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EXHIBIT 10.50
MASTER DRILLING AGREEMENT
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MASTER DRILLING AGREEMENT
THIS AGREEMENT, made and entered into the 19th day of September, 1996,
by and between Xxxxxx Offshore, Inc., a Delaware corporation, hereinafter
called "TOFF", and Sedco Forex Division, Schlumberger Technology Corporation,
hereinafter called "Contractor";
WITNESSETH, that:
WHEREAS, TOFF may from time to time desire to have a well or xxxxx
drilled and completed or abandoned in search of oil, or gas, or for other
purposes;
AND, WHEREAS, Contractor is engaged in the business of drilling and
completing or abandoning such xxxxx and warrants and represents that it has or
will have adequate equipment in good working order and fully trained personnel,
properly certified, and capable of efficiently operating such equipment with
which it desires to drill and/or complete or abandon such well or xxxxx;
NOW, THEREFORE, it is agreed by and between TOFF and Contractor as
follows:
I. MASTER AGREEMENT
1.1 USE OF DRILLING ORDER. If at any time during the term of this
Master Agreement, hereinafter called "Agreement", TOFF desires to have a well
or xxxxx drilled and/or completed or abandoned by Contractor, TOFF shall
prepare and submit to Contractor a "Bid Sheet and Drilling Order", hereinafter
referred to as "Drilling Order", which shall set forth the specifications and
other conditions under which such well or xxxxx are to be drilled and/or
completed or abandoned. If Contractor desires to drill and/or complete or
abandon the well or xxxxx set forth in Drilling Order under the terms and
conditions thereof and of this Agreement, Contractor shall complete the
Drilling Order, setting forth the prices it proposes to charge for its services
and properly execute the Drilling Order in duplicate originals and return them
to TOFF. If TOFF is satisfied with Contractor's proposals, TOFF will execute
the Drilling Order and return one duplicate original to Contractor. When the
Drilling Order has been so executed, it together with this Agreement shall
become the "Contract" which shall control the relationship of the parties
relative to the drilling and/or completing or abandoning of any well or xxxxx
covered therein. This Agreement and the accepted and executed Drilling Order
may hereinafter be referred to as the "Contract." Execution of this Agreement
alone shall not obligate either TOFF or Contractor to enter into any Drilling
Order. TOFF is not obligated by this "Agreement" to solicit or submit bids to
Contractor on any xxxxx and may solicit and submit bids from and enter into
contracts with other parties for drilling and/or completing or abandoning xxxxx
or may do same itself.
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1.2 DRILLING ORDER TERMS INCLUDED. If and when the Drilling Order
has been executed by the parties, Contractor shall commence operations for
drilling of the well or xxxxx at the time and date set forth in the Drilling
Order and drill and/or complete or abandon the well or xxxxx during the term,
at the location, in the manner, to the depth, and in accordance with all
provisions and specifications of both this Agreement and the Drilling Order.
II. FURNISHING OF MATERIALS, EQUIPMENT, SUPPLIES AND LABOR
2.1 FURNISHED BY WHOM. For the work to be performed by it,
hereunder, Contractor shall furnish the minimum crew complement specified in
the Drilling Order Section 13 and shall furnish the rig and drilling equipment
referred to in the Drilling Order Section 4, and such other equipment,
materials and services as specified in the Drilling Order Section 5 as are to
be furnished by Contractor for TOFF. TOFF shall furnish such items as it is
required to furnish by the Drilling Order Section 5. All other materials,
equipment, tools, appliances, machinery, services and supplies for the proper
drilling, completing, abandoning, working over, or deepening, and for
protecting the rig or the well or xxxxx involved, except that which TOFF herein
expressly agrees either to furnish or reimburse Contractor for, shall be
furnished and installed by and at the expense of Contractor. All labor
necessary and proper in such operations shall be furnished by and at the
expense of the Contractor.
2.2 PURCHASES FOR TOFF. If Contractor purchases at TOFF's request
any materials, supplies or equipment which TOFF is obligated to furnish under
the terms of this Agreement or under the Drilling Order, TOFF shall pay
Contractor within thirty (30) days after date of receipt of Contractor's
invoice the actual cost of such materials, supplies or equipment, less any cash
discounts thereon to which Contractor may be entitled. Contractor shall
furnish TOFF copies of suppliers', vendors' or third party invoices covering
such materials, supplies or equipment. The use of machinery, tools and
equipment which according to the Drilling Order are to be furnished by
Contractor but which are nevertheless furnished by TOFF, will be charged to
Contractor on mutually agreed commercial rental rates and terms.
2.3 MOVING ON LOCATION. TOFF will survey the location of the well
and furnish such labor, equipment, materials, supplies and services as set out
in the Drilling Order Section 5 so that Contractor may fulfill its obligation
to position the rig on location.
III. BASIS OF PAYMENT
3.1 DAY WORK RATES. TOFF shall pay Contractor for work performed
hereunder in accordance with the rates and basis of payment set forth in the
applicable Drilling Order Section 13 (Day Work Bid).
3.2 SHUT-DOWN - TOFF. When Contractor's rig is shut down by
Contractor waiting for orders from TOFF, or for materials, services or other
items which TOFF is obligated to furnish, TOFF shall pay Contractor the
applicable standby rates specified in the Drilling Order Section 13C. Before
changing to or from standby rate without crew, TOFF shall: (a) give Contractor
a minimum of eight (8) hours notice, and (b) provide for the rate change to
take effect at the "tour-change-time" only.
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3.3 SHUT-DOWN - CONTRACTOR. When it is necessary to shut down
Contractor's rig for repairs or due to lack of materials or labor to be
furnished by Contractor, Contractor shall be allowed compensation in the manner
set out in the applicable Drilling Order Section 13M.
IV. TIME OF PAYMENT
4.1 PAYMENT IN GENERAL. Subject to and conditioned upon the full
and complete compliance by Contractor with all terms and conditions of this
Agreement and of the Drilling Order, TOFF shall make payments to Contractor as
stipulated herein.
4.2 DAY WORK PAYMENT. Contractor shall invoice TOFF at the close
of each calendar month for the number of days work was performed during the
month at day work rates set forth in the applicable Drilling Order Section 13
(Day Work). Upon completion of drilling operations, Contractor shall remove
its rig from location (unless a delay is agreed to by TOFF) and clean up the
well site as specified in the Drilling Order. If clean up at the well site is
not accomplished to TOFF's satisfaction, TOFF may retain an amount sufficient
to accomplish such clean up out of the last invoice submitted to TOFF. This
shall not limit TOFF's right to recover the full amount of clean up costs.
4.3 TIME OF PAYMENT. TOFF shall pay all properly documented
invoices within thirty (30) days after receipt thereof, except as provided in
Paragraph 4.2 for cleanup.
V. STOPPAGE OF WORK
5.1 WELL-TO-WELL CONTRACTS. In well-to-well contracts, TOFF shall
have the right to terminate the performance of the work covered by the Drilling
Order for any reason at any point it may desire. This includes the right to
delete as many xxxxx as desired from a multiple-well Drilling Order.
5.2 TERM CONTRACTS. TOFF shall have the right to direct the
stoppage of the work to be performed hereunder at any time, including during
work on any well and prior to reaching the objective depth or to completion of
other work being performed. In the event of such stoppage, TOFF shall be under
no obligation to Contractor except to pay for all work done by Contractor and
otherwise satisfy TOFF's obligations in accordance with the terms of this
Agreement and the applicable Drilling Order as of the time of such stoppage,
and to pay charges later incurred and perform later duties in accordance with
the terms hereof for and in connection with any completion or abandoning
operations or moving off location. However, the parties may agree to other
work under provisions of Drilling Order Section 15 in which event such further
work shall be conducted in accordance with the terms and conditions of this
Agreement and the Drilling Order.
VI. TAKEOVER BY TOFF
Time is of the essence in performance of this "Contract". In the
event of unreasonably slow progress, carelessness, inattention or incompetence
on the part of Contractor or in the event Contractor for any reason shall fail
to supply sufficient properly skilled workmen or
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suitable tools, machinery and equipment for efficient performance of the work
on any well hereunder or in the event Contractor neglects or willfully
discontinues or delays commencement of work to be performed hereunder, then
TOFF shall notify Contractor of its dissatisfaction. If such condition is not
corrected to TOFF's satisfaction within five days of notice, TOFF shall have
the option to terminate the "Contract" or take possession of the well,
discontinue the drilling thereof, and dismantle or abandon same, being liable
only for the work done by contractor prior to such termination or takeover. If
TOFF so elects, it may take possession of the well and any or all of
Contractor's tools, machinery and equipment at the well site and, through its
own employees or some other contractor, drill such well to completion. TOFF
shall also have such termination right after takeover of work on a well as
provided below. If there should be imminent danger of a blowout or other well
hazards, TOFF shall have the right to take over operations immediately and
either discontinue, abandon, or continue drilling. Contractor shall continue
to have custody of and be responsible for its rig and the positioning, locating
and maintaining of it, and TOFF or its representative shall have supervision
and control of such facilities only to the extent of the drilling or other
operations involved. If TOFF takes over the well and operation of Contractor's
tools, machinery and equipment and completes the well, TOFF's costs in
completing the well, with no allowance for use of Contractor's tools, machinery
and equipment shall be deducted from the contract price which otherwise would
have been paid to Contractor, and the balance, if any, paid to Contractor.
TOFF shall be responsible for the return of such drilling equipment and tools,
machinery and equipment to Contractor in as good as condition as when received,
natural wear and weathering, accidental loss or breakage excepted. If
operations are taken over by TOFF as herein provided, all operations thereafter
performed shall be at TOFF's risk and the indemnity provisions hereof shall not
apply. Contractor shall continue to have custody, control and supervision of
the vessel, its hull and all ballast control and related systems essential to
maintaining the vessel in a safe condition. TOFF shall have supervision,
custody and control over Contractor's drilling equipment and related drilling
operations. If Contractor carries insurance on Contractor's tools, machinery
and equipment, such insurance shall be continued in effect during the period of
such takeover, and TOFF shall reimburse Contractor for the cost thereof. TOFF
may elect to secure such insurance through some other source including
assumption of all or part of the risk as a self-insurer.
VII. CASING PROGRAM
7.1 METHOD AND COMPENSATION. Contractor shall run and cement all
strings of casing as provided in the applicable Drilling Order Section 6 and
shall be compensated at the applicable day work rates as set out in that
Drilling Order.
