AGREEMENT OF COMPROMISE AND SETTLEMENT
--------------------------------------
This AGREEMENT OF COMPROMISE AND SETTLEMENT (hereinafter referred to
as "this Agreement") is made and entered into this 29th day of May, 1987,
by and between MESA OPERATING LIMITED PARTNERSHIP, a limited partnership
organized under the laws of the State of Delaware with its principal place
of business in Amarillo, Texas (hereinafter referred to as "Mesa"), and
COLORADO INTERSTATE GAS COMPANY, a corporation organized under the laws of
the State of Delaware with its principal place of business in Colorado
Springs, Colorado (hereinafter referred to as "CIG").
RECITALS
A. CIG and Mesa are the current parties in interest to an agreement,
as amended and supplemented, initially entered on January 3, 1928, between
Canadian River Gas Company and Amarillo Oil Company, which is commonly
referred to as the "B" Contract.
B. CIG is operator of the wells committed under the "B" Contract and
is obligated to deliver certain volumes of natural gas to Mesa under that
agreement. Mesa has a priority right to receive such gas as is required by
Mesa to supply any customers located in the City of Amarillo or its
environs. CIG is entitled to receive that natural gas produced from such
wells in excess of those volumes taken by Mesa. The rights of the parties
have been modified by the terms of an Uncontested Settlement Agreement
approved by the Federal Energy Regulatory Commission.
C. Disputes have arisen regarding the actions of CIG and Mesa under
the "B" Contract, with the result that litigation has been instituted in
Texas and Colorado. The parties now wish to resolve their disputes, dismiss
all pending litigation between them, and establish an overall framework for
future operations and procedures which is intended to mitigate the
possibility of prospective disputes arising.
AGREEMENT
For and in consideration of the premises and mutual covenants
contained herein and of the instruments attached as Exhibits A, B, C, D, E,
and Fhereto, the parties, intending to be legally bound hereby, agree as
follows:
ARTICLE I.
DEFINITIONS
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The terms defined in this Article I shall, for all purposes of this
Agreement, have the meanings specified, unless otherwise specified or the
context otherwise requires.
Amarillo Litigation:
- -------------------
The term "Amarillo Litigation" shall mean that lawsuit instituted by
Mesa against CIG, and all causes of action asserted therein, whether as a
claim or counterclaim, in the District Court of Potter County, Texas, 251st
Judicial District, Cause No. 68002C, and subsequently removed to the United
States District Court for the Northern District of Texas, Civil Action No.
2-86-0300.
"B" Contract:
- ------------
The "'B' Contract" is that agreement, as amended and supplemented,
entered on January 3, 1928, between Canadian River Gas Company, as
predecessor in interest to CIG, and Amarillo Oil Company, as predecessor in
interest to Mesa.
Colorado Springs Litigation:
- ---------------------------
The term "Colorado Springs Litigation" shall mean that lawsuit
instituted by CIG against Mesa, and all causes of action asserted therein,
whether as a claim or counterclaim, in the District Court of El Paso
County, Colorado, Civil Action No. 86 CV 5573.
FERC:
- ----
"FERC" shall mean the Federal Energy Regulatory Commission; its
predecessor agency, the Federal Power Commission; and any successor agency
or other authority succeeding to its regulatory powers.
Fiscal Year:
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The term "fiscal year" shall mean the 12 month period commencing
October 1 of any year.
Settlement Date:
- ---------------
The term "Settlement Date" shall mean the data upon which this
Agreement shall become effective, which shall be August 1, 1987, or such
other business day in the State of Texas selected by mutual agreement in
writing of Mesa and CIG.
Staff:
- -----
The term "Staff" shall mean the Staff of the FERC.
Uncontested Settlement Agreement:
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The term "Uncontested Settlement Agreement" shall mean the Uncontested
Settlement Agreement on Reserved Issues submitted to the FERC by the
parties and the Staff in Docket No. RP79-59, Colorado Interstate Gas
-----------------------
Company, on or about December 31, 1980, and accepted and approved without
- --------
change or modification by the FERC on March 4, 1981.
ARTICLE II.
PROVISIONS WITH RESPECT TO UNCONTESTED SETTLEMENT AGREEMENT
-----------------------------------------------------------
Section 2.01 Withdrawal Rights.
- ------------------------------
Mesa and CIG agree not to withdraw from the Uncontested Settlement
Agreement prior to January 1, 1990 and to continue to be bound by the terms
and conditions of the Uncontested Settlement Agreement until that date,
unless
(a) Staff or any other party withdraws
from the Uncontested Settlement
Agreement, or
(b) the FERC issues an order which
materially modifies the Uncontested
Settlement Agreement.
Section 2.02 Limitation on Daily Takes.
- --------------------------------------
CIG may exercise its right under Paragraph 2.2 of the Uncontested
Settlement Agreement to request that Mesa limit its daily takes from CIG to
a volume not to exceed 70,000 Mcf on any day during the period from the
Settlement Date until the Uncontested Settlement Agreement is terminated
or, if terminated prior to September 30, 1988, 80,000 Mcf on any day
during the period from such date of termination until September 30, 1988.
Subject to Paragraph 2.1 of the Uncontested Settlement Agreement, CIG will
utilize all reasonable efforts to deliver to Mesa additional volumes up to
a total delivery of 90,000 Mcf on any day such deliveries are requested by
Mesa. CIG has no obligation to install additional facilities in order to
deliver more than 70,000 Mcf on any such day. However, the parties
recognize that CIG will, irrespective of this Agreement, install
approximately $400,000 worth of pigging facilities. Mesa shall have the
option, if it desires the delivery of additional volumes, to install any
additional compression facilities at the inlet side of the Fain Processing
Plant, or such other location as may be mutually agreed, necessary to
deliver such additional volumes. Whenever deficiencies in deliveries
based upon such requests by Mesa appear to be occurring on an unacceptable
frequency in Mesa's opinion, CIG agrees to meet with Mesa upon Mesa's
request to determine whether there are feasible and economic methods
and/or changes to improve deliveries and to implement, in good faith and
with diligence, such methods which would permit 90,000 Mcf per day to be
delivered to Mesa. Deliveries of such additional volumes shall not affect
the obligation of CIG to deliver to Mesa the lesser of the fiscal year
requirements of Amarillo and environs as per the "B" Contract or 25.55 Bcf
so long as the Uncontested Settlement Agreement remains in effect.
Section 2.03 Expression of Parties' Intent.
- ------------------------------------------
Mesa and CIG hereby affirm that it is their intent that nothing
contained in this Article II or elsewhere in this Agreement is to be
construed as a material modification of the Uncontested Settlement
Agreement.
ARTICLE III.
AMENDMENTS TO THE "B" CONTRACT
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Section 3.01 The Amendment.
- --------------------------
Mesa and CIG agree that, concurrently with the execution of this
Agreement, the parties shall execute amendment to the "B" Contract in the
form attached hereto a Exhibit A to become effective on January 1, 1990.
ARTICLE IV.
BALANCING AGREEMENT.
-------------------
Section 4.01. Extension of Balancing Arrangements.
- ------------ -----------------------------------
CIG and Mesa agree that the letter agreement dated March 6, 1981,
between CIG and Amarillo Oil Company, regarding the delivery of gas by CIG
to Mesa, as successor to Amarillo Oil Company, under the "B" Contract
shall not terminate at the time the Uncontested Settlement Agreement
terminates, but shall be terminable by either party effective at the end
of a fiscal year after the termination of the Uncontested Settlement
Agreement upon at least ninety (90) days written notice given prior to the
commencement of the next fiscal year.
ARTICLE V.
GATHERING AGREEMENT.
-------------------
Section 5.01. Gathering Issues.
- ------------ ----------------
Mesa and CIG agree that, concurrently with the execution of this
Agreement, the parties shall execute an agreement in the form attached
hereto as Exhibit B to become, effective on the Settlement Date.
ARTICLE VI.
OPERATING AGREEMENT
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Section 6.01. Operations.
- ------------ ----------
Mesa and CIG agree that Mesa shall become operator of the wells
committed to the "B" Contract on January 1, 1990. In this regard, Mesa
and CIG agree to enter into good faith negotiations as soon as reasonably
possible after the execution by the parties of this Agreement, to reach
agreement as to the terms and conditions which should be contained within
an operating agreement and accounting procedure, to be effective January
1, 1990. Mesa and CIG shall cooperate fully in such project so that an
operating agreement and accounting procedure can be completed no later
than September 1, 1987 As to the operating agreement and accounting
procedure, Mesa and CIG agree that the A.A.P.L. Form 610-1982 Model Form
Operating Agreement, and the Copas 1984 Onshore Accounting Procedure for
Joint Operations shall be utilized as a guideline by the parties as the
"forms" within which the mutual agreement of the parties shall be
incorporated. However, both Mesa and CIG acknowledge that each form shall
be modified or amended to contain such provision as the parties shall
mutually deem necessary including, but not limited to, the following
items:
(1) The delivery to Mesa of all necessary production data, well files
and records incident to all producing wells.
(2) The responsibility to maintain the oil and gas leases by the
payment of royalties, rentals or shut-in payments, etc.
