EXHIBIT 10.22
ROCKY POINT
AGREEMENT
THIS ROCKY POINT AGREEMENT (the "Agreement")dated as of the 2nd day of
November 2000, is entered into by and among ▇▇▇▇▇▇▇ PETROLEUM CORPORATION
("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇ INC. ("▇▇▇▇▇▇▇▇"), DEVON ENERGY CORPORATION ("Devon"),
▇▇▇▇ INDUSTRIES, INC., ("▇▇▇▇"), ▇▇▇▇▇▇▇▇ PT. ▇▇▇▇▇▇▇▇ PRODUCTION COMPANY
("▇▇▇▇▇▇▇▇"), ▇▇▇▇-▇▇▇▇▇ CORPORATION, ("KMG"), TEXACO EXPLORATION AND
PRODUCTION INC. ("Texaco"), and OXBOW ENERGY, INC. ("Oxbow"), (collectively,
sometimes referred to as the "Point A Owners"), and ▇▇▇▇▇▇▇, DELTA PETROLEUM
CORPORATION ("Delta"), ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ (collectively, sometimes referred
to as the "Rocky Point Owners"),
WHEREAS, the Point A Owners own an interest in the oil and gas leases
subject to the Point ▇▇▇▇▇▇▇▇ Unit Agreement (the "Point A Unit Agreement")
and the Point ▇▇▇▇▇▇▇▇ Unit Operating Agreement (the "Point A Unit Operating
Agreement"), both dated effective October 1, 1995 (collectively referred to as
the "Point A Unit Agreement"), which formed the Point ▇▇▇▇▇▇▇▇ Unit (the
"Point A Unit") as a federal offshore unit for the purposes of exploring,
developing and producing hydrocarbons from the Point ▇▇▇▇▇▇▇▇ area offshore
California. The Mineral Management Service ("MMS") has designated ▇▇▇▇▇▇▇▇
the Operator of the Point A Unit; and
WHEREAS, the Rocky Point Owners own an interest in the oil and gas leases
subject to the Rocky Point Unit Agreement dated effective February 15, 1985
("Rocky Point Unit Agreement") and Unit Operating Agreement dated effective
February 1, 1985 and amended by Letter Agreement dated February 6, 1985
("Rocky Point Unit Operating Agreement"), which formed the Rocky Point Unit
(the "Rocky Point Unit") as a federal offshore unit for the purposes of
exploring, developing and producing hydrocarbons from the Rocky Point area
offshore California. The MMS has designated ▇▇▇▇▇▇▇ the Operator of the Rocky
Point Unit; and
WHEREAS, after receiving the required drilling, production and operating
permits from the county, state and federal governing agencies (the "Rocky
Point Permits"), one or more of the Rocky Point Owners may desire to pursue
the drilling of one or more ▇▇▇▇▇ from the Point A Unit platform(s) to a
bottom hole location(s) lying within the Rocky Point Unit (the "Rocky Point
Well(s)") and after establishing production therefrom to operate, produce,
transport and store hydrocarbons produced from the Rocky Point Well(s) drilled
and operated from the Point A Platforms and Facilities, as hereinafter
defined; and
WHEREAS, the Rocky Point Owners wish to offer the Point A Owners the
opportunity to participate in the Rocky Point Well(s) and be assigned an
interest in the Rocky Point Unit in exchange for the right to use the Point A
Platforms and Facilities; and
WHEREAS, certain new permits and/or permit modifications of existing
permits relating to the Point A Unit will be required from the county, state
and federal governing agencies to allow the drilling, operating, handling,
transportation, and storage of hydrocarbons from the Rocky Point Well(s)
("Point A Modified Permits"). To facilitate the filing of such permits and
permit modifications, it will be beneficial for ▇▇▇▇▇▇▇▇ to succeed ▇▇▇▇▇▇▇ as
the Designated Operator of Rocky Point Unit prior to modifying the Point A
Unit Development and Production Plans; and
WHEREAS, ▇▇▇▇▇▇▇▇ has agreed to be named the Designated Operator of Rocky
Point Unit and has agreed to try and obtain the Point A Modified Permits and
the Rocky Point Permits, and to design the drilling and completion program for
the drilling of the Rocky Point Well(s); provided, however, that the Rocky
Point Owners and a sufficient number of Point A Owners necessary to grant
approvals under the Point A Unit Operating Agreement agree to i) a framework
of how the costs shall be borne, ii) the rights of the Point A Owners to
participate in the Rocky Point Well(s), and iii) certain other issues relating
to the development of the Rocky Point Well(s) from the Point A Platforms and
Facilities, as discussed more fully below.
NOW, THEREFORE. in consideration of mutual promises set forth in this
Agreement, the receipt and sufficiency of which is hereby acknowledged, the
undersigned parties hereby agree as follows:
1. Definitions. Except as otherwise expressly provided or unless the
context otherwise requires, the terms in this Section 1 shall, for all
purposes of this Agreement, have the meaning herein specified, the
following definitions to be equally applicable to both the singular and
the plural forms of any of the terms herein defined:
1.1 "PAPCO Owners". The current owners of Point ▇▇▇▇▇▇▇▇ Pipeline
Company, a California general partnership, are Capitan Pipeline
Company, ▇▇▇▇ Exploration Company, Oxbow Energy, Inc., The Largo
Company, Sun Offshore Gathering Company, Texaco Harvest Pipeline
Company Inc., ▇▇▇▇▇▇▇ Programs Inc. and ▇▇▇▇▇▇▇▇ Inc.