7.2 PROTECTORS AND LUBRICANTS. Contractor shall keep thread
protectors on the casing until it is taken from the racks to be run into the
hole and shall apply a suitable pipe thread lubricant as it is run. Contractor
shall preserve all such protectors. After operations are completed, Contractor
shall break down all surplus casing, put protectors on same as it is broken
down, and return such casing to the pipe racks.
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VIII. DRILLING METHODS AND PRACTICES
8.1 STANDARDS OF PERFORMANCE. Contractor agrees to perform all
work under the terms of this Agreement and according to the specifications and
conditions set forth in the Drilling Order with due diligence and care in a
good, workmanlike manner in accordance with best drilling practices.
8.2 TOFF EQUIPMENT - FAILURE NOTIFICATION. Contractor agrees to
notify TOFF promptly in case of any failure of TOFF provided equipment,
materials, or supplies.
8.3 EQUIPMENT CONDITION. Contractor shall maintain all its
equipment in good safe operating condition at all times. Well control
equipment shall be checked by Contractor as prescribed in Section 4B of the
Drilling Order and Contractor shall use all reasonable means to control and
prevent fires and blowouts and to protect the hole and TOFF's equipment. Any
equipment furnished by TOFF to Contractor shall be controlled and maintained by
Contractor in good working condition. TOFF agrees to reimburse Contractor for
any third party expense incurred and authorized by TOFF's on- the-job
representative to repair TOFF furnished equipment.
8.4 MAXIMUM EQUIPMENT CAPACITY. Contractor shall utilize its
equipment to its maximum capacity as rated by the manufacturer thereof, if TOFF
so requests.
8.5 MUD PROGRAM. Contractor shall maintain the mud program in a
manner satisfactory to TOFF. Drilling fluid shall be maintained in accordance
with specifications set forth in the Drilling Order Section 7. The amounts of
mud and mud conditioners to be furnished by either party shall be as specified
in the Drilling Order. If TOFF furnishes mud and mud conditioners, TOFF shall
have supervision over use of these materials.
8.6 FORMATION DATA. Contractor agrees to save and label samples
of such formations and to keep drilling times of such formations as TOFF may
request. Contractor agrees to notify TOFF promptly whenever any oil and/or gas
bearing formation is found. TOFF shall be afforded sufficient time to examine
such formation to determine whether or not the well should be completed, and
for such time consumed, Contractor shall be paid the applicable rate provided
in the Drilling Order.
8.7 EQUIPMENT, PERSONNEL AND DEVIATION SURVEYS. Contractor agrees
to furnish equipment, personnel, and instruments acceptable to TOFF and in
conformity with all governmental regulations and to make deviation surveys as
provided in the Drilling Order Section 8 to maintain drill angle and direction
of the hole within allowable limits specified in the Drilling Order. All such
deviation surveys shall be made at TOFF's sole risk, cost, and expense. TOFF
reserves the right to require drift angle and directional surveys additional to
those specified in the Drilling Order. If the course of the hole is found to
be within prescribed limits of the Drilling Order, the cost of such additional
survey, including rig time, shall be borne by TOFF at the applicable day work
rate.
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8.8 SAFE PRACTICES. Contractor shall locate boilers and other
sources of ignition a safe distance from the well and shall prohibit use of
open flames (except welding under controlled conditions) or smoking on the rig
floor or other hazardous areas by its own personnel or other parties. If the
well or equipment should catch fire from use of open flames (other than those
covered by a mutually agreed work permit) or from smoking in hazardous areas,
this will be considered as negligence on the part of the Contractor.
Contractor shall observe recommendations contained in API RP 54 ("Recommended
Practices for Occupational Safety & Health for Oil and Gas Well Drilling and
Servicing Operations") and all revisions to same and shall obey all Federal,
State, and local laws, rules, and regulations relative to safety and health.
Contractor shall permit no employee, invitee or other party on the rig that is
under the influence of alcohol or drugs. No alcohol, illegal drugs or firearms
shall be allowed by Contractor on the job site. Contractor shall prohibit the
presence on the rig of unauthorized personnel or visitors unless such visits
are approved by TOFF. Contractor shall have a formal safety program and shall
provide suitable equipment and personnel properly and adequately trained in the
safe performance of their duties.
8.9 RIG EVACUATION. Contractor's supervisor at the location shall
have sole and final responsibility to issue orders to Contractor's personnel to
evacuate the rig for reasons of weather or emergency.
8.10 BLOWOUT PREVENTION. Blowout prevention equipment shall be
furnished by Contractor as specified in Drilling Order Section 4B and installed
and tested in accordance with TOFF's requirements. The control manifold shall
be located near the driller's position with a second remote control located at
a safe distance from the xxxxxxx floor at a point mutually satisfactory to
Contractor and TOFF. It is essential that each member of the drilling crew
understand the operation of the equipment and be capable of operating it when
necessary. Regularly scheduled drills shall be conducted and noted on the
Drilling Report.
8.11 INSPECTION OF TOFF EQUIPMENT. Contractor shall visually
examine all casing, equipment, machinery, tools or other items furnished by
TOFF and if any apparent defects are found therein sufficient to make the use
of any such items unsuitable or unsafe, Contractor shall immediately notify
TOFF of such defects, and TOFF shall promptly replace the item so found
defective.
IX. CORING, TESTING, LOGGING AND COMPLETION
Contractor shall perform all coring, testing, logging and completion
work on a day work basis as provided in Drilling Order.
X. REPORTS TO BE FURNISHED BY CONTRACTOR
10.1 DAILY DRILLING REPORT. Contractor shall complete and furnish
TOFF with the Standard API-IADC Daily Drilling Report showing the depth of the
hole, the formations penetrated, and such other data as required by TOFF.
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10.2 RIG TIME. TOFF's representative will consult with Contractor's
representative at the rig on the proper breakdown of rig time, which shall be
entered by Contractor in tile "Time Summary" section of the API-IADC Report.
TOFF's representative will sign the tour sheets in receipt of such work. This
breakdown should be reviewed by each party's authorized representatives and any
desired changes shall be negotiated, prior to preparation of the invoice.
10.3 DELIVERY TICKETS. Delivery tickets covering any materials or
supplies furnished by TOFF or furnished by vendors for which TOFF is obligated
to reimburse Contractor, shall be submitted as received with the Daily Drilling
Report. The quantity, description and condition of the materials and supplies
so furnished shall be verified and checked by Contractor, and delivery tickets
shall be properly certified as to receipt by Contractor's representative.
Contractor must obtain approval of TOFF's representative on the job of delivery
tickets for materials and supplies for which Contractor is to be reimbursed by
TOFF.
10.4 DAMAGE OR INJURY. Contractor shall orally report to TOFF, as
soon as practicable, followed by an appropriate written report, all accidents
or occurrences resulting in death or injuries to Contractor's employees,
invitees or third parties, or damage to property of TOFF or third parties
arising out of or during the course of operation of Contractor or of any
subcontractor of Contractor, and shall furnish TOFF with a copy of all reports
made by Contractor to Contractor's insurer(s) or to others of such accidents
and occurrences.
10.5 GOVERNMENTAL REPORTS. Contractor when requested by TOFF shall
provide to government or state agencies further information on deaths or lost
time injuries and shall provide TOFF with a copy of such further information.
XI. INSURANCE AND INDEMNITY
11.1 TYPES AND LIMITS. At all times during the term of the
"Contract", Contractor shall maintain, at Contractor's expense, insurance
satisfactory to TOFF of the minimum types and limits as follows:
a. Such insurance as may be required or available to cover any
risk exposures under the workers' compensation, social
security or other laws of any nation, state, or other
governmental entity and/or regulations of any authorities
having jurisdiction in the operations.
b. Employers' Liability Insurance, with dollar limits as
specified in Section 14 of the Drilling Order for each
occurrence for employment subject to state Workers'
Compensation Acts and with dollar limits as specified in
Section 14 of the Drilling Order for each occurrence for
employment where there is possible liability under the Xxxxx
Act or Death on the High Seas Act. (This coverage may be
contained to some extent in other insurances listed elsewhere
herein).
c. Comprehensive General Liability Insurance, including
contractual liability coverage for Contractor's obligations
hereunder to defend and/or indemnify TOFF, with dollar limits
as specified in Section 14 of the Drilling Order for
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each occurrence for bodily/personal injury, death and property
damage combined.
d. Comprehensive Automobile Liability Insurance including owned,
non-owned, and hired vehicles, with dollar limits as specified
in Section 14 of the Drilling Order for each occurrence for
bodily injury, death and property damage combined.
e. Full Form Marine Protection and Indemnity Insurance (including
transportation, wages, maintenance and cure) covering the rig
with dollar limits as specified in Section 14 of the Drilling
Order for each occurrence or the actual cash value of the rig,
whichever is greater. (This coverage may be contained to some
extent in other insurances listed elsewhere herein).
f. Standard Marine Hull and Machinery, (including collision
liability coverage to the extent not provided in any insurance
listed elsewhere herein) and for International operations, War
and Political Risks Insurance in the amount of the actual cash
value of the rig.
This insurance shall provide that any action "in rem" against
the rig shall be treated as though it were an action against
Contractor.
g. Property Insurance on all other property of Contractor,
including drilling rig and machinery in the amount of actual
cash value.
h. If aircraft are owned, leased, or hired by Contractor:
Aircraft Liability Insurance covering any such aircraft
including passenger liability with dollar limits as specified
in Section 14 of the Drilling Order for each occurrence.
11.2 ADDITIONAL INSUREDS AND SUBROGATION WAIVER. To the fullest
extent permitted by law and without in anyway limiting Contractor's liability
or responsibility under the indemnity provision hereof, all insurance policies
maintained by Contractor in accordance with Paragraph 11.1 above and any other
insurance maintained applicable to Contractor's performance under the
"Contract" shall include TOFF and any parties in joint operation with TOFF as
additional insureds and/or shall contain a waiver of subrogation against TOFF
and said other parties (each to the extent Contractor has assumed liability
under this Contract) as appropriate to secure the maximum benefit to TOFF and
its joint operations parties. To the extent Contractor has assumed liability
hereunder, Contractor's insurance shall be regarded as primary insurance
underlying any other applicable insurance. Any risks and liabilities not
expressly assumed by TOFF or Contractor hereunder shall be governed by
applicable law, and to the extent any such liabilities are imposed upon the
Contractor by applicable law, and not expressly assumed by TOFF, the insurance
carried by the Contractor shall be regarded as primary insurance underlying any
other applicable insurance.
11.3 CANCELLATION NOTICE. All such insurance shall be carried by
an insurance company acceptable to TOFF and shall not be cancelled nor
materially changed without thirty
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(30) days prior written notice having been furnished TOFF. Contractor agrees
to furnish TOFF, upon request, evidence of such insurance satisfactory to TOFF.