(3) The responsibility for making required production and pipeline
nominations with the Texas Railroad Commission, and such other
regulatory filings as may be required. The parties agree that CIG
shall continue to make the pipeline nominations and have the
right to instruct Mesa of its nominations from the wells
committed under the "B" Contract to the same extent as Mesa shall
determine the nominations it wishes to make from such wells, and
the composite nominations to the Railroad Commission for both
parties shall then be made by Mesa to reflect such instructions.
(4) The establishment of an engineering committee to discuss various
operational matters pertaining to the production, gathering and
delivery of the natural gas and constituent elements.
(5) The specific rights and obligations of Mesa and *CIG as to the
access to, and the *supervision and maintenance of, the
production and gathering facilities, including but not limited
to, employee duties and responsibilities.
(6) The coordination and reconciling*g of production and gathering
metering facilities.
(7) Notices and representatives of Mesa and CIG.
(8) Coordination of emergency responses and press releases.
(9) The allocation of capital costs to be charged to each party in
the event of major construction or the commencement of additional
development or exploratory wells, etc.
(10) The method of receiving and handling nominations and dispatching
of natural gas to be delivered to CIG, taking into account the
rights of both Mesa and CIG to receive natural gas with
representative *Btu content from the wells committed to the "B"
Contract. Mesa shall, in the good-faith exercise of its
obligations as a prudent operator, give reasonable consideration
to CIG's volumetric nominations and well scheduling requests, so
as to permit CIG to operate the Gathering System in order to
comply with its obligations to Mesa and third parties. Mesa and
CIG shall cooperate, including having monthly meetings, in order
to carry out this and other provisions of the operating
agreement.
(11) The terms of a cost-based, reasonable operating fee payable to
Mesa by CIG. The specific components of such fee shall be
negotiated, but shall be based on the pro-rata portion of the
costs incurred by Mesa in operating the wells. The parties agree
that the operating fee to be charged to CIG will be based upon
Mesa's actual costs for each producing well capable of producing
in commercial quantities, with such operating fee being charged
to CIG on a prorata basis (i.e., such fee would be
proportionately reduced to CIG s actual percentage of gas taken
each month from total field production), such operating fee to be
inclusive all of Mesa's direct and indirect administrative
charges incurred by it, exclusive of any new capital costs but
including overhead.
(12) The terms under which Mesa shall indemnify and defend CIG and its
agents from all claims arising out of the actions of Mesa under
the operating agreement and accounting procedure, and the terms
under which CIG shall indemnify and defend Mesa and its agents
from all claims arising out of the actions of CIG under the
operating agreement and accounting procedure.
(13) The responsibility for CIG's obligations to third parties under
various agreements involving the West Panhandle Field.
(14) The responsibility for Mesa to deliver to CIG, and CIG to receive
at the wellhead meter inlet, all natural gas produced from wells
committed to the "B" Contract.
(15) The method for payment of royalties, production and property
taxes, so that each party bears its share of such expenses.
ARTICLE VII.
JOINT UNDERTAKINGS.
------------------
Section 7.01. Dismissal of Litigation.
- ------------ -----------------------
Mesa and CIG will file within ten (10) business days after the
execution of this Agreement the forms of orders of dismissal with
prejudice attached hereto as Exhibits C and D. Neither CIG nor Mesa shall
argue or assert, by way of res judicata, collateral estoppel or
otherwise, any interpretation or consequence of such orders which is
broader than the scope of the Waiver and Release of Claims referred to in
Section 7.02.
Section 7.02. Waiver and Release of Claims on the
- ------------ -----------------------------------
Settlement Date.
---------------
Concurrently with the execution of this Agreement, Mesa shall execute and
deliver to CIG a Waiver and Release of Claims in the form attached hereto an
Exhibit E.
Concurrently with the execution of this Agreement, CIG shall execute
and deliver to Mesa a Waiver and Release of Claims in the form attached
hereto as Exhibit E.
ARTICLE VIII.
ADDITIONAL PROVISIONS
---------------------
Section 8.01 "B" Contract
- ------------ ------------
The rights and obligations of CIG and Mesa under the "B" Contract are
modified only to the extent expressly required by the terms of this
Agreement and the instruments attached hereto and concurrently executed.
Section 8.02 Non-Alienation of Reserves
- ------------ --------------------------
Mesa and CIG hereby affirm that it is their intent that nothing
contained in this Agreement is to be construed as a sale, transfer or
alienation of natural gas reserves prohibited by CIG's service agreements
and the orders of the FERC in Docket No. G-1326 (issued March 1, 1951, at
10 FPC 778) and Docket No. CP73-184 (issued January 7, 1974, at 51 FPC
74).
Section 8.03 Duly Constituted Authorities
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This Agreement is subject to valid laws, orders, rules and regulations
of duly constituted authorities having jurisdiction in the premises.
ARTICLE IX.
MISCELLANEOUS.
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Section 9.01. Notices.
- ------------ -------
Notices and other communications provided for herein shall be in
writing and shall be delivered or mailed addressed at such address as the
party to be addressed shall have provided the other party hereto for such
purposes. All notices and other communications given to either party
hereto in accordance with the provisions of this Agreement shall be
deemed to have been given when sent by registered or certified mail, if
by mail, or when actually delivered, in each case addressed to such party
in accordance with the latest unrevoked direction from such party.
Section 9.02. Further Assurances.
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Each party hereto shall provide such further instruments, documents
and assurances as shall be necessary or desirable to carry out, subject to
the terms and conditions hereof, and shall do all things necessary or
proper to carry out the provisions of this Agreement.
Section 9.03. Enforcement.
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Each party hereto shall be entitled to enforce this Agreement by all
remedies available to it at law or otherwise, including, without limitation
and where applicable, by action for specific performance.
Section 9.04. Successors and Assigns.
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This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties
hereto. This Agreement shall not be assignable without the consent of the
other party, which consent shall not be unreasonably withheld.
Section 9.05. Simultaneity of Actions.
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All actions taken or occurring on the date of execution of this
Agreement, including the execution of documents attached as Exhibits to
this Agreement, shall be deemed to have been taken or to have occurred
simultaneously on such date. No such action shall be deemed to have been
taken or to have occurred until all such actions have been taken or have
occurred.
Section 9.06. Governing Law.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.
Section 9.07. Headings.
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The titles of the several Articles and Sections of this Agreement are
used herein solely for convenience of reference and shall be not be
deemed to be parts hereof or to affect the construction hereof or
otherwise to be of any force or effect.
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed by their duly authorized representatives as of the date first
written above.
MESA OPERATING LIMITED
PARTNERSHIP
By: Pickens Operating Co.,
General Partner
WITNESS: By: /s/ Paul W. Cain
---------------------------
/s/ (Undecipherable) Paul W. Cain
- ---------------------------- President
COLORADO INTEREST GAS
COMPANY
By: Pickens Operating Co.,
General Partner
WITNESS: By: /s/ Michael G. Morris
---------------------------
/s/ Barbara J. Hanna Michael G. Morris
- ------------------------- President
EXHIBIT A
May 29, 1987
Mesa Operating Limited Partnership
One Mesa Square
P. 0. Box 2009
Amarillo, Texas 79189-2009
RE: Agreement Dated January 3, 1928,
as Amended ("B" Contract)
Gentlemen:
The purpose of this letter is to confirm the agreement of Colorado
Interstate Gas Company ("CIG") and Mesa Operating Limited Partnership
("Mesa") regarding the agreement dated January 3, 1928, as amended,
commonly known as the Amarillo "B" Contract.
Mesa and CIG hereby agree that effective January l, 1990, the Amarillo
"B" Contract shall be further amended as follows:
1. Mesa shall assume the position of operator of the wells committed
to the "B" Contract. The specific terms and conditions under
which Mesa will operate such wells shall be negotiated and set
forth in a definitive Operating Agreement which the parties
contemplate executing no later than September 1, 1987.
2. Notwithstanding that Mesa shall become operator on January 1,
1990, nothing in this amendment shall be construed to modify,
amend, terminate or otherwise affect the title to all facilities,
leases,reserves and other property committed to the "B" Contract.
3. The provisions of Article V of the "B" Contract, as amemded,
concerning CIG's costs of producing the gas subject to the "B"
Contract shall be superseded by the provisions of the Operating
Agreement referred to in Paragraph 1 hereof.
4. The provisions of Article VI of the "B" Contract, as amended,
concerning the gathering by CIG of the gas subject to the "B"
Contract, shall be superseded by the terms of that certain
Gathering Agreement, dated May 29, 1987, between CIG and Mesa.
5. Except to the extent expressly set forth herein, the terms and
provisions of the "B" Contract, as heretofore amended, shall
remain in full force and effect.
If the above is in accordance with your understanding of our
agreement, please so indicate by signing in the space provided below.
Yours very truly,
COLORADO INTERSTATE GAS COMPANY
By: /s/ Michael G. Morris
--------------------------
Michael G. Morris
President
Accepted and agreed to this
29th day of May, 1987
MESA OPERATING LIMITED PARTNERSHIP
By: Pickens Operating Company,
General Partner
By: /s/ Paul W. Cain
-------------------------------
Paul W. Cain
President
EXHIBIT B
GATHERING AGREEMENT
THIS AGREEMENT is made and entered into this 29th day of May, 1987, by
and between Mesa Operating Limited Partnership ("Mesa") and Colorado
Interstate Gas Company ("CIG"), to be effective August 1, 1987.
