Exhibit 10.1
MASTER GAS PURCHASE CONTRACT
ALAMCO, INC.
Contract No. 9131-A
THIS MASTER GAS PURCHASE CONTRACT (Agreement) is made and entered
into as of the 1st day of November, 1995, by and between ALAMCO, INC., a
Delaware corporation, (Seller) with its principal address at 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxxx, XX 00000, and HOPE GAS, INC., a West Virginia corporation
(Buyer), whose address is P. O. Xxx 0000, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000.
WHEREAS, Seller desires to sell and deliver natural gas to Buyer and
Buyer desires to purchase such gas upon and subject to the terms of this
Agreement; and,
WHEREAS, Seller and Buyer are parties to Master Gas Purchase Contract
No. 9131 dated November 1, 1989, as amended ("Master Contract"); and,
WHEREAS, Seller and Buyer wish to replace said Master Contract with
the terms and conditions set forth herein.
NOW, THEREFORE, WITNESSETH, in consideration of the mutual covenants
and promises set forth below, and intending to be bound by them, Seller and
Buyer covenant and agree:
ARTICLE I
SALE & PURCHASE OBLIGATIONS
1.01 Seller shall produce and sell to Buyer at the Points of
Delivery listed in Article III herein, and Buyer shall take and pay for, volumes
of natural gas from the xxxxx and MID numbers set forth in Appendix B
(attached), as amended from time to time. Notwithstanding the foregoing, Buyer
shall be under no obligation to purchase any of the production offered by Seller
in the event that Buyer has insufficient pipeline capacity or market demand to
facilitate the sale and/or use of Seller's natural gas. However, Buyer shall
use its best efforts to ensure sufficient pipeline capacity and market demand to
facilitate the sale and/or use of Seller's natural gas. Further, in the event
of a curtailment, Buyer shall not discriminate against the gas described in
Appendix B, and any suspensions of deliveries shall be on a nondiscriminatory
basis.
1.02 Exclusive right to purchase; additional xxxxx. Unless provided
otherwise, Seller shall offer to sell to Buyer all of the natural gas that may
be produced from each existing and future well located in Buyer's general
operating area of Monongalia and Preston counties. Within ten (10) days after
completion of any such well, Seller shall give notice to Buyer of such
completion, and Buyer may elect to purchase gas from the well under the terms of
this Agreement by giving written notice to Seller within ten (10) days after
receipt of Seller's written offer. Xxxxx accepted by Buyer, under the terms of
this Agreement, shall be added to Appendix B along with their corresponding MID
numbers.
ARTICLE II
TERM
2.01 This Agreement shall be in full force and effect from November
1, 1995, through October 31, 1999, and thereafter unless terminated by either
Buyer or Seller upon sixty (60) days' prior written notification.
ARTICLE III
DELIVERY POINTS
3.01 The Points of Delivery for natural gas purchased hereunder
shall be at existing or future interconnections between the facilities of Buyer
and Seller at those MID numbers listed on Appendix B (attached).
3.02 Termination for low volume. In the event that Seller cannot
deliver to Buyer an average of five thousand (5,000) cubic feet of natural gas
per day at a Point of Delivery, during the period November 1, through April 30,
then Buyer may, in its sole discretion, either terminate the contract as it
relates to such Point of Delivery by giving Seller notice in writing ten (10)
days prior to the effective date of termination or withhold from Seller's
proceeds, or invoice Seller, for any costs imposed upon Buyer by upstream
transporters as a result of Seller's inability to transport certain minimum
quantities.
ARTICLE IV
METER SITE AND FACILITIES
4.01 Buyer's Facilities; Meter Site. All gas sold by Seller to
Buyer shall be measured by a meter owned, installed, maintained, and read by
Buyer upon a site satisfactory to Buyer. Rights-of-way and the related surface
grants for such site shall be furnished by Seller to Buyer free of all costs and
from all claims. In the event Buyer is at any time required to pay for such
rights-of-way or such costs or claims, then the amounts paid therefor and other
expenses related thereto may be deducted from the payments to be made for gas
purchased from Seller and applied to the reimbursement of Buyer for such
payments. Seller warrants generally that title to the rights-of-way and the
related surface grants conveyed hereunder shall be free and clear of all liens,
encumbrances, and claims whatsoever and free of any claim, rightful or
otherwise, of any third person by way of infringement.