11.4 SELF-INSURANCE. In the event Contractor self-insures in part
or whole any risks for which insurance is herein required, notice of same must
be in writing and approved by TOFF.
11.5 TOFF'S PROCUREMENT. TOFF has the right but not the duty, by
giving Contractor timely notice, to procure any or all of the insurance
specified herein with terms, conditions, and limits as mutually agreed and as
further detailed in the Drilling Order Section 14 subject to annual review if
requested.
11.6 INDEMNITY. Whenever "TOFF" or "Contractor" appears herein as
an indemnitee, said term shall also include indemnitee's parent, subsidiary and
affiliated companies, and directors, officers, employees and invitees of such
parties.
11.6 a(1) Contractor shall release, defend, indemnify and hold
harmless TOFF to the fullest extent permitted by law from and against any loss,
damage, claim, suit, liability, judgment, and expense (including attorneys'
fees and other costs of litigation) arising in connection herewith, resulting
from or in any way related to the work to be performed hereunder for
bodily/personal injury, disease or death of Contractor's employees or invitees,
Contractor's subcontractors of any tier and their employees or invitees,
without regard to the cause or causes thereof or the sole or concurrent
negligence, fault or strict liability without fault of TOFF, TOFF's
contractors, or of any party or parties.
11.6 a(2) Contractor shall release, defend, indemnify, and hold
harmless TOFF to the fullest extent permitted by law from and against any loss,
damage, claim, suit, liability, judgment and expense (including attorneys' fees
and other costs of litigation), arising in connection herewith, resulting from
or in any way related to the work to be performed hereunder for (except as
provided otherwise elsewhere herein) loss of or damage to property owned or
leased by Contractor, its employees and invitees, and Contractor's
subcontractors of any tier and their employees and invitees without regard to
the cause or causes thereof or sole or concurrent negligence, fault, or strict
liability without fault of TOFF, TOFF's contractors, or of any party or
parties.
11.6 b(l) TOFF shall release, defend, indemnify and hold harmless
Contractor to the fullest extent permitted by law from and against any loss,
damage, claim, suit, liability, judgment, and expense (including attorneys'
fees and other costs of litigation) arising in connection herewith, resulting
from or in any way related to the work to be performed hereunder for bodily
injury, disease or death of TOFF's employees and invitees, TOFF's contractors
of any tier (except Contractor herein and its subcontractors of any tier) and
their employees and invitees, without regard to the cause or causes thereof or
the sole or concurrent negligence, fault or strict liability without fault of
Contractor and its subcontractors of any tier, or of any party or parties.
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11.6 b(2) TOFF shall release, defend, indemnify, and hold harmless
Contractor to the fullest extent permitted by law from and against any loss,
damage, claim, suit, liability, judgment and expense (including attorney's fees
and other costs of litigation), arising in connection herewith, resulting from
or in any way related to the work to be performed hereunder for (except as
provided otherwise elsewhere herein) loss of or damage to property owned by
TOFF, its employees and invitees, and its contractors of any tier (except
Contractor herein and its subcontractors of any tier) and their employees and
invitees without regard to the cause or causes thereof or the sole or
concurrent negligence, fault, or strict liability without fault of Contractor
and its subcontractors of any tier, or of any party or parties.
11.7 NOTICE PROVISIONS. Indemnitee shall, as soon as practical
after receiving notice of claim or suit brought against it, provide to
indemnitor full particulars within its knowledge and shall render all
reasonable assistance requested by indemnitor in the defense of such claim or
suit.
11.8 SPECIAL PROVISIONS APPLICABLE. Except as otherwise expressly
limited herein, it is the intent of the parties hereto that all indemnity
obligations and/or contribution and/or liabilities and/or responsibilities
assumed by such parties be without monetary limit and shall not be limited by
any amounts of insurance carried or required herein and be without regard to
the cause or causes thereof, including pre-existing conditions, the
unseaworthiness of any vessel or vessels, strict liability, and to the fullest
extent permitted by law without regard to negligence or fault of any party or
parties, whether such negligence or fault be sole, joint or concurrent, active
or passive.
11.9 ADJUSTMENT OF LIMITS. If it is judicially determined that the
monetary limits of insurance required or the indemnities assumed by either
party herein (which Contractor and TOFF agree will be supported by insurance or
which are self-insured in whole or part) do not conform with applicable law, it
is agreed that said insurance or indemnities shall automatically be amended to
conform to the maximum monetary limits and other provisions in such law.
XII. RESPONSIBILITY FOR THE HOLE
12.1 LOSS, DAMAGE OR IMPAIRMENT. If the hole is lost, damaged or
otherwise impaired, TOFF shall be responsible and shall bear any resulting loss
and expense including cost of regaining control of well, except as otherwise
provided in Article XIII. However, if such loss or damage is caused by
Contractor's gross negligence or willful misconduct, then Contractor shall
drill a new hole on the same location, or at TOFF's election, redrill said
section of the hole as TOFF may require, in either case subject to all of the
terms and conditions of this Agreement and the Drilling Order, except that the
operating day rate will be reduced 20% until the new hole has reached the depth
at which the old hole was abandoned or the section has been redrilled to TOFF's
satisfaction. It is agreed that this is TOFF's exclusive remedy for loss or
damage to the hole. "Hole" shall mean the connector pipe leading from
immediately below the rotary table to the ocean floor and below that any cased
and/or open hole extending from the connector pipe.
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12.2 OTHER CAUSES OF LOSS. Notwithstanding the provisions of
Paragraph 12.1, TOFF, except to the extent caused by the gross negligence or
willful misconduct of Contractor, shall be responsible for loss of or damage to
or other impairment to the hole to the extent caused by the failure of casing,
cement or cementing services, equipment, machinery, tools or any other material
or services furnished by TOFF.
12.3 TOOLS ON DAY WORK. Notwithstanding Contractor's
responsibility for Contractor owned or leased property as set forth in
Paragraph 11.6.a(2) TOFF assumes responsibility while work is being performed
on a day work basis for loss of or damage to tools and equipment when in the
hole except to the extent caused by Contractor's gross negligence or willful
misconduct. The basis for reimbursement shall be the depreciated replacement
cost as mutually agreed.
12.4 FISHING JOBS. If a fishing job is required while the work is
being performed on a day work basis, TOFF shall be responsible for all cost and
expense unless such fishing job is caused by Contractor's gross negligence or
willful misconduct in which case it shall be performed at 80% of Contractor's
operating day rate.
XIII. POLLUTION RESPONSIBILITY
13.1 CONTRACTOR'S RESPONSIBILITY. Contractor shall assume all
responsibility for, including control and removal of, and release, defend,
indemnify and hold TOFF harmless against and from loss, cost, damage, or
liability arising from pollution or contamination:
1. Which originates above the surface of the land or
water:
(a) From spills or leaks of fuels, lubricants,
motor oils, pipe dope, paints, solvents, ballasts,
bilge, garbage, sewerage, and other materials
exclusive of those covered by subpart (b), in
Contractor's possession and control, whether or not
caused by the negligence of Contractor and/or TOFF;
and
(b) From spills, leaks or dumping of oil
emulsion, oil base or chemically treated fluids,
contaminated cuttings and lost circulation and fish
recovery materials and fluids, when said materials
are in Contractor's possession, although their use or
disposition may be at TOFF's direction, and such
spill, leak or dumping are a result of Contractor's
gross negligence, willful misconduct or act not in
accordance with TOFF's direction.
2. Resulting from fire, blowout, cratering, seepage, or
any other uncontrolled flow, from surface or
subsurface, of oil, gas or water from xxxxx during
the conduct of operations hereunder, when caused by
Contractor's gross negligence or willful misconduct,
but only up to and not in excess of the amount of the
dollar limit as set out in Section 14 of the Drilling
Order for each occurrence of such loss, cost or
damage.
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3. Resulting from leakage, or other uncontrolled flow of
oil, gas or water from pipelines, including lines on
or in submerged lands, ruptured or damaged by
Contractor's rig, barge, anchors, or other equipment,
or by Contractor's operations, whether or not
Contractor is grossly negligent except that
Contractor shall not be responsible for pollution
when the pipeline rupture or damage is caused by the
correct positioning or operation of Contractor's
equipment at a specific location, or on a specific
route, designated by TOFF or by the actual
positioning of such equipment whether or not correct)
by TOFF.
13.2 TOFF'S RESPONSIBILITY. TOFF shall assume all responsibility
for, including control and removal of, and release, defend, indemnify and hold
Contractor and the rig harmless against and from loss, cost, damage, or
liability arising from pollution or contamination:
(1) Resulting, except as provided in Paragraph
A.1(b) above, from possession, use or disposition of
oil emulsion, oil base or chemically treated fluids,
contaminated cuttings, and lost circulation and fish
recovery materials and fluids, including such
possession, use or disposition by third party
contractors;
(2) Resulting from fire, blowout, cratering,
seepage, or any other uncontrolled flow of oil, gas
or water from xxxxx during the conduct of operations
hereunder when not resulting from Contractor's gross
negligence or willful misconduct, and, when
Contractor is grossly negligent, excluding the amount
per occurrence of such loss, cost or damage for which
Contractor is responsible under A.2 above; and
(3) Resulting as stated in Paragraph A.3 above,
when caused by the correct positioning or operation
of Contractor's equipment at a specific location, or
on a specific route, designated by TOFF or by the
actual positioning of such equipment (whether or not
correct) by TOFF.
13.3 TOFF CONTROL. Without relieving Contractor of any obligations
hereunder, it is agreed that TOFF may take part to any degree it deems
necessary in the control and removal of any pollution or contamination which is
the responsibility of Contractor under the foregoing provisions; and Contractor
shall reimburse TOFF for the cost thereof, subject to any limitation above
provided, upon the receipt of billing from TOFF. Initiation of cleanup
operation by either party shall not be construed as an admission or assumption
of liability.
XIV. RESPONSIBILITY FOR THE RIG
14.1 CONTRACTOR RESPONSIBILITY. Contractor agrees that TOFF shall
not be liable for or responsible for any damage, loss, or repair to
Contractor's rig, drilling equipment and appliances, including, but not limited
to, damage, loss, or repair of the rig during movement to, from or between
locations, whatsoever the cause whether through TOFF's sole or joint
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negligence or fault during existence of the "Contract" but the benefits of this
Paragraph shall not, under any circumstance, inure to the benefit of any third
party. Contractor and TOFF agree that the value or amount of the hull and/or
machinery insurance carried by Contractor on its rig shall be considered the
agreed value of the rig for any purpose of the "Contract" or otherwise.