WHEREAS, Mesa and CIG have been involved in various disputes
concerning the operation of and the charges made to Mesa by CIG regarding
the West Panhandle Field Gathering System (the "Gathering System"), through
which natural gas which is produced under the agreement, as amended and
supplemented, entered on January 3, 1928, between Canadian River Gas
Company, as predecessor in interest to CIG, and Amarillo Oil Company, as
predecessor in interest to Mesa (the "'B' Contract") is gathered and
delivered; and
WHEREAS, the parties have resolved their disputes and have agreed
upon the appropriate gathering fees to be charged in the past, and the
method of calculating such fees in the future for gathering and delivering
such gas through the Gathering System; and
WHEREAS, the parties have agreed upon certain procedures to be
followed in order to avoid the recurrence of certain disputes regarding the
operation of the Gathering System in the future;
NOW, THEREFORE, Mesa and CIG, in consideration of mutual promises,
covenants, releases and agreements contained herein, do agree as follows:
I.
For all natural gas delivered& through the Gathering System to Mesa or
its predecessor, Amarillo Oil Company, under the "B" Contract for the
period commencing October 1, 1984, through the Settlement Data as
determined pursuant to the Agreement of Compromise and Settlement between
the parties: (the "Settlement Date"), the amounts which Mesa or its
predecessor, Amarillo Oil Company, has paid to crG shall be considered to
be full and complete compennatiom for such gathering services. No further
amounts shall be payable by Mesa, nor shall any refunds be owed by CIG, for
such gathering services during such period, except for volumes delivered
prior to the Settlement Date for which payment has not been made by that
date. Mesa and CIG agree that Mesa shall pay CIC, as full and-complete
compensation for such volumes delivered, at the same rate per Mcf that Mesa
has been paying for deliveries during prior months in 1987, without-regard
to amounts invoiced by CIG.
II.
CIG shall deliver to Mesa at the inlet to the Fain Processing Plant or
such alternate delivery point as Mesa shall request (subject to CIC's right
to reject such request, in whole or in part, in the reasonable exercise of
its discretion giving due consideration to the interests of both parties),
the natural gas Mesa is entitled to receive under the "B" Contract. For 411
such deliveries to Mesa for the period from the Settlement Date through
December 31, 1989 the gathering fee payable by Mesa to CIG shall be 44
cents per Mcf.
III.
For all natural gas produced under the "B" Contract and delivered
through the Gathering System to Mesa on and after January 1, 1990, CIG
shall calculate gathering fee which will be based upon its annual costs,
which shall be the sum of (a) its direct out-of-pocket expenses (including
all taxes not related to income taxes) reasonably incurred in operating the
Gathering System; (b) 20% of such actual, direct out-of-pocket expenses to
compensate CIG for general and administrative expenses; (c)depreciation on
the riginal cost of the Gathering System at the applicable depreciation
rate for gathering, facilities owned by CIG, as approved in a final order
of the Regulatory Commission (the "FERC"), with such depreciation not to
accumulate beyond the gross plant cost; and (d) a return (including cost
less accumulated depreciation for the Gathering System) at the applicable
overall rate of return provided to CIG in a final order of the FERC. Items
(c) and (d) will be adjusted retroactively, as appropriate, to reflect the
effect of any final order of the FERC. Mesa shall provide its prorata
share of fuel actually used at its own cost (including any necessary
facilities) for the gathering of all gas delivered to Mesa, and such fuel
is provided by Mesa shall not be included in CIG's calculations of cost in
operating the Gathering System. Mesa and CIG shall pursue with diligence
the obtaining of any necessary regulatory approvals to carry out the terms
of this Article III. CIG shall calculate and Mesa shall pay to CIG each
month a gathering fee for the volumes gathered for Mesa and redelivered
from the Gathering System during that month. Such gathering fee shall be
estimated for each Mcf so delivered on the basis of the prior year's actual
costs, as set forth above, divided by the total volumes of gas gathered and
redelivered through the Gathering System for the prior year. Such estimate
shall take into account any significant known and measurable changes
expected to occur during the next billing year, if so agreed to by both
parties. The estimated billing basis will be furnished to Mesa on or before
November 30th of the prior year. On or before the April 30th succeeding
each billing year, CIG shall account to Mesa for actual costs and volumes,
with any necessary payment by one party to the other party due 30 days
after such accounting is received by Mesa.
IV.
In the event that the FERC shall allocate or assign costs, by a final
order in any proceeding involving rates charged by CIG, to deliveries of
natural gas to Mesa through the Gathering System, or otherwise treat the
gathering fee payable by Mesa, as if the gathering fee were greater than
the amount otherwise payable by Mesa to CIG, Mesa shall increase as of the
effective date of the FERC action the fee payable to CIG by an amount equal
to 50 percent of the increase, as allocated to Mesa in the determination of
CIG's rates. In the event that such final order of the FERC shall have the
effect of treating the gathering fee as if it were greater than 20 cents
per Mcf more than the gathering fee otherwise payable by Mesa to CIG under
this Agreement, then Mesa, upon request by CIG, agrees to moot with CIG and
enter into good-faith negotiations to determine what new arrangements, if
any, are equitable and reasonable under the circumstances in existence.
V.
CIG shall operate the Gathering System in a fair operator and without
undue discrimination so an to reasonably assure that Mesa receives in the
natural gas and drip liquids, if any, delivered to Mesa an average Btu
content ("Delivered Btu") representative of the average Btu content found
in the natural gas produced from all wellecommitted under the "B" Contract
("B Contract Btu"). In the event that the Delivered Btu during any fiscal
year exceeds two percent (2%) greater or less than the B Contract Btu
during that fiscal year, CIG shall correct the imbalance in the Delivered
Btu to the extent such imbalance exceeds two percent greater or less than
the B Contract Btu by delivering natural gas containing a higher or lower
average Btu content than that contained in the B Contract Btu during the
next fiscal year and thereafter until such time as the imbalance has been
reduced to within such two percent of the average. To the extent any
additional facilities are reasonably necessary to correct such imbalance,
Mesa shall have the option to request the installation of such facilities,
provided that Mesa agrees to reimburse CIG for all costs reasonably
incurred in constructing and installing same. If Mesa chooses not to
request installation of such facilities, CIG's obligation to Mesa, if any,
to deliver natural gas containing Delivered Btu within two percent (2%) of
the "B" Contract Btu shall be suspended to the extent such additional
facilities are necessary.
V.
CIG acknowledges that Mesa is involved in a pending lawsuit, (Mapco
Westpan, Inc. v. Pioneer Corp., Case No. 62,922-A, 47th Judicial District
Court, Potter County, Texas). CIC agrees, based upon Mesa's claims of
ownership liquids asserted in such lawsuit, to collect such drips over
which it has control, on a monthly basis, and to use reasonable efforts for
the marketing of such drips to achieve the highest net value. As soon as
reasonably possible, CIG agrees to file with the District Court of Potter
County, Texas, an appropriate interpleader action wherein CIC shall tender
on a continuing basis the not revenues attributable to the sale of such
drips, into the registry of such Court; and petition such Court to
ascertain the lawful owner of such drips and the revenues attributable
thereto. In consideration of CIC's filing the interpleader suit as required
herein, Mesa hereby agrees to defend, indemnify, and hold CIG harmless from
and against any and all claims, damages, losses, causes of actions,
judgments or other actions, including costs of suit and attorneys fees, if
any, which may arise directly from the interpleader suit to be filed by
CIG, and which may be brought about, through and by virtue of, claims
and/or demands which Mapco Westpan, Inc., its predecessors and successors
in interest allege to have suffered as a result of the denial to it of the
possession of the drips as aforesaid. Upon the conclusion of such
interpleader action, CIG and Mesa shall enter into a new arrangement, if
applicable, consistent with the court's judgment.
VII.
CIG and Mesa shall keep records sufficient to document requests or
nominations by Mesa for gas deliveries from CIG, and deliveries by CIC to
Mesa. Each party shall have the right at all reasonable times to examine
the books, records and charts of the other party to the extent necessary to
verify the accuracy of any request or nomination, statement, payment
calculation or determination made pursuant to the provisions of this
Agreement. If any error shall be discovered, proper adjustment and
correction thereof shall be made and any refunds due shall be made as
promptly as practicable thereof tor.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed by their duly authorized representatives as of the date first
written above.
MESA OPERATING LIMITED PARTNERSHIP
By: Pickens Operating Co.,
General Partner
By: /s/ Paul W. Cain
------------------------
Paul W. Cain
President
COLORADO INTERSTATE GAS COMPANY
By: /s/ Michael Morris
----------------------------
Michael Morris
President
EXHIBIT C
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
AMARILLO DIVISION
MESA OPERATING LIMITED S
PARTNERSHIP, S
Plaintiff, S
VS. S Civil Action No.
S 2-86-0300
COLORADO INTERSTATE GAS S
COMPANY, S
S
Defendant. S
ORDER DISMISSING CLAIMS WITH PREJUDICE
--------------------------------------
On the _____ day of _______________ 1987, came on for consideration a
stipulation of dismissal with prejudice filed by all parties to this suit.