4.02 Meter maintenance fee. Seller agrees that should the amount
of gas passing through any meter installed, maintained, and operated hereunder
during any month, be less than a daily average of ten thousand (10,000) cubic
feet, it will pay to Buyer a mutually agreed upon reasonable fee for maintaining
and operating each such meter for each month. Buyer shall render a xxxx for
such meter operating charge or deduct the amount thereof from the monthly
settlements hereunder.
ARTICLE V
PRICE
5.01 Commodity Rate. For each dekatherm of gas delivered to Seller
during the period commencing November 1, 1995, and continuing through October
31, 1998, Buyer shall pay Seller a fixed price equal to two dollars ($2.00).
5.02 Price Renegotiation. Not less than thirty (30) days prior to
October 31, 1998, the parties will have negotiated in good faith to agree on the
price to be paid for gas sold and purchased hereunder for the succeeding year,
or for such other period as may be agreed upon by the parties. If, after good
faith negotiations, Buyer and Seller fail to agree upon the price to be paid for
gas for the succeeding term, either party may terminate this Agreement upon
thirty (30) days written notice. Buyer and Seller expressly agree that the
price to be paid for natural gas purchased through October 31, 1998, is
non-negotiable and that fluctuations in the market will not serve as grounds for
renegotiation.
5.03 Change in Regulation Results in Material Adverse Effect. If
the Public Service Commission of West Virginia or any other successor
governmental agency, whether state or federal, takes any action or issues any
determination that directly or indirectly results in a material adverse change
to any provision of this Agreement, then Buyer may either: (a) continue to
fulfill its obligations under this Agreement as altered by the change in
regulation; or (b) seek to renegotiate the affected terms of this Agreement by
giving notice to Seller within thirty (30) days of the material adverse change.
If Buyer elects to renegotiate the terms of this Agreement, both Parties shall
be obligated to renegotiate in good faith.
ARTICLE VI
STATEMENTS AND PAYMENT
6.01 Statements. On or before the last day of each calendar month,
Buyer shall mail to Seller a statement showing the quantity of natural gas
delivered by Seller to Buyer during the billing period ending with the next
preceding calendar month, Buyer's check in payment for said natural gas, and the
meter charts, if requested. If the meter charts are mailed to Seller, they
shall be returned to Buyer within fifteen days.
6.02 Audits. Buyer shall have the right to audit Seller's
accounting records and other documents relating to volumes of gas delivered by
or on behalf of Seller for Buyer's account for any calendar year within the
forty-eight (48) month period following the end of such calendar year. Buyer
shall also have the right to audit Seller's records relative to Hope's Business
Ethics policy which has been made available to Seller. Seller shall have the
right to audit Buyer's accounting records and other documents relating to
volumes of gas delivered by or on behalf of Seller for Buyer's account for any
calendar year within the forty-eight (48) month period following the end of such
calendar year. This provision shall continue in full force and effect for a
period of forty-eight (48) months from the termination of this Agreement.
6.03 Withholding. If Seller fails to comply with any of the
covenants contained herein, Buyer may immediately withhold all payments due to
Seller under the terms of this Agreement until all necessary actions have been
taken by Seller and all adjustments have been made by Seller so that in Buyer's
opinion Seller is fully complying with all the covenants and terms of this
Agreement.
6.04 Error Correction. In the event an error is discovered in the
amount billed in any statement rendered to Seller, such error shall be adjusted
within thirty (30) days of the determination thereof; provided that claim
therefor shall have been made within sixty (60) days from the date of discovery
of such error, but in any event within forty-eight (48) months from the date
such statement is rendered.
ARTICLE VII
POSSESSION
7.01 Seller shall be deemed to be in possession and control of the
natural gas sold by it hereunder until it shall have been delivered to Buyer at
the Delivery Point(s), after which delivery, as between Buyer and Seller, Buyer
shall be deemed to be in control and possession thereof. Buyer shall have no
responsibility with respect to any natural gas sold to it hereunder until it is
delivered at the Delivery Point(s), and no responsibility therefor because of
anything which may be done or may occur with respect to said natural gas before
delivery to Buyer at the Delivery Point(s). Seller shall have no responsibility
unless the gas does not meet the gas quality provision set forth in Appendix A
because of anything which may be done or may occur with respect to said natural
gas after its delivery to Buyer at such point of delivery.
ARTICLE VIII
WARRANTY, INDEMNIFICATION, WITHHOLDING
8.01 Title and Indemnification. Seller warrants generally the
title to the natural gas sold and delivered hereunder to Buyer and that at the
time of delivery the natural gas is or will be free and clear of all liens,
encumbrances, and claims whatsoever and free of any claim, rightful or
otherwise, of any third person by way of infringement. Seller further warrants
that at the time of delivery Seller will have good right and title to sell the
natural gas to Buyer, and that Seller will indemnify Buyer and save it totally
harmless from all suits, claims, actions, debts, levies, damages, costs, losses,
and expenses of any nature arising from or out of adverse claims of any kind or
nature asserted by anyone whatsoever to said natural gas, including but not
limited to claims, suits, actions, and demands which may arise due to
non-payment of landowner royalties, overriding royalties, or rentals thereof or
therefrom.
8.02 Withholding. In the event of any adverse claim to or against
the proceeds payable under this Agreement is made by any person, Buyer may
withhold payment due Seller under this Agreement or any other contract between
Buyer and Seller or may refuse to accept delivery of such natural gas until the
dispute is settled by contract between Seller and such adverse claimant or by
the final decree of a court of competent jurisdiction. If litigation results
from any such adverse claim, Buyer may pay any money withheld by it hereunder
into court without further liability therefor, or may interplead all claimants,
including Seller. Seller will reimburse Buyer for all costs incurred, including
reasonable attorney's fees, as a result of litigation.
8.03 Payment Correction. In the event Buyer mistakenly overpays or
underpays Seller for natural gas sold and purchased hereunder, which over- or
under-payment is the result of a mistake of fact or law, miscalculation,
coercion, duress, fraud, governmental or regulatory constraint, ignorance or
want of knowledge, then Seller or Buyer, as the case may be, will promptly upon
demand by the other party make appropriate refund or adjustment in such over- or
under-payments, without liability for payment of interest by either party;
provided, however, that the obligation of either party to make restitution
hereunder shall be limited to mistaken payments made within the period
commencing four (4) years prior to the date on which demand for refund or
adjustment shall be made. In the event of Seller's refusal or inability to
refund undisputed over-payments, Buyer may withhold payment for the natural gas
sold and purchased under this agreement between Seller and Buyer in an amount
equivalent to the over-payment, without liability for payment of interest on the
amounts so withheld. Nothing in this Agreement shall be construed as a waiver
or relinquishment by Seller or Buyer of either of its rights to recover such
over-payments.
8.04 Royalties. In no event will Buyer be obligated to make
royalty, overriding royalty, or working interest payments to any party or
payments to any supplier of Seller for natural gas purchased hereunder.
ARTICLE IX
COMMUNICATIONS
9.01 Unless otherwise instructed in writing, all communications
shall be sent to the parties at the following addresses:
Seller: Alamco, Inc.
000 Xxxx Xxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Buyer: Hope Gas, Inc.
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attn: Manager, Gas Supply
ARTICLE X
GENERAL PROVISIONS
10.01 Labor. Seller covenants and agrees to comply with all
the requirements of the Fair Labor Standards Act of 1938 and the Civil Rights
Act of 1964, as amended, with respect to all natural gas produced or sold and
delivered under the terms of this Agreement to the extent that said Acts as now
or hereafter amended are applicable to Seller and Seller's employees.
10.02 Force Majeure. Neither party to this Agreement shall be
liable for any damage or loss that may be due to force majeure as defined
herein. In the event either party is rendered unable, wholly or in part, by
force majeure to carry out its obligations under this Agreement, other than to
demand payment of amounts due hereunder, then the obligations of such party, so
far as they are affected by such force majeure, shall be suspended during the
continuance of any inability so caused. However, the party claiming the
existence of force majeure shall use all reasonable efforts to remedy any
situation which may interfere with the performance of its obligations
hereunder. The term "force majeure" as used herein, and as applied to either
party hereto, shall mean acts of law, acts of God, strikes, lockouts or other
labor disturbances, acts of the public enemy, war, blockades, insurrections,
riots, epidemics, fires, floods, washouts, arrests and restraints of rules and
people, civil disturbances, explosions or any other cause, whether of the kind
herein enumerated or otherwise, not reasonably within the control of the party
claiming suspension. It is understood that settlement of strikes, lockouts, or
labor disturbances shall be entirely within the discretion of the party having
the difficulty and that the above requirement that any force majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes, lockouts, or labor disturbances by acceding to the demands of the
opposing party when such course is inadvisable in the discretion or judgment of
the party having the difficulty.
Among other things, the term "Force Majeure" shall not include: (a)
any cause resulting from a Party's negligence or willful misconduct; (b) the
freezing of any xxxxx or pipelines; and (c) lack of funds by either party.
10.03 Tax. In the event any tax is now or hereafter imposed
on the production, severance, delivery to the point of sale, or sale of natural
gas, or upon the business of producing, severing, selling or delivering natural
gas to the point of sale, or if such tax is imposed in any other manner so as to
constitute directly a charge upon the gas delivered to Buyer hereunder, then the
amount of such tax shall be borne by Seller so far as it affects or relates to
or is apportionable to the gas delivered to Buyer hereunder. In the event Buyer
is required to pay such tax, the amount thereof may be deducted from the
payments accruing to Seller under this Agreement.
10.04 Persons Bound. All of the terms, covenants, conditions,
and obligations of this Agreement shall extend to and be binding upon the
parties hereto and their heirs, successors, and assigns. Any sale or assignment
by Seller of its interest in the natural gas delivered hereunder or its interest
in this Agreement or its interest in any property, real or personal, required
for or dedicated to the performance of this Agreement, shall be made expressly
subject to the rights of Buyer hereunder and with provision that the assignee or
purchaser shall assume and covenant to perform all of the Seller's obligations
hereunder. Seller will give notice in writing to Buyer of any sale or
assignment or other disposition of its interest hereunder and will furnish to
Buyer copies of any relevant documents evidencing transfer or assignment of
Seller's interest. Until notice and relevant documents have been given and
furnished to Buyer, Buyer may withhold all payments that may become due
hereunder, without interest.
10.05 Terms and Governing Law. The terms and provisions of
this Agreement are subject to the limitations of orders of courts and the
orders, rules and regulations of all regulatory bodies having jurisdiction.
This agreement shall be interpreted in accordance with the laws of the State of
West Virginia.
10.06 Captions. The captions of the articles of this
Agreement are inserted for the purpose of convenient reference and are not
intended to be a part of this Agreement nor considered in any interpretation of
the same.
10.07 Severability. If any part, term, or provision of this
Agreement is held by any court to be illegal or in conflict with any law of the
State of West Virginia, the validity of the remaining portions or provisions
shall not be affected, and the rights and obligations of the parties shall be
construed and in force as if the Agreement did not contain the particular part,
term, or provision held to be invalid.
10.08 Entire Agreement. This Agreement constitutes the entire
agreement between Seller and Buyer with respect to the subject matter hereof and
supersedes all prior offers, negotiations, and other written or oral agreements,
including the Master Contract. This Agreement may only be amended or modified
by written instrument signed by duly authorized representatives of Seller and of
Buyer.
IN WITNESS WHEREOF, Seller and Buyer have duly executed this
Agreement as of the day and year first above written.
ALAMCO, INC.
By: /s/ Xxxx X. Xxxxxxxx
Its: President and CEO
HOPE GAS, INC.
By: /s/ Xxxx X. Xxxxxxxx
Its: Vice President and General Manager
APPENDIX A
MASTER GAS PURCHASE CONTRACT
TECHNICAL PROVISIONS
All gas purchased under the Master Gas Purchase Contract and all
Schedules attached thereto is purchased subject to the provisions of this
Appendix A.
A1. Well Connections.
A1.1 Seller shall notify Buyer's area superintendent immediately upon
the completion of each well hereunder and shall, within a reasonable time
thereafter, permit Buyer to obtain final open-flow and reservoir shut-in
pressures for each such well in order to program the turning of same into
Buyer's pipeline under the terms of this Agreement.
A1.2 Seller and Buyer shall add each new well to Appendix B within a
reasonable time after completion of the well and prior to turn-in into either
Buyer's lines or Seller's gathering system.
A1.3 At the time of introduction of well gas into the Buyer's
pipelines, Buyer's representative shall operate the valves at the meter, and in
addition, the Seller shall provide experienced personnel to be located at the
well site during this operation.
A1.4 The Seller shall provide and install, where needed, pressure
regulating equipment. Such regulation shall deliver pressures which are
suitable to pressures in the distribution pipeline system. Buyer will recommend
the type of regulators to be used and specify orifice size, pressure ranges, and
operating settings.
A1.5 To prevent entrance of fluids, sand, or other contaminates into
the Buyer's pipelines, the Seller shall provide and install facilities such as
drips, float valve separators, etc., such equipment to be determined by Buyer
and Seller.
A1.6 Seller shall provide Buyer with a copy of a Gas Analysis prepared
by an acceptable lab verifying the natural gas quality.
A1.7 Any gas being delivered into the Buyer's pipelines not meeting the
standards set forth in Appendix Section 4.1, 4.2, 5.1, and 5.2 shall be shut in
immediately and remain shut in until the operator has taken remedial action to
correct the problem. Gas flow may be restored again by providing Buyer with an
acceptable Gas Analysis.
A2. Delivery Pressure.
A2.1 Buyer shall have the right to require regulation and over-pressure
protection at the point of delivery hereunder. The cost of such equipment and
installation shall be borne by the Seller.
A2.2 Seller shall not use any mechanical means or accessory equipment
to pump or compress the natural gas in order to aid its delivery into Buyer's
pipeline without the written consent of Buyer. Buyer may, at its option,
compress and pump the natural gas purchased hereunder.
A2.3 Buyer makes no representations concerning the pressure which will
be maintained in its pipeline from time to time or concerning other factors
which may affect the quantity of gas which Seller may be able to deliver to
Buyer.
A3. Well Tests, Reports, and Conditions.
A3.1 Seller shall equip each well described in Appendix B with a valve
suitable for gauging the pressure of natural gas in the well, and Buyer shall
have the privilege of gauging such pressure at all reasonable times during the
term of this Contract. Such xxxxx shall be and remain continuously connected to
Seller's gathering lines for production deliveries, except to the extent that
disconnection is required as xxxxx are being repaired. Seller shall operate all
xxxxx in a reasonable and prudent manner and keep the same in good condition in
order to maximize the production of natural gas.
A3.2 If possible, Seller will make all necessary well repairs during
the summer period, May 1 to October 31.
A3.3 Seller will advise Buyer, as soon as reasonably possible, prior to
taking any well out of production when such well will be out of production more
than seven (7) days. After repairs have been completed, Seller shall
immediately reconnect the well to Buyer's gathering line and resume production,
subject to authorization for turn-in by the Buyer's area superintendent.
A3.4 Should the Buyer schedule seven-day or other shut-in pressure
tests on natural gas xxxxx situated in the same production areas or reservoirs
as are covered by this Agreement, then Seller, upon request of Buyer, agrees to
make similar tests on Seller's xxxxx covered by this Agreement at the same time
as Buyer's scheduled tests and to furnish Buyer with written reports on the
results thereof for each such well.
A3.5 Buyer shall not be obligated to accept delivery or pay for any
natural gas delivered to it from any well subject to this Agreement until Seller
has furnished to Buyer complete and accurate copies of the drillers' logs,
copies of all state reports, and copies of any and all surveys made for each
such well. In the event any such well is to be abandoned, Seller shall notify
Buyer in writing fifteen (15) days prior to such abandonment.
A4. Gas Quality.
A4.1 The gas delivered by Seller to Buyer hereunder at the point(s) of
delivery specified shall not contain an amount of water vapor exceeding seven
(7) pounds per million cubic feet of gas, or an amount of water vapor exceeding
the quantity that is required for saturation of the gas at the flowing
temperature and pressure of the gas as described in Appendix Section 5.1,
whichever is lesser; provided however, that such gas shall not contain any water
in the liquid state.
A4.2 Seller shall deliver the natural gas to Buyer free from air,
sulphur in any form or compound, nitrogen (no greater than 3 mole %), carbon
dioxide (no greater than 3 mole %), total combined inerts (no greater than 5
mole %), and other deleterious substances which may in Buyer's opinion adversely
affect its marketability as a fuel or use for other purposes, or be injurious to
equipment, transmission lines, and machinery. If, in Buyer's opinion, a
sufficient quantity of such natural gas is or can be produced from said xxxxx
hereinbefore described to make it economically feasible to purify same and
remove substances which would otherwise affect its marketability, Seller has the
option to install the necessary purification plant and treat and purify said
natural gas so as to make same acceptable to Buyer.
A4.3 Seller acknowledges that Buyer intends to resell the natural gas
sold and purchased hereunder in the conduct of Buyer's natural gas pipeline and
utility business for ultimate residential, commercial, or industrial
consumption. Nothing herein is intended or shall be construed to exclude,
modify, limit, or negate any warranties, express or implied, as may be provided
by law, including without limitation warranties of merchantability and fitness
for a particular purpose.
A4.4 Seller shall not extract or permit the extraction of any liquid
hydrocarbons (ethane, propane, butane, and heavier hydrocarbons) without the
prior written consent of Buyer.
A4.5 Notwithstanding any other provision of this Agreement, if the gas
delivered fails to meet the quality specifications set forth herein, then Buyer
may elect to continue to receive such gas or refuse to take all or any portion
of such gas until Seller brings the gas into conformity with such
specifications.
A5. Measurement and Heating Value.
A5.1 The volume of natural gas delivered to Buyer shall be determined
as follows:
(a) The unit of volume for the purpose of measurement shall be one cubic
foot of gas at a pressure base of 14.73 pounds per square inch absolute and a
temperature base of 60 degree Fahrenheit.
(b) In determining the quantity of natural gas delivered to Buyer, factors
such as those for pressure, temperature, and deviation from the laws for ideal
gases shall be applied. If a displacement or turbine meter is used, these
factors shall be applied in accordance with the gas laws as more fully described
in the recommendations of the Gas Measurement Committee of the American Gas
Association (AGA) in their publication, AGA Gas Measurement Manual; and if an
orifice meter is used, the measurement of said gas shall be in accordance with
AGA Report No. 3, as amended or superseded from time to time.
(c) The average absolute atmospheric pressure shall be assumed to be 14.4
pounds per square inch, irrespective of actual elevation or location of the
meter or variations in actual atmospheric pressure.
(d) In the absence of a recording thermometer, an assumed flowing
temperature of 60 degree Fahrenheit shall be used in computing said quantities
of gas; but if the temperature of the natural gas passing through the meter is
determined for any day by the use of a recording thermometer, then the
arithmetic average of the temperature recorded for such day shall be used.
(e) At Seller's request, Buyer will install, at Seller's expense,
equipment which will adjust the measurement of gas for the effects of changes in
temperature.
(f) The specific gravity of the natural gas shall be determined by the use
of an Xxxxxxx balance or other approved instrument at the commencement of the
delivery of natural gas and as often thereafter as deemed necessary.
(g) The deviation of the natural gas from the laws for ideal gases shall
be determined in accordance with the Manual for Determination for
Super-Compressibility Factors for Natural Gas, an American Gas Association
publication completed December 1962, as superseded or revised.
A5.2 The total heating value per cubic foot of natural gas delivered
hereunder shall not be less than 1,000 British thermal units (Btu) per cubic
foot calculated on a saturated basis at 14.73 pounds per square inch absolute at
60 degree Fahrenheit. Such heating value per cubic foot of the natural gas
delivered hereunder shall be determined at various intervals of time as may be
designated by Buyer or Seller, but not required more often than once each year,
by tests made by taking samples of such gas at the Delivery Point(s) specified
herein and by testing such samples in accordance with accepted chromatographic
analysis techniques, or methods specified in AGA Gas Measurement Committee
Report No. 5, as amended or superseded from time to time, or by other accepted
methods. Seller and Buyer shall have the right to witness any and all such
tests.
A5.3 Seller may request that Buyer test and verify the accuracy of the
meter used for measuring the natural gas delivered to Buyer hereunder. In the
event the meter is out of service or is determined by Buyer to be registering
inaccurately for any period of time during which times delivery of gas is
continued by Seller to Buyer, then the quantity of natural gas delivered during
such a period shall be estimated (i) by using the data recorded by any
check-measuring equipment, if installed and accurately registering, or if not
installed or registering accurately, (ii) by correcting the error if the
percentage of error is ascertainable by calibration, test, or mathematical
calculation, or if neither such method is feasible, (iii) by estimating the
quantity or quality delivered, based upon deliveries under similar conditions
during a period when the equipment was registering accurately. If the meter, on
a test requested by Seller, shall prove to be accurate within plus or minus two
(2) percent, the cost of testing and repairing the same shall be borne by the
Seller, but if the meter on test proves to be in error by more than plus or
minus two (2) percent, then the cost of testing and repairing same shall be
borne by Buyer.
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