Contractor assumes full and complete responsibility at its sole cost and
expense for removal of any debris, drilling equipment or material lost on the
lease by Contractor or its subcontractor or the debris of the loss or wreck of
the rig itself when removal is required by TOFF for proper operations on its
lease, or to conduct safe oil and gas drilling and producing operations, or if
required by law or government rule or regulation.
14.2 TOFF'S PROPERTY. Notwithstanding TOFF's responsibility for
TOFF owned property as set out in Paragraph 11.6.b(2), Contractor shall make
all reasonable efforts to return to TOFF at completion or abandonment of the
well all machinery, tools, material and equipment ,furnished by TOFF in as good
condition as when received by Contractor, ordinary wear and tear excepted.
XV. TAXES AND CLAIMS
15.1 TAXES, LICENSES & FEES. Contractor shall pay all taxes,
licenses and fees levied or assessed on Contractor in connection with or
incidental to the performance of the "Contract" by any governmental agency for
unemployment compensation insurance, old age benefits, social security, or any
other taxes upon the wages of Contractor, its agents, employees and
representatives. Contractor shall require the same agreements and be liable
for any breach of such agreements by any of its subcontractors.
15.2 REIMBURSEMENT OBLIGATION. Contractor shall reimburse TOFF on
demand for all such taxes or governmental charges, state or federal, which TOFF
may be required or deem it necessary to pay on account of employees of
Contractor or its subcontractors. Contractor shall furnish TOFF with the
information required to enable it to make the necessary reports and to pay such
taxes or charges. TOFF may elect to deduct all sums so paid for such taxes and
governmental charges from such amounts as may be or become due to Contractor
hereunder.
15.3 LABOR AND MATERIALS. Contractor shall pay all claims for
labor, material, services and supplies furnished by Contractor hereunder and
shall allow no lien or charge to be fixed upon the lease, the well, the tract
on which the well is to be drilled or other property of TOFF. Contractor
agrees to release, defend, indemnify, protect, and save TOFF harmless from and
against all such claims and liens. If Contractor shall fail or refuse to pay
any claims or indebtedness incurred by Contractor in connection with the
drilling of any well or xxxxx hereunder, TOFF shall have the right to pay any
such claims or indebtedness out of any money due or to become due to Contractor
hereunder. No assignment or transfer by Contractor of rights to monies due
Contractor hereunder shall have any force or effect as far as TOFF's rights are
concerned until all such claims and indebtedness incurred by Contractor shall
have been completely liquidated and discharged.
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15.4 PROOF OF PAYMENT. Before payments are made by TOFF to
Contractor, TOFF may require Contractor to furnish proof that there are no
unsatisfied claims for labor, materials, equipment and supplies, or for
injuries to persons or property not covered by insurance.
XVI. INDEPENDENT CONTRACTOR RELATIONSHIP
16.1 INDEPENDENT CONTRACTOR. Contractor is an independent
contractor with respect to performance of all work hereunder and neither
Contractor nor anyone employed by Contractor shall be deemed for any purpose to
be the employee, agent, servant or representative of TOFF in performance of any
work or service hereunder. TOFF shall have no direction or control of
Contractor or its employees and agents except in the results to be obtained.
The work performed hereunder shall meet the approval of TOFF and be subject to
the general right of inspection provided herein for TOFF to secure the
satisfactory completion thereof.
16.2 TOFF ACCESS. Contractor shall perform and supervise all work
hereunder, but TOFF's representatives shall have unlimited access to the
premises to determine whether work is being performed by Contractor in
accordance with all of the provisions of this Agreement and Drilling Order.
TOFF's representative shall have the right at all times to be on or about the
rig and to have access to all reports, records, logs, samples and cores.
XVII. LAWS, RULES AND REGULATIONS
Contractor shall comply with all federal, state and municipal laws,
special permit conditions, rules and regulations which are now or may become
applicable to operations covered by this Agreement and the Drilling Order.
XVIII. FORCE MAJEURE
Neither Contractor nor TOFF shall be liable to the other for delays,
damages, or any act, due, occasioned or caused by reason of federal or state
laws, or the rules, regulations or orders of any public body or official
exercising or purporting to exercise authority or control concerning the
operations covered hereby, including the use of tools and equipment, or due,
occasioned or caused by strikes, terrorists, riots, civil commotions, action of
the elements or causes beyond the control of the parties affected hereby.
Delays due to the above causes, or any of them, shall not he deemed to be a
breach of or failure to perform under this agreement. Hazardous weather shall
not constitute a force majeure condition. Notice of force majeure occurrences
and the details constituting them shall be given promptly in writing.
XIX. INGRESS AND EGRESS TO LOCATION
TOFF shall secure for Contractor rights of ingress and egress to the
location on which the well is to be drilled. TOFF shall advise Contractor of
any limitations or restrictions affecting ingress and egress, and Contractor
shall abide by and shall have its employees, invitees, agents or subcontractors
abide by such limitations or restrictions. If Contractor is
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denied free access to the location for any reason not within the control of
Contractor, time lost by such denial shall be paid for at a reasonable rate in
keeping with the stage of operations at the time.
XX. AUDITS
If any payment provided for hereunder is to be made on the basis of
Contractor's costs, TOFF shall have the right to audit Contractor's books and
records relating to such costs. Contractor agrees to maintain such books and
records for a period of two (2) years from the date such costs were incurred
and to make such books and records available to TOFF at any time or times
within the two-year period. TOFF at its option may request Contractor to
provide copies of such records as needed.
XXI. PATENTS AND LICENSES
Notwithstanding any other provisions herein to the contrary,
Contractor represents and warrants that the use or construction of all tools
and equipment furnished by Contractor and used in the work provided for herein
does not infringe on any license or patent which has been issued or applied
for, and Contractor shall release, defend, indemnify and hold TOFF harmless
from any and all claims, demands and causes of action of every kind and
character in favor of or made by any patentee, licensee or claimant of any
right or priority to any such tool or equipment, or the use or construction
thereof which may result from or arise out of the furnishing or use of any such
tool or equipment by Contractor in connection with the work under this
"Contract".
XXII. CONFLICTS
In the event there is a conflict between the provisions hereof and any
papers or documents, other than the Drilling Order, which may have been
executed or passed between the parties hereto in connection with the subject
matter hereof, it is understood and agreed that the provisions hereof shall be
controlling. If there be a conflict between the provisions hereof and the
Drilling Order executed in connection herewith, it is understood and agreed
that the provisions of such Drilling Order shall he controlling.
XXIII. ASSIGNMENTS
23.1 BY CONTRACTOR. This Agreement or the "Contract" completed
hereunder and operations thereunder shall not be assigned in whole or in part,
without the prior written consent of TOFF. Contractor shall not assign any sum
that may accrue to Contractor hereunder without written consent of TOFF.
23.2 BY TOFF. TOFF shall have the right to assign and re-assign
both this Agreement and the "Contract" completed hereunder to any of its
subsidiaries or affiliates upon giving timely notice to Contractor. TOFF shall
have the right, subject to prior consent of Contractor, which consent shall not
be unreasonably withheld, to assign the "Contract" to any company other than
its subsidiaries and affiliates. TOFF shall have the right to employ other
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companies including affiliates and subsidiaries to perform any operations or
services to be provided by TOFF under the "Contract".
XXIV. CANCELLATION
Whenever there is no accompanying Drilling Order currently in effect
between the parties, this Agreement may be cancelled by either party but only
after ten (10) days prior notice of such cancellation has been furnished to the
other party.
XXV. WELL INFORMATION
Neither Contractor nor Contractor's employees or invitees shall
disclose any information in connection with any well and Contractor shall use
its best efforts to ensure that its employees, agents and subcontractors shall
not disclose any information in connection with any well to be drilled under
this Agreement to anyone or permit visitors access to the drilling unit for
purposes of obtaining well information other than TOFF, or its duly authorized
representative except upon written instructions of TOFF, and then only in
accordance with such written instructions.
XXVI. EQUAL OPPORTUNITY
In connection with the performance of services under this Agreement,
Contractor shall, when applicable, comply with all of the provisions provided
on the "Equal Opportunity" attachment made a part hereof and labeled as Exhibit
"A".
XXVII. UTILIZATION OF MINORITY & WOMEN BUSINESS ENTERPRISES
It is the policy of the U.S. Government that Minority and Female
Business Enterprises shall not be excluded from participating in business
opportunities because of race or sex and that they have the maximum practicable
opportunity to participate in the performance of government contracts.
Contractor agrees to use his best efforts to carry out this policy in
the awards of his subcontracts to the fullest extent consistent with the
efficient performance of the "Contract" under good oil field practices. As
used herein, a minority- or woman-owned business enterprise is defined as a
business that has at least 51% ownership by minority or women members and whose
management and daily business operations are controlled and operated by one or
more of such individuals. Minority group members shall include Black
Americans, Hispanic Americans, Native Americans and Asian-Pacific Americans.
Contractors acting in good faith may rely on written representations from
subcontractors and suppliers as to their minority- and/or women-owned
qualifications. This provision shall be automatically amended to conform to
any future changes in statute or regulation.
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XXVIII. EARLY TERMINATION
28.1 TOTAL OR CONSTRUCTIVE TOTAL LOSS. If the drilling rig
utilized by Contractor for operations hereunder is for whatever cause declared
a total or constructive total loss, then the "Contract" between the parties
which had been completed by acceptance of the Drilling Order shall be
terminated without notice as of the moment of such loss and no further payments
shall be due under the "Contract". TOFF shall remain liable for all costs
incurred and outstanding under the "Contract" before the moment of such loss.
Contractor shall be liable for salvage or debris removal as set out in either
this Agreement or the Drilling Order.
28.2 INSOLVENCY. Should Contractor become insolvent or make an
assignment for the benefit of creditors or be adjudicated as bankrupt or admit
in writing its inability to pay its debts generally as the same become due, or
should any proceedings be instituted by Contractor under any State or Federal
law for relief of debtors or for the appointment of a receiver, trustee or
liquidate of Contractor, or should a voluntary petition in bankruptcy or for a
reorganization or for an adjudication of Contractor as an insolvent or a
bankrupt be filed, or should an attachment be levied upon Contractor's
equipment and not removed within ten (10) days therefrom, then upon the
occurrence of any such event, TOFF shall thereupon have the right to cancel the
"Contract" and to terminate immediately all work then being performed
thereunder.