1.2 "PANGL Owners". The current owners of Point ▇▇▇▇▇▇▇▇ Natural Gas
Line Company, a California general partnership, are Sisquoc Gas
Pipeline Company, ▇▇▇▇ Exploration Company, Oxbow Energy, Inc.,
▇▇▇▇▇▇▇▇ Pt. ▇▇▇▇▇▇▇▇ Production Company, Sun Offshore Gathering
Company, Texaco Harvest Gas Pipeline Company Inc., ▇▇▇▇▇▇▇
Programs, Inc. and ▇▇▇▇▇▇▇▇ Inc.
1.3 "PATC ". The current owners of Point ▇▇▇▇▇▇▇▇ Terminal Company,
a California general partnership, are Capitan Pipeline Company,
▇▇▇▇ Exploration Company, Oxbow Energy, Inc., The Largo Company,
Sun Offshore Gathering Company, Texaco Harvest Pipeline Company
Inc., ▇▇▇▇▇▇▇ Programs Inc. and ▇▇▇▇▇▇▇▇ Inc.
1.4 "GGP Owners". The current owners of Gaviota Gas Plant Company, a
California general partnership, are Cachuma Gas Processing
Company, ▇▇▇▇ Exploration Company, Oxbow Energy, Inc., ▇▇▇▇▇▇▇▇
Pt. ▇▇▇▇▇▇▇▇ Production Company, Sun Offshore Gathering Company,
Texaco Harvest Pipeline Company Inc., ▇▇▇▇▇▇▇ Programs Inc. and
▇▇▇▇▇▇▇▇ Inc.
1.5 "Point A Platforms and Facilities". The platforms, compressors,
tanks, surface equipment, pipelines, surface ownership, right-of-
ways and easements, permits contracts, real property and all other
related assets together which are used in the operation of Point A
Unit and are owned or leased by the Point A Owners or the PAPCO
Owners, PANGL Owners, PATC Owners, or GGP Owners.
1.6 "Rocky Point Unit Ownership". The current owners and ownership of
the oil and gas leases located in the Rocky Point Unit is as
follows:
(a) East l/2 OCS-P-451: ▇▇▇▇▇▇▇ 11.112%; ▇▇▇▇▇▇▇▇ 44.444%; and
▇▇▇▇▇▇▇▇ 44.444%;
(b) OCS-P-452: Delta (▇▇▇▇▇▇▇ as nominee/Operator) 100%; and
(c) OCS-P-453: Delta (▇▇▇▇▇▇▇ as nominee/Operator) 100%.
2. Costs and Responsibilities Prior to the Issuance of Rocky Point Permits
and Point A Modified Permits and Prior to Election of Point A Owners'
Participation in Rocky Point Unit.
2.1 Designated Operator of Rocky Point Unit. Immediately upon
execution of this Agreement, ▇▇▇▇▇▇▇, Delta, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
shall file the appropriate documents with the MMS to cause
▇▇▇▇▇▇▇▇ to be named Operator of the Rocky Point Unit.
2.2 Bonds and Insurance Certificates. ▇▇▇▇▇▇▇▇ shall file as required
with the county, state and federal agencies the bonds and
insurance certificates required under the change of Operatorship
of the Rocky Point Unit.
2.3 Point A Unit Agreement. After the Effective Date of this
Agreement (as hereinafter defined), the costs incurred by ▇▇▇▇▇▇▇▇
in connection with the application for the Rocky Point Permits and
the Point A Modified Permits, as well as pre-engineering work
incurred prior to the execution of a new Rocky Point Unit
Operating Agreement (the "New Rocky Point Operating Agreement"),
shall be subject to the approval process to which all other Point
A Unit expenses are subject under the Point ▇▇▇▇▇▇▇▇ Unit
Operating Agreement (i.e., 68% working interest and 40% of
partners) and shall be charged to the Point A Owners in accordance
with their respective Participating Interests as set forth in the
Point A Unit Operating Agreement. No costs shall be charged to
the Point A Unit without the appropriate Point A Owners' prior
written approvals required under Paragraph 9.5 of the Point A Unit
Operating Agreement. The costs covered by this Paragraph 2.3
specifically exclude any litigation or legal appeal costs
associated with the denial of the Rocky Point Permits and/or the
Point A Modified Permits which are exclusively the responsibility
of the Rocky Point Owners, except for such costs approved by the
Point A Owners under Paragraph 9.5 of the Point A Unit Operating
Agreement.
2.4 Permits. ▇▇▇▇▇▇▇▇ shall attempt to obtain the Rocky Point Permits
and Point A Modified Permits in accordance with the approval
authorities required under Paragraph 9.5 of the Point A Unit
Operating Agreement and Paragraph 2.3 of this Agreement.
2.5 Design of Drilling Plan. ▇▇▇▇▇▇▇▇ shall as soon as possible and
from time to time work with consultants and/or perform required
work with ▇▇▇▇▇▇▇▇ and/or contract employees to design the
drilling, completion and operating plans that may be required by
the applications for the Rocky Point Permits and Point A Modified
Permits in accordance with the approval authorities required under
Paragraph 9.5 of the Point A Unit Operating Agreement and
Paragraph 2.3 of this Agreement.
2.6 Costs Prior to Effective Date. ▇▇▇▇▇▇▇▇ has, prior to the
Effective Date of this Agreement, incurred costs associated with
the Rocky Point Permits and Point A Modified Permits prior to the
Effective Date. All or almost all of these costs have been
invoiced to Point.A Owners prior to the Effective Date. The Point
A Owners agree to bear such costs even though they were incurred
prior to the Effective Date to the extent that such costs were
orally approved by the Point A Owners via telephone conferences.
2.7 Costs After Effective Date. From the Effective Date until the
execution of New Rocky Point Operating Agreement by the Rocky
Point Participants or until this Agreement is terminated,
whichever shall first occur, all costs incurred hereunder shall be
borne by the Point A Owners in accordance with Paragraph 9.5 of
the Point A Unit Operating Agreement and Paragraph 2.3 of this
Agreement. ▇▇▇▇▇▇▇▇ shall invoice the Point A Owners in the same
manner as ▇▇▇▇▇▇▇▇ invoices such parties under the Point A Unit
Operating Agreement.
2.8 ▇▇▇▇▇▇▇'▇ and Delta's Costs Prior to Effective Date. Except as
provided in Paragraph 6.1, ▇▇▇▇▇▇▇ and Delta agree not to invoice
the Point A Owners, the Rocky Point Owners, or the Rocky Point
Participants for any costs incurred prior to the Effective Date.
2.9 ▇▇▇▇▇▇▇'▇ or Delta's Costs After Effective Date. Except as
provided in Paragraph 6.1, ▇▇▇▇▇▇▇ and Delta agree not to invoice
the Point A Owners, the Rocky Point Owners, or the Rocky Point
Participants for any costs incurred after the Effective Date,
unless approved by the Point A Owners pursuant to the provisions
of the Point A Unit Operating Agreement.
3. Ability of Point A Owners to Participate in Rocky Point; Point A Owners'
Understanding.
3.1 Receipt of the Rocky Point Permits. Upon receipt of i) the Rocky
Point Permits; ii) the Point A Modified Permits; iii) the
California Coastal Commission's written approval of the Rocky
Point Well(s); and iv) the Santa ▇▇▇▇▇▇▇ County permits for County
related facilities: the Rocky Point Owners and the Point A Owners
shall attempt, in good faith, to enter into agreements which will
authorize the drilling of a Rocky Point Well(s) and use of Point A
Platforms and Facilities. All parties agree that new agreements
and amendments to existing agreements will be required. The
parties hereby agree that they will negotiate in good faith and
use reasonable efforts to enter into all agreement(s) deemed
necessary to implement, at a minimum, the intentions of the
parties as reflected in this Agreement.
3.2 Point A Owners' Rights to Participate in Rocky Point Unit. Upon
receipt of i) the Rocky Point Permits; ii) the Point A Modified
Permits; iii) the California Coastal Commission's written approval
of the Rocky Point ▇▇▇▇▇; and iv) the Santa ▇▇▇▇▇▇▇ County permits
for County related facilities, the Rocky Point Owners shall
collectively offer to assign their interest in the Rocky Point
Unit to each of the Point A Owners, without warranty of title,
express or implied, except as to persons claiming by, through or
under the Rocky Point Owners, such that the working interest being
so offered shall be the same as that Point A Owner's working
interest in the Point A Unit. Such right to participate shall be
subject to the following terms and conditions:
3.2.1 No Point A Owner shall have the obligation to accept an
assignment of an interest in the Rocky Point Unit.
3.2.2 An offer to assign an interest in the Rocky Point Unit shall
be made to all Point A Owners in the same percentages as
their Point A Unit working interests. The Point A Owners
shall have thirty (30) days from receipt of the offer to
elect to accept an assignment of an interest in the Rocky
Point Unit by sending written notice to the Rocky Point
Owners.
3.2.3 All Point A Owners who elect to accept an assignment of an
interest in the Rocky Point Unit, together with all Rocky
Point Owners (including Delta), shall be known as the "Rocky
Point Participants."
3.2.4 Within thirty (30) days after the thirty (30) day period
referred to in 3.2.2 above, the Rocky Point Owners shall
assign to each Point A Owner who has elected to accept an
assignment of its proportionate share of the collective
interests in the oil and gas leases included within the
Rocky Point Unit so that each Point A Owner shall receive
its appropriate working interest without any need for
additional consideration to be paid to the Rocky Point
Owners.
3.3 Certain Interests in the Rocky Point Unit to be Retained by the
Rocky Point Owners. If a Point A Owner does not elect to accept
an assignment of an interest in the Rocky Point Unit, then such
interest shall be retained by the existing Rocky Point Owners
pursuant to their respective Rocky Point Unit Ownership, based on
surface acres owned in the Rocky Point Unit (East l/2 OCS-P-451,
all of OCS-P-452, and all of OCS-P-453), prior to such offer.
3.4 In/Out Election: The election by the Point A Owners under this
Section 3 shall be on a one-time basis as set forth herein. Point
A Owners who do not elect to participate as set forth above
shall have no subsequent right, under the terms of this
Agreement, to participate in the Rocky Point Unit.
3.5 Additional Burdens: Except as provided in Paragraph 6.1, from and
after the Effective Date of this Agreement, the Rocky Point Owners
shall not cause any burden or obligation to be placed on the Rocky
Point Unit. If any Rocky Point Owner causes any such burden to be
placed on the Rocky Point Unit, such Owner shall indemnify, defend
and hold all other. parties to this Agreement harmless for any
costs, expenses (including reasonable attorney's fees), losses,
monies, or damages attributable to such burden.
3.6 New Rocky Point Operating Agreement: The Rocky Point Participants
shall negotiate in good faith the terms of the New Rocky Point
Operating Agreement, and such Agreement shall provide for a cash
call and non-consent provisions. Further, the parties agree to
use the Point .A Operating Agreement as the initial go by document
from which the parties agree to begin negotiations. Upon
execution of the new Rocky Point Operating Agreement, operation of
the Rocky Point Unit shall be governed thereby and the existing
Rocky Point Unit Operating Agreement shall be terminated.
3.7 Point A Owners' Understanding:
3.7.1 The production from the Rocky Point Well(s) shall be
commingled with Point A Unit production and allocated based
on well tests.
3.7.2 Point A Platforms and Facilities, including but not limited
to well slots or conductors, will be made available to Rocky
Point Participants for the Rocky Point Well(s) without
charge, but all capital costs for Rocky Point Well(s), such
as drilling, hook-up, or modifications to Point A Platforms
and Facilities, shall be paid by the Rocky Point
Participants. Abandonment costs of the Rocky Point ▇▇▇▇▇
and all facilities installed for the production of the Rocky
Point ▇▇▇▇▇ shall be paid by the Rocky Point Participants.
3.7.3 The monthly Point A Unit OPEX shall include the overhead and
facility capital required to operate the Point A Unit and
the Rocky Point Unit. Such costs shall be allocated between
the Point A Unit and the Rocky Point Unit on an active well
count basis.
3.7.4 In the event of a production constraint relating to the
production from the Point A Unit and the Rocky Point Unit,
the production from the Rocky Point Unit shall not be
preferentially curtailed in favor of the Point A Unit
production. Likewise, the production from the Point A Unit
shall not be preferentially curtailed in favor of the Rocky
Point Unit production. Except as specifically otherwise set
forth above, all parties shall cooperate so that the
production from all ▇▇▇▇▇ is treated equally and without
consideration to any one party's ownership.
3.7.5 Rocky Point Unit gas may be commingled with Point A Unit gas
and fuel usage shall be proportional to production with such
usage being free of any compensation to any such owner.
4. ▇▇▇▇▇▇▇ and Delta Transactions.
4.1 ▇▇▇▇▇▇▇/Delta Point A Unit Transaction: ▇▇▇▇▇▇▇ has entered into a
transaction with Delta respecting ▇▇▇▇▇▇▇'▇ ownership in certain
onshore or offshore California properties, including the Point A
Unit. By the execution of this Agreement, the Point A Owners do
not consent to, affirm, ratify, or in any way assent to the
transaction between ▇▇▇▇▇▇▇ and Delta with respect to ▇▇▇▇▇▇▇'▇
interest in the Point A Unit.
4.2 ▇▇▇▇▇▇▇/Delta Rocky Point Unit Transaction: ▇▇▇▇▇▇▇ has entered
into a transaction with Delta which transferred its equitable
ownership in the Rocky Point Unit, but ▇▇▇▇▇▇▇ remains the record
owner. By the execution of this Agreement, ▇▇▇▇▇▇▇ and Delta
agree to be bound by this Agreement with regard to the Rocky Point
Unit. ▇▇▇▇▇▇▇ and Delta each agree to execute, from time to time,
any other documents required to complete the transactions
contemplated hereunder.
5. Relationship of Point A Owners and PANGL Owners, PANGL Owners, PATC
Owners, and GGP Owners.
5.1 Ownerships: The Point A Owners, either directly or through an
affiliate or subsidiary, are the PANGL Owners, PAPCO Owners, PATC
Owners, and GGP Owners. Upon request by any party hereto, each
Point A Owner agrees to use its reasonable efforts to cause its
respective subsidiaries or affiliates, as applicable, to ratify
this Agreement. Each Point A Owner shall use its reasonable
efforts to cause its affiliated companies to execute, from time to
time, any other documents required to complete the transactions
contemplated hereunder.
5.2 Cooperation: All Point A Owners, including those who choose not to
participate in the drilling of the Rocky Point Well(s), hereby
recognize the benefits from this transaction, and therefore agree
to support and cooperate with the Rocky Point Participants, and,
subject to reasonable terms, agree to execute, from time to time,
any other documents required to complete the transactions
contemplated hereby.
5.3 Tariffs. The PAPCO Owners charge the Point A Unit shippers
certain FERC treating and pipeline tariffs. Each Point A Owner,
for itself and/or on behalf of its affiliates or subsidiaries
which comprise the PAPCO Owners, agrees to use its reasonable
efforts to cause the PAPCO Owners to:
5.3.1 Charge the Rocky Point Unit only the pipeline tariffs
charged to the Point A Unit; and
5.3.2 Work in good faith to suspend or eliminate the treating
tariff.
6. Settlement Rights; Rejection of Rocky Point Permits, Point A Modified
Permits and/or Election of Rocky Point Owners to Terminate the
Permitting Process.
6.1 The parties to this Agreement recognize that Delta is presently
participating in negotiations with the federal and California
state governments with regard to a potential settlement of an
inverse condemnation or governmental "taking" claim against these
governmental entities for the Delta Leases. It is hereby agreed
that at any time prior to receipt of items i) through iv) set
forth in Paragraph 3.1, Delta, at its sole option, may negotiate
and finalize a settlement, and may elect to receive, directly or
otherwise, in exchange for such leases, a taking settlement,
governmental repurchase of the leases, or other payment from any
governmental entity or agency. In such event, Delta will receive
any settlement amounts directly. As compensation for expenses
incurred by the Point A Owners in attempting to obtain drilling
permits, Delta will pay the Point A Owners the larger of (a)
twenty percent (20%) of the net cash amount or fully transferable
contractual rights received in settlement after deducting all
compensation to be paid to attorneys and all reasonable and
necessary expenses incurred in accomplishing the settlement
("Settlement Proceeds"); or (b) the cost incurred by the Point A
Owners pursuant to Section 2 of this Agreement. Within five (5)
business days after actual receipt of any Settlement Proceeds,
Delta will pay (a) twenty percent (20%) of such Settlement
Proceeds; or (b) the cost incurred by the Point A Owners pursuant
to Section 2 of this Agreement to ▇▇▇▇▇▇▇▇, as Operator, who shall
promptly thereafter distribute to all Point A Owners (including
▇▇▇▇▇▇▇) their appropriate shares, derived by dividing each such
Point A Owner's working interest by the aggregate ownership
interest owned by all Point A Owners.
6.2 In the event that i) the Rocky Point Permits and/or the Point A
Modified Permits are denied and there is no longer a legal right
to appeal such denial; ii) the oil and gas leases owned one
hundred percent (100%) by ▇▇▇▇▇▇▇ and/or Delta (i.e., OCS-P-0452
and OCS-P-0453) and included in the Rocky Point Unit (the "Delta
Leases") are terminated by governmental agency action and there is
no longer a right to appeal such action; or iii) 100% of the
parties to this Agreement have agreed in writing to terminate the
permitting process and this Agreement, then the Rocky Point
Owners, including ▇▇▇▇▇▇▇ and Delta, shall, collectively or
individually, have the right to enter into negotiations,
settlement discussions or bring suit against the county, state
and/or the federal government. The Rocky Point Owners who are
parties to any litigation or negotiated settlement under this
Section 6.2 shall bear 100% of the costs of such suit, including
court costs and expenses and attorney's fees, and shall also
retain 100% of the damages recovered in such suit or settlement,
if any, less reimbursement of any costs incurred by Point A Owners
under Section 2 of this Agreement.
6.3 Upon the occurrence of one of the events set forth in Subsections
(i), (ii), and (iii) of Paragraph 6.2 or the payment of the
Settlement Proceeds under Paragraph 6.1, if any Point A Owner has
received an assignment of any interest in the Rocky Point Unit
pursuant to the terms of this Agreement, such interest shall be
reassigned to the respective Rocky Point Owners from which it was
received and in the same respective percentages.
7. Responsibilities for Abandonment Costs of Point A Unit.
Nothing contained herein shall modify, alter, amend, change or otherwise
effect the terms and provisions in that certain Consent Agreement dated
June 29, 1999, relating to certain obligations retained by Chevron U. S.
A. Inc. relating to the Point A Unit and the Point A Platforms and
Facilities.
8. Term of Agreement. This Agreement shall terminate upon the first to
occur of the events set forth below; however, Point A Owners shall still
be responsible to bear all costs as authorized under Paragraph 9.5 of
the Point A Unit Operating Agreement and Paragraph 2.3 of this
Agreement, until the obligations incurred under this Agreement prior to
termination have been satisfied:
8.1 the Delta Leases included in the Rocky Point Unit are terminated
by MMS and there is no longer a right to appeal such termination;
8.2 the Delta Leases included in the Rocky Point Unit are terminated
by final court order which is no longer appealable;
8.3 the Rocky Point Permits and/or the Point A Modified Permits are
denied and there is no longer a right to appeal such denial;
8.4 100% of the signatory parties to this Agreement elect to terminate
such Agreement; or
8.5 Delta has made an election to receive payment in exchange for
assignment and/or cancellation of the Delta Leases and has made
the required payment of the Settlement Proceeds to the Point A
Owners as provided under Section 6.1.
9. General Provisions.
9.1 Notices: Any notices required to be sent under this Agreement
shall be in writing and shall be delivered personally or sent by
facsimile transmission, confirmed answer back received, or by
recognized overnight courier to the addresses for each party set
forth on Exhibit "A" attached hereto.
9.2 Severability. In the event that any provision of this Agreement
conflicts with the law under which this Agreement is constructed
or if any such provision is held invalid by an arbitrator or a
court with jurisdiction over the parties, such provision shall be
deemed to be, restated to reflect as nearly as possible the
original intentions of the parties in accordance with applicable
law. The remainder of this Agreement shall remain in full force
and effect.
9.3 Miscellaneous. This Agreement shall be governed by and construed
in accordance with the laws of the State of California. This
Agreement may be executed in counterparts, and each such
counterpart shall for all purposes be an original, and all such
counterparts shall together constitute one and the same Agreement.
9.4 Assignment of this Agreement. Subject to the terms and conditions
of the Agreement, this Agreement shall inure to the benefit of and
be binding upon the respective successors and assigns of the
parties hereto. However, this Agreement shall not be assigned in
whole or part without the consent of the other parties hereto,
which consent shall not be unreasonably withheld. Prior to any
request for assignment of any party's interest, the requesting
party shall be required to provide documentation(s) to the other
party that the prospective assignee has the financial ability to
perform under the terms and conditions of this Agreement and the
terms and conditions of the other agreements and contracts
contemplated hereunder. The consenting party shall have the right
to use the prospective assignee's financial ability to bear the
said obligations in making its decision in approving or not
approving the assignment.
9.5 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof,
superceding all prior statements, representations, discussions,
agreements and understanding related to the subject matter herein.
9.6 Further Assurances. The parties each agree to, from time to time
upon the reasonable request of the other party, execute,
acknowledge and deliver, or cause to be executed, acknowledged or
delivered, such other documents or instruments as may be
reasonably required for the carrying out of the provisions of this
Agreement or any agreement or other instrument entered in
accordance with the term of this Agreement.
9.7 Laws and Regulations. This Agreement shall be subject to all
valid laws and regulations and all provisions of the leases
comprising the Point A Unit and the Rocky Point Unit and
agreements related thereto.
9.8 Scope of Agreement. This Agreement shall not be construed as
imposing any obligation on any party hereto, whether as a Point A
Owner or a Rocky Point Owner or a Rocky Point Participant, to
participate in the drilling of any well or to pay any portion of
any costs other than those costs authorized under Paragraph 9.5 of
the Point A Unit Operating Agreement and specifically described in
Paragraph 2.3 of this Agreement.
9.9 Effectiveness of Agreement. This Agreement will become binding
and effective only if one hundred percent (100%) of the Rocky
Point Owners and at least sixty eight percent (68%) of the Point
A Owners execute this Agreement.
10. ARBITRATION.
10.1 ANY CONTROVERSY OR CLAIM (WHETHER SUCH CLAIM SOUNDS IN CONTRACT,
TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS CONTRACT,
OR THE BREACH THEREOF, OR THE COMMERCIAL OR ECONOMIC RELATIONSHIP
OF THE PARTIES HERETO, SHALL BE SETTLED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES AND THE
GUIDELINES FOR EXPEDITING LARGE, COMPLEX COMMERCIAL ARBITRATIONS
OF THE AMERICAN ARBITRATION ASSOCIATION, AND JUDGMENT UPON THE
AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION THEREOF. THE ARBITRATION SHALL BE GOVERNED BY
U. S. ARBITRATION ACT, 9 U. S. C. SECS. 1-16, TO THE EXCLUSION OF
ANY PROVISIONS OF STATE LAW INCONSISTENT THEREWITH OR WHICH WOULD
PRODUCE A DIFFERENT RESULT. THE ARBITRATOR(S) IS NOT
EMPOWERED TO AWARD DAMAGES IN EXCESS OF ACTUAL DAMAGES, INCLUDING
PUNITIVE DAMAGES. THE PLACE OF HEARING SHALL BE IN HOUSTON,
TEXAS.
IN WITNESS WHEREOF, the parties have executed the Agreement as first set
forth hereinabove, but to be effective for all purposes as of August 1, 2000
(the "Effective Date").
▇▇▇▇▇▇▇ PETROLEUM CORPORATION ▇▇▇▇▇▇▇▇ INC.
By: ____________________________ By: ____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Project Manager
DEVON ENERGY CORPORATION ▇▇▇▇▇▇▇▇ PT. ▇▇▇▇▇▇▇▇
PRODUCTION COMPANY
By:____________________________ By: ____________________________
Name: Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Title: Vice President
▇▇▇▇-▇▇▇▇▇ CORPORATION TEXACO EXPLORATION AND
PRODUCTION INC.
By:____________________________ By: ____________________________
Name: Name:
Title: Title:
▇▇▇▇ INDUSTRIES OXBOW ENERGY, INC.
By: ___________________________ By: ___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
Title: Attorney-in-Fact Title:
DELTA PETROLEUM CORPORATION
By: ___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇ Point ▇▇▇▇▇▇▇▇ Production Company
Mr. ▇. ▇. (▇▇▇▇▇) ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail: P. 0. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Texaco Exploration and Production Company
Mr. R. W. (Rich) Hill
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇ Petroleum Corporation/Delta Energy Corporation
Mr. J. (▇▇▇) ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(303) 837-1661 ext. 123
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Exhibit "A"
NOTICE INFORMATION
▇▇▇▇▇▇▇▇ Inc.
▇▇. ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇.▇▇▇▇.▇▇▇
Devon Energy Corporation
Mr. R. (▇▇▇) ▇▇▇▇
▇. 0. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ 772 1 O-46 16
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇▇▇▇.Abib@dvn. com
▇▇▇▇-▇▇▇▇▇ Corporation
Mr. D. (▇▇▇▇▇▇▇) ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(281) 618-6440
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇▇▇▇@▇▇▇.▇▇▇
▇▇▇▇ Exploration Company
Mr. D. (▇▇▇▇) ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Oxbow Energy, Inc.
Mr. T. (▇▇▇▇) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ FAX
▇▇▇▇_▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
AMENDMENT NO. 1 TO THE ROCKY POINT AGREEMENT
▇▇▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇▇"), Devon Energy Production Company, L. P., ▇▇▇▇-
▇▇▇▇▇ Oil and Gas Corporation, ▇▇▇▇ Industries, Inc. for ▇▇▇▇ Exploration, LLC
(subject to MMS approval of pending assignment), Harvest Energy Corp. f/k/a
Oxbow Energy, Inc., Texaco Exploration and Production Inc., and ▇▇▇▇▇▇▇
Petroleum Corporation (collectively, sometimes referred to as the "Point A
Owners"), and ▇▇▇▇▇▇▇▇ and Delta Petroleum Corporation ("Delta Petroleum")
(collectively, sometimes referred to as the "Rocky Point Owners"), hereby
enter into the following Amendment No. 1 to the Rocky Point Agreement
("AMENDMENT NO. 1").
RECITALS
A. WHEREAS, the PARTIES and/or their predecessors entered into the
"Rocky Point Agreement," with an effective date of August 1, 2000, under which
they agreed, inter alia, that the Point A Owners would acquire the right to
obtain an interest in production from the leases of the Rocky Point Unit in
exchange for, inter alia, the use of the platforms and facilities of the Point
▇▇▇▇▇▇▇▇ Unit in order to develop the Rocky Point Unit;
B. WHEREAS, the Rocky Point Unit currently consists of Outer Continental
Shelf ("OCS") Leases OCS-P 0452 and 0453, and the eastern half of Lease OCS-P
0451;
C. WHEREAS, Delta Petroleum has a 100% ownership interest in OCS Leases
OCS-P 0452 and 0453, and an 11.112% ownership interest in the eastern half of
OCS Lease OCS-P 0451; and ▇▇▇▇▇▇▇▇ currently has the remaining 88.888%
ownership interest in the eastern half of OCS Lease ▇▇▇-▇ ▇▇▇ ▇;
D. WHEREAS, ▇▇▇▇▇▇▇▇ is the operator of the Rocky Point Unit;
E. WHEREAS, ▇▇▇▇▇▇▇▇ is also the operator of the Point ▇▇▇▇▇▇▇▇ Unit;
F. WHEREAS, the development of the entire Rocky Point Unit has been
encumbered by the district court and court of appeals decisions in the
California ▇. ▇▇▇▇▇▇ litigation, which litigation incorporates OCS Leases OCS-
P 0452 and 0453, but not the eastern half of OCS Lease OCS-P 0451;
G. WHEREAS, ▇▇▇▇▇▇▇▇ has concluded that the development of the eastern
half of OCS Lease OCS-P 0451 would accordingly be facilitated by its removal
from the Rocky Point Unit, and that such development is material to the
continued operation of the Pont ▇▇▇▇▇▇▇▇ Unit platform and facilities;
H. WHEREAS, under the Rocky Point Unit Agreement, the eastern half of
Lease OCS-P 0451 cannot be withdrawn from the Rocky Point Unit, resulting in a
"contraction" of the unit, without the approval of all of the unit's Working
Interest Owners, which are comprised of ▇▇▇▇▇▇▇▇ and Delta Petroleum;
I. WHEREAS, a contraction of the Rocky Point Unit is subject to the
approval of the United States Minerals Management Service ("MMS");
J. WHEREAS, certain of the Rocky Point Owners' rights under the Rocky
Point Agreement, including but not limited to their rights under P aragraph
3.3 of that Agreement, depend, in part, on their ownership interests in the
Rocky Point Leases;
K. WHEREAS, Delta Petroleum has agreed, subject to certain conditions,
to permit ▇▇▇▇▇▇▇▇ to file a request with MMS to withdraw the eastern half of
OCS-P 0451 from the Rocky Point Unit (the "Contraction Request"); and
L. WHEREAS, the parties recognize that certain amendments need to be
made to the Rocky Point Agreement in light of the Contraction Request, all as
more fully set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained in this
AMENDMENT NO. 1, and intending to be legally bound, the PARTIES agree as
follows:
ARTICLES
1. The PARTIES agree that if MMS approves the Contraction Request, thus
permitting the withdrawal of the eastern half of Lease OCS-P 0451 from the
Rocky Point Unit, the PARTIES will continue to treat the eastern half of Lease
OCS-P 0451 as if it were still a part of the Rocky Point Unit for all purposes
of the Rocky Point Agreement.
2. Since execution of the Rocky Point Agreement, Delta, along with other
third parties , have instituted a legal action Amber Resources Co., et al. v.
United States of America (U. S. Court of Federal Claims), in which Delta seeks
damages for breach of contract with respect to Leases OCS-P 0452 and 0453 (the
"Leases OCS-P 0452 and 0453 Damages"); accordingly, the parties agree that any
Leases OCS-P 0452 and 0453 Damages are subject to the terms and conditions of
Paragraph 6.1 of the Rocky Point Agreement, such that 20% of Delta's net share
of the Leases OCS-P 0452 and 0453 Damages shall be payable to the Point A
Owners.
3. Delta has assigned an overriding royalty interest of five percent
(5%) ("override") in and to the leases within the Rocky Point Unit to ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Oil Company ("Kaiser") and Delta has granted to Kaiser a Deed of Trust
covering its interest in and to the leases in the Rocky Point Unit. Delta
hereby agrees to indemnify, defend and to hold ▇▇▇▇▇▇▇▇, and any other Rocky
Point owner and/or Point ▇▇▇▇▇▇▇▇ owner, harmless from any claims, demands,
losses, or suits, that i) such override burdens any other owner's interests
besides Delta's final working interest in and to the East half of OCS-P 0451,
OSC-P 0452 and/or OSC-P 0453 leases or ii) Kaiser has rights under the Deed of
Trust which cover any other Party's interest in such leases except for Delta's
final working interest.
4. Each PARTY represents and warrants to the other that the execution
and delivery of this AMENDMENT NO. 1 have been duly and validly authorized and
approved and that no further action is necessary to make this AMENDMENT NO. 1
valid and binding on each of the PARTIES hereto and in accordance with the
terms of this AMENDMENT NO. 1. Each PARTY represents and warrants that the
person executing this AMENDMENT NO. 1 on its behalf is duly authorized to bind
that PARTY to this AMENDMENT NO. 1.
5. The wording of this AMENDMENT NO. 1 was reviewed and accepted by
legal counsel for all PARTIES. No PARTY will be entitled to have any wording
of this AMENDMENT NO. 1 construed against any other PARTY based on any
contention that it was drafted or proposed by the other PARTY.
6. This AMENDMENT NO. 1 constitutes the entire agreement relating to the
subject matter of this AMENDMENT NO. 1. Except as explicitly set forth in
this AMENDMENT NO. 1, there are no representations, warranties, or
inducements, whether oral, written, express or implied, that in any way affect
or condition the validity of this AMENDMENT NO. 1 or alter its terms. This
AMENDMENT NO. 1 may be amended only by a written instrument executed by each
of the PARTIES.
7. This AMENDMENT NO. 1 shall be binding upon and inure to the benefit
of the PARTIES hereto and their respective successors, predecessors,
transferees, and assigns. Nothing in this AMENDMENT NO. 1 is intended, nor
shall be construed, to confer any benefit whatsoever on any party other than
the PARTIES hereto.
8. This AMENDMENT NO. 1 will be effective on the date that all of the
Point A Owners who executed the Rocky Point Agreement, or their successors in
interest, and 100% of the Rocky Point Owners, have executed this AMENDMENT
NO. 1.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Energy Production Company, L. P.,
▇▇▇▇-▇▇▇▇▇ Oil and Gas Corporation, ▇▇▇▇ Industries, Inc., Harvest Energy
Corp., Texaco Exploration and Production Inc., ▇▇▇▇▇▇▇ Petroleum Corporation
and Delta Petroleum, by their authorized representatives, have duly executed
this AMENDMENT NO. 1 as of the date(s) set forth below.
▇▇▇▇▇▇▇▇ INC.
DATE: _________________________ By: _________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
DELTA PETROLEUM CORPORATION
DATE: _________________________ By: _________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
President
DEVON ENERGY PRODUCTION
COMPANY, L. P.,
DATE: _________________________ By: _________________________________
▇▇▇▇-▇▇▇▇▇ OIL AND GAS
CORPORATION
DATE: _________________________ By: _________________________________
▇▇▇▇ INDUSTRIES, INC.
DATE: _________________________ By: _________________________________
HARVEST ENERGY CORP.
DATE: _________________________ By: _________________________________
TEXACO EXPLORATION AND
PRODUCTION INC.
DATE: _________________________ By: _________________________________
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
DATE: _________________________ By: _________________________________
