July 2, 2019
July 2, 2019
Mesquite SWD, Inc.
Mesquite Disposals Unlimited, LLC
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Re: Purchase Price
Ladies and Gentlemen:
Reference is hereby made to that certain Asset Purchase and Sale Agreement dated May 13, 2019 (the “Purchase Agreement”) by and among Mesquite SWD, Inc., a New Mexico corporation (“Mesquite”), Mesquite Disposals Unlimited, LLC a New Mexico limited liability company (“Disposals Unlimited” and, together with Mesquite, the “Seller”), and NGL Water Solutions, LLC, a Colorado limited liability company (“NGL”). Capitalized terms used but not otherwise defined herein have the respective meanings given to such terms in the Purchase Agreement.
The Seller and NGL are closing the transactions contemplated by the Purchase Agreement (the “Transactions”) as of the date hereof, and by execution of this letter agreement, hereby agree to the terms set forth herein, intending to amend and supplement the terms of the Purchase Agreement as set forth herein. Therefore, for and in consideration of the mutual covenants between the parties and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
Purchase Price
The Purchase Price payable by NGL to Seller will be paid as follows:
· At Closing, NGL will pay Disposals Unlimited $592,500,000 in cash (which shall be the “Cash Consideration” for all purposes under the Purchase Agreement) in accordance with Section 2.2(a) of the Purchase Agreement. This paragraph only changes the amount of the Cash Consideration payable at Closing; it is not intended to change or amend the Purchase Agreement in any other way.
· At Closing, NGL will issue to Precious Lady $100,000,000 in NGL Preferred Units as provided in Section 2.2(b) of the Purchase Agreement. This paragraph is included for completeness only; it does not change or amend the Purchase Agreement in any way.
· The remainder of the Purchase Price will be payable in installments, as follows:
· Following Closing (i) if the Average Volume is 400,000 Bpd or greater for a calendar month, NGL will pay $100,000,000 in cash to Disposals Unlimited as provided below (the “First Installment”), and (ii) if the Average Volume is 500,000 Bpd or greater for a calendar month, NGL will pay an additional $100,000,000 in cash to Disposals Unlimited as provided below (the “Second Installment” and together with the First Installment, the “Installments”).
In no event will NGL be obligated to pay more than $200,000,000 in the aggregate in respect of the Installments. There will not be a time limit imposed on Mesquite to reach the Average Volume of Bpd.
· “Average Volume” means, for any calendar month, the average daily volume of produced water and/or flowback water in Bpd that is handled, transported or disposed of utilizing the assets purchased from the Seller in the Transaction or any interconnected assets upstream thereof, without duplication of any volumes, including water from locations identified on Exhibit A attached hereto.
· “Bpd” means barrels of produced water per day, with each barrel being equivalent to forty-two (42) U.S. gallons.
· If one or more Installment thresholds have been met, NGL will pay the Installment amounts owed to Disposals Unlimited in cash within 30 days after the end of the calendar month in which the Installment threshold is met; provided however, that in no event shall (i) the First Installment be payable prior to October 2, 2019 or (ii) the Second Installment be payable prior to April 2, 2020.
· All payments made under this letter agreement will be included in the “Purchase Price” for all purposes under the Purchase Agreement.
This letter agreement, together with the Purchase Agreement and the other agreements and instruments executed in connection therewith, constitute the complete understanding among the Seller and NGL regarding the subject matter hereof, and supersede any prior agreements, representations or understandings (whether written, oral or implied) among such parties as to the matters set forth herein. Except to the extent expressly set forth in this letter agreement, neither the Seller nor NGL waive or change any of the terms, conditions, or obligations set forth in the Purchase Agreement. This letter agreement may not be amended or modified, except by an express written agreement signed by the Seller and NGL. The terms of this letter agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this letter agreement or arising out of, related to, or in any way connected with, this letter agreement, will be governed by the laws of the State of Texas, excluding laws relating to conflicts or choice of law.
This letter agreement may be executed and delivered (including by facsimile or Portable Document Format (pdf) transmission) in any number of counterparts with the same effect as if all parties hereto had signed the same document. Facsimile and other electronic copies of manually signed originals shall have the same effect as manually signed originals and shall be binding on the parties hereto. All counterparts must be construed together to constitute one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto hereby execute this letter agreement effective on the date hereof.
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MESQUITE SWD, INC., | |
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a New Mexico corporation | |
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By: |
/s/ Xxxx Xxxxxx |
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Name: |
Xxxx Xxxxxx |
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Title: |
President |
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MESQUITE DISPOSALS UNLIMITED, LLC, | |
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a New Mexico limited liability company | |
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By: |
/s/ Xxxx Xxxxxx |
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Name: |
Xxxx Xxxxxx |
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Title: |
Managing Member |
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NGL WATER SOLUTIONS, LLC, | |
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a Colorado limited liability company | |
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By: |
/s/ Xxxxxxx X. Xxxxx |
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Name: |
Xxxxxxx X. Xxxxx |
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Title: |
Executive Vice President |
[Signature Page to Side Letter Agreement]
Exhibit A
Meters
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Site |
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Operator |
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Meter |
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Cypress SWD |
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BTA Oil |
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BTA FM |
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Paduca Booster |
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BTA Oil |
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BTA 1 FM |
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Paduca Booster |
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BTA Oil |
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BTA 2 XX |
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Xxxx Draw |
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BTA Oil |
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BTA 1 XX |
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Xxxx Draw |
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BTA Oil |
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BTA 2 XX |
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Xxxx Draw |
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BTA Oil |
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BTA 3 FM |
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West Gramma |
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Centennial |
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Centennial Pipeline |
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Salado Draw Booster |
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Chevron |
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Chevron Flowmeter |
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Blue Quail SWD |
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Cimarex |
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Cimarex FM |
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Cypress SWD |
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Cimarex |
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Cimarex FM |
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Deep Purple SWD |
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Cimarex |
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Cimarex-Red Tank Totalizer FM |
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Paduca Booster |
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Cimarex |
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Hallerteau FM |
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Paduca Main |
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Cimarex |
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Cimarex FM |
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Paduca SWD |
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Cimarex |
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Cimarex FM |
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Red Hills SWD |
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Cimarex |
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Cimarex XX |
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Xxxx Draw |
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Cimarex |
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Cimarex FM |
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Big Eddy Front |
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Cimarex |
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Xxxxxxx/Hackberry |
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Big Eddy Back |
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Cimarex |
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Cimarex |
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Bran SWD |
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Concho Resources |
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COG 1 FM |
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Bran SWD |
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Concho Resources |
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COG 2 FM |
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Bran SWD |
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Concho Resources |
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OXY SDS11 1 FM |
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Cotton Draw SWD |
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Concho Resources |
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COG FM |
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Deep Purple SWD |
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Concho Resources |
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COG FM |
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Big Eddy SWD |
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Concho Resources |
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Paduca SWD |
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Concho Resources |
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COG FM |
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Battle Axe |
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Conoco Xxxxxxxx |
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Battle Axe |
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Big Xxxx |
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Xxxxx Energy Corporation |
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Hackberry |
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Cypress SWD |
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Devon Energy Corporation |
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Potato Basin |
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Blue Quail SWD |
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Devon Energy Corporation |
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Devon 2 FM |
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Blue Quail SWD |
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Devon Energy Corporation |
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Xxxxx Xxxx Lake FM |
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Bran SWD |
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Devon Energy Corporation |
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Devon FM |
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Deep Purple SWD |
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Devon Energy Corporation |
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Devon FM |
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Paduca 6 |
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Devon Energy Corporation |
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Devon FM |
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Paduca Main |
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Devon Energy Corporation |
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Devon FM |
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Cotton Draw |
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Devon Energy Corporation |
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Cotton Draw |
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Xxxx Draw |
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Devon Energy Corporation |
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Flaggler |
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VJ Ranch |
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EOG Resources |
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EOG |
Exhibit A to Side Letter Agreement
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Stateline Booster |
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EOG Resources |
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Xxxxx |
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Xxxxxx Draw Booster |
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EOG Resources |
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EOG Ortanna Flowmeter |
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Pipeline/ Paduca Booster |
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EOG Resources |
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Gem |
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Xxxx Draw |
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EOG Resources |
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Xxxx Draw |
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Paduca 6 |
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Xxxxxxxxx Oil Company |
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Xxxxxxxxx 2 FM |
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Paduca 6 |
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Xxxxxxxxx Oil Company |
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Xxxxxxxxx XX |
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Paduca Booster |
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Xxxxxxxxx Oil Company |
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Xxxxxxxxx 0 XX |
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Xxxxxx Xxxxxxx |
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Xxxxxxxxx Oil Company |
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Xxxxxxxxx XX |
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West Gramma |
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Xxxxxxxxx Oil Company |
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Xxxxxxxxx Pipeline |
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Bran SWD |
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OXY USA INC. |
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OXY 12” FM |
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Bran SWD |
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OXY USA INC. |
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OXY SDS11 2 FM |
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Cedar Canyon SWD |
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OXY USA INC. |
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Oxy FM |
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Deep Purple SWD |
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OXY USA INC. |
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Oxy 2 FM |
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Deep Purple SWD |
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OXY USA INC. |
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Oxy 4 FM |
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Deep Purple SWD |
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OXY USA INC. |
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Pipeline 1 Totalizer FM |
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Deep Purple SWD |
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OXY USA INC. |
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Pipeline 3 Totalizer FM |
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Mesa Verde |
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OXY USA INC. |
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Oxy XX |
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Xxxxxxx Injection Site |
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OXY USA INC. |
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Oxy FM |
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Sand Dunes SWD |
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OXY USA INC. |
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Oxy Pipeline Totalizer |
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Sand Dunes SWD #1 |
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OXY USA INC. |
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Oxy FM |
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Deep Purple SWD |
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Regeneration |
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Regeneration XX |
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Xxxx Draw |
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Xxxxxx |
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Xxxxxx XX |
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Xxxxxx SWD |
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SHELL WESTERN E&P |
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Xxxxxxxx |
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Stateline Booster |
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SHELL WESTERN E&P |
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Xxxxx |
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Stateline Booster |
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SHELL WESTERN E&P |
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12’ Shell-Rocazoller FM |
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Stateline Booster |
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SHELL WESTERN E&P |
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Great White FM |
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Stateline Booster |
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SHELL WESTERN E&P |
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Shell- Rocazoller FM |
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Blue Quail SWD |
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Taprock |
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Taprock 2 FM |
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Blue Quail SWD |
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Taprock |
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Taprock FM |
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Cypress SWD |
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Taprock |
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Taprock 2 FM |
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Cypress SWD |
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Taprock |
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Taprock 3FM |
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Cypress SWD |
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Taprock |
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Taprock XX |
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Xxxxxx SWD |
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BHP |
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BHP |
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Rattlesnake Booster |
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Tema |
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Tema |
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Cowboy Booster |
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XTO |
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Cowboy tie in |
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Cypress SWD |
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XTO |
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Remuda Basin |
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Blue Quail SWD |
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XTO |
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Mis Amigos |
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Outetbanks SWD |
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XTO |
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Powerpuff |
Exhibit A to Side Letter Agreement
Trucked water from the
following unload stations:
Cotton Draw
Blue Quail
Bran
Outlaw
Xxxxxxx
Exhibit A to Side Letter Agreement