28.3 EXTENSIVE REPAIRS. TOFF shall have the right, upon written
notice, to terminate the "Contract" in the event operations cannot be performed
because of or in conjunction with extensive repairs or modifications to the rig
or its equipment which exceed or are estimated to exceed thirty (30) days. No
day work rate will be payable during the period when such repairs or
modifications are being made beyond limits set forth in Section 13 of the
Drilling Order.
28.4 INABILITY TO MEET SPECIFICATIONS. TOFF may, at its option,
terminate the "Contract" on written notice if Contractor's drilling rig fails
to meet the requirements for which it has been designed due to a deficiency in
construction and/or design and Contractor is unable to show that corrective
work can be accomplished within thirty (30) days. No day work rate will be
payable during the period when such deficiencies are being corrected.
28.5 FORCE MAJEURE. Either party, at its option, may terminate the
"Contract" on or after the fifteenth day after operations have been suspended,
due to a force majeure condition as described in Article XVIII.
XXIX. JOINT OPERATIONS
If any of the work performed or to be performed hereunder is a part of
a joint operation between TOFF and other parties, then the obligation and
liabilities of Contractor hereunder shall run to and in favor of TOFF and the
other parties engaged in such joint operation.
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XXX. CAPTIONS
The headings and captions in this Agreement and the Drilling Order are
for convenience only, and shall not be used in construing the meaning hereof.
XXXI. NOTICES
Notices required under this Agreement shall be sent by U. S. Mail,
Telex, or telegram to the following addresses:
TOFF Contractor
Xxxxxx Offshore, Inc. Sedco Forex Division of Schlumberger
7400 Texas Commerce Tower Technology Corporation
600 Xxxxxx 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Xx. Attention: J. R. Powers
When there is a currently effective Drilling Order, notices required
under the "Contract" shall be sent to the address given in the Drilling Order
Section 12.
XXXII. GENERAL PROVISIONS.
32.1 WAIVER. None of the requirements of this Agreement or the
Drilling Order shall be considered as waived unless such waiver is made in
writing by both of the parties.
32.2 ATTORNEYS' FEES. In the event TOFF is required to retain an
attorney to enforce any of the provisions of the "Contract" then the reasonable
costs of such attorney shall be a charge against the contractor.
32.3 CONTINUING OBLIGATIONS. All indemnity obligations and/or
contributions and/or liabilities and/or duties and responsibilities assumed by
the parties to this "Contract" shall survive the termination for any cause of
this "Contract," including but not limited to Contractor's responsibility for
salvage and debris removal.
32.4 GOVERNING LAW. This "Contract" shall be construed and the
relations between the parties shall be determined in accordance with the
General Maritime Law of the United States of America, not including however any
of its "conflicts of law" rules which would direct or refer to the laws of
another jurisdiction.
32.5 CONSEQUENTIAL DAMAGES. Neither party shall be liable to the
other for special, indirect or consequential damages resulting from or arising
out of this Contract, including without limitation loss of profit, production,
or business interruption, howsoever they may be caused including negligence.
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32.6 RESPONSIBILITY FOR THE RESERVOIR. TOFF assumes all liability
for and agrees to release, defend and indemnify, and hold CONTRACTOR harmless
from any and all claims, demands, and causes of action resulting from the loss
of or damage to geological formation or strata or oil and/or gas reservoir
underlying TOFF's lease resulting from a blowout, crater or any other cause
during or resulting from operations under this CONTRACT irrespective of the
negligence or fault of CONTRACTOR. However, this clause shall be applicable
only to loss of or damage to the reservoir or formation itself and all damages
or losses related to or arising out of pollution, contamination, spill or other
surface or subsurface release of oil, gas, other hydrocarbons or other
uncontrolled flows shall be governed by the provisions of the Pollution Clause
Article XIII of the Master Drilling Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have executed duplicate originals of
this Agreement on this 19th day of September, 1996 in the presence of the
undersigned witnesses.
WITNESSES: CONTRACTOR
SEDCO FOREX DIVISION, SCHLUMBERGER
TECHNOLOGY CORPORATION
/s/ XXXXXX X. XXXXXXXX By: /s/ J. R. POWERS
------------------------------ -------------------------
Printed Name: J. R. Powers
-------------------------
/s/ XXXXXXXX X. XXXXXX Title: District Manager
------------------------------ -------------------------
WITNESSES: XXXXXX OFFSHORE, INC.
/s/ XXXXXX X. XXXXXXXX By: /s/ X. XXXXXXXXX XX.
------------------------------ -------------------------
Printed Name: Xxxxxxx Xxxxxxxxx Xx.
-------------------------
/s/ XXXXXXXX X. XXXXXX Title: C.O.O.
------------------------------ -------------------------
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EXHIBIT A
CERTIFICATE OF EQUAL OPPORTUNITY COMPLIANCE
The following certification and agreements shall be a part of and a
supplement to the Master Drilling Agreement entered into between Xxxxxx
Offshore, Inc. (TOFF) and Sedco Forex Division, Schlumberger Technology
Corporation (Contractor), dated September _____, 1996, and will continue in
effect if and so long as required by any applicable Executive Order, rules,
regulations, or Federal laws, or until resolicited by TOFF.
I. EQUAL OPPORTUNITY CLAUSE
A. Contractor agrees to the following provisions of Section 202
of Executive Order 11246.
1. Contractor will not discriminate against any employee
or applicant for employment because of race, color,
religion, sex, of national origin. Contractor will
take affirmative action to ensure that applicants are
employed and that employees are treated during
employment, without regard to their race, color,
religion, sex, or national origin. Such action shall
include, but not be limited to the following:
employment, upgrading, demotion or transfer,
recruitment or recruitment advertising, layoff or
termination, rates of pay or other forms of
compensation, and selection for training, including
apprenticeship. Contractor agrees to post in
conspicuous places, available to employees and
applicants for employment, notices to be provided by
the contracting officer setting forth the provisions
of this nondiscrimination clause.
2. Contractor will, in all solicitations or
advertisements for employees placed by or on behalf
of the Contractor, state that all qualified
applicants will receive consideration for employment
without regard to race, color, religion, sex or
national origin.
3. Contractor will send to each labor union or
representative of workers with which he has a
collective bargaining agreement or other contract or
understanding a notice, to be provided by the agency
contracting officer, advising the labor union or
workers' representative of the Contractor's
commitments under Section 202 of Executive Order No.
11246 of September 24, 1965, and shall post copies of
the notice in conspicuous places available to
employees and applicants for employment.
4. Contractor will comply with all provisions of
Executive Order No. 11246 of September 24, 1965, and
of the rules, regulations, and relevant orders of the
Secretary of Labor.
A-1
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5. Contractor will furnish all information and reports
required by Executive Order No. 11246 of September
24, 1965, and by the rules, regulations, and order of
the Secretary of Labor, or pursuant thereto, and will
permit access to his books, records, and accounts by
the contracting agency and the Secretary of Labor for
purposes of investigation to ascertain compliance
with such rules, regulations and orders.
6. In the event of the Contractor's noncompliance with
the nondiscimination clauses of this "Contract" or
with any of such rules, regulations or orders, this
"Contract" may be cancelled, terminated, or suspended
in whole or in part and the Contractor may be
declared ineligible for further Government contracts
in accordance with procedures authorized in
Protective Order No. 11246 of September 24, 1965,
and such other sanctions may be imposed and remedies
invoked as provided in Executive Order No. 11246 of
September 24, 1965, or by rule, regulation, or order
of the Secretary of Labor, or as otherwise provided
by law.
7. Contractor will include the provisions of Paragraphs
(1) through (7) in every subcontract or purchase
order unless exempted by rules, regulations or orders
of the Secretary of Labor issued pursuant to Xxxxxxx
000 xx Xxxxxxxxx Xxxxx Xx. 00000 of September 24,
1965, so that such provisions will be binding upon
each subcontractor or vendor. Contractor will take
such action with respect to any subcontract or
purchase order as the contracting agency may direct
as a means of enforcing such provisions including
sanctions for noncompliance; provided, however, that
in the event the Contractor becomes involved in or is
threatened with, litigation with a subcontractor or
vendor as a result of such direction by the
contracting agency, the Contractor may request the
United States to enter into such litigation to
protect the interests of the United States.
B. CERTIFICATION OF NONSEGREGATED FACILITIES
By submission of this Certificate, Contractor certifies that
segregated facilities are not and will not be maintained or
provided for its employees at any of its establishments; that
such employees are not and will not be permitted to perform
their services at any location under its control where
segregated facilities are maintained, and, that Contractor is
aware of and understands that any breach of the foregoing is a
violation of the Equal Opportunity Clause of Executive Order
11246. "Segregated Facilities" as used herein means any
waiting rooms, work areas, rest rooms. and washrooms,
restaurants and other eating rooms, time clocks, locker rooms
and other storage or dressing areas, parking lots, drinking
fountains, recreation or entertainment areas, transportation
and housing facilities provided for employees which are
A-2
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segregated by explicit directive or are in fact segregated on
the basis of race, creed, color or national origin, because of
habit, local customs, or otherwise.
Contractor further agrees that except where it has obtained
identical certifications from proposed subcontractors for
specific time periods, it will obtain identical certification
from proposed subcontractors prior to the award of
subcontracts exceeding $10,000 which are not exempt from the
provisions of the Equal Opportunity Clause; that it will
retain such certifications in its files; and that it will
forward the following notice to prospective subcontractors.
"NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT
FOR CERTIFICATION OF NONSEGREGATED FACILITIES. A
Certificate of Nonsegregated Facilities, as required
by Section 60-1.8 of Title 41 of the Code of Federal
Regulations, must be submitted prior to the award of
a subcontract exceeding $10,000 which is not exempt
from the provisions of the Equal Opportunity Clause.
The certification may be submitted either for each
subcontract or for all subcontracts during a
specified period, i.e., quarterly, semi-annually or
annually.
Note: The penalty for making false statements in
offers is prescribed in 18 U.S.C. 1001."
II. STANDARD FORM 100 (EEO-1) AND AFFIRMATIVE ACTION PROGRAM
Contractor agrees and certifies that if the value of any "Contract" or
purchase order with TOFF is $50,000 or more and the Contractor has
fifty (50) or more employees, Contractor:
1. Agrees to file a complete and accurate report on Standard Form
100 (EEO-1) within thirty (30) days of the date of "Contract"
award unless such a report has been filed in the last twelve
(12) months and agrees to file such reports annually, as
required by Section 60-1.7 of Title 41 of the Code of Federal
Regulations.
2. Affirms that it has developed and is maintaining current an
affirmative action program at each of its establishments, as
prescribed in Section 60-1.40 of Title 41 of the Code of
Federal Regulations or that if such a program has not been
established that it will be within 120 days of receipt of any
"Contract" of $50,000 or more.