The Court is of the opinion that the stipulation is in order and should be
granted. It is therefore:
ORDERED that all claims of Mesa Operating Limited Partnership against
Colorado Interstate Gas Company in this suit are dismissed with prejudice;
and it is further,
ORDERED that all claims filed by Colorado Interstate Gas Company
against Mesa Operating Limited Partnership in this suit are dismissed with
prejudice.
________________________________
Judge Presiding
EXHIBIT D
DISTRICT COURT, COUNTY OF EL PASO, STATE OF COLORADO
Civil Action No. 86CV5573, Division 9
_________________________________________________________________________
ORDER OF DISMISSAL
_________________________________________________________________________
COLORADO INTERSTATE GAS COMPANY,
Plaintiff,
V.
MESA OPERATING LIMITED PARTNERSHIP,
Defendant.
_________________________________________________________________________
Came on for consideration the stipulation for dismissal of Plaintiff
Colorado Interstate Gas Company (CIG) and Defendant Mesa Operating Limited
Partnership (Mesa) in the above-captioned action. The Court is of the
opinion that the stipulation is in order and should be granted. It is
therefore:
ORDERED that all claims by Plaintiff CIG against Mesa in this suit
be dismissed with prejudice; save and except those claims relating to
Mesa's alleged breach of the Celeron Agreement, which is dismissed without
prejudice; it is further
ORDERED that all claims by Mesa against CIG in this suit be dismissed
with prejudice.
DATED this _____ day of _______________, 1987.
______________________________________
Judge Presiding
EXHIBIT E
WAIVER AND RELEASE OF CLAIMS BY
MESA OPERATING LIMITED PARTNERSHIP
KNOW ALL MEN BY THESE PRESENTS THAT:
WHEREAS, Mesa Operating Limited Partnership (hereinafter referred to
as "Mesa"), a limited partnership organized under the laws of the State of
Delaware with its principal place of business in Amarillo, Texas has
compromised certain claims against Colorado Interstate Gas Company
(hereinafter referred to as "CIG"), a corporation organized under the laws
of the State of Delaware with its principal place of business in Colorado
Springs, Colorado; and
WHEREAS, in connection with such compromise, Mesa has agreed to
execute and deliver a waiver and release of certain claims, and this waiver
and release of claims is being executed and delivered pursuant to such
agreement; and
WHEREAS, for the purposes hereof the term "Claim" shall mean any
right, remedy, claim or other action or assessment for money or other
property (as damages, either direct or indirect, or otherwise) and for
breach of contract, for rescission, for termination, for specific
performance or for other equitable relief, and whether arising under an
agreement, as amended and supplemented, initially entered on January 3,
1928, between Amarillo Oil Company (hereinafter referred to as "AOC"), as
predecessor to Mesa, and Canadian River Gas Company, as predecessor to
CIG, (hereinafter, as the same has been or may hereafter be amended,
modified or supplemented, referred to as the "B" Contract) or at common
law or in equity or created by any rule of law, regulatory order, rule or
regulation, statute, constitution or otherwise, and whether now known or
unknown, discovered or undiscovered, disclosed or undisclosed, fixed or
contingent, and whether or not asserted or unasserted, in any litigation,
including but not limited to, the Amarillo Litigation or the Colorado
Springs Litigation, by or on behalf of Mesa or any subsidiary, parent,
partner or affiliate thereof or any direct or indirect customer of any
thereof against CIG or Canadian River Gas Company, its predecessor in
interest, or any subsidiary or affiliate, or any director, officer,
employee, partner, agent or stock holder, pant, present, or future, of any
thereof which constitutes, is tantamount to, relates to, arises out of or
is based upon:
(a) overcharges by CIG for any quantity of natural gas
delivered by CIG to Mesa under the "B" Contract at any
time or times prior to the Settlement Date whether such
charges shall relate to compensation for production,
compression, gathering, delivery, or any other aspect of
the provision of volumes of natural gas to Mesa or AOC
under the "B" Contract;
(b) the failure of CIG to deliver the volumes of gas
required to be delivered by CIG to Mesa or AOC under the
"B" Contract at any time or times prior to the
Settlement Date; or
(c) the failure of CIG to deliver to Mesa or AOC natural gas
containing field wide average Btu content at any time or
times prior to the Settlement Date;
(d) the failure to account to Mesa or AOC for the proceeds of
gas condensate liquids ("drips") collected from the "B"
Contract gas at any time or times prior to the Settlement
Date; or
(e) any other Claim for alleged breach of, or failure to
comply in any respect with, the "B" Contract, at any time
or times prior to the Settlement Date; and
WHEREAS, for the purposes hereof, the term "Amarillo Litigation" shall
mean that lawsuit instituted by Mesa against CIG, and all causes of action
asserted therein, whether as a claim or counterclaim, in the District
Court of Potter County, Texas, 251st Judicial District, Cause No. 68
002C, and subsequently removed to the United States District Court for the
Northern District of Texas, Civil Action No. 2-86-0300; and
WHEREAS, for the purposes hereof, the term "Colorado Springs
Litigation" shall mean that lawsuit instituted by CIG against Mesa, and
all causes of action asserted therein, whether as a claim or counterclaim,
in the District Court of El Paso County, Colorado, Civil Action No. 86 CV
5573; and
WHEREAS, for the purposes hereof, the term "Settlement Date" shall
mean the date upon which the Agreement of Compromise and Settlement between
Mesa and CIG shall become effective, which shall be August 1, 1987, or
such other business day in the State of Texas selected by mutual agreement
in writing of Mesa and CIG;
NOW, THEREFORE, in consideration of the aforesaid compromise and other
good and valuable consideration, the receipt and sufficiency whereof are
hereby acknowledged, Mesa does fully, finally and forever release CIG
Canadian River Gas Company, and the subsidiaries, affiliates directors,
officers, employees, partners, agents and stock holders, in each case past,
present, and future, of each thereof from all Claims which Claims Mesa
agrees shall, from and after the Settlement Date, be fully and finally
released and forever waived regardless of the occurrence or nonoccurrence
of any event or events after the Settlement Date, and, further Mesa
undertakes, covenants and agrees that, from and after the Settlement Date,
it shall never litigate or relitigate or cause or permit any person acting
for it or in its behalf to litigate or relitigate, directly or indirectly,
collaterally or otherwise, any Claim or other issue resolved by the said
compromise, and Mesa undertakes that it has not and will not assign any
Claims in whole or in part.
To the extent that litigation is instituted against Mesa by any party
other than CIG with respect to Claims otherwise released hereunder, this
Waiver and Release shall be null and void and of no further effect to the
extent of such third-party litigation, and Mesa may assert in defense of
such third-party litigation any cross claim or third-party claim against
CIG as if this Waiver and Release had never been entered into.
IN WITNESS WHEREOF, Mesa has caused these presents to be executed by
its duly authorized representative this 29th day of May, 1987, in the
presence of the undersigned competent witness.
MESA OPERATING LIMITED PARTNERSHIP
By: Pickens Operating Co.,
General Partner
By: /s/ Paul W. Cain
------------------------------
Paul W. Cain
President
WITNESS:
/s/ Stephen A. Wakefield
- ---------------------------------
ACKNOWLEDGEMENT
STATE OF TEXAS
-----
COUNTY OF HARRIS
------
On this the 29th day of May, 1987, before me appeared
Paul W. Cain to me personally known, who, being by me
- ------------
duly sworn did say that he is the President of Mesa Operating
---------
Limited Partnership, and that the seal affixed to said instrument is the
official seal of said partnership and that the instrument was signed and
sealed in behalf of the partnership by authority of its Management
Committee and that he acknowledged the instrument to be the free act
--
and deed of the partnership.
/s/ Cindy Cavness
-----------------------------------
NOTARY PUBLIC, IN AND FOR THE STATE
OF TEXAS
-----
CINDY CAVNESS
-----------------------------------
PRINTED NAME OF NOTARY PUBLIC
My Commission Expires:
03-12-90
-----------------------------------
EXHIBIT F
WAIVER AND RELEASE OF CLAIMS BY
COLORADO INTERSTATE GAS COMPANY
KNOW ALL MEN BY THESE PRESENTS THAT:
WHEREAS, Colorado Interstate Gas Company (hereinafter referred to as
"CIG"), a corporation organized under the laws of the State of Delaware
with its principal place of business in Colorado Springs, Colorado, has
compromised certain claims against Mesa Operating Limited Partnership
(hereinafter referred to as "Mesa"), a limited partnership organized under
the laws of the State of Delaware with its principal place of business in
Amarillo, Texas; and
WHEREAS, in connection with such compromise, CIG has agreed to execute
and deliver a waiver and release of certain claims, and this waiver and
release of claims is being executed and delivered pursuant to such
agreement; and
WHEREAS, for the purposes hereof the term "Claim" shall mean any
right, remedy, claim or other action or assessment for money or other
property (as damages, either direct or indirect, or otherwise) and for
breach of contract, for rescission, for termination, for specific
performance or for other equitable relief, and whether arising under an
agreement, as amended and supplemented, initially entered on January 3,
1928, between Canadian River Gas Company, as predecessor to CIG, and
Amarillo Oil Company (hereinafter referred to as "AOC"), as predecessor to
Mesa, (hereinafter, as the same has been or may hereafter be amended,
modified or supplemented, referred to as the "'B' Contract") or at common
law or in equity or created by any rule of law, regulatory order, rule or
regulation, statute, constitution or otherwise, and whether now known or
unknown, discovered or undiscovered, disclosed or undisclosed, fixed or
contingent, and whether or not asserted or unassorted, in any litigation,
including but not limited to the Amarillo Litigation or the Colorado
Springs Litigation, by or on behalf of CIG or any subsidiary, parent or a
affiliate thereof or any direct or indirect customer of CIG against Mesa or
AOC, or any subsidiary or affiliate, or any director, officer, employee,
partner, agent, or stock holder, past, present, or future, of any thereof
which constitutes, is tantamount to, relates to, arises out of or is based
upon:
(a) the failure, whether actual or anticipated, of Mesa or AOC
to fully and adequately compensate CIG for any quantity of
natural gas delivered by CIG to Mesa or AOC under the "B"
Contract at any time or times prior to the Settlement Date
whether such charges shall relate to compensation for
production, compression, gathering, delivery, or any other
aspect of the provision of volumes of natural gas to Mesa or
AOC under the "B" Contract, except for volumes delivered
prior to the Settlement Date for which payment has not been
made by that date;
(b) the failure of Mesa or AOC to negotiate in good faith a new
gathering fee for quantities of gas delivered by CIG to Mesa
or AOC under the "B" Contract at any time or times prior to
the Settlement Date;
(c) the extraction and sale or use by Mesa or AOC of ethane,
propane, and heavier hydrocarbons from the stream of gas
delivered by CIG to Mesa or AOC at any time or times prior
to the Settlement Date;
(d) the operation of the New Fain Gas Processing Plant by Mesa
or AOC to extract hydrocarbons from the gas stream in a
manner alleged to cause CIG to deliver volumes of natural
gas which would otherwise be greater than that amount
required to serve the City of Amarillo and its environs at
any time or times prior to the Settlement Date; or
(e) any other claim for alleged breach of, or failure to comply
in any respect with, the "B" Contract, at any time or times
prior to the Settlement Date; and
WHEREAS, for the purposes hereof, the term "Amarillo Litigation" shall
mean that lawsuit instituted by Mesa against CIG, and all causes of action
asserted therein, whether as a claim or counterclaim, in the District Court
of Potter County, Texas, 251st Judicial District, Cause No. 68 002C, and
subsequently removed to the United States District Court for the Northern
District of Texas, Civil Action No. 2-86-0300; and
WHEREAS, for the purposes hereof, the term "Colorado Springs
Litigation" shall mean that lawsuit instituted by CIG against Mesa, and all
causes of action asserted therein, whether as a claim or counterclaim, in
the District Court of El Paso County, Colorado, Civil Action No. 86 CV
5573; and
WHEREAS, for the purposes hereof, the term "Settlement Date" shall
mean the date upon which the Agreement of Compromise and Settlement between
Mesa and CIG shall become effective, which shall be August 1, 1987, or such
other business day in the State of Texas selected by mutual agreement in
writing by Mesa and CIG;
NOW, THEREFORE, in consideration of the aforesaid compromise and other
good and valuable consideration, the receipt and sufficiency whereof are
hereby acknowledged, CIG does fully, finally and forever release Mesa, AOC,
and the subsidiaries, affiliates, directors, officers, employees, partners,
agents, and stock holders, in each case past, present, and future, of each
thereof from all Claims which Claims CIG agrees shall, from and after the
Settlement Date, be fully and finally released and forever waived
regardless of the occurrence or nonoccurrence of any event or events after
the Settlement Date, and, further CIG undertakes, covenants and agrees
that, from and after the Settlement Date, it shall never litigate or
relitigate or cause or permit any person acting for it or in its behalf to
litigate or relitigate, directly or indirectly, collaterally or otherwise,
any claim or other issue resolved by the said compromise, and CIG
undertakes that it has not and will not assign any Claims, in whole or in
part.
To the extent that litigation is instituted against CIG by any party
other than Mesa with respect to Claims otherwise released hereunder, this
Waiver and Release shall be null and void and of no further effect to the
extent of such third-party litigation, and CIG may assert in defense of
such third-party litigation any cross claim or third-party claim against
Mesa as if this Waiver and Release had never been entered into.
IN WITNESS WHEREOF, CIG has caused these presents to be executed by
its duly authorized representative this 29th day of May, 1987, in the
presence of the undersigned competent witness.
COLORADO INTERSTATE GAS COMPANY
WITNESSES: By: /s/ Michael G. Morris
-------------------------------
Michael G. Morris
President
/s/ Barbara J. Hanna
- --------------------------------
EXHIBIT F
ACKNOWLEDGEMENT
STATE OF MICHIGAN
--------
COUNTY OF WAYNE
-----
On this the 29th day of May, 1987, before me appeared
Michael G. Morris to me personally known, who, being by me
- -----------------
duly sworn did say that he is the President of Colorado
---------
Interstate Gas Company, and that the seal affixed to said instrument is the
official seal of said corporation and that the instrument was signed and
sealed in behalf of the corporation by authority of its Board of Directors
and that he acknowledged the instrument to be the free act
--
and deed of the corporation.
/s/ Judy M. Finnern
----------------------------------
NOTARY PUBLIC, IN AND FOR THE STATE
OF MICHIGAN
--------
JUDY M. FINNERN
----------------------------------
PRINTED NAME OF NOTARY PUBLIC
My Commission Expires:
JUDY M. FINNERN
----------------------------------
Notary Public, Macomb County, Michigan
Acting in Wayne County
My Commission Expires June 28, 1989
AMENDMENT TO GATHERING AGREEMENT
This Amendment to Gathering Agreement is made and entered into as of
this 15th day of July, 1990, by and between Mesa Operating Limited
Partnership ("Mesa") and Colorado Interstate Gas Company ("CIG").
WHEREAS, Mesa and CIG entered into that certain Gathering Agreement
dated May 29, 1987 (but effective August 1, 1987) covering certain
deliveries by CIG to Mesa from the West Panhandle Field;
WHEREAS, a disagreement has arisen between the parties as to the
specific conditions under which Mesa is to provide its pro rata share of
fuel gas in kind as described in the Gathering Agreement;
WHEREAS, Mesa and CIG wish to resolve such dispute and to provide for
an option for Mesa to purchase fuel gas or to supply fuel gas in kind in
conjunction with the execution of other related documents of even date.
NOW, THEREFORE, Mesa and CIG, in consideration of the mutual promises
contained herein and other good and valuable consideration, do hereby agree
that effective as of July 15, 1990:
1. The third sentence of Article III of the Gathering Agreement is
deleted:
2. The following new Article IV shall be added to the Gathering
Agreement:
Subject to the provisions of this Article IV, Mesa shall
have the option of providing its pro rata share of fuel in
kind (in MMBtus) at its own cost (including any necessary
facilities) for the gathering of all gas delivered to Mesa or
separately pay CIG, at its WACOG, for Mesa's pro rata share
of fuel actually used. "CIG's WACOG" means CIG's projected
weighted average cost of gas from all field sources, as shown
in CIG's Quarterly Purchased Gas Adjustment (PGA) filing with
the FERC. In the event CIG no longer files a quarterly PGA,
CIG and Mesa shall negotiate a substitute measure of CIG's
WACOG. If Mesa elects to provide such fuel in-kind, then such
fuel reimbursement volumes shall be delivered to CIG from the
wells or other delivery points listed on Exhibit "A" hereto
which is made a part of this Agreement.
Prior to November 30, 1990, and each November 30 thereafter,
CIG and Mesa shall agree upon an estimate of Mesa's pro rata
share of fuel gas to be used in calendar year 1991, and each
calender year thereafter. In agreeing to such an estimate, the
parties shall consider Mesa's pro rata share of fuel actually
used during the most recent 12-month period for which such data
is available, any underage or overage in fuel reimbursement
volumes identified to date, Mesa's expected take requirements
under the "B" Contract, historic field compressor fuel usage,
and other relevant factors. Prior to November 30, 1990, and
each November 30 thereafter, CIG shall also provide Mesa, as
part of the estimated billing basis described in Article III
hereof, an estimate of the cost of fuel, based on CIG's WACOG,
if purchased by Mesa from CIG in accordance with the provisions
of this Article IV.
Prior to January 1, 1991, and each January 1 thereafter,
Mesa shall notify CIG in writing of its election to provide a
designated percentage of its pro rata share of fuel in kind
and pay for any remaining share for the upcoming calendar year
at a price equal to CIG's WACOG. If Mesa elects to provide
all or part of its pro rata share of fuel in kind, Mesa's share
for a calendar year shall be delivered to CIG any time during
the period April through October (Summer Period) commencing with
the calendar year 1991; provided, however, Mesa shall have the
right to deliver to CIG at a daily rate of flow, of 1/120th of
the estimated annual fuel usage volume each day of the Summer
Period until a volume equal to the estimated annual fuel use
volume has been delivered. For any month of a Summer Period in
which Mesa elects to deliver fuel in kind, Mesa shall provide
monthly and daily volume nominations consistent with Article VI
of the Storage Service Agreement between CIG and Mesa dated July 15,
1990. CIG shall have the right to curtail such deliveries for up
to a total of 60 days during any Summer Period.
If during a particular calendar year, the estimate of Mesa's
pro rata share of fuel gas to be used during such calendar year is
either more or less than Mesa's pro rata share of fuel gas actually
used; then the estimate for the immediately succeeding calendar year
shall be either decreased or increased by the amount of such excess
or deficient estimate. Further, if during a particular calendar
year, the volume of fuel gas which Mesa delivered in kind to CIG
plus the volume of fuel gas which Mesa purchased from CIG, all as
provided for herein, was either more or less than Mesa's pro rata
share of fuel gas actually used during such calendar year, then the
estimate of the volume of fuel gas which Mesa would otherwise be
obligated to deliver in kind or purchase from CIG during the
immediately succeeding calendar year shall be reduced or increased
by the amount of such excess or deficient volume.
In lieu of providing the designated percentage of its pro rata
share of fuel in kind for a calendar year, Mesa may elect to pay for
its share at CIG's WACOG.
For gas so purchased from CIG, CIG will invoice Mesa and Mesa
will pay CIG monthly (as part of the gathering fee described in
Article III) based on CIG's estimate of Mesa's pro rata share of
fuel used during the year. On or before April 30, 1991, and each
April 30 thereafter, CIG shall account to Mesa (as part of the
accounting described in Article III above) for Mesa's share of
fuel actually used in the prior calendar year (if Mesa paid CIG
for fuel in the prior year).
CIG and Mesa agree that CIG will provide Mesa with a minimum
of 100 psig delivery pressure at the outlet of CIG's meter station
at Field Station 20 on as consistent a basis as is practicable in
light of the prudent operation of the Gathering System. If CIG's
failure to do so is the cause for Mesa being unable to take its
allowed Maximum Daily Volumes pursuant to Section 2.4(a) of the
Supplemental Stipulation and Agreement dated July 15, 1990, Mesa
shall have the right to make up such deficient volume at any time
by having the option of taking up to 5 Mmcfd in excess of its then
current Maximum Daily Volume (as set forth in the aforementioned
Supplemental Stipulation and Agreement) until the deficiency is
made up. Mesa's right to make up such deficient volumes shall be
subject to: (1) Mesa's providing notice to CIG not less than 24
hours in advance of the gas day upon which Mesa plans to take such
make-up volumes in excess of its Maximum Daily Volume set forth in
the Supplemental Stipulation and Agreement; and (2) Mesa shall have
no right to any such make up volumes on any Peak Day as described
in Section 2.5(b) of the Supplemental Stipulation and Agreement.
Such right of make-up shall be Mesa's sole remedy in the event CIG
is unable to provide the 100 psig delivery pressure, except that in
the event Mesa is unable to make up any deficiency within the
following six months because of CIG's failure to maintain the above-
described 100 psig delivery pressure so that Mesa can take the make-
up volumes plus other volumes to which Mesa is entitled, Mesa may
pursue in addition any other remedy or remedies that it may have.
CIG and Mesa further agree that the facility and operating costs
associated with any new facilities required to meet such pressure
shall be treated in accordance with this Agreement.
3. The existing Articles designated successively as "IV," "V,"
"V"{sic}, and "VII" shall be renumbered Articles "V,", "VI," "VII" and
"VIII" respectively.
4. This Amendment to Gathering Agreement shall continue in full force
and effect from July 15, 1990, until (i) the Supplemental Stipulation and
Agreement dated July 15, 1990, is terminated in accordance with Section
4.1(a) thereof or (ii) an event described in Section 5.2 thereof occurs.
Upon termination of the Supplemental Stipulation and Agreement, the terms
and provisions of the Gathering Agreement shall remain as if this Amendment
to Gathering Agreement was never entered into.
5. As amended herein and subject to the provisions of Paragraph 4
above, the Gathering Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, CIG and Mesa cause this Amendment to Gathering
Agreement to be executed by the duly authorized representatives to be
effective as of the date first written above.
COLORADO INTERSTATE GAS COMPANY
By: /S/ C. S. Hobbs
----------------------------
C. S. Hobbs
Senior Vice President
MESA OPERATING LIMITED PARTNERSHIP,
a Limited Partnership,
By: PICKENS OPERATING COMPANY.
General Partner
By: /S/ Claude Jenkins
------------------------------
Claude Jenkins
Vice President Marketing
July 10, 1990
FEDERAL EXPRESSED
- -----------------
Donald E. Williams, Esquire John E. Archibold, Esquire
John P. Roddy, Esquire Staff Counsel
Staff Counsel Colorado Public Utilities Commission
Federal Regulatory Commission 1580 Logan Street
825 North Capitol Street, N.E. Denver CO 80202
Washington DC 20426
Stephen H. Kaplan, Esquire
Mr. Jon R. Whitney Office of City Attorney
Executive Vice President and City and County of Denver
Chief Operating Officer City and County Building - Room 353
Colorado Interstate Gas Company Denver Co 80202
2 North Nevada
Colorado Springs CO 80944
Gregory L. Johnson, Esquire
City of Colorado Springs
James K. Tarpey, Esquire 104 South Cascade Avenue - Suite 204
Counsel for Colorado Springs CO 80903
Public Service Company of Colorado
Western Slope Gas Company and James K. McElligott, Esquire
Cheyenne Light, Fuel & Power Company Natural Gas Pipeline Company of
Kelly, Stansfield & O'Donnell America
550 Fifteenth Street - Suite 900 701 East 22nd Street
Denver CO 80202 Lombard IL 60140
Gentlemen:
Subject: Uncontested Settlement Agreements on
Reserved Issues; In the Matter of
Colorado Interstate Gas Company,
FERC Docket No. RP79-59
On December 31, 1980, the Federal Energy Regulatory Commission Staff,
Amarillo Oil Company {predecessor-in-interest to Mesa Operating Limited
Partnership ("Mesa")}, Colorado Interstate Gas Company ("CIG") and the
other parties to whom this letter is addressed entered into the Uncontested
Settlement Agreement on Reserved Issues relating to certain matters arising
connection with deliveries of gas from CIG to Amarillo Oil Company from the
West Panhandle Field pursuant to the "B" Contract dated January 3, 1928, as
described more fully in the proceedings in which the Uncontested Settlement
was filed, Colorado Interstate Gas Company, FERC Docket No. RP79-59. The
Uncontested Settlement was accepted and approved by FERC order dated March
4, 1981. 14 F.E.R.C. para. 61,216.
Many fundamental changes have taken place in the natural gas industry
and in the marketplace since the Uncontested Settlement was entered into in
1980. The Uncontested Settlement was devised in the midst of an acute
natural gas shortage, whereas at present there is adequate gas
deliverability. In contrast, the volumetric limits on "B" Contract
deliveries to Mesa are unchanged from the original provisions that were
negotiated under conditions of severe shortage. Moreover, gas is available
at prices now that generally lower than the prices of available supplies in
1980. However, because of its automatic escalation provisions, the
Uncontested Settlement requires substantially larger surcharge payments now
than in the years when it first went into effect.
For these reasons and others, Mesa believes that the provisions of the
Uncontested Settlement are inappropriate in the light of current conditions
and unfair to Mesa. The Uncontested Settlement, in Paragraph 3.1, reserves
to Mesa, as well as to other parties, the right to withdraw from the
Uncontested Settlement and thereby terminate it. Because of the wide
disparity between the terms of the Uncontested Settlement and current
conditions, Mesa has determined that it must exercise this right. However,
before doing so, Mesa entered into discussions with CIG to explore the
possibility of reaching a new settlement to replace the Uncontested
Settlement. These negotiations have resulted in an agreement between Mesa
and CIG to a proposed new settlement that Mesa believes is fair to CIG and
its customers, as well as to Mesa.
In accordance with its agreement with CIG, Mesa is withdrawing from
the Uncontested Settlement effective July 15, 1990, and pursuant to
Paragraph 3.1 of the Uncontested Settlement, Mesa hereby gives notice of
such withdrawals. A copy of Mesa's notice to the Commission is enclosed
with this letter.
If approved by the FERC, the new proposed settlement is to take effect
on July 15, 1990. Pending Commission consideration and approval of the
proposed settlement, Mesa has agreed to abide by the volumetric limits in
the proposed settlement and to pay into escrow the amounts required under
it.
The proposed settlement documents will be furnished to you as soon as
possible. Mesa, as well as CIG, will be ready to answer any questions or
discuss any comments that you may have.
Sincerely,
MESA OPERATING LIMITED PARTNERSHIP
By Pickens Operating Co.,
General Partner
By /s/ Paul C. Cain
------------------------------
Paul C. Cain, President and
Chief Operating Officer
nr
Enclosure
July 10, 1990
Lois D. Cashell, Secretary
Federal Energy Regulator Commission
825 North Capitol Street, N.E.
Washington DC 20426
Dear Ms. Cashell:
Subject: Uncontested Settlement Agreement on
Reserved Issues; In the Matter of
Colorado Interstate Gas Company,
FERC Docket No. RP79-59
Reference is made to the Uncontested Settlement Agreement on Reserved
Issues (the "Uncontested Settlement") dated December 31, 1980, entered into
among Federal Energy Regulatory Commission Staff, Colorado Interstate Gas
Company ("CIG"), Amarillo Oil Company {predecessor-in-interest to Mesa
Operating Limited Partnership ("Mesa"}], Public Service Company of
Colorado, the Colorado Public Utilities Commission, Western Slope Gas
Company, Cheyenne Light, Fuel & Power Company, the City and County of
Denver, the City of Colorado Springs and Natural Gas Pipeline Company of
America. The Uncontested Settlement was accepted and approved by order
dated March 4, 1981, in Colorado Interstate Gas Company, FERC Docket No.
RP79-59, 14 F.E.R.C. para. 61,216.
Pursuant to Paragraph 3.1 of the Uncontested Settlement, Mesa as
successor-in-interest to Amarillo Oil Company hereby gives notice of
withdrawal from the Uncontested Settlement effective July 15, 1990.
Sincerely,
MESA OPERATING LIMITED PARTNERSHIP
By Pickens Operating Co.,
General Partner
By /S/ Paul C. Cain
------------------------------
Paul C. Cain, President and
Chief Operating Officer
nr
Copy to FERC Staff Counsel
All Parties to the Uncontested Settlement
Agreement on Reserved Issues
EXHIBIT "A"
TO THAT AMENDMENT TO GATHERING AGREEMENT
between
COLORADO INTERSTATE GAS COMPANY (Buyer)
and
MESA OPERATING LIMITED PARTNERSHIP
Acting on Behalf of Itself and as Agent for
MESA MIDCONTINENT LIMITED PARTNERSHIP (Seller)
DATED: July 15, 1990
SOURCE OF GAS AND DELIVERY POINT(S).
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Akers, Barnery 1 05-26S-39W 001630 100.00 100.00
Hamilton, KS
Akers, Barnery 2-5 05-26S-39W 001631 100.00 100.00
Hamilton, KS
Brothers, I.S. 1 09-26S-39W 020620 100.00 100.00
Hamilton, KS
Brothers 2A 03-26S-39W 020690 100.00 100.00
Hamilton, KS
Brothers 3-3 03-26S-39W 020600 100.00 100.00
Hamilton, KS
Brothers 4-9 09-26S-39W 020700 100.00 100.00
Hamilton, KS
Brothers 5-9 09-26S-39W 020710 100.00 100.00
Hamilton, KS
Fed Farm Mortgage 1-10 10-26S-39W 033758 100.00 100.00
Hamilton, KS
Fields, R. S. 1-36 36-25S-39W 035100 100.00 100.00
Hamilton, KS
Frease, E. M. 1 20-26S-39W 036420 100.00 100.00
Hamilton, KS
Frease, E. M. 2-20 20-26S-39W 036421 100.00 100.00
Hamilton, KS
Frease, E. M. 3-25 25-25S-39W 036422 50.00 50.00
Hamilton, KS
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Hattrup, L. J. 1 30-26S-39W 043310 100.00 100.00
Hamilton, KS
Hattrup 2-30 30-26S-39W 043290 100.00 100.00
Hamilton, KS
Heltemes, N. A. 1 19-26S-39W 044160 100.00 100.00
Hamilton, KS
Heltemes, N. A. 2 36-26S-40W 044210 100.00 100.00
Hamilton, KS
Heltemes, N. A. 3 25-26S-40W 044260 100.00 100.00
Hamilton, KS
Heltemes 1-36 36-26S-40W 044140 100.00 100.00
Hamilton, KS
Heltemes 4-19 19-26S-39W 044143 100.00 100.00
Hamilton, KS
Heltemes 5-25 25-26S-40W 044144 100.00 100.00
Hamilton, KS
Hoffman, C. A. 1 16-26S-39W 046460 100.00 100.00
Hamilton, KS
Hoffman, C. A. 2-16 16-26S-39W 046340 100.00 100.00
Hamilton, KS
Lampe, John 1 08-26S-39W 054940 100.00 100.00
Hamilton, KS
Lampe Inc. 2-8 08-26S-39W 054900 100.00 100.00
Hamilton, KS
Lampe John Inc. 1 10-26S-39W 054990 100.00 100.00
Hamilton, KS
Lowenburg 1-7 07-26S-39W 068570 100.00 100.00
Hamilton, KS
Rector, Oscar 1 04-26S-39W 078930 100.00 100.00
Hamilton, KS
Rector 2-4 04-26S-39W 078929 100.00 100.00
Hamilton, KS
Stucky, Martin 1 17-26S-39W 091650 100.00 100.00
Hamilton, KS
Stucky 2-17 17-26S-39W 091651 100.00 100.00
Hamilton, KS
Yingling, Effie R. 1 36-25S-39W 099850 100.00 200.00
Hamilton, KS
Baughman, J. W. C 1 35-27S-34W 007070 25.00 25.00
Haskell, KS
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Burton, T. C. 1 06-29S-34W 021770 50.00 50.00
Haskell, KS
Burton A-2 06-29S-34W 021780 50.00 50.00
Haskell, KS
Eubank, M. H. 1 33-28S-34W 032270 100.00 100.00
Haskell, KS
Eubank, M. H. A-1 28-28S-34W 032020 50.00 50.00
Haskell, KS
Eubank, M. H. B-1 23-28S-34W 032120 50.00 50.00
Haskell, KS
Eubank, M. H. C-1 07-28S-34W 032170 50.00 50.00
Haskell, KS
Eubank C-4 07-28S-34W 032173 50.00 50.00
Haskell, KS
Green, C. E. C-1 30-28S-34W 039630 50.00 50.00
Haskell, KS
Green C-2 30-28S-34W 039631 50.00 50.00
Haskell, KS
Gregg, E. M. #1 04-29S-34W 039930 50.00 50.00
Haskell, KS
Gregg 8-32 32-28S-34W 039933 100.00 100.00
Haskell, KS
Home Royalty Co. 1 15-28S-34W 046660 50.00 50.00
Haskell, KS
Jones, J. E. C-1 03-28S-34W 051110 50.00 50.00
Haskell, KS
Laird, C. C. B-1 30-28S-34W 054690 50.00 50.00
Haskell, KS
Lemon, J. C. A-1 24-28S-34W 055390 50.00 50.00
Haskell, KS
Lemon, J. C. B-1 25-28S-34W 055440 50.00 50.00
Haskell, KS
Lemon, J. C. C-1 09-29S-33W 055490 50.00 50.00
Haskell, KS
McCoy, Frank 1 32-28S-34W 064480 100.00 100.00
Haskell, KS
Onions A 1-2 02-29S-34W 075060 56.25 56.25
Haskell, KS
Orth, W. E. 1 21-28S-33W 075110 50.00 50.00
Haskell, KS
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Pickens, Wm C. 1 31-28S-34W 076760 50.00 50.00
Haskell, KS
Pickens A-2 31-28S-34W 076751 50.00 50.00
Haskell, KS
Rahenkamp, E. W. 1 03-29S-34W 078030 50.00 50.00
Haskell, KS
Rahenkamp A 2 03-29S-34W 078035 50.00 50.00
Haskell, KS
Roy, Frank 3 27-27S-33W 080070 100.00 100.00
Haskell, KS
Roy, Frank 4 34-27S-33W 080110 100.00 100.00
Haskell, KS
Roy, Frank 6 33-27S-33W 080190 100.00 100.00
Haskell, KS
Stonestreet C 10-28S-34W 090870 50.00 50.00
Haskell, KS
Wheatley, J. S. 1 06-29S-33W 096810 100.00 100.00
Haskell, KS
Winsted, H. E. 1 29-28S-34W 098410 100.00 100.00
Haskell, KS
Winsted 2-29 29-28S-34W 098413 100.00 100.00
Haskell, KS
Bakke-Wiatt 1-A 09-24S-38W 003340 37.50 37.50
Kearney, KS
Burnett 1-A 17-24S-38W 021471 50.00 50.00
Kearney, KS
Swank 1-A 21-24S-38W 091850 12.50 12.50
Kearney, KS
Adams, A. W. M-2 33-34S-30W 000710 25.00 25.00
Meade, KS
Baughman 3-16 16-27S-40W 006980 100.00 100.00
Stanton, KS
Baughman J. W. 2 16-27S-40W 006970 100.00 100.00
Stanton, KS
Baughman 6-16 05-28S-40W 006990 100.00 100.00
Stanton, KS
Collingwood, A. J. 1 22-27S-40W 026790 100.00 100.00
Stanton, KS
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Cooper, E. D. 1 08-28S-40W 027090 100.00 200.00
Stanton, KS
Cross, J. L. 2 32-27S-40W 028390 100.00 100.00
Stanton, KS
Dennis B 1-1 08-28W-40W 029450 56.24 56.24
Stanton, KS
Floyd, Eugene 1 09-28S-40W 035720 100.00 100.00
Stanton, KS
Floyd 2-9 09-28S-40W 035721 100.00 100.00
Stanton, KS
Floyd 3-9 06-28S-40W 035722 100.00 100.00
Stanton, KS
Fraser, Nellie E 1 30-27S-40W 036270 100.00 100.00
Stanton, KS
Mohney, E 2-34 34-27S-40W 070761 100.00 100.00
Stanton, KS
Mohney, Eugene 1 34-27S-40W 070760 100.00 100.00
Stanton, KS
Smith, Abbie E 1 26-27S-40W 086010 100.00 100.00
Stanton, KS
Smith, A. E. 2-26 26-27S-40W 086011 100.00 100.00
Stanton, KS
Timm, R. K. 1 27-27S-40W 093200 100.00 100.00
Stanton, KS
Williamson, Mary C. 1 29-27S-40W 097810 100.00 100.00
Stanton, KS
Wilson, D. R. 1-22 22-27S-40W 097912 100.00 100.00
Stanton, KS
Winger, Clarence 2 28-27S-40W 098110 100.00 100.00
Stanton, KS
Winger, Clarence 1 33-27S-40W 098060 100.00 100.00
Stanton, KS
Winger, Clarence 3 04-27S-40W 098160 100.00 100.00
Stanton, KS
Winger, Clarence 4 21-28S-40W 098210 100.00 100.00
Stanton, KS
Winger, Clarence 5 35-27S-40W 098260 100.00 100.00
Stanton, KS
Winger, C. 10-33 33-27S-40W 098265 100.00 100.00
Stanton, KS
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Winger, C. 11-4 04-28S-40W 098266 100.00 100.00
Stanton, KS
Winger, C. 6-35 35-27S-40W 098261 100.00 100.00
Stanton, KS
Winger, C. 7-27 27-27S-40W 098262 100.00 100.00
Stanton, KS
Winger, C. 8-21 21-27S-40W 098263 100.00 100.00
Stanton, KS
Winger, C. 9-28 28-27S-40W 098264 100.00 100.00
Stanton, KS
Winger, T. R. 1 23-27S-40W 098310 75.00 75.00
Stanton, KS
Winger, T. R. 2-23 23-27S-40W 098311 75.00 75.00
Stanton, KS
Adams, R E 8 23-6N-24ECM 001410 50.00 50.00
Beaver, OK
Adams, R E 11 30-6N-25ECM 001460 37.50 37.50
Beaver, OK
Adams 1-20 20-6N-25ECM 00252 50.00 50.00
Beaver, OK
Adams 1-31 (St. Louis) 31-06N-25ECM 000330 50.00 50.00
Beaver, OK
Adams A-5 (Che) 36-06N-24ECM 000430 50.00 50.00
Beaver, OK
Adams A-5 (SG) 36-06N-24ECM 000440 50.00 50.00
Beaver, OK
Adams B 4 36-06N-24ECM 000450 50.00 50.00
Beaver, OK
Baldwin 1 07-05N-25ECM 003349 25.48 25.48
Beaver, OK
Barby, Fred 1 36-05N-25ECM 005220 100.00 100.00
Beaver, OK
Barby, Fred 2 31-05N-26ECM 005270 87.50 87.50
Beaver, OK
Barby, Lloyd 1 10-04N-25ECM 005580 100.00 100.00
Beaver, OK
Barby, Lloyd 2 22-04N-25ECM 005420 100.00 100.00
Beaver, OK
Barby, Otto 1 34-05N-26ECM 006170 43.75 43.75
Beaver, OK
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Barby, Otto A-1 25-05N-25ECM 006270 15.00 15.00
Beaver, OK
Carlisle, H 16-22 C 22-03N-28ECM 024718 50.00 50.00
Beaver, OK
Carlisle, H. 16-22 M 22-03N-28ECM 024719 50.00 50.00
Beaver, OK
Carlisle, H. 10-A 22-03N-28ECM 024660 50.00 50.00
Beaver, OK
Carlisle, H. 11 22-03N-28ECM 024690 50.00 50.00
Beaver, OK
Carlisle, H. 1-10 10-03N-28ECM 024140 50.00 50.00
Beaver, OK
Carlisle, H. 3 16-03N-28ECM 024290 100.00 100.00
Beaver, OK
Carlisle, H. 4 15-03N-28ECM 024230 100.00 100.00
Beaver, OK
Carlisle H. 6 21-03N-28ECM 024490 34.36 34.36
Beaver, OK
Carlisle, H. 8 16-03N-28ECM 024540 100.00 100.00
Beaver, OK
Carlisle 13-15 (Chester) 15-03N-28ECM 024715 100.00 100.00
Beaver, OK
Carlisle 13-15 (Morrow) 15-03N-28ECM 024714 100.00 100.00
Beaver, OK
Carlisle 14-16 LT 16-03N-28ECM 024712 100.00 100.00
Beaver, OK
Carlisle 14-16 UT 16-03N-28ECM 024173 100.00 100.00
Beaver, OK
Carlisle 15-14 14-03N-28ECM 024717 25.00 25.00
(Chester/MO) Beaver, OK
Carlisle 17-21 21-03N-28ECM 024716 34.92 34.92
Beaver, OK
Carlisle 5 (Hoover) 23-03N-28ECM 024390 100.00 100.00
Beaver, OK
Carlisle H. 12-10 10-03N-28ECM 024710 57.14 57.14
Beaver, OK
Evans, E. E. 1 (Chester) 08-05N-25-ECM 033120 50.00 50.00
Beaver, OK
Evans, E. E. 1 (Morrow) 08-05N-25ECM 033221 50.00 50.00
Beaver, OK
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
Judy 1 (WYAND) 06-05N-25ECM 25.00 25.00
Beaver, OK
July 4-6 06-05N-25ECM 051305 100.00 100.00
Beaver, OK
Judy A 2-6 06-05S-25W 051380 50.00 50.00
Beaver, OK
Judy B 1-5 05-05S-25W 051410 37.50 37.50
Beaver, OK
Kamas 1-15 15-05N-25ECM 051970 63.00 63.00
Beaver, OK
Kamas 2-15 15-05N-25ECM 051975 67.24 67.24
Beaver, OK
Mayo, Nina 1-18 18-04N-25ECM 062480 68.75 68.75
Beaver, OK
Mayo, Nina 2 07-04N-25ECM 062560 100.00 100.00
Beaver, OK
Mayo, Nina 3 06-04N-25ECM 062640 100.00 100.00
Beaver, OK
Mayo, Nina 4 01-04N-24ECM 062720 100.00 100.00
Beaver, OK
Mulberry 1 (HOOV) 26-03N-28ECM 072160 6.67 6.67
Beaver, OK
Overton 06-03N-26ECM 075210 50.00 50.00
Beaver, OK
Raymond 2 31-06N-25ECM 078590 25.00 25.00
Beaver, OK
USA Unit 05-04N-25ECM 094260 100.00 100.00
Beaver, OK
Cole 1 15-04N-9ECM 026540 25.00 25.00
Cimmarron, OK
Hager, A. H. 1 36-06N-08ECM 041260 25.00 25.00
Cimmarron, OK
Ross, M. B. 2 28-05N-09ECM 079952 33.33 33.33
Cimmarron, OK
Ross, M. B. 3 28-05N-09ECM 079953 33.33 33.33
Cimmarron, OK
Wiggins 1 23-04N-8ECM 097410 83.20 83.20
Cimmarron, OK
Hamilton, Ella 06-05N-10ECM 042510 75.00 75.00
Texas, OK
Delivery Point/ Meter Working Percent of
Well Name Location No. Interest Ownership
- ---------------- ------------ ------- --------- ----------
ANR Pipeline Co. Beaver Co., OK Int. Various Various
(Beaver) 31-5N-21E 9911221
Northern Natural Gas Co. Finney Co., KS Int. Various Various
(Meadowlark) (Note 1) 3-24S-34W 991664100
Transwestern Pipeline Co. Sherman Co., TX Int. Various Various
(Tumbleweed) (Note 1) 991489000
Panhandle Eastern Pipe Kearney Co., KS Int. Various Various
Line Co. 29-24S-36W 991118000
(Lakin) (Note 1)
Northern Natural Gas Co. Moore Co., TX Int. Various Various
(Dumas) (Note 1) 99112900
Natural Gas Pipeline Co. Beaver Co., OK Int. Various Various
of America 29-5N-23E 991044000
(Forgan) (Note 1)
El Paso Natural Gas Co. Moore Co., TX Int. Various Various
(Big Blue) (Note 1) 991291000
Other Hugoton Infill
Wells As Connected
Note 1: Delivery of gas by displacement only.
AMENDMENT TO
OPERATING AGREEMENT
This Amendment to the OPERATING AGREEMENT dated January 8, 1988, by
and between MESA OPERATING LIMITED PARTNERSHIP (hereinafter referred to as
("MESA"), and COLORADO INTERSTATE GAS COMPANY (hereinafter referred to as
"CIG") is entered into and effective as of October 1, 1988.
WHEREAS, MESA and CIG executed an Operating Agreement on the 8th day
of January, 1988; and
WHEREAS, MESA and CIG now wish to amend Exhibit "C", Accounting
Procedure, to the Operating Agreement.
NOW, THEREFORE, the Parties agree as follows:
1. Article III. ADMINISTRATIVE FEES, Paragraph 3.1 Authorized
Payments and Charges, Paragraph A of the Accounting Procedure (Exhibit "C"
to the Operating Agreