Exhibit 10.1
The portion of this Exhibit 10.1 marked "******" has been omitted
and confidentially filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 promulgated under the Securities Exchange Act
of 1934, as amended.
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made
and entered into this 25th day of January, 2002, by and between
Halliburton Energy Services, Inc. ("HES"), a Delaware
corporation, and McMoRan Oil & Gas LLC, a Delaware limited
liability company ("MOXY"). HES and MOXY are sometimes
hereinafter referred to individually as a "Party" and/or
collectively as "Parties."
WITNESSETH:
WHEREAS, MOXY desires to sell and assign to HES and HES
desires to purchase the properties described in Exhibit "A"
hereto all in accordance with the terms and conditions
hereinafter provided.
NOW, THEREFORE, for good and valuable consideration and for
the mutual covenants herein contained, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as
follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase, Sale and Assignment:
At the Closing, as defined in Section 8.2 hereof, MOXY shall
sell and assign and HES shall purchase and pay for the record
title and operating rights described in Exhibit "A," and a
proportionate interest in the related platforms, facilities and
oil, gas and/or condensate wells, rights of ways, easements,
fixtures, equipment, rights, privileges and obligations
appurtenant thereto including the right to receive any payments
associated therewith (including without limitation any insurance
proceeds covering damages to the foregoing for which repairs have
not been made prior to Closing and any payment made by a non-
consenting party in lieu of a non-consent penalty) (such rights
and interests to be purchased by HES being referred to
collectively herein as the "Subject Interests"). The sale of the
Subject Interests by MOXY to HES shall be effective as of 11:59
p.m. Central Standard Time on December 31, 2001 (the "Effective
Time").
1.2 Proprietary Data and Business Records:
The Subject Interests shall include, to the extent
assignable or transferable, a proportionate interest in the lease
files, land files, well files, production records, division order
files, abstracts, title opinions and contract files related to
the interests described in Exhibit "A" (excluding any internal
valuations, production or other forecasts or interpretative data
or documentation) and a like interest in the geological data
existing as of Closing relating to the Subject Interests
(excluding any seismic surveys and other seismic, shallow hazard
surveys, geophysical, or geological data to the extent owned by
or licensed from third parties and not freely transferable or any
of MOXY's software, patents, trademarks, logos or service marks
used in developing or operating a lease or any other data which
might serve to reveal or disclose MOXY's proprietary interpretive
or processing methods or techniques).
1.3 Subject Interests Subject to Existing Agreements:
HES and MOXY agree that the sale of the Subject Interests
will be made subject to, and HES will accept the Subject
Interests subject to, the contracts and other instruments which
are listed in Exhibit "B." Upon Closing, HES agrees to expressly
assume MOXY's obligations and liabilities under the contracts and
other instruments listed in Exhibit "B" insofar as such
obligations or liabilities relate to the Subject Interests after
the Effective Time; provided, however, that HES shall not assume
or be responsible for (i) property damage sustained by third
parties, or personal injury or death arising in connection with
the operation of the Subject Interests prior to the Closing, or
(ii) any regulatory fines or penalties arising in connection with
the operation of the Subject Interests prior to the Closing.
1.4 Lease Obligations:
Upon Closing, HES shall assume MOXY's obligations under the
terms and conditions of the leases described in Exhibit "A"
(including all federal, state and local laws, rules and
regulations applicable thereto), insofar as such obligations are
attributable to the Subject Interests and accrue after the
Effective Time (subject to the proviso set forth at the end of
Section 1.3 hereof), MOXY retaining any such obligations insofar
as they accrue prior to the Effective Time. Notwithstanding the
foregoing, the responsibility for the plugging and abandonment
and/or removal of platforms, wells, wellbores, equipment and
facilities attributable to the Subject Interests shall be borne
in proportion to the cost bearing ownership interests of the
Parties at the time such plugging and abandonment and/or removal
is required to be done, in accordance with applicable law and
industry standards.
1.5 Retained Reversionary Interest:
In the assignment of the Subject Interests there shall be
reserved, and the Subject Interests shall be subject to, a
retained reversionary interest in favor of MOXY equal to an
undivided Seventy Five Percent (75%) of the Subject Interests
which reversionary interest shall be subject to the terms and
conditions of Article 3 hereof.
1.6 Reservation of Right to Use Platform and Facilities:
The assignment of the Subject Interests will allow MOXY to
access and utilize the platforms and facilities included in the
Subject Interests in connection with MOXY's exploration and
exploitation opportunities on an appropriate commercial basis
with respect to the costs (including reasonable amortization) of
operating and using the platform(s) and facilities (the
"Facilities Usage Rights"). For the avoidance of doubt, the
Facilities Usage Rights do not entitle MOXY to use any platform
slot reserved for planned activities by HES within the Subject
Interests without HES's approval (which HES may grant or withhold
at its sole discretion). If MOXY elects to exercise its Facility
Usage Rights, MOXY shall give written notice of such election to
HES describing the proposed scope and terms of such usage.
Thereafter, HES and MOXY shall negotiate in good faith and in an
expeditious manner an agreement covering the terms and conditions
pursuant to which MOXY shall have access to and use of the
platforms(s) and facility(ies) sought to be used which agreement
will contain terms appropriate to the circumstances. For the
avoidance of doubt, (i) the Facilities Usage Rights are subject
to HES's obligations under the Basic Documents (as defined in
Section 6.2.7 below) and any other similar agreements entered
into by HES in the ordinary course of business and (ii) HES shall
have no obligation or responsibility for obtaining any approvals
of third parties (including other working interest owners and
governmental authorities) which may be required for MOXY to
exercise its Facility Usage Rights and MOXY shall, upon HES'
request, provide HES reasonable proof that such approvals have
been obtained.
1.7 Allocation of Production and Costs:
With respect to the Subject Interests, MOXY shall retain or
receive all proceeds attributable to production, including oil in
the tanks and gas in pipelines, produced prior to the Effective
Time and agrees to pay all costs and expenses incurred prior to
the Effective Time. With respect to the Subject Interests, HES
shall be entitled to receive the proceeds of all production
occurring after the Effective Time and shall be responsible for
all costs and expenses incurred after the Effective Time and
shall promptly reimburse MOXY for the payment of any such
expenses. In the event of any conflict between this Section 1.7
and Section 8.4 hereof, Section 8.4 shall control.
1.8 Title and Risk of Loss:
MOXY shall deliver possession of the Subject Interests to
HES at the Closing. Title to and risk of loss with respect to
the Subject Interests shall pass to HES as of the Closing.
1.9 Specific Performance:
Subject to the further terms hereof, each Party shall have
the right of specific performance.
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price:
The total purchase price for the Subject Interests shall be
SIXTY Million and no/hundredths ($60,000,000) Dollars (subject to
reduction as set forth in this Agreement, the "Purchase Price")
payable at Closing. The payment of the Purchase Price shall be
made by electronic transfer of immediately available funds (EFT)
to the credit of MOXY at:
Bank: JP Morgan Chase Bank New York, NY
Acct: McMoRan Oil & Gas LLC
Acct. No. 910-2-713667
ARTICLE 3
REVERSIONARY INTEREST
AND OTHER RETAINED RIGHTS
3.1 Reconveyance of Reversionary Interest:
After Payout, as defined in Section 3.2 hereof, HES shall
execute and deliver an assignment to MOXY of an undivided Seventy
Five Percent (75%) of the Subject Interests, but excluding any
portion of any lease to which the Subject Interests pertain which
has expired, (the "Retained Reversionary Interest"). The
assignment of the Retained Reversionary Interest from HES to MOXY
shall be free and clear of all burdens, except those affecting
the Subject Interests at the time assigned to HES or established
in the ordinary course of the operation of the Subject Interests
in accordance with any applicable operating agreement or other
applicable agreement, shall be effective as of Payout and shall
be in a form containing substantially the terms of the
assignments attached hereto as Exhibit "C" (excluding any
reference to the Retained Reversionary Interest or Facility Usage
Rights and including any additional terms reasonably required by
the Minerals Management Service for purposes of obtaining
approval of such assignments). HES shall execute and deliver such
assignment after Payout, within 30 days after HES has received
MOXY's written notice (i) certifying the Parties' agreement that
Payout has occurred, (ii) requesting an assignment of the
Retained Reversionary Interest and (iii) providing an instrument
of assignment that has been approved by both Parties. MOXY shall
be responsible to obtain any consents, approvals and/or waivers
of rights necessary for such assignment. In connection with such
reassignment and where HES is the designated operator of the
Subject Interests, HES shall resign as operator of the Subject
Interests being assigned to MOXY, and, subject to the provisions
of the applicable operating agreement, designate (or vote for)
MOXY or MOXY's designee as operator.
3.2 Payout:
"Payout" shall mean 7:00 a.m. on the day following the date
when the proceeds from the sale of production accruing after the
Effective Time and attributable to the Subject Interests and any
other payment received with respect to the Subject Interests
after deduction of:
(i) royalties, overriding royalties, net profits interests
and other such burdens created by any leases,
agreements or instruments affecting the Subject
Interests as of Closing, and
(ii) severance, production, ad valorem and other
similar taxes chargeable to the Subject Interests,
equals the sum of
(i) the Purchase Price,
(ii) lease operating expenses (including, but not
limited to, processing, handling, and transportation
fees and charges) chargeable to the Subject Interests
after the Effective Time,
(iii) all capital expenditures incurred, charged to and
paid with respect to the Subject Interests after the
Effective Time under the applicable operating agreement
(including without limitation costs incurred to drill
and plug and abandon dry holes) and
(iv) an administrative fee which will be (a) calculated
each calendar month by multiplying ******* times the
average outstanding cash balance to Payout (as averaged
across such month), and (b) added at the end of the
month for which calculated to the then outstanding cash
balance to Payout.
The amount chargeable for costs and expenses shall be
determined in accordance with the accounting procedure attached
to the operating agreements applicable to the Subject Interests.