III. THE VIETNAM ERA VETERAN'S READJUSTMENT ASSISTANCE ACT OF 1974
If the value of any "Contract" is $10,000 or more, the Contractor
agrees and certifies that he is and will remain in compliance with the
affirmative action clause set forth at
X-0
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00 XXX 60-250.4, to promote affirmative action in the employment and
advancement of qualified disabled veterans and veterans of the Vietnam
era. The contract clause is incorporated herein by reference.
IV. THE REHABILITATION ACT OF 1973
If the value of any "Contract" is $2,500 or more, the Contractor
agrees and certifies that he is and will remain in compliance with the
affirmative action clause set forth in 41 CFR 60-741.4 (to employ and advance
in employment qualified handicapped individuals) and incorporated herein by
reference.
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MASTER DRILLING AGREEMENT
XXXXXX OFFSHORE, INC. (TOFF)
EXEMPTION CLAIMS
I. EQUAL OPPORTUNITY CLAUSE
We are exempt because: (please xxxx below)
None of our contracts/purchase orders with TOFF is in excess
of $10,000.
We have a specific exemption provided by 41 CFR 60-1.5.
(Please attach a copy of the document granting the exemption.)
II. EMPLOYER INFORMATION REPORT (STANDARD FORM 100) AND AFFIRMATIVE ACTION
PROGRAM
We are exempt because: (please xxxx below)
We are exempt for a reason marked in Section 1 above.
We have fewer than fifty (50) employees.
Our contract, subcontract or purchase order is under $50,000.
III. EMPLOYMENT OF DISABLED VETERANS AND VETERANS OF THE VIETNAM ERA
We are exempt because: (please xxxx below)
None of our contracts/purchase orders are for $10,000 or more.
All of our contracts with TOFF are for personal services.
Other. (Please specify.)_________________________________________
__________________________________________________________________
IV. EMPLOYMENT OF HANDICAPPED INDIVIDUALS
We are exempt because: (please xxxx below)
None of our contracts or purchase orders are for $2,500 or
more.
We have a special exemption as provided by 41 CFR 60-741.3(b).
(Please enclose the document granting the exemption.)
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Other. (Please specify an attach documents, if appropriate.)
------------------------------------------------------------
Please sign below signifying your agreement to comply with the foregoing
provisions unless exempt as indicated above and return to TOFF.
Executed this _____ day of _______________, 19_____, by:
--------------------------------------------------------------------------------
FIRM/COMPANY NAME X.X. XXX XXXX XXXXX XXX
--------------------------------------------------------------------------------
XXXXXX XXXXXXX XXXX XXXXX ZIP
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AUTHORIZED SIGNATURE NAME (Type/Print) Title
--------------------------------------------------------------------------------
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DRILLING ORDER
SECTION 1. NAME AND LOCATION OF WELL(S) - TERM OF CONTRACT
Initial CONTRACT TERM shall be for the earlier of (i) ninety (90) days or (ii)
the completion of initial drilling operations and the mobilization of the rig
for another operator unless Xxxxxx Offshore, Inc. (TOFF or OPERATOR) has
provided notice to Sedco Forex Division, Schlumberger Technology Corporation
(SEDCO or CONTRACTOR) of its intent to exercise an Extension Option or its Out
Sourcing Option (each as set forth below). That term shall be automatically
extended, if and as applicable, through the completion of operations on any
well which is spudded within that initial ninety (90) day period.
TOFF shall have the right and the option to extend the Contract Term following
completion of the initial Contract Term set forth hereinabove through either
one of the following two forms of extension options: (i) three successive
options to drill one well (the "Well Extension Options") or (ii) two successive
options to extend the initial Contract Term for one year (the "Term Extension
Options" and, together with the Well Extension Options, the "Extension
Options"). The Well Extension Options and the Term Extension Options shall be
mutually exclusive. If TOFF chooses to exercise an Extension Option, it shall
notify SEDCO in writing of its choice of Extension Option and of its exercise
of such Extension Option at least forty-five (45) days prior to the expiration
of the initial Contract Term. After exercise of the initial Extension Option,
to exercise a successive Extension Option, TOFF must give SEDCO written notice
at least forty-five (45) days prior to (i) the expiration of the first Term
Extension Option period, with respect to the Term Extension Option or (ii) the
completion of operations on the preceding well, with respect to the Well
Extension Option.
During the Contract Term and the Extension Option Periods, if exercised, TOFF
shall have the right and the option to "out source" the rig to other operator's
in North and Central America at the then current market rates. SEDCO agrees to
assist in the brokering of the rig for such out sourcing. In the event that
the rig is out sourced, TOFF and SEDCO agree that any day rate received in
excess of TOFF's contract day rate during the period of out sourcing shall be
for the benefit of TOFF. TOFF and SEDCO further agree that TOFF's Contract
Term and Extension Option Periods shall continue to run during any such period
of out sourcing. To exercise the Out Sourcing Option, TOFF must give SEDCO
written notice at least forty-five (45) days prior to the actual out sourcing
of the rig.
The Basic Rig shall be equipped per Attachment 12 entitled "Single Riser System
Minimum Requirements" and be capable of performing drilling operations in water
depths of up to 1,500 feet.
29
SECTION 2. COMMENCEMENT DATE
The initial Contract Term shall commence coincident with the point in time that
the rig commences mobilization to TOFF's initial location provided the rig has
completed and passed all required regulatory inspections and certifications but
in no event prior to February 1, 1997. CONTRACTOR hereby agrees to obtain such
inspections and certifications immediately following the completion of the
complete overhaul and reconditioning of the rig's machinery and systems
including all upgrades and modifications to such machinery and systems. In the
event CONTRACTOR has not delivered the FPS XXXX XXXXXXXXX due to having signed
the Amoco contract, pursuant to Section 4.C.1, and an acceptable substitute rig
is not readily available to TOFF as set forth herein on or prior to June 30,
1997, TOFF or CONTRACTOR may terminate this Drilling Order without penalty;
provided, however, the options set forth in Sections 4.C.1 and 4.C.2 herein
shall survive. In the event that the conditions set forth in Section 13.N of
that certain Drilling Make-Ready Agreement dated June 1, 1996 by and between
Deepwater Drillers, L.L.C. and CONTRACTOR are not satisfied, CONTRACTOR may, in
addition to any other remedies it might have, terminate this Drilling Order.
SECTION 3. CONTRACT DEPTH(S): (PER PROGNOSIS)
Subject to right of TOFF to abandon the well(s) or to have the well(s)
completed at a lesser depth, CONTRACTOR agrees to drill the well(s) to a total
maximum Contract Depth of 25,000 feet or prognosis specified depth, whichever
is less. All such drilling shall be on a day work basis at rates specified in
Section 13 hereof.
At TOFF's request, CONTRACTOR agrees to drill a depth greater than total
Contract Depth if in CONTRACTOR's opinion equipment at the well site is capable
of such drilling. The cost of Rig upgrades and Rates for such drilling shall
be negotiated by the parties hereto unless otherwise provided by Section 13
hereof.
At TOFF's request, CONTRACTOR agrees to drill in water depths greater than
1,500' water depth if, in CONTRACTOR's opinion, the rig is capable of such
drilling.
SECTION 4. RIG AND EQUIPMENT TO BE FURNISHED BY CONTRACTOR
A. Rig: The FPS XXXX XXXXXXXXX or, subject to the reasonable consent of
TOFF or as set forth in Section 4.C., another semisubmersible drilling
rig capable of drilling in up to 1,500 feet of water. CONTRACTOR
shall have the right to suspend this Drilling Order for up to 120 days
prior to the commencement of the initial well or after the completion
of operations on any well for purposes of substituting the rig to be
used or the rig then in use. In the event a substitute rig is
provided as set forth in this Section 4, changes to the equipment
specifications set forth in this Drilling Order (including, without
limitation, the specifications set forth in this Section 4 and in
Section 5) may be made as such rig
2
30
substitution may reasonably require, subject to the consent of TOFF,
which consent may not be unreasonably withheld.
One of the following options shall apply (as checked):
Attachment 1, Check List for Drilling Equipment, which is
----- incorporated herein by this reference, defined minimum
equipment requirements desired by TOFF. CONTRACTOR should use
blank forms provided to describe its equipment and attach its
equipment list.
X CONTRACTOR should fill out Attachment 1 or attach its equipment
----- list to show equipment it can furnish which CONTRACTOR
considers adequate for the job.
B. BLOWOUT PREVENTION EQUIPMENT
The following options shall apply (as checked):
X CONTRACTOR is to provide and install blowout prevention
----- equipment after setting 20" casing. The Blowout Preventer
Stack shall have a bore of 18-3/4" and pressure rating of
10,000 psi as a minimum. The TOFF well control equipment
specifications and configuration for the diverter and
preventer stack are shown in Attachment 2 (drawings No. 101B
and 110) and for the choke manifold in Attachment 3 (drawing
202C). Any deviations from the TOFF specifications and
configuration shall be listed in Attachment 1 (Enclosures I,
J, and K) including a description of the deviation, the cost,
if any, CONTRACTOR would charge TOFF to bring the equipment
into compliance, and the timing required by CONTRACTOR to
implement such modifications. CONTRACTOR to state additional
costs, if any, to meet all minimum equipment requirements that
would be for TOFF's account. Costs over and above those
stated would be for CONTRACTOR's account.
All the blowout prevention equipment shall be manufactured to
and maintained in accordance with XXXX MRO175, latest edition.
In Attachment 1 (Enclosure J) CONTRACTOR shall provide the
equipment certification and inspection records showing that
all the blowout prevention equipment was manufactured to XXXX
MRO175 specification. In addition, CONTRACTOR shall provide
in Attachment 1 (Enclosure J) a record (certification and
inspection records) of all blowout prevention equipment
repairs (field repairs, shop repairs, component and/or parts
replacement, etc.) showing that the equipment has been
maintained in accordance with XXXX.
3
31
Any repairs to CONTRACTOR's blowout prevention equipment shall
comply with the original equipment manufacturers (OEM)
specification. TOFF retains the right to inspect any repair
and/or replacement component/part to insure that the OEM
specifications are met.
All well control equipment shall meet the rules and
regulations set forth by the Minerals Management Service,
Federal Register Part 250 - Oil and Gas and Sulphur operations
in the Outer Continental Shelf.
X CONTRACTOR to provide schematic representing actual equipment
----- being provided in order to meet the requirements of
Attachments 2 and 3 (BOP stack and Choke Manifold Drawings and
Specs).
No blowout equipment is required.
-----
Regardless of option selected, the blowout prevention
equipment is to be serviced, maintained and tested by the
CONTRACTOR in accordance with Attachment 4, Instruction Sheet.
Give last repair or inspection date and who performed service.
Give serial numbers on ram preventers. If rated for sour
service, provide applicable documentation that certifies the
sour service rating.
C. TOFF hereby acknowledges that, as of the date hereof, CONTRACTOR has
submitted a bid to engage the FPS XXXX XXXXXXXXX to perform operations for
Amoco and that delivery of the FPS XXXX XXXXXXXXX thereunder may be
required prior to the commencement and completion of the Contract Term. In
the event that CONTRACTOR shall sign an agreement to perform work for Amoco
and pursuant to such agreement CONTRACTOR shall be required to deliver the
FPS XXXX XXXXXXXXX prior to the commencement and completion of the Contract
Term, CONTRACTOR may substitute the FPS XXXX XXXXXXXXX with another
semisubmersible drilling rig as set forth in Section 4.A. above. In the
event CONTRACTOR elects to carry out such rig substitution, in addition to
the rights hereunder as they relate to the substitute rig, TOFF shall have
the following options:
1. Subject to agreement by Amoco to delay delivery of the FPS XXXX
XXXXXXXXX and upon written notice to CONTRACTOR, TOFF may elect to
use the FPS XXXX XXXXXXXXX in the Newfoundland Grand Banks Area or
such general vicinity rather than the substitute rig to complete
the Contract Term, subject to the terms and conditions set forth
herein; provided that the rates set forth in Section 13 hereof
shall be adjusted to account for any additional costs to
CONTRACTOR as a result of such new location. The election by TOFF
to use the FPS XXXX XXXXXXXXX instead of the substitute rig
pursuant to this Section 4.C.1. shall in no way impair TOFF's
right to exercise the Extension Options with respect to the
substitute rig.
4
32
2. Upon completion of CONTRACTOR's operations for Amoco and subject
to the use of the FPS XXXX XXXXXXXXX by Petro Canada for the
Terra Nova development project, TOFF shall have the right to
contract to use the FPS XXXX XXXXXXXXX at the then prevailing
Amoco rates for the drilling of one well.
SECTION 5. CHECK LIST OF ADDITIONAL EQUIPMENT, MATERIAL AND SERVICES TO
BE PROVIDED
Attachment 5, Check List for Equipment, Material, and Services, which is
incorporated herein by this reference, defines certain specific items to be
furnished by the party therein designated and, with respect to the items to be
furnished by CONTRACTOR, designates the basis of payment.
SECTION 6. INTENTIONALLY LEFT BLANK:
SECTION 7. INTENTIONALLY LEFT BLANK:
SECTION 8. INTENTIONALLY LEFT BLANK:
SECTION 9. INTENTIONALLY LEFT BLANK:
SECTION 10. INTENTIONALLY LEFT BLANK:
SECTION 11. INTENTIONALLY LEFT BLANK:
SECTION 12. DESIGNATED REPRESENTATIVES:
TOFF CONTRACTOR
Xxxxxx Offshore, Inc. Sedco Forex Division, Schlumberger
Technology Corporation
(Company Name) (Company Name)
Xxxxxxx Xxxxxxxxx, Xx. Xxxx Xxxxxx
(Representative's Name) (Representative's Name)
7400 Texas Xxxxxxxx Xxxxx 0000 Xxxxx Xxxxx Xxxxxxx,
600 Xxxxxx Suite 402
5
33
(Address) (Address)
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
(State, Zip Code) (State, Zip Code)
(000) 000-0000 (000) 000-0000
(Day Telephone Number) (Day Telephone Number)
(000) 000-0000 (000) 000-0000
(Night Telephone Number) (Night Telephone Number)
SECTION 13. COMPENSATION TO BE PAID CONTRACTOR (DAY WORK BID):
A. $70,000 per day when operating
B. INTENTIONALLY LEFT BLANK
C. $66,700 *per day standby rate, when the rig is anchored on
location and is in position for drilling operations
and in the opinion of CONTRACTOR and TOFF, it is
considered prudent and necessary to suspend drilling
operations because of hazardous weather conditions or
the possibility of hazardous weather conditions.
This rate will apply when drilling operations are
suspended and shall be effective until weather
conditions permit commencement of drilling
operations. In the event the rig is damaged, repairs
will be made at the CONTRACTOR's expense, and
drilling day work payments will cease at the time of
damage and will not resume until the rig is again
ready and able to perform. This rate shall also
apply when operations are suspended due to lack of
materials and/or services to be furnished by TOFF and
during periods while waiting on orders.
D. $66,700 per day moving rate - to apply when moving to TOFF's
first location, between TOFF locations and from last
TOFF location to a mutually agreed stacking location.
Attachment 7 shall apply to day work moves. Between
locations, moving rate starts when the last anchor is
racked at the end of P&A or T&A Operations on the
previous well. Moving rate stops when all anchors
are run and tensioned and the vessel is spotted
within 50' of the final well location or mutually
agreed stacking location.
E. $70,000 per day Workover Rate.
F. $53,500 per day Force Majeure Rate.
6
34
Loop/eddy currents which prevent the rig from
conducting normal operations shall be considered a
Force Majeure condition in addition to those
conditions set forth in the Master Drilling
agreement.
G. This Drilling Order shall terminate after TOFF has released the rig
after finishing the Contract Term stipulated in Section 1. Rig
release shall occur when the well operations are completed at the last
well of the Contract Term, the TOFF equipment is removed from the rig
and the last anchor is racked. If the rig will be stacked at a
neutral site, this Drilling Order shall terminate upon arrival at a
mutually agreed stacking location in the Gulf of Mexico. If the rig
is going directly to a new operator following its release from TOFF,
the CONTRACTOR shall be responsible for moving the rig from the last
TOFF location. Term contracts shall always include the time necessary
to complete a well in progress.
H. The appropriate day work rate above will commence when the rig is
positioned and moored on location, ballasted to drilling draft, rigged
up and ready to commence drilling operations.
I. The moving rate shall commence at such time as the rig clears its last
location with all of the prior operator's equipment off loaded.
J. The moving rate shall commence at such time as the rig clears its last
TOFF location en route to a mutually agreed stacking location. If the
rig is going to a new Operator, Section 13.G. above shall apply.
NOTE: *For all rates set forth in A. Through F. above, pricing
includes the following. If not included but requested by TOFF, CONTRACTOR
agrees to provide for the additional amount specified below:
7
35
Additional Charges $/Day
ROV Yes No X
----- ----- --------------------------------------
Diverter Yes X No
----- ----- --------------------------------------
BOP Stack Yes X No
----- ----- --------------------------------------
Choke Manifold Yes X No
----- ----- --------------------------------------
Remote Hydraulic Chokes (2) Yes X No
----- ----- --------------------------------------
Drill Scan w/CH4 gas detector Yes No X
----- ----- --------------------------------------
Top Drive (TD4-S or Equal) Yes X No
----- ----- --------------------------------------
1,500' of Boosted Drilling Riser Yes X No
----- ----- --------------------------------------
Addition of 3rd 1600 HP Mud Pump Yes X No
----- ----- --------------------------------------
Equipment to mix and displace cement, Yes No
test BOP/seal assemblies and LOT
----- ----- --------------------------------------
Casing Crews & Equipment Yes No X Cost plus 15%
----- ----- --------------------------------------
Marine Transportation Yes No X
----- ----- --------------------------------------
Backdown buoy and Jewelry Yes No X Cost plus 15%
----- ----- --------------------------------------
Anchor Handling Boats & Crews Yes No X
----- ----- --------------------------------------
Helideck for 412 fully loaded Yes X No
----- ----- --------------------------------------
Quarters for 98 Personnel Yes X No
----- ----- --------------------------------------
Catering for 6 TOFF Personnel and/or Yes No
TOFF third party personnel X Excess $12/meal & $6/bunk
----- ----- --------------------------------------
Reimbursement of Mutually Agreed Rig
Upgrades investment to be amortized
over the period of one (1) year Yes No X
----- ----- --------------------------------------
8
36
K. Additional Compensation:
1. Standby without crew $53,500 per day
L. CONTRACTOR to list personnel complement for rig. Personnel complement
to meet all MMS, and other applicable regulatory requirements.
Cost Per Man
Per Day for
Normal Added
Staff/Hourly On Duty On Rig Hrs./Day Rates Per Hour Per Man Personnel**
------------ ------- ------ -------- ----------------------- ------------
Straight
Time Overtime
-------- --------
Rig Supt. 1 1 Salaried $ 750
------- ------ -------- --------- -------- ------------
Asst. Rig Supt. 1 1 Salaried $ 654
------- ------ -------- --------- -------- ------------
Chief Mech. 1 1 Salaried $ 577
------- ------ -------- --------- -------- ------------
Chief Elec. 1 1 Salaried $ 577
------- ------ -------- --------- -------- ------------
Sub Sea Eng. 1 1 Salaried $ 654
------- ------ -------- --------- -------- ------------
Barge Eng. 1 1 Salaried $ 591
------- ------ -------- --------- -------- ------------
Driller 1 2 12 $ 17.20 $ 46.31 $ 515
------- ------ -------- --------- -------- ------------
Asst. Driller 1 2 12 $ 14.01 $ 38.05 $ 427
------- ------ -------- --------- -------- ------------
Derrickmen 1 2 12 $ 12.15 $ 32.72 $ 366
------- ------ -------- --------- -------- ------------
Roughneck 3 6 12 $ 10.82 $ 29.13 $ 330
------- ------ -------- --------- -------- ------------
Roustabout 4 8 12 $ 9.22 $ 24.82 $ 285
------- ------ -------- --------- -------- ------------
Mechanic 1 1 12 $ 15.30 $ 41.20 $ 453
------- ------ -------- --------- -------- ------------
Motormen 1 2 12 $ 11.59 $ 31.22 $ 350
------- ------ -------- --------- -------- ------------
Electrician 1 1 12 $ 15.30 $ 41.20 $ 453
------- ------ -------- --------- -------- ------------
Watchstander 1 2 12 $ 13.91 $ 37.46 $ 414
------- ------ -------- --------- -------- ------------
Crane Oper. 1 2 12 $ 13.18 $ 35.49 $ 394
------- ------ -------- --------- -------- ------------
Welder 1 1 12 $ 12.57 $ 38.85 $ 378
------- ------ -------- --------- -------- ------------
Store Keeper 1 1 12 $ 14.01 $ 37.73 $ 427
------- ------ -------- --------- -------- ------------
Medic 1 1 12 $ 11.64 $ 31.34 $ 352
------- ------ -------- --------- -------- ------------
12
------- ------ -------- --------- -------- ------------
12
------- ------ -------- --------- -------- ------------
12
------- ------ -------- --------- -------- ------------
12
Total
------- ------ -------- --------- -------- ------------
Catering: Self Catered? Yes No.
----- -----
If No, Specify Caterer:
------------------------
CONTRACTOR to provide Catering Services with the number of Catering Personnel
provided to be at CONTRACTOR's discretion.
*S.T. means straight time rate (rate w/o burden); O.T. means overtime rate
(rate w/burden).
9
37
CONTRACTOR's burden rate is 79.5%.
**includes burden and catering.
Additional crew complement, if required by TOFF, will be reimbursed at the
rates listed above.
For all above labor used by TOFF in excess of regular scheduled hours,
CONTRACTOR will be reimbursed at overtime rates plus payroll burden. In such
cases duplicate time tickets signed by CONTRACTOR's Drilling Xxxxxxx and TOFF's
Drilling Xxxxxxx will be furnished to TOFF for verification. In the event a
drilling crew is not manned to the specified complement for a full schedule
tour, a deduction will be made from the daily rig rate based upon the missing
crew member's hourly rate, or daily rate with burden.
M. DOWNTIME PROVISIONS
If it becomes necessary to shut down CONTRACTOR's rig for repairs of surface or
subsurface equipment or due to lack of materials or labor furnished by
CONTRACTOR while CONTRACTOR is performing work on a day work basis, CONTRACTORS
shall be allowed compensation for such repairs or delay at the appropriate day
work rate commensurate with the stage of operations then in effect; i.e., with
drill pipe, without drill pipe, or standby rate. The number of hours for which
CONTRACTOR is to be compensated shall be limited as follows (CONTRACTOR shall
be allotted 30 minutes per tour to conduct normal maintenance without penalty.
All delays beyond that 30 minutes per tour shall be subject to the following):
Hours for any one delay/repair: 0
Total hours per day: 0
Total hours per calendar month: 0
Total hours in the aggregate for the well: 0
N. DOWNTIME INCENTIVE PLAN
This Drilling Order provides for a REPAIR RATE equal to ninety percent (90%) of
the Operating Rate (Section 13.A.) to apply during the first forty-eight (48)
hours of Downtime associated with rig or rig equipment downtime during each
calendar month, prorata, with any subsequent Downtime experienced during the
month to be compensated at $0.00.
O. DRILLING PERFORMANCE BONUS PROVISIONS
Any Drilling Performance Bonus Plan, if offered hereunder, will be subject to
TOFF's sole discretion.
P. SAFETY PERFORMANCE BONUS PROVISIONS
Any Safety Performance Bonus Plan, if offered hereunder, will be subject to
TOFF's sole discretion.
10
38
Q. EXTENSION PERIOD RATES
During the term of the first Term Extension Option and for any Well Extension
Options, the rates set forth in A through F and K above shall be increased by
$5,000 per day.
During the term of the second Term Extension Option, the rates shall be the
then prevailing market rates, as mutually agreed by the parties hereto.
SECTION 14. INSURANCE: (CONTRACTOR TO ATTACH CERTIFICATE INDICATING
COVERAGE)
A. *Limits: CONTRACTOR to list below CONTRACTOR's liability
insurance limits, including limits in primary and all excess
insurance, applicable to the Master Drilling Agreement paragraph
indicated.
Employers' Liability for employment subject to State Workers'
Compensation Acts: $1,000,000 (see Paragraph 11.1.b).
Employers' Liability where possible liability under Xxxxx Act or Death
on the High Seas Act: $1,000,000 (see Paragraph 11.1.b).
Comprehensive General Liability with the Watercraft Exclusion deleted:
$1,000,000 (see Paragraph 11.1.c).
Comprehensive Automobile Liability: $1,000,000 (see Paragraph
11.1.d).
Marine Protection and Indemnity: $1,000,000 (see Paragraph
11.1.e(1)).
Aircraft Liability: $1,000,000(see Paragraph 11.1.g).
Pollution/Contamination: $1,000,000 (see Article XIII A(2)).
($1,000,000.00 minimum coverage required) CONTRACTOR may elect to self
insure
Excess Liability: $10,000,000
B. Costs: Complete Attachment 9 only if Drilling Order is for one year
or more.
11
39
SECTION 15. WORK TO BE PERFORMED - ADDITIONAL WORK:
See Attachment 10.
SECTION 16. MOVEMENT OF RIG:
CONTRACTOR shall be solely responsible for movement of the rig between all
locations as well as for spotting, positioning and maintaining the rig on
location. The costs and responsibilities for arranging for services used in
accomplishing this shall be as designated in Attachment 7.
SECTION 17. SPECIAL AGREEMENTS:
A. Other special agreements - Refer to Attachment #11, Special
Agreements.
B. Summary of Attachments: The following Attachments, accompany this
Drilling Order.
Attachments Provided by CONTRACTOR:
Attachment 1: Contractor's Rig/Equipment Specifications and
Descriptions
Attachments Provided by TOFF:
Attachment 2: Minimum Specifications for BOP Equipment and Diverter
Equipment
Attachment 3: Minimum Specifications for Choke Manifold Equipment
Attachment 4: Instructions for Testing and Operation of BOP
Equipment
Attachment 5: Checklist for Equipment, Material and Services
Attachment 6: Intentionally left blank
Attachment 7: Rig Movement Checklist - Day Work Moves
Attachment 8: CONTRACTOR Awareness of Provisions of FR Vol. 53
Attachment 9: Cost of Insurance
Attachment 10: Work to be Performed - Additional Work
Attachment 11: Special Agreements
11.1: Helideck Specifications Form
11.3: Minimum Requirements for Eye Protection
Attachment 12: Minimum Requirements, Single Riser System
C. CONTRACTOR to provide all of the following items upon request.
1. Completed Drilling Order Items, Sections 1-17 as applicable
12
40
2. Completed Forms in Attachments
Attachment 5
Attachment 7
Attachment 8
Attachment 9
Attachment 11.1
3. Documents of Compliance with Regulatory Bodies
4. Standard Rig Brochure
5. Enclosures
A: Minimum of three drawings of rig dimensions and deck layout
B: Crane description
C: Inventory - Drill String Handling Tools
Latest Drill String Inspection Reports
(Inspection Reports Required upon TOFF's request)
D: Inventory of XO subs, etc.
E: Fishing Tools Inventory
F: Circulating System Drawings
G: Ballast Control System
H: Riser, BOP Handling Tools
I: Diverter System drawings w/Riser Gas Handling Equipment
J: BOP & LMRP Drawings (Include Equipment Certification and
Inspection Records)
K: Detailed description of Accumulator System
L: Choke Manifold Drawing
M: Well Control System Records
N: Quarters Layout
O: Drawing of ROV Location
P: Solids Control System Drawings
Q: Oil Base Mud & Cuttings Containment Plan
R: Mooring System Analysis, Maximum Weather Conditions (API
hurricane criteria)
S: Size vessel required to run/pull anchors (bollard pull, winch
capacity, pennant line size and length)
T: Sample Load Forms for Variable Deck Load Calculations
U: BOP Control System detailed schematic
Other Information to be provided by CONTRACTOR (all items to be provided upon
request):
(1) Financial Statements
(2) Qualification Records of Crew Members
(3) CONTRACTOR Safety Data Report Form
(4) Detailed description of Crews
13
41
(5) Description of Waste Treatment System
(6) Downtime Hours on a Monthly Basis
(7) Fire Detection Systems and Sensors
(8) Safety Devices
(9) Emergency Power Systems
(10) EMR's for Three Years
(11) OSHA No. 200 Log for Two Years
D. Suspension - The dayrates established herein for CONTRACTOR's rig
shall be suspended during any and all required dry docking/inspection
periods including transit time to and from said drydocking/inspection
periods that may be/are mandated by any and all regulatory agencies.
Additionally, the parties hereto hereby agree that the Contract Term
shall continue to run during said drydocking/inspection periods.
E. Notwithstanding any other provision of this Agreement, should there be
any unknown or unidentified man-made or natural obstructions, above or
below the surface of the water, at the location of the well or within
the access thereto and the Rig and/or its associated equipment damage
those unknown or unidentified obstructions, TOFF shall release,
defend, indemnify and hold harmless CONTRACTOR from and against any
claims for such damage, including without limitation, loss of or
damage to pipelines, platforms, cables or other man-made obstructions.
Should the Rig and/or its associated equipment damage any known or
identified man-made or natural obstructions, above or below the
surface of the water, at the location of the well or within the access
thereto when caused by the correct positioning or operation of the Rig
and/or its associated equipment at a specific location, or on a
specific route, designated and/or approved by TOFF or by the actual
positioning of the Rig and/or its associated equipment by TOFF, TOFF
shall release, defend, indemnify and hold harmless CONTRACTOR from and
against any claims for such damage, including without limitation, loss
of or damage to pipelines, platforms, cables or other man-made
obstructions.
SECTION 18. SECURITY
1As security for its obligations under this Drilling Order, TOFF shall post
cash collateral or an irrevocable letter of credit in an amount equal to (i)
the applicable operating day rate set forth in Section 13 hereunder multiplied
by (ii) the number of days of the initial Contract Term. In the event TOFF
exercises any Extension Option, Contractor and TOFF shall agree upon additional
security for the extension period. Such security shall be released upon the
earlier to occur of (i) the termination of this Drilling Order and the
satisfaction of all of TOFF's obligations under this Drilling Order or (ii) the
receipt of a guarantee, in a form reasonably acceptable to Contractor, for all
amounts payable under this Drilling Order from an entity having a Standards &
Poors credit rating of BBB- or equivalent credit rating from a national credit
facility.
[Remainder of page intentionally left blank.]
14
42
In response to the above request, our input for the Drilling Order for the
drilling of the well(s) hereinabove described is submitted as set forth above.
Provisions of the Master Drilling Agreement dated September 19, 1996, as
amended shall apply hereto.
Date: SEDCO FOREX DIVISION, SCHLUMBERGER
TECHNOLOGY CORPORATION
BY: /s/ J.R. POWERS
------------------------------------
PRINTED NAME: J.R. Powers
--------------------------
TITLE: District Manager
---------------------------------
The foregoing Drilling Order is hereby accepted and approved this 19th day of
September, 1996.
XXXXXX OFFSHORE, INC.
BY: X. XXXXXXXXX, XX.
------------------------------------
PRINTED NAME: Xxxxxxx Xxxxxxxxx, Xx.
--------------------------
TITLE: C.O.O.
---------------------------------
