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EXHIBIT 10.14
[SUNOCO, INC. LETTERHEAD]
[SUNOCO, INC. LOGO]
CRUDE OIL PURCHASE AGREEMENT
SUNOCO REFERENCE NO. 502685
This agreement, made and entered into as of October 1, 2000, and
between "Buyer" and "Seller" as follows:
Buyer: Seller:
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Sunoco, Inc. (R&M) Coho Oil & Gas, Inc.
("SUNOCO") 00000 Xxxxxxx Xxxx, Xxx. 000
X0 Xxx 0000 Xxxxxx, XX 00000
Xxxxx, XX 00000
WITNESSETH:
WHEREAS, Seller owns or is authorized to sell all of the volumes of
crude oil and condensate produced from the properties described in Exhibit "A"
attached hereto; and
WHEREAS, Buyer desires to purchase and receive said crude oil and
condensate and Seller desires to sell and deliver said crude oil and condensate
in accordance with the terms of this agreement;
1. Sale and Purchase. Subject to the provisions hereof, Seller shall
sell to Buyer and Buyer shall purchase from Seller all of the crude oil and
condensate produced from the properties described in Exhibit "A" attached
hereto. Seller hereby commits and dedicates to the performance of this agreement
all of the crude oil and condensate produced from the lease(s) included on
Exhibit "A" attached hereto. The parties hereto, by mutual consent, may amend
this agreement at any time to include additional properties to Exhibit "A".
2. Term. This agreement shall remain in effect for an initial term of
one (1) year commencing on October 1, 2000, and from month to month thereafter,
unless and until terminated by either party upon written notice thereof given
thirty (30) days in advance of the end of the primary term of this agreement or
any extension thereof.
3. Delivery Point. Delivery shall take place and title shall pass from
the Seller to the Buyer when the crude oil passes the outlet flange of the
Seller's lease facility to the receiving equipment of Buyer or Buyer's
designated agent.
4. Warranty of Title and Authority to Sell. Seller hereby warrants and
guarantees that the title to the portion of the crude oil sold and delivered
hereunder which is owned by Seller is free and clear of all liens and
encumbrances and warrants that as to the remaining portion of the crude oil sold
and delivered hereunder Seller has the right and authority to sell and deliver
said crude oil for the benefit of the true owners thereof. Seller further
warrants that the crude oil has been produced, handled, and transported to the
delivery point hereunder, in accordance with the laws, rules and regulations of
all governmental authorities having jurisdiction thereof. Seller shall indemnify
and hold Buyer harmless from and against any and all cost, damage and expense
suffered and incurred by reason of any failure of the title so warranted or any
inaccuracy in the representation of Seller's right and authority to sell said
crude oil made herein.
5. Price. For those leases listed on the attached Exhibit "A" and any
additions thereto, the U.S. dollar price per barrel for each delivery month
shall be:
The simple average of daily settling price of the near month NYMEX
light sweet crude oil contract during the calendar month of delivery
minus (-) fifty cents ($0.50) per barrel.
0
Xxxx Xxx & Xxx, Xxx. - Xxxx#000000
October 31, 2000
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e.g. for Oct, 2000 deliveries, the average of NYMEX settling prices
for November Light Sweet crude contract from Oct 1, 2000 through Oct
22, 2000, and December Light Sweet crude contracts from Oct 21, 2000,
through Oct 31, 2000, shall apply.
This simple average shall be calculated to allow the averaging of
settling prices only, as determined by the NYMEX. Saturdays, Sundays,
and holidays are not included in the calculation therefore only NYMEX
trading days will be averaged in the above calculation.
For pricing purposes, the oil delivered during any given calendar month
hereunder shall be deemed to have been delivered in equal daily quantities for
each day of the given month.
Buyer and Seller agree that for the term of this agreement and any extensions
thereof, Seller shall not incur gravity penalties.
6. Manner of Payment. Subject to verification of deliveries, payment
for crude oil sold and delivered Shall be made by check on or about twenty-third
(23rd) day of the month following the month of delivery. Payment shall be made
to the Seller utilizing Buyer's Division Order excluding taxes.
7. Taxes. Buyer is hereby authorized to withhold from the proceeds
allocable to the sale and delivery of crude oil hereunder the amount of
severance taxes levied by Indian Tribes, State and Federal Agencies.
8. Prevailing Document. In the event of any conflict between the
provisions of this agreement and the provisions of any applicable division order
executed in accordance with the terms hereof, the provisions of this agreement
shall control.
9. Quality Requirements. If the crude oil shall not meet Sunoco's
Oklahoma Sweet requirements at the delivering point, then Buyer shall have the
right to terminate this Crude Oil Purchase Agreement by giving thirty (30) days
written notice.
10. General Provisions. The General Provisions attached to this
agreement are made a part of this agreement.
ALL SIGNATURES MUST BE WITNESSED
COHO OIL & GAS, INC. SUNOCO, INC. (R&M)
Witness By /s/ XXXXX X. XXXX
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/s/ XXXXXX XXXXX Xxxxx X. Xxxx
------------------------------------ Title Sr. Crude Oil Representative
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SELLER
Witness: By /s/ XXXX X. XXXXXXX
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/s/ XXXXX XXXXX
------------------------------------ Title CFO
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SUNOCO, INC. (R&M)
COPA GENERAL PROVISIONS
1. Existing Laws. This Agreement will be governed by existing laws of the
State of Oklahoma.
2. Force Majeure. Neither party shall be liable to the other for failure
or delay in making or accepting deliveries hereunder to the extent that
such failure or delay may be due to compliance with acts, orders,
regulations or requests of any federal, state or local civilian or
military authority or as a result of insurrections, wars, rebellion,
riots, strikes, labor difficulties, action of the elements, disruption
or breakdown of production or transportation facilities, or any other
cause, whether or not of the same class or kind, reasonably beyond the
control of such party.
3. Quality and Measurement. Seller warrants that all crude oil purchased
hereunder shall be of merchantable quality (that is, unaltered and
uncontaminated by any foreign substances or chemicals not normally
associated with oil) and suitability shall be determined within the
Buyer's exclusive, good faith opinion. Quantities of oil delivered
hereunder shall be determined by a method of measurement generally
accepted within the industry including, but not limited to, the use of
automatic measuring equipment, tank gauges on l00% tank table basis,
and certified truck gauges and meters. Meters shall be proven in
accordance with the latest American Petroleum Institute standards.
Volume shall be measured in barrels of forty-two (42) U.S. Gallons as
adjusted for temperature to 60 degrees Fahrenheit, less deductions for
basic sediment and water and other impurities determined according to
applicable API practices. Oil containing basic sediment and water in
excess of the quantity permitted by the carrier's tariff shall be
treated by Seller to render it merchantable. Tests for quality shall be
made at regular intervals by Buyer or Buyer's Agent in accordance with
recognized procedures. Each party shall have the right to have a
representative present to witness all tests and measurements but in the
absence of either party's representative, the results of the tests and
measurements performed by the Buyer shall be deemed to be conclusive.
4. Waiver. Failure by either party to object to any failure of performance
by the other party of any provision of this Agreement shall not
constitute a waiver of, or estoppel against, the right of such party to
require such performance by the other. Nor shall any such failure to
object constitute a waiver or estoppel with respect to any succeeding
failure of performance.
5. Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other. Any attempted
assignment without such consent shall be void.
6. Compliance with Laws. Each party agrees that the performance of this
contract shall comply with all applicable state, federal and local
laws. Each party shall supply evidence of compliance, if required.
7. Security. If, in the reasonable opinion of either party, the financial
responsibility of the other party is or becomes impaired or
unsatisfactory, or if the other party fails to make any payment or
delivery when required, the requesting party may require satisfactory
security to secure performance or payment or both, whether by way of
stand-by or documentary letter of credit, guaranty, advance payment, or
otherwise. Failure to provide the required security shall constitute a
material breach of the Agreement entitling the requesting party to
cancel or suspend its delivery obligation and to offset any payments or
deliveries due the other party under this Agreement or other Agreements
between the two parties.
8. Damages. The parties agree that in the event of a material breach of
the Agreement resulting from a repudiation of an obligation or a
failure to deliver or receive all or a material portion of the required
quantities, the non-breaching party shall be entitled to recover
contract damages, administrative costs for any cover or resale and any
other costs including but not limited to court costs and reasonable
legal fees incurred in recovering such damages.