Payout balance and HES's return thereon shall be calculated on a
cash basis. Once Payout has occurred, uncollected revenues and
unpaid costs and expenses attributable to the Payout period and
not taken into account when calculating Payout shall be adjusted
on a post-Payout basis. From and after Payout, all revenues,
costs and expenses attributable to the post-Payout period shall
be accounted for as if the after-Payout assignments referred to
in Section 3.1 had occurred at Payout (regardless of when such
assignments are actually made).
3.3 Payout Computation and Reports:
Prior to Payout and after Closing, HES shall provide to MOXY
on a quarterly basis a Payout status report reflecting the Payout
balance calculations (which may include estimated amounts as
appropriate) for the previous quarter within thirty days of the
end of each quarter.
3.4 Operation of the Subject Interests Prior to Payout:
Prior to Payout and after Closing, where HES is operator of
the Subject Interests, HES shall perform its duties as operator
in accordance with the applicable operating agreements.
3.5 Additional Rights:
In the event HES participates prior to Payout in rights of a
non-consenting party to an operation under the applicable
operating agreement covering the Subject Interests or otherwise
acquires prior to Payout additional participation interest under
the terms of the operating agreements applicable to the Subject
Interests, then such additional acquired rights shall be
considered as part of the Subject Interests and the revenues,
costs and expenditures attributable thereto shall be included in
the calculation of Payout under Section 3.2 hereof.
3.6 Option to Elect to Participate in Non-Consent Operations and
Other Rights:
After Closing and prior to Payout, if (i) HES decides to non-
consent any operation proposed in accordance with the terms of an
operating agreement covering the Subject Interests, (ii) HES
decides not to exercise any right to participate in any well,
sidetrack, deepening, completion, recompletion, workover, or
other operation designed to recover hydrocarbons under the terms
of any operating agreement or other contract or agreement
applicable to the Subject Interests, (iii) HES decides not to
exercise any preferential right or option arising by virtue of
the Subject Interests to acquire additional leasehold or other
interests or (iv) HES decides not to conduct operations or other
activities necessary to maintain a lease or unit covered by the
Subject Interests (the non-consent decision or the decision not
to exercise preferential right, option, or not to conduct lease
or unit maintenance operation being hereinafter referred to as
the "Option"), then HES shall notify MOXY in writing of its
intent not to exercise the Option detailing the nature of the
Option in which HES has decided not to participate (such
declaration of intent not to exercise the Option being referred
to as a "Notice of Non-Consent"). HES will endeavor to give its
Notice of Non-Consent to MOXY reasonably in advance of HES's
deadline to elect to participate in such Option but shall have no
liability for failing so to do (regardless of the cause of such
failure).
After MOXY's receipt of a Notice of Non-Consent, if MOXY
desires to participate in the relevant operation as to the right
which HES has decided not to exercise, MOXY shall notify HES
thereof in writing (an "Election to Consent"), and the Parties
will endeavor in good faith to negotiate a mutually acceptable
agreement governing such Election to Consent (without liability
for failing to successfully negotiate such agreement, regardless
of the cause of such failure), subject to, among other things,
the rights of third parties pursuant to the applicable operating
agreement and MOXY's obligation to fund that portion of the
operation as to which an Option applies under the applicable
operating or other agreement with respect thereto. If MOXY fails
to provide any Election to Consent within 2 business days (i.e.
excluding Saturdays, Sundays and Federal holidays) after MOXY's
receipt of the relevant Notice of Non-Consent, MOXY shall be
deemed to have elected not to exercise the Election to Consent
for the Option.
Any agreement governing an Election to Consent would
provide, among other things, that (a) MOXY will at all times be
responsible (i) for all obligations to make payments to the
Operator for all funds required to be paid with respect to HES's
interest in the operation in which MOXY has elected to
participate, including, without limitation, any continuing costs,
such as workover costs and reclamation costs (collectively, the
"Operations"), and (ii) to fully indemnify and hold harmless HES
for any and all liabilities in connection with or arising out of
the exercise of the Election to Consent in the Operations,
whether such liabilities arise in contract, quasi contract, tort
or otherwise, (b) so long as MOXY complies with its obligations,
HES shall hold such exercised rights for the beneficial interest
of MOXY (or, if the Operation is necessary to maintain a lease or
unit, then HES shall relinquish and/or reassign such portion of
the affected Subject Interests in accordance with the applicable
operating agreement), and MOXY shall be entitled to all the
benefits of and shall bear all of the costs, risks and expenses
associated with the Operations to the extent resulting from such
Election to Consent, and (c) the proceeds, capital expenditures,
operating costs, royalties and other expenses associated with
Election to Consent Operations shall be excluded from and shall
not affect the calculation of Payout under Section 3.2 hereof.
ARTICLE 4
PREFERENTIAL RIGHTS AND CONSENTS
4.1 Preferential Rights Notice:
MOXY has prepared forms of the notices and the requests for
waivers to be sent to all holders of preferential purchase rights
or consent rights in the Subject Interests (hereinafter referred
to as "Rights"). For purposes of the notice to the Rights
holders, MOXY has allocated the Purchase Price in good faith as
may be required by the applicable operating agreements. The
Purchase Price allocation of MOXY is set forth on Exhibit "D"
hereto. As soon as practicable after the execution hereof, MOXY
shall transmit to the respective holders of the Rights the
notices and requests for waivers. Closing shall be delayed until
necessary consents have been obtained and any applicable periods
under unwaived, unexercised preferential rights have expired.
4.2 Closing Delayed Pending Closing on Sale of Exercised Rights:
If any Rights are exercised, the closing in connection
therewith shall be concluded concurrently with the Closing under
this Agreement unless the Parties agree otherwise in writing and,
if necessary, the Closing hereunder may be delayed such that
concurrent closings may occur.
4.3 Exercise of Rights:
To the extent that any Rights are exercised by any third
party entitled to exercise such Rights, then the Subject
Interests subject to such exercised Rights shall not be sold to
HES and shall be excluded from this Agreement and shall not be
considered part of the Subject Interests (including for purposes
of calculating Payout in Section 3.2 hereof). In such event, the
Purchase Price shall be reduced by the value allocated to the
interests so excluded as set forth in Exhibit "D" hereof.
ARTICLE 5
MOXY COVENANTS PENDING CLOSING
5.1 Covenants of MOXY:
From and after the execution of this Agreement and until
Closing, MOXY covenants and agrees as follows:
5.1.1 Availability of Records and Data:
MOXY will make available to HES all information in its
possession or available to it relating to the Subject Interests,
including title information, relevant agreements and leases,
records relevant to rentals and royalties, production records,
maps and accounting and tax records. MOXY will notify HES in
writing, immediately after MOXY becomes aware thereof, of (a) any
adverse material change in the condition or status of any of the
Subject Interests, and (b) any communication of material
consequence given or received with respect to the Subject
Interests (including without limitation proposals for drilling or
for other operations).
5.1.2 Operation of Subject Interests:
MOXY (i) will cause the Subject Interests to be operated and
maintained in a manner substantially consistent with prior
operations; (ii) other than normal production operations, will
not undertake any new operations except in the event of emergency
or as required under existing contractual obligations; and (iii)
will not convey or dispose of any of the Subject Interests except
as permitted under Article 4 hereof.
5.1.3 Physical Inspection:
MOXY shall make a good faith effort to obtain for HES, or
HES's authorized representatives, at all reasonable times before
the Closing and upon adequate notice to MOXY, physical access to
the Subject Interests for the purpose of inspecting same.
5.1.4 Preferential Rights:
MOXY will use or has used all reasonable efforts, consistent
with good industry practices in transactions of this type, to
identify, with respect to the Subject Interests, all preferential
rights to purchase that are applicable to the transactions
contemplated herein. Further, MOXY has provided or will provide
all parties holding preferential rights with all required notice
and information required under each respective preferential right
agreement, all in accordance with good industry practices in
transactions of this type. If a party from whom a waiver of
preferential right to purchase is requested refuses to give such
waiver, MOXY agrees that it will tender to such party an interest
in the Subject Interests as required by the applicable
preferential right to purchase agreement and, in the event the
applicable preferential right to purchase is exercised and
Closing occurs, such interest will be excluded from the
transaction contemplated hereunder and the Purchase Price will be
adjusted appropriately downward in accordance with Section. 4.3.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Reciprocal Representations and Warranties:
MOXY and HES each represent and warrant to the other, that
as of the date of this Agreement, as of the Effective Time and as
of the Closing:
6.1.1 Organization:
The Party making the representation is a corporation or
limited liability company validly existing and in good standing
under the laws of its incorporation or formation, with the
requisite power and authority to own property and assets such as
the Subject Interests and to carry on its business as now being
conducted.
6.1.2 Requisite Approvals:
The Party making the representation has the corporate power
and/or authority to execute and deliver this Agreement and to
consummate the transaction contemplated in this Agreement. This
Agreement constitutes a valid and binding obligation of the Party
making the representation, enforceable against it in accordance
with the terms hereof, except to the extent such enforceability
may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting creditors'
rights generally and (ii) equitable principles which may limit
the availability of certain equitable remedies (such as specific
performance) in certain instances. No other act, approval or
proceeding on the part of the Party making the representation is
required to authorize the execution and delivery of this
Agreement. This Agreement (and all closing documents) has been
or will be executed by appropriate officers having full authority
to execute and deliver such documents on behalf of the Party
making the representation.
6.1.3 Impediments to Consummation of Agreement:
This Agreement, and the execution and delivery hereof by the
Party making the representation, do not, and the consummation of
the transaction contemplated hereunder will not, violate any
provision of, or constitute a default under, or give rise (with
or without the giving of notice or the passage of time or both)
to any right of termination, cancellation, or acceleration under,
the charter or by-laws of such Party or any law or regulation to
which it is subject, or any provision of any agreement,
indenture, mortgage, lien, lease, instrument, order, arbitration
award, judgment, or decree to which it is a Party or by which it
or any of its assets or properties is bound.
6.2 MOXY's Representations & Warranties:
MOXY represents and warrants to HES, that as of the date of
this Agreement, the Effective Time and the Closing:
6.2.1 Compliance with Laws:
To MOXY's knowledge, MOXY has not violated any applicable
laws or statutes, or any applicable regulations, rules or orders
promulgated by the Federal Energy Regulatory Commission, the
Minerals Management Service or any other federal or state
regulatory agency, or any of their predecessor agencies, which
might materially and adversely affect the value to HES of the
Subject Interests, or the production therefrom.
6.2.2 Leases and Wells:
To MOXY's knowledge (i) MOXY is not in material default
under any of the material terms and provisions of any of the
Leases or under any agreement to which the same are subject;
(ii) all royalties, rentals, and other payments due thereunder by
MOXY have been timely and properly paid in full on or before the
due dates thereof; and (iii) all of the wells to which the
Subject Interests pertain have been drilled, completed, and
operated within the boundaries of the leases to which the Subject
Interests pertain or within the limits otherwise permitted by
contract, pooling, or unit agreement, and by law and in
compliance with all applicable rules, regulations, permits,
judgments, orders and decrees of any court or the federal and
state regulatory authorities having jurisdiction thereof.
6.2.3 Marketable Title:
MOXY owns Marketable Title, as defined below, to the net
revenue interests and working interests (record title and/or
operating rights) in the leases as indicated in Exhibit "A."
"Marketable Title" as used herein shall mean that as to the
Subject Interests, such title that (a) entitles MOXY to receive
not less than the net revenue interest as set forth in Exhibit
"A" of all hydrocarbons produced, saved and marketed from the
Subject Interests, free and clear of all liens and other
encumbrances except (i) those contained in the contracts and
instruments listed in Exhibits "A" and "B" hereto and (ii) those
mortgages securing indebtedness to JP Morgan Chase Bank (formerly
Chase Bank of Texas, National Association) which shall be
released at Closing, and (b) obligates MOXY to bear costs and
expenses relating to the maintenance, development, operation and
production of hydrocarbons in an amount not greater than the
working interest as set forth in Exhibit "A".
6.2.4 Production Sales Contracts:
There exist no agreements or arrangements for the sale of
production from the Subject Interests (including calls on, or
other rights to purchase, production, whether or not the same are
currently being exercised) other than (a) production sales
contracts (in this Section, the " Production Sales Contracts")
disclosed in Schedule 6.2.4 hereto or (b) agreements or
arrangements that are cancelable on 90 days notice or less
without penalty or detriment. MOXY is presently receiving a
price for all production from (or attributable to) each of the
Subject Interests covered by a Production Sales Contract as
computed in accordance with the terms of such contract, and are
not having deliveries of gas from any Subject Interests subject
to a Production Sale Contract curtailed substantially below such
property's delivery capacity. No portion of the Subject
Interests is either overproduced or underproduced in natural gas.
MOXY is not obligated, by virtue of a prepayment arrangement, a
"take or pay" arrangement, a production payment or any other
arrangement, to deliver hydrocarbons produced from the Subject
Interests at some future time without then or thereafter
receiving full payment therefor.
6.2.5 Approvals:
Other than requirements (if any) that there be obtained
consents to assignment (or waivers of preferential rights to
purchase) from third parties, and except for approvals required
to be obtained from governmental entities who are lessors under
leases forming a part of the Subject Interests (or who administer
such leases on behalf of such lessors) which are customarily
obtained post-closing and which MOXY has no reason to believe
cannot be obtained, no consent, approval, order, or authorization
of, or declaration, filing, or registration with, any court or
governmental agency or of any third party is required to be
obtained or made by MOXY in connection with the execution,
delivery, or performance by MOXY of this Agreement, each other
agreement, instrument, or document executed or to be executed by
MOXY in connection with the transactions contemplated hereby to
which MOXY is a party or the consummation by MOXY of the
transactions contemplated hereby and thereby.
6.2.6 Pending Litigation:
Except as set forth in Schedule 6.2.6, there are no pending
suits, actions, or other proceedings in which MOXY is a party
that relate to the Subject Interests (including any actions
challenging or pertaining to MOXY or title to any of the Subject
Interests), or affecting the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
6.2.7 Basic Documents:
The oil, gas and/or mineral leases, MOXY's interest that
comprise parts of the Subject Interests, and all other material
contracts and agreements, licenses, permits and easements, rights-
of-way and other rights comprising any part of or otherwise
relating to the Subject Interests (for purposes of this
Section, such leases and such material contracts, agreements,
licenses, permits, easements, rights-of-way and other rights
being called the "Basic Documents"), are in full force and effect
and constitute valid and binding obligations of the parties
thereto. All contracts and agreements that are Basic Documents
are disclosed on Exhibit "A" or Exhibit "B" in connection with
the descriptions of the Subject Interests to which they relate.
MOXY is not in breach or default (and no situation exists which
with the passing of time or giving of notice would create a
breach or default) of its obligations under the Basic Documents,
and no breach or default by any third party (or situation which
with the passage of time or giving of notice would create a
breach or default) exists, to the extent such breach or default
(whether by MOXY or such a third party) could reasonably be
expected to materially adversely affect the ownership, operation,
value or use of any of the Subject Interests after the Effective
Time. All payments (including all royalties and valid calls for
payment or prepayment under operating agreements) owing under
Basic Documents have been and are being made (timely, and before
the same became delinquent) by MOXY in all material respects and,
where the non-payment of same by a third party could materially
adversely affect the ownership, operation, value or use of any of
the Subject Interests after the Effective Time, have been and are
being made by such third parties. For the purposes of the
representations contained in this Section (and without limitation
of such representations), the non-payment of an amount, or non-
performance of an obligation, where such non-payment, or non-
performance, could result in the forfeiture or termination of
rights of MOXY under a Basic Document, shall be considered
material.
6.2.8 Commitments, Abandonments or Proposals:
Except as set forth at Schedule 6.2.8 hereto: (a) MOXY has
incurred no expenses, and has made no commitments to make
expenditures (including not having entered into any agreements
that would obligate HES to make expenditures), in connection with
(and no other obligations or liabilities have been incurred which
would adversely affect) the ownership or operation of the Subject
Interests after the Effective Time, other than routine expenses
incurred in the normal operation of existing wells on the Subject
Interests.
6.2.9 Area of Mutual Interest and Other Agreements; Tax
Partnerships:
Except as set forth in Schedule 6.2.9, none of the Subject
Interests is subject to (or has related to it) any area of mutual
interest agreements or is subject to (or has related to it) any
tax partnership. None of the Subject Interests is subject to (or
has related to it) any farm-out or farm-in agreement under which
any party thereto is entitled to receive assignments not yet
made, or could earn additional assignments after the Effective
Time.
6.2.10 Payment of Expense:
Other than as set forth at Schedule 6.2.10 hereto, all
expenses (including all bills for labor, materials and supplies
used or furnished for use in connection with the Subject
Interests, and all severance, production, ad valorem, windfall
profit and other similar taxes) relating to the ownership or
operation of the Subject Interests, have been, and are being,
paid by MOXY when due, or with respect to vendors of oilfield
services in the ordinary course of MOXY's business with such
vendors.
6.2.11 Compliance with Laws:
The ownership and operation of those of the Subject
Interests operated by MOXY and the ownership and operation of the
Subject Interests not operated by MOXY, to the extent that non-
conformance could adversely affect the ownership, operation,
value or use thereof after the Effective Time (or otherwise
affect HES), has been in conformity, in all material respects,
with all applicable laws, and all applicable rules, regulations
and orders of all governmental agencies having jurisdiction,
relating to the Subject Interests. Without in any way limiting
the foregoing representations, the Subject Interests operated by
MOXY, and the Subject Interests operated by others, are not in
violation of (or subject to any existing, pending or, threatened
investigation or inquiry by any governmental authority, or to any
remedial obligations under) any applicable laws, rules,
regulations or orders pertaining to health or the environment.
6.2.12 Plugging Obligations:
Except as set forth on Schedule 6.2.12 hereto, there are no
shut in or otherwise inactive wells, located on the Subject
Interests or on lands pooled or unitized therewith, except for
wells that have been properly plugged and abandoned or awaiting
hook-up, and except for wells drilled to depths not included
within the Subject Interests or within units in which the Subject
Interests participate that have never been completed in such
depths.
6.2.13 Governmental Permits:
MOXY (or the operator of the Subject Interest) has obtained
all governmental licenses and permits necessary or appropriate to
own and operate the Subject Interests as presently being owned
and operated, and such licenses, permits and filings are in full
force and effect, and MOXY has not received written notice of any
violations in respect of any such licenses or permits.
6.2.14 State of Repair:
The Subject Interests have been maintained in a state of
repair so as to be reasonably adequate for normal operations.
6.2.15 No Alienation:
MOXY has not sold, assigned, conveyed, or transferred or
contracted to sell, assign, convey or transfer any right or title
to, or interest in, the Subject Interests.
6.2.16 Current Interests:
MOXY is currently receiving from all purchasers of
production from the Subject Interests at least the net revenue
interest set forth in Exhibit "A" without suspense or indemnity
(other than customary indemnities as to ownership).
6.2.17 Filings:
All necessary plans for development, applications,
inspection, reports, certificates and other instruments
pertaining to environmental matters have been filed with the
appropriate governmental bodies, authorities and agencies and all
permits necessary for the legal operation of the Subject
Interests in full compliance with all environmental laws, rules,
regulations, ordinances and orders have been obtained and MOXY is
in full compliance with all such laws, rules, regulations,
ordinances and orders. All applications, reports, certificates
and other instruments filed with or furnished to any governmental
body, authority or agency do not (1) contain any untrue statement
of material fact or (2) omit any statement of material fact
necessary to make the statements therein not misleading.
6.2.18 MOXY's Information:
MOXY has made available to HES or HES's representatives all
of its documents and other information that are in MOXY's
possession or that MOXY is able to furnish to HES, including, but
not limited to, all of MOXY's production sale agreements,
processing agreements, transportation agreements, permits,
licenses, orders, production records, inventory, bonds, insurance
policies, operating agreements, engineering data, geological
data, geophysical data, and all other records and files, relating
to the Subject Interests.
6.2.19 MOXY's Obligation:
MOXY shall promptly notify HES (i) if any representation or
warranty of MOXY contained in this Agreement is discovered to be
or becomes untrue, or (ii) if MOXY fails to perform or comply
with any covenant or agreement contained in this Agreement or it
is reasonably anticipated that MOXY will be unable to perform or
comply with any covenant or agreement contained in this
Agreement.
6.3 HES's Representations & Warranties:
Subject to Closing, HES represents and warrants to MOXY:
6.3.1 Receipt of Data:
HES represents that it has had the opportunity to perform
due diligence on the Subject Interests, which includes physical
inspection(s), environmental assessment(s), reviewing well data
and other files, and performing all necessary tasks involved in
evaluating the Subject Interests.
6.3.2 Independent Evaluation:
HES represents and acknowledges that it has had access to
the Subject Interests, the officers and employees of MOXY, and
the books, records and files of MOXY relating to the Subject
Interests. In making the decision to enter into this Agreement
and consummate the transactions contemplated hereby, HES has
relied solely on the basis of its own independent due diligence
investigation of the Subject Interests. Accordingly, HES
acknowledges that MOXY has not made, and MOXY hereby expressly
disclaims and negates, any representation or warranty (other than
those express limited representations and warranties made in
Article 6.0 of this Agreement), express, implied, at common law,
by statute or otherwise, relating to the Subject Interests.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 MOXY's Conditions to Closing:
The obligations of MOXY at the Closing are subject to the
satisfaction at or prior to the Closing, or the waiver by MOXY
(at MOXY's sole discretion), of the following conditions:
7.1.1 Representations:
All representations and warranties of HES contained in this
Agreement shall be true and correct in all material respects at
and as of the Closing; and
7.1.2 No Prohibitions or Litigation:
On the Closing Date, (i) no order shall have been entered by
any court or governmental agency having jurisdiction over the
parties or the subject matter of this Agreement that restrains or
permits or prohibits the purchase and sale contemplated by this
Agreement and which remains in effect at the time of such
Closing, and (ii) no suit, action, or other proceeding shall be
pending or threatened before any court or governmental agency
seeking to restrain, prohibit, or obtain material damages or
other material relief in connection with the consummation of the
transactions contemplated by this Agreement or with respect to
any of the Subject Interests.
7.2 HES's Conditions to Closing:
The obligations of HES at the Closing are subject, at the
option of HES, to the satisfaction at or prior to the Closing, or
the waiver by HES (at HES' sole discretion), of the following
conditions:
7.2.1 Representations:
All representations, warranties, covenants and agreements of
MOXY contained in this Agreement shall be true and correct in all
material respects at and as of the Closing;
7.2.2 No Prohibitions or Litigation:
On the Closing Date, no (i) order shall have been entered by
any court or governmental agency having jurisdiction over the
parties or the subject matter of this Agreement that restrains or
prohibits the purchase and sale contemplated by this Agreement
and which remains in effect at the time of such Closing, and (ii)
except as may be described in Schedule 6.2.6, no suit, action, or
other proceeding shall be pending or threatened before any court
or governmental agency with respect to any of the Subject
Interests.
7.2.3 Release of Mortgage:
At Closing MOXY shall deliver to HES, in form reasonably
acceptable to HES, releases of all Subject Interests from any
and all mortgages affecting such interests.
7.2.4 Waivers and Consents:
Prior to Closing, HES shall have received, in form
reasonably acceptable to HES, (a) waivers of, or elections not to
exercise, all preferential rights affecting the Subject
Interests, and (b) all consents required for MOXY to make the
assignments of the Subject Interests as contemplated herein.
7.2.5 Other Instruments:
Prior to Closing, the Parties will have identified, and
agreed as to the form of, all of those instruments referenced in
Section 8.2.3 hereof.
7.2.6 Condition of Subject Interests:
There shall been no adverse material change in the physical
condition or legal status of the Subject Interests.
7.2.7 Inchoate Liens:
If any construction, drilling, major repair (i.e., exceeding
$100,000.00), recompletion or other similar activity has occurred
on any lease to which the Subject Interests pertain where MOXY is
operator within one hundred and eighty days prior to Closing, HES
shall have received, prior to Closing, in form reasonably
acceptable to HES, proof of payment for such activities and/or
releases of inchoate and/or materialmen's liens with respect
thereto.
ARTICLE 8
CLOSING AND POST CLOSING OBLIGATIONS
8.1 Time:
The Closing shall be held as soon as practicable after the
date hereof once all waivers and consents necessary for Closing
have been received, or as specified in Article 4, but in any
event not before February 15, 2002, (unless otherwise mutually
agreed as provided in this Section), at the offices of MOXY at
1615 Poydras Street, New Orleans, Louisiana. The time and place
for Closing may be changed to an earlier or later time and place
by mutual written agreement of the Parties, but any acceleration
or delay in the Closing shall not change the Effective Time. The
date Closing occurs is referred to herein as the "Closing Date."
8.2 Closing:
The following shall take place at, and is referred to herein
as, the "Closing":
8.2.1 Assignments:
MOXY and HES shall execute and deliver Assignments of Record
Title and/or Operating Rights conveying the Subject Interests to
HES substantially in the form of one of the form assignments
which are attached as Exhibits "C-1" and "C-2" with such changes
thereto (if any) as may be reasonably required to obtain approval
from the Minerals Management Service.
8.2.2 Payment of Purchase Price:
HES shall pay to MOXY by wire transfer an amount equal to
the Purchase Price.
8.2.3 Other Instruments:
The Parties shall execute other appropriate instruments
necessary to effect or support the transaction contemplated in
this Agreement, including without limitation, any forms required
by federal or state agencies to transfer operatorship of the
Subject Interests to HES and further including a tax partnership
agreement substantially in the form attached hereto as Exhibit
"E."
8.2.4 Delivery of Subject Interests:
MOXY shall deliver to HES, exclusive possession of the
Subject Interests as of the Closing.
8.2.5 Complete Actions:
No agreement or other instrument to be executed and
delivered at the Closing, or action to be taken at the Closing,
shall be effective until all such agreements and instruments have
been executed and delivered and all such actions have been taken,
and all such agreements, instruments and actions shall be deemed
to be effective concurrently.
8.2.6 Revenue and Cost Proration:
MOXY shall promptly pay over to HES any revenues MOXY has
received for the period following the Effective Time and HES
shall promptly reimburse MOXY any costs MOXY has paid for that
period, in each case to be trued-up as information becomes
available.
8.3 Post Closing Obligations:
Upon condition that the Closing shall have occurred, MOXY
and HES agree to perform the following "post-Closing
obligations":
8.3.1 Recording & Filing:
Within ninety (90) days of Closing, HES shall (i) file or
record the conveyancing documents in the appropriate governmental
records and (ii) file for approval with the applicable
governmental agencies all state and federal transfer and
assignment documents for the Subject Interests. HES shall
provide a copy of same, including recording information, to MOXY.
8.3.2 Change of Operator:
MOXY shall resign as operator of the Subject Interests being
assigned to HES where MOXY is operator, and, subject to the
provisions of the applicable operating agreement, designate (or
vote for) HES or HES's designee as operator.
8.3.3 Notices to Third Parties:
HES shall notify all lessors, royalty owners, operators, non-
operators, purchasers, and governmental agencies that HES has
purchased the Subject Interests and has assumed liability for
their continued operation from and after the Closing. HES and
MOXY shall execute all transfer orders and division orders
necessary to transfer payment of the proceeds from the sale of
production from the Subject Interests as of the Effective Time to
HES.
8.3.4 Property Records:
Within thirty (30) days after Closing, MOXY shall deliver to
HES legible photocopies (or at MOXY's option, original records)
of the property and business records specified in this Agreement
(subject to the limitations contained in this Agreement). If
MOXY retains any original records, HES shall have the right to
review (and make additional copies at HES' expense) such original
records during MOXY's normal business hours. HES shall retain
any original records delivered, and MOXY shall retain any such
original records not delivered to HES for a period of seven (7)
years from the Effective Time. MOXY reserves the right to access
(and copy at MOXY's expense) all original records delivered for a
period of seven (7) years from the Effective Time (and HES agrees
to grant MOXY access to the records during HES's normal business
hours). In the event that MOXY or HES wishes to destroy any
original books or records in its possession prior to such date,
such Party shall give not less than sixty (60) days notice to the
other Party and such other Party shall have the right, at its own
expense, during reasonable business hours, to remove such books
and records and to keep possession of same. The records which
are the subject matter of this Section include without limitation
revenue check stubs, lease operating statements, royalty check
stubs and any other relevant accounting records.
8.3.5 Property Information During Payout Period:
During the period following Closing and extending until the
reassignments following Payout occurs, MOXY shall be entitled to
and HES agrees to provide, subject to any applicable
confidentiality obligations, production, engineering and other
data from the operations of the Subject Interests, as well as
copies of all notices received or issued under the applicable
joint operating agreements, on a timely basis. MOXY also shall
be entitled to copy any relevant records in HES's possession at
MOXY's expense. In addition, MOXY shall have the right to audit
HES's financial records relative to the Subject Interests, for
any calendar year within the twenty-four (24) month period
following the end of such calendar year, in order to verify the
amounts charged and credited to the Payout account. MOXY shall
provide reasonable notice to HES with respect to arrangements for
copying records or conducting audits, each of which shall take
place during normal business hours. MOXY's audit rights set
forth in this Section shall not be exercised more than once per
calendar year and shall terminate 24 months after HES has made an
assignment as contemplated by Section 3.1 hereof.
8.3.6 Marketing of Production for MOXY's Prior Program
Participants:
Until Payout (but not thereafter), HES agrees to use
commercially reasonable efforts to market, on the same basis as
it markets its own production, the production of one of MOXY's
prior program participants in accordance with the letter
agreement furnished by MOXY to HES as set forth in Schedule
8.3.6.
8.4 Indemnification:
8.4.1 MOXY's Indemnification of HES:
MOXY shall (a) retain, and timely pay and perform, all
duties, obligations and liabilities relating to the ownership
and/or operation of the Subject Interests that are attributable
to that period of time prior to the Effective Time (including,
without limitation, those arising under the contracts and
agreements described in Exhibit "B") and (b) indemnify, defend
and hold harmless HES and its affiliates, and its/their
respective directors, officers, employees, stockholders and
agents, from and against any and all claims, liabilities, losses,
causes of actions, costs and expenses (including, without
limitation, those involving theories of negligence or strict
liability and including court costs and attorneys' fees) asserted
against, resulting from, imposed upon or incurred by HES and/or
its affiliates, and/or its/their respective directors, officers,
employees, stockholders and agents as a result of, or arising out
of, or attributable to, (i) MOXY's ownership or operation of the
Subject Interests before the Effective Time, or (ii) any breach
of any representation given or agreement made by MOXY in Article
6 hereof.
8.4.2 HES's Indemnification of MOXY:
Subject to Section 8.4.1 above, HES shall indemnify, defend
and hold harmless MOXY and its affiliates, and its/their
respective directors, officers, employees, stockholders and
agents, from and against any and all claims, liabilities, losses,
causes of actions, costs and expenses (including, without
limitation, those involving theories of negligence or strict
liability and including court costs and attorneys' fees) asserted
against, resulting from, imposed upon or incurred by MOXY and/or
its affiliates, and/or its/their respective directors, officers,
employees, stockholders and agent, as a result of, or arising out
of, or attributable to, (i) HES's ownership or operation of the
Subject Interests from and after the Effective Time (subject to
the proviso set forth at the end of Section 1.3 hereof) and until
Payout, or (ii) any breach of any representation given by HES in
Article 6 hereof.
8.4.3 Effect of Payout:
From and after Payout, the rights and obligations between
the Parties shall be governed by the applicable operating
agreements.
ARTICLE 9
ADMINISTRATIVE PROVISIONS
9.1 Expenses of Sale:
Except as otherwise specifically provided herein, each Party
to this Agreement shall pay its own expenses (including without
limitation, the fees and expenses of their respective agents,
representatives, counsel and accountants) with respect to the
negotiation, execution and the delivery of this Agreement and the
consummation of the transactions under this Agreement.
9.2 Further Actions:
HES and MOXY further agree that each will, from time to time
and upon reasonable request, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such
instruments, and take such other action as may be necessary, or
advisable, to carry out their obligations under this Agreement.
9.3 Public Announcements:
The Parties have jointly agreed to the form of press release
to be issued by MOXY with respect to the execution of this
Agreement. The Parties shall mutually agree on the form of the
press release to be issued with respect to the occurrence of
Closing. Any SEC or NYSE filings or reports of MOXY (and its
parent) shall not refer to HES (or its parent) with respect to
this transaction unless the text thereof has been approved by HES
or is otherwise required by applicable rules. Except as required
by law or applicable stock exchange requirements, no other public
announcement may be made without the express written consent of
both Parties.
9.4 Applicable Law:
The provisions of this Agreement and the relationship of the
Parties shall be governed and interpreted according to the laws
of the State of New York without giving effect to principles of
conflicts of laws, EXCEPT that the laws of the State of Louisiana
and applicable federal law shall govern to the extent such laws
contain mandatory provisions for conveyance, recordation, notice
and the like with respect to any of the Subject Interests.
9.5 Conflict of Terms:
In the event of any conflict between the main body of this
Agreement and the attached Exhibits, the provisions of the main
body of this Agreement shall control.
9.6 Notices:
All notices authorized or required between the Parties by
any of the provisions of this Agreement, unless otherwise
specifically provided, shall be in writing and delivered in
person or by United States mail, overnight express delivery,
courier service or facsimile (with receipt confirmed), postage or
charges prepaid, and addressed to such Parties at the addresses
set forth below:
Halliburton Energy Services, Inc. McMoRan Oil & Gas LLC
4100 Clinton Drive (77020-6299) 1615 Poydras (70112)
P.O. Box 3 P.O. Box 60004
Houston, Texas 77001-0003 New Orleans, Louisiana 70160
Fax: Fax: 504-582-4155
Attention: Mr. Charles White Attention: Mr. Glenn A. Kleinert,
General Counsel President
Any originating notice and/or response thereto given under
any provision hereof shall be deemed given only when received by
the Party to whom such notice is directed, except that; (1) any
notice or response by certified U.S. mail, return receipt
requested, properly addressed pursuant to this Section 9.6, and
with all postage and charges prepaid, shall be deemed received on
the date actually delivered as so addressed, and (2) any notice
or response given by overnight express delivery or courier,
properly addressed pursuant to this Section 9.6, shall be deemed
received on the date actually delivered as so addressed.
9.7 Consequential Damages:
In no event shall either HES or MOXY be liable to the other
for special, incidental, indirect, punitive or consequential
damages arising or resulting from any breach of this Agreement,
including, but not limited to, lost profits and business
opportunity.
9.8 Severance of Invalid Provisions:
In case of a conflict between the provisions of this
Agreement and the provisions of any applicable laws or
regulations, the provisions of the laws or regulations shall
govern over the provisions of this Agreement. If, for any reason
and for so long as, any clause or provision of this Agreement is
held by a court of competent jurisdiction to be illegal, invalid,
unenforceable or unconscionable under any present or future law
(or interpretation thereof), the remainder of this Agreement
shall not be affected by such illegality or invalidity. Any such
invalid provision shall be deemed severed from this Agreement as
if this Agreement had been executed with the invalid provision
eliminated.
9.9 Independent Representation:
Each Party has had the benefit of independent representation
with respect to the subject matter of this Agreement. This
Agreement, though drawn by one Party, shall be construed fairly
and reasonably and not more strictly against one Party than
another.
9.10 Binding Effect:
This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and
assigns.
9.11 Termination:
This Agreement may be terminated by mutual agreement of the
Parties, or by MOXY or HES if, through no fault of the
terminating party, the Closing does not occur on or before May 1,
2002. . If the Closing has not occurred by the date specified in
the preceding sentence, by reason of one Party's breach of this
Agreement and the other Party is in compliance with the terms of
this Agreement and terminates this Agreement, each Party shall
retain all legal and equitable remedies against the other Party
for breach of the Agreement (provided, however that special,
incidental, indirect, consequential and punitive damages are
waived by each Party as contemplated by Section 9.7 hereof).
9.12 Multiple Counterparts:
This Agreement may be executed by signing the original or a
counterpart hereof. If this Agreement is executed in multiple
counterparts, each counterpart shall be deemed an original, and
all of which when taken together shall constitute but one and the
same agreement with the same effect as if all Parties had signed
the same instrument.
9.13 MOXY's Knowledge:
Any references herein to the "best of MOXY's knowledge" and
any other similar phrases shall mean (a) the actual knowledge of
the officers, managers and supervisors of MOXY as of the date of
this Agreement, and (b) such knowledge as such persons reasonably
would be expected to have after having made diligent inquiry into
the matters to which such knowledge relates.
ARTICLE 10
DISPUTE RESOLUTION
10.1 Dispute Resolution:
Notwithstanding anything contained heretofore in this
Agreement to the contrary, the Parties specifically acknowledge
and agree that any claim, controversy or dispute arising out of,
relating to, or in connection with this Agreement, including the
interpretation, validity, termination or breach thereof, shall be
resolved solely in accordance with the following Dispute
Resolution Procedure which shall constitute a condition precedent
to any Party seeking judicial enforcement of any provisions of
this Agreement. Any dispute, controversy or claim concerning this
Agreement (other than claims by a third party under which a Party
hereto is claiming indemnity, and such third party claim is in
litigation) shall be resolved under the mediation and binding
arbitration procedures of this Article. The Parties will first
attempt in good faith to resolve all disputes by negotiations
between management level persons who have authority to settle the
controversy. If any Party believes further negotiations are
futile, such Party may initiate the mediation process by so
notifying the other Party to the dispute in writing. The Parties
shall then attempt in good faith to resolve the dispute by
mediation in New Orleans, Louisiana, in accordance with the
Center for Public Resources Model Procedure for Mediation of
Business Disputes, as such procedure may be modified by agreement
of the Parties. The Parties shall share the costs of mediation
services equally and shall each have present at the mediation at
least one individual who has authority to settle the dispute. If
the dispute has not been resolved pursuant to mediation within
sixty (60) days after initiating the mediation process, the
dispute shall be resolved through binding arbitration, as
follows:
10.1.1 Selection of Arbitrators:
If any dispute or controversy arises between the Parties out
of this Agreement, the alleged breach thereof, or any tort in
connection therewith, or out of the refusal to perform the whole
or any part thereof, and the Parties are unable to agree with
respect to the matter or matters in dispute or controversy, the
same shall be submitted to arbitration before a panel of three
(3) arbitrators in accordance with the Center for Public Resource
Rules for Non-Administered Arbitration of Business Disputes and
the provisions in this Article. The panel of arbitrators shall
be chosen as set forth herein. The arbitrators selected to act
hereunder shall be qualified by education, experience, and
training to pass upon the particular matter or matters in
dispute. Upon the written demand of either of the Parties and
within fifteen (15) days from the date of such demand, each Party
shall name an arbitrator and these two (2) so named shall
promptly thereafter choose a third. If a Party fails to name an
arbitrator within fifteen (15) days from such demand, the other
Party shall name the second arbitrator as well as the first, or
if the two arbitrators fail within fifteen (15) days from their
appointment to agree upon and appoint the third arbitrator, then
upon written application by any Party, such third arbitrator may
be appointed by the President of the Center for Public Resources,
Inc.
10.1.2 Arbitration:
The panel of arbitrators so chosen shall proceed promptly to
hear and determine the matter or matters in dispute, after giving
the Parties due notice of hearing and a reasonable opportunity to
be heard. The procedure of the arbitration proceedings shall be
in accordance with the Center for Public Resources Rules for Non-
Administered Arbitration of Business Disputes, as may be modified
by the panel of arbitrators. Unless otherwise determined by the
arbitrators, the hearing and presentations of the Parties shall
not exceed two days cumulative. All arbitration proceedings
hereunder shall be held in Lafayette, Louisiana, unless the panel
of arbitrators determines that another venue is more appropriate.
The award of the panel of arbitrators or a majority thereof
shall be made within forty-five (45) days after the appointment
of all the arbitrators, subject to any reasonable delay due to
unforeseen circumstances. In the event the panel or a majority
thereof fail to make an award within sixty (60) days after the
appointment of all the arbitrators, new arbitrators may, at the
election of any Party, be chosen in like manner as if none had
been previously selected.
10.1.3 Award and Arbitration Expenses:
The award of the arbitrators, or a majority thereof, shall
be in writing, determined in accordance with the substantive law
of the State of New York, except as otherwise required pursuant
to Section 9.4 hereof, and shall be final and binding on the
Parties as to the question or questions submitted and the Parties
shall abide by such award and perform the conditions thereof.
The award of the arbitrators shall be based on the applicable law
and facts, the merits of the parties' positions in the
controversy or dispute, and the arbitrators' assessment of the
fairness and reasonableness of any settlement proposal of any
Party. The arbitrators may not award any punitive or exemplary
damages. The award shall not provide or create any rights or
benefits in any person or entity which is not a Party to this
Agreement, as this Agreement and any arbitration thereunder shall
not be construed as a third party beneficiary contract. Unless
otherwise determined by the arbitrators, all expenses in
connection with such arbitration shall be divided equally between
the Parties, except that the expenses of counsel, witnesses,
employees, or other representatives of each Party shall be borne
solely by the Party incurring them, and the compensation of any
arbitrator named by a Party or group of Parties shall be borne
solely by such Party or group of Parties; provided that if court
proceedings to stay litigation or compel arbitration are
necessary, the Party who unsuccessfully opposes such proceedings
shall pay all reasonable associated costs, expenses, and
attorneys' fees of such court proceedings. Except as otherwise
provided in the immediately preceding sentence, each Party shall
bear its own attorneys' fees in connection with any appeal of an
arbitration award, or in any other court litigation arising out
of this Agreement.
10.1.4 Confidentiality:
The arbitrators may, but shall not be required, to explain
reasons for the award. No transcript or other recording shall be
made of the arbitration proceedings. Except (i) in connection
with a suit for enforcement of the award, (ii) as required by
law, court order, or regulation, (iii) when reasonably necessary
to explain the terms and conditions of the award to outside
attorneys, auditors, and insurers, or (iv) as part of good faith
compliance with disclosure obligations under applicable law, the
arbitration proceedings, the award, and the Parties' actions in
connection with the arbitration are confidential and shall not be
disclosed to third parties, and no disclosure of or reference to
the arbitration, the award, or of the Parties' statements or
actions in connection with the arbitration shall be made to any
third party. All offers, promises, conduct, statements, and
evidence, whether oral or written, made in the course of the
arbitration by any of the Parties, their agents, employees,
experts, or attorneys are confidential. Such offers, promises,
conduct, statements, and evidence shall be considered
inadmissible under Rule 408 of the Federal Rules of Evidence and
any similar state-law provisions, and shall be inadmissible for
any purpose, including impeachment. However, evidence that is
otherwise admissible shall not be rendered inadmissible as a
result of its use in the arbitration.
10.1.5 Indemnification:
The provisions of this Article shall not limit the
obligation of a Party to defend, indemnify or hold harmless
another Party against court proceedings or other claims, loss,
damages or expenses as provided elsewhere in the Agreement.
10.1.6 Preservation of Rights:
Notwithstanding the above, any Party may file a complaint
for statute of limitations or venue reasons, or seek a
preliminary injunction or other provisional judicial relief, if
in its sole judgment such action is necessary to avoid
irreparable damage or to preserve the status quo. Despite such
actions, the Parties shall continue to try to resolve the dispute
by negotiation, mediation, or arbitration as necessary.
IN WITNESS WHEREOF, this Agreement is executed by the duly
authorized representatives of the parties on the date first above
written.
Halliburton Energy Services, Inc.
By: ______________________________
Name:
Title:
McMoRan Oil & Gas LLC
By: /s/ Glenn A. Kleinert
-----------------------
Name: Glenn A. Kleinert
Title: President
EXHIBIT "A-1"
SHIP SHOAL BLOCK 296
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 49.40% of 8/8ths operating rights interest in and to
the following described lease, to wit:
OCS-G 15303 Oil and Gas Lease from the United States of
America, as Lessor, to Mobil Oil Exploration &
Producing Southeast Inc., et al, as Lessee, dated
effective July 1, 1995 and identified in the
Office of the Minerals Management Service,
Department of the Interior, as Outer Continental
Shelf Serial Number OCS-G 15303 covering the
submerged lands of the Outer Continental Shelf
described as follows:
All of Block 296, Ship Shoal Area, South Addition,
OCS Leasing Map, Louisiana Map No. 5A, containing
approximately 5000.00 acres, INSOFAR AND ONLY
INSOFAR as said lease covers from the surface down
to and including one hundred feet below the
stratigraphic equivalent of the base of the Ang B-
3(b) Sand, seen at 9831' measured depth (-9332'
subsea) on the 5" MD/HRI/SD/DSN Log for the
McMoRan Oil & Gas LLC OCS-G 15303 Well No. 1, API
#1771240612.
The aforedescribed operating rights vests MOXY with a 49.40%
working interest and 34.83524% net revenue interest in costs and
production attributable to the aforedescribed portion of the
lease.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B".
EXHIBIT "A-2"
VERMILION BLOCK 1956
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 47.5% of 8/8ths operating rights interest in and to
the following described lease, to wit:
OCS-G 19759 Oil and Gas Lease from the United States of
America, as Lessor, to Shell Offshore Inc., as
Lessee, dated effective August 1, 1998 and
identified in the Office of the Minerals
Management Service, Department of the Interior, as
Outer Continental Shelf Serial Number OCS-G 19759
covering the submerged lands of the Outer
Continental Shelf described as follows:
All of Block 195, Vermilion Area, OCS Leasing Map,
Louisiana Map No. 3, containing approximately 5000
acres, INSOFAR AND ONLY INSOFAR as said lease
covers the SW/4 of said block from the surface
down to and including one hundred feet below the
stratigraphic equivalent of the base of the TX-4
Sand seen at 14,360' measured depth (-14,276'
subsea) on the 5" HRI/Density/Neutron/Sonic-Delta-
T Log in the McMoRan Oil & Gas LLC OCS-G 19760
Well No. 2.
The aforedescribed operating rights interest vests MOXY with
a 47.5% working interest and 34.2% net revenue interest in costs
and production attributable to the aforedescribed portion of the
lease.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B".
EXHIBIT "A-3"
VERMILION BLOCK 196
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 47.5% of 8/8ths operating rights interest in and to
the following described lease, to wit:
OCS-G 19760 Oil and Gas Lease from the United States of
America, as Lessor, to Shell Offshore Inc., as
Lessee, dated effective August 1, 1998 and
identified in the Office of the Minerals
Management Service, Department of the Interior, as
Outer Continental Shelf Serial Number OCS-G 19760
covering the submerged lands of the Outer
Continental Shelf described as follows:
All of Block 196, Vermilion Area, OCS Leasing Map,
Louisiana Map No. 3, containing approximately 5000
acres, INSOFAR AND ONLY INSOFAR as said lease
covers from the surface down to and including one
hundred feet below the stratigraphic equivalent of
the base of the TX-4 Sand seen at 14,360' measured
depth (-14,276' subsea) on the 5"
HRI/Density/Neutron/Sonic-Delta-T Log in the
McMoRan Oil & Gas LLC OCS-G 19760 Well No. 2.
The aforedescribed operating rights interest vests MOXY with
a 47.5% working interest and 34.2% net revenue interest in costs
and production attributable to the aforedescribed portion of the
lease.
NOTE: In addition, as a result of a co-venturer, Ocean Energy,
Inc., non-consenting an operation under the joint operating
agreement, MOXY is entitled to an additional 23.75% working
interest (71.25% total) and an additional 19.07916% net
revenue interest (53.27916% total) in the Vermilion 196 #A1
well and associated platform and facilities until payout
including applicable penalties.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B".
EXHIBIT "A-4"
VERMILION BLOCK 207
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 47.5% of 8/8ths operating rights interest in and to
the following described lease, to wit:
OCS-G 19761 Oil and Gas Lease from the United States of
America, as Lessor, to Shell Offshore Inc., as
Lessee, dated effective August 1, 1998 and
identified in the Office of the Minerals
Management Service, Department of the Interior, as
Outer Continental Shelf Serial Number OCS-G 19761
covering the submerged lands of the Outer
Continental Shelf described as follows:
All of Block 207, Vermilion Area, OCS Leasing Map,
Louisiana Map No. 3, containing approximately 5000
acres, INSOFAR AND ONLY INSOFAR as said lease
covers the N/2 of said block from the surface down
to and including one hundred feet below the
stratigraphic equivalent of the base of the TX-4
Sand seen at 14,360' measured depth (-14,276'
subsea) on the 5" HRI/Density/Neutron/Sonic-Delta-
T Log in the McMoRan Oil & Gas LLC OCS-G 19760
Well No. 2.
The aforedescribed operating rights interest vests MOXY with
a 47.5% working interest and 34.2% net revenue interest in costs
and production attributable to the aforedescribed portion of the
lease.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B".
EXHIBIT "A-5"
VERMILION BLOCK 208
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 75% of 8/8ths operating rights interest in and to
the following described lease, to wit:
OCS-G 22627 Oil and Gas Lease from the United States of
America, as Lessor, to McMoRan Oil & Gas LLC and
Samedan Oil Corporation, as Lessee, dated
effective July 1, 2001 and identified in the
Office of the Minerals Management Service,
Department of the Interior, as Outer Continental
Shelf Serial Number OCS-G 22627 covering the
submerged lands of the Outer Continental Shelf
described as follows:
All of Block 208, Vermilion Area, OCS Leasing Map,
Louisiana Map No. 3, containing approximately 5000
acres, INSOFAR AND ONLY INSOFAR as said lease
covers the NW/4NW/4 and the W/2NE/4NW/4 of said
block from the surface down to and including one
hundred feet below the stratigraphic equivalent of
the base of the TX-4 Sand seen at 14,360' measured
depth (-14,276' subsea) on the 5"
HRI/Density/Neutron/Sonic-Delta-T Log in the
McMoRan Oil & Gas LLC OCS-G 19760 Well No. 2.
The aforedescribed operating rights interest vests MOXY with
a 75% working interest and 60.25% net revenue interest in costs
and production attributable to the aforedescribed portion of the
lease.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B".
EXHIBIT "A-6"
MAIN PASS BLOCK 86
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 71.25% of 8/8ths record title interest in and to the
following described lease, to wit:
OCS-G 19852 Oil and Gas Lease from the United States of
America, as Lessor, to Shell Offshore Inc., as
Lessee, dated effective June 1, 1998 and
identified in the Office of the Minerals
Management Service, Department of the Interior, as
Outer Continental Shelf Serial Number OCS-G 19852
covering the submerged lands of the Outer
Continental Shelf described as follows:
All of Block 86, Main Pass Area, OCS Leasing Map,
Louisiana Map No. 10, containing approximately
4994.55 acres.
The aforedescribed record title interest vests MOXY with a
71.25% working interest and 51.3% net revenue interest in costs
and production attributable to the aforedescribed lease.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B".
EXHIBIT "A-7"
MAIN PASS BLOCK 97
OCS GULF OF MEXICO
OFFSHORE LOUISIANA
An undivided 71.25% of 8/8ths record title interest in and to the
following described lease, to wit:
OCS-G 19856 Oil and Gas Lease from the United States of
America, as Lessor, to Shell Offshore Inc., as
Lessee, dated effective May 1, 1998 and identified
in the Office of the Minerals Management Service,
Department of the Interior, as Outer Continental
Shelf Serial Number OCS-G 19856 covering the
submerged lands of the Outer Continental Shelf
described as follows:
All of Block 97, Main Pass Area, OCS Leasing Map,
Louisiana Map No. 10, containing approximately
4994.55 acres.
The aforedescribed record title interest vests MOXY with a
71.25% working interest and 51.3% net revenue interest in costs
and production attributable to the aforedescribed lease.
The aforedescribed interest is subject to the contracts,
agreements and other instruments described in the applicable
section of Exhibit "B"
EXHIBIT "B"
MAIN PASS BLOCK 86
OCS-G 19852
Subject to the following Agreement(s):
(a) Letter Agreement dated March 11, 1999 between Shell Offshore
Inc. and Ocean Energy, Inc. amending the Exploration Program
Agreement.
(b) Letter Agreement dated September 15, 1999 between Shell
Offshore Inc. and Ocean Energy, Inc. terminating the Exploration
Program Agreement.
(c) Letter Agreement dated December 23, 1999 between Shell
Offshore Inc. ("SOI"), McMoRan Oil & Gas LLC ("MOXY") and Ocean
Energy, Inc. regarding the sale of Properties from SOI to MOXY.
(d) Asset Purchase Agreement, dated effective December 1, 1999,
between SOI Finance Inc. and SOI, as seller, and MOXY, as
purchaser.
(e) Assignment of Record Title Leasehold Interest, dated
effective December 1, 1999, from SOI to MOXY in which SOI
reserved an overriding royalty.
(f) Letter Agreement dated March 30, 2000, between McMoRan Oil &
Gas LLC and Shell Offshore Inc., regarding well data and
information.
(g) Offshore Operating Agreement dated effective December 1,
1999 between Ocean Energy, Inc. and McMoRan Oil & Gas LLC
covering MP 86.
(h) Letter Agreement dated November 7, 2000 between Gerald J.
Ford and McMoRan Oil & Gas LLC.
(i) Assignment of Overriding Royalty Interest from McMoRan Oil &
Gas LLC to CLK Company, L.L.C., et al dated effective December 1,
1999.
(j) Participation Agreement - McMoRan 1997 Exploration Program
dated effective as of December 15, 1997, by and between McMoRan
Oil & Gas Co. (predecessor to McMoRan Oil & Gas LLC) and Gerald
J. Ford, as amended.
(k) Letter Agreement dated April 27, 2000 between Ocean Energy
Inc. and McMoRan Oil & Gas LLC covering the use of MP 86 Shallow
Hazard Survey.
MAIN PASS BLOCK 97
OCS-G 19856
Subject to the following Agreement(s):
(a) Letter Agreement dated March 11, 1999 between Shell Offshore
Inc. and Ocean Energy, Inc. amending the Exploration Program
Agreement.
(b) Letter Agreement dated September 15, 1999 between Shell
Offshore Inc. and Ocean Energy, Inc. terminating the Exploration
Program Agreement.
(c) Letter Agreement dated December 23, 1999 between Shell
Offshore Inc. ("SOI"), McMoRan Oil & Gas LLC ("MOXY") and Ocean
Energy, Inc. regarding the sale of Properties from SOI to MOXY.
(d) Asset Purchase Agreement, dated effective December 1, 1999,
between SOI Finance Inc. and SOI, as seller, and MOXY, as
purchaser.
(e) Assignment of Record Title Leasehold Interest, dated
effective December 1, 1999, from SOI to MOXY in which SOI
reserved an overriding royalty.
(f) Letter Agreement dated March 30, 2000, between McMoRan Oil &
Gas LLC and Shell Offshore Inc., regarding well data and
information.
(g) Offshore Operating Agreement dated effective December 1,
1999 between Ocean Energy, Inc. and McMoRan Oil & Gas LLC
covering MP 97.
(h) Letter Agreement dated November 7, 2000 between Gerald J.
Ford and McMoRan Oil & Gas LLC.
(i) Assignment of Overriding Royalty Interest from McMoRan Oil &
Gas LLC to CLK Company, L.L.C., et al dated effective December 1,
1999.
(j) Participation Agreement - McMoRan 1997 Exploration Program
dated effective as of December 15, 1997, by and between McMoRan
Oil & Gas Co. (predecessor to McMoRan Oil & Gas LLC) and Gerald
J. Ford, as amended.
VERMILION BLOCK 196
OCS-G 19760
Subject to the following Agreement(s):
(a) Offshore Operating Agreement dated effective February 9,
1999 between Shell Offshore Inc. and Ocean Energy, Inc. covering
VE 196.
(b) Letter Agreement dated March 11, 1999 between Shell Offshore
Inc. and Ocean Energy, Inc. amending the Exploration Program
Agreement.
(c) Fourth Amendment to Conveyance of Gas Processing Rights
dated effective August 1, 1999 between Shell Offshore Inc, et al
and Tejas Natural Gas Liquids, LLC.
(d) Letter Agreement dated September 15, 1999 between Shell
Offshore Inc. and Ocean Energy, Inc. terminating the Exploration
Program Agreement.
(e) Letter Agreement dated December 23, 1999 between Shell
Offshore Inc. ("SOI"), McMoRan Oil & Gas LLC ("MOXY") and Ocean
Energy, Inc. regarding the sale of Properties from SOI to MOXY.
(f) Asset Purchase Agreement, dated effective December 1, 1999,
between SOI Finance Inc. and SOI, as seller, and MOXY, as
purchaser.
(g) Assignment of Record Title Leasehold Interest, dated
effective December 1, 1999, from Shell Offshore Inc. to McMoRan
Oil & Gas LLC in which SOI reserves an overriding royalty.
(h) Exploration Agreement, dated effective August 22, 2000,
between McMoRan Oil & Gas LLC and Samedan Oil Corporation insofar
as it relates to VE 196.
(i) Letter Agreement dated April 3, 2001 between Samedan Oil
Corporation and McMoRan Oil & Gas LLC.
(j) Letter Agreement dated August 15, 2000 between Gerald J.
Ford and McMoRan Oil & Gas LLC.
(k) Letter of Agreement, effective March 2, 2001, between
McMoRan Oil & Gas LLC and Pioneer National Resources USA, Inc.
(l) Letter Agreement dated May 15, 2001 between Gerald J. Ford
and McMoRan Oil & Gas LLC.
(m) Letter Agreement dated June 1, 2001 between Tennessee Gas
Pipeline Company and McMoRan Oil & Gas LLC, Samedan Oil
Corporation and Anadarko Energy Services Company.
(n) Liquids Allocation Agreement dated effective June 1, 1999
between Chevron U.S.A. Inc. and McMoRan Oil & Gas LLC.
(o) Facilities Agreement dated April 12, 2001, by and between
Tennessee Gas Pipeline Company and McMoRan Oil & Gas LLC.
(p) Letter Agreement dated March 30, 2000, between McMoRan Oil &
Gas LLC and Shell Offshore Inc., regarding well data and
information.
(q) Assignments of Overriding Royalty Interest between McMoRan
Oil & Gas LLC and CLK Company, L.L.C., et al (pending).
(r) That certain Discount Letter Agreement (PTR) dated June 1,
2001, by and between McMoRan Oil & Gas LLC and Tennessee Gas
Pipeline Company.
(s) That certain Discount Letter Agreement (Liquids
Transportation, Bluewater Plant) dated June 1, 2001, by and
between McMoRan Oil & Gas LLC and Tennessee Gas Pipeline Company.
(t) That certain PTR Transportation Agreement (Yscloskey PTR
Plant and Bluewater PTR Plant) dated June 1, 2001, by and between
McMoRan Oil & Gas LLC and Tennessee Gas Pipeline Company.
(u) That certain Liquids Transportation Agreement
(Cocodrie/Pecan Island Plants) dated June 1, 2001, by and between
Tennessee Gas Pipeline Company and McMoRan Oil & Gas LLC.
(v) That certain PTR-D (Retrograde) Transportation Agreement
dated June 27, 2001, by and between Tennessee Gas Pipeline
Company and McMoRan Oil & Gas LLC.
(w) Participation Agreement - McMoRan 1997 Exploration Program
dated effective as of December 15, 1997, by and between McMoRan
Oil & Gas Co. (predecessor to McMoRan Oil & Gas LLC) and Gerald
J. Ford, as amended.
SHIP SHOAL BLOCK 296
OCS-G 15303
Subject to the following Agreement(s):
(a) That certain Farmout Agreement dated effective May 17, 2000,
by and between Marathon Oil Company and McMoRan Oil & Gas LLC.
(b) That certain Farmout Agreement dated effective May 17, 2000,
by and between Vastar Offshore, Inc. and McMoRan Oil & Gas LLC.
(c) That certain Farmout Agreement dated effective May 17, 2000,
by and between Texaco Exploration and Production Inc., Anadarko
Petroleum Corporation and McMoRan Oil & Gas LLC.
(d) That certain Ownership and Well Participation Agreement
dated May 17, 2000, by and between McMoRan Oil & Gas LLC and
Anadarko Petroleum Corporation.
(e) That certain Operating Agreement attached as Exhibit D to
that certain Ownership and Well Participation Agreement dated May
17, 2000, by and between McMoRan Oil & Gas LLC and Anadarko
Petroleum Corporation.
(f) That certain Letter Agreement dated June 15, 2000, by and
between Gerald J. Ford and McMoRan Oil & Gas LLC.
(g) That certain Letter Agreement dated February 26, 2001, as
amended, by and between McMoRan Oil & Gas LLC and Union Oil
Company of California.
(h) That certain Letter Agreement dated March 28, 2001, by and
between McMoRan Oil & Gas LLC and Trunkline Gas Company.
(i) That certain Facilities Agreement dated April 12, 2001, by
and between Tennessee Gas Pipeline Company and McMoRan Oil & Gas
LLC.
(j) That certain Letter Agreement dated June 1, 2001, by and
between Tennessee Gas Pipeline Company, McMoRan Oil & Gas LLC,
Samedan Oil Corporation and Anadarko Energy Services Company.
(k) That certain Liquids Allocation Agreement dated effective
June 1, 1999, by and between Chevron U.S.A. Inc. and McMoRan Oil
& Gas LLC.
(l) That certain Letter Agreement dated June 1, 2001, by and
between McMoRan Oil & Gas LLC and Anadarko Energy Services
Company.
(m) That certain Assignment of Record Title Interest In Oil and
Gas Lease dated effective May 17, 2000, by and between Texaco
Exploration and Production Inc., as Assignor, and McMoRan Oil &
Gas LLC and Anadarko Petroleum Corporation, as Assignees, in
which Assignor retained an overriding royalty.
(n) That certain Assignment of Operating Rights dated effective
May 17, 2000, by and between Marathon Oil Company, as Assignor,
and McMoRan Oil & Gas LLC and Anadarko Petroleum Corporation, as
Assignees, in which Assignor retained an overriding royalty.
(o) That certain Assignment of Operating Rights dated effective
May 17, 2000, by and between Vastar Offshore, Inc., as Assignor,
and McMoRan Oil & Gas LLC and Anadarko Petroleum Corporation, as
Assignees, in which Assignor retained an overriding royalty.
(p) That certain Letter Agreement dated May 31, 2000, by and
between Marathon Oil Company, Vastar Offshore, Inc., Texaco
Exploration and Production Inc. and McMoRan Oil & Gas LLC.
(q) That certain Letter Agreement dated May 15, 2001, by and
between Gerald J. Ford and McMoRan Oil & Gas LLC.
(r) That certain Discount Letter Agreement (PTR) dated June 1,
2001, by and between McMoRan Oil & Gas LLC and Tennessee Gas
Pipeline Company.
(s) That certain Discount Letter Agreement (Liquids
Transportation, Bluewater Plant) dated June 1, 2001, by and
between McMoRan Oil & Gas LLC and Tennessee Gas Pipeline Company.
(t) That certain PTR Transportation Agreement (Yscloskey PTR
Plant and Bluewater PTR Plant) dated June 1, 2001, by and between
McMoRan Oil & Gas LLC and Tennessee Gas Pipeline Company.
(u) That certain Liquids Transportation Agreement
(Cocodrie/Pecan Island Plants) dated June 1, 2001, by and between
Tennessee Gas Pipeline Company and McMoRan Oil & Gas LLC.
(v) That certain Gas Transportation Agreement (Firm) dated
October 1, 2001, by and between Tennessee Gas Pipeline Company
and McMoRan Oil & Gas LLC.
(w) That certain Gas Processing Agreement dated August 10, 2001,
by and between Dynegy Midstream Services, Limited Partnership and
McMoRan Oil & Gas LLC.
(x) That certain PTR-D (Retrograde) Transportation Agreement
dated June 27, 2001, by and between Tennessee Gas Pipeline
Company and McMoRan Oil & Gas LLC.
(y) Assignment of Overriding Royalty Interest from McMoRan Oil &
Gas LLC to CLK Company, L.L.C., et al dated effective June 5,
2000.
(z) Participation Agreement - McMoRan 1997 Exploration Program
dated effective as of December 15, 1997, by and between McMoRan
Oil & Gas Co. (predecessor to McMoRan Oil & Gas LLC) and Gerald
J. Ford, as amended.
VERMILION BLOCK 195
OCS-G 19759
Subject to the following Agreement(s):
(a) Offshore Operating Agreement dated effective February 9,
1999 between Shell Offshore Inc. and Ocean Energy, Inc. covering
VE 195.
(b) Letter Agreement dated March 11, 1999 between Shell Offshore
Inc. and Ocean Energy, Inc. amending the Exploration Program
Agreement.
(c) Fourth Amendment to Conveyance of Gas Processing Rights
dated effective August 1, 1999 between Shell Offshore Inc, et al
and Tejas Natural Gas Liquids, LLC.
(d) Letter Agreement dated September 15, 1999 between Shell
Offshore Inc. and Ocean Energy, Inc. terminating the Exploration
Program Agreement.
(e) Letter Agreement dated December 23, 1999 between Shell
Offshore Inc. ("SOI"), McMoRan Oil & Gas LLC ("MOXY") and Ocean
Energy, Inc. regarding the sale of Properties from SOI to MOXY.
(f) Asset Purchase Agreement, dated effective December 1, 1999,
between SOI Finance Inc. and SOI, as seller, and MOXY, as
purchaser.
(g) Assignment of Record Title Leasehold Interest, dated
effective December 1, 1999, from Shell Offshore Inc. to McMoRan
Oil & Gas LLC in which SOI reserves an overriding royalty.
(h) Exploration Agreement, dated effective August 22, 2000,
between McMoRan Oil & Gas LLC and Samedan Oil Corporation insofar
as it relates to VE 195.
(i) Letter Agreement dated August 15, 2000 between Gerald J.
Ford and McMoRan Oil & Gas LLC.
(j) Letter Agreement dated March 30, 2000, between McMoRan Oil &
Gas LLC and Shell Offshore Inc., regarding well data and
information.
(k) Assignments of Overriding Royalty Interest between McMoRan
Oil & Gas LLC and CLK Company, L.L.C., et al (pending).
(l) Participation Agreement - McMoRan 1997 Exploration Program
dated effective as of December 15, 1997, by and between McMoRan
Oil & Gas Co. (predecessor to McMoRan Oil & Gas LLC) and Gerald
J. Ford, as amended.
VERMILION BLOCK 207
OCS-G 19761
Subject to the following Agreement(s):
(a) Offshore Operating Agreement dated effective February 9,
1999 between Shell Offshore Inc. and Ocean Energy, Inc. covering
VE 207.
(b) Letter Agreement dated March 11, 1999 between Shell Offshore
Inc. and Ocean Energy, Inc. amending the Exploration Program
Agreement.
(c) Fourth Amendment to Conveyance of Gas Processing Rights
dated effective August 1, 1999 between Shell Offshore Inc, et al
and Tejas Natural Gas Liquids, LLC.
(d) Letter Agreement dated September 15, 1999 between Shell
Offshore Inc. and Ocean Energy, Inc. terminating the Exploration
Program Agreement.
(e) Letter Agreement dated December 23, 1999 between Shell
Offshore Inc. ("SOI"), McMoRan Oil & Gas LLC ("MOXY") and Ocean
Energy, Inc. regarding the sale of Properties from SOI to MOXY.
(f) Asset Purchase Agreement, dated effective December 1, 1999,
between SOI Finance Inc. and SOI, as seller, and MOXY, as
purchaser.
(g) Assignment of Record Title Leasehold Interest, dated
effective December 1, 1999, from Shell Offshore Inc. to McMoRan
Oil & Gas LLC in which SOI reserves an overriding royalty.
(h) Exploration Agreement, dated effective August 22, 2000,
between McMoRan Oil & Gas LLC and Samedan Oil Corporation insofar
as it relates to VE 207.
(i) Letter Agreement dated August 15, 2000 between Gerald J.
Ford and McMoRan Oil & Gas LLC.
(j) Letter Agreement dated March 30, 2000, between McMoRan Oil &
Gas LLC and Shell Offshore Inc., regarding well data and
information.
(k) Assignments of Overriding Royalty Interest between McMoRan
Oil & Gas LLC and CLK Company, L.L.C., et al (pending).
(l) Participation Agreement - McMoRan 1997 Exploration Program
dated effective as of December 15, 1997, by and between McMoRan
Oil & Gas Co. (predecessor to McMoRan Oil & Gas LLC) and Gerald
J. Ford, as amended.
VERMILION BLOCK 208
OCS-G 22627
Subject to the following Agreement(s):
(a) Joint Bidding Agreement, entered into March 20, 2001,
between McMoRan Oil & Gas LLC and Samedan Oil Corporation.
(b) Assignment of Overriding Royalty Interest between McMoRan
Oil & Gas LLC and CLK Company, L.L.C., et al (pending).