, Inc., et al., as filed
in the 38th Judicial District Court, Cameron Parish,
Louisiana.
NOTE: OXY retains responsibility for the above litigation and to
indemnify and hold Buyer harmless from and against the same
pursuant to Paragraph 11 of this agreement.
20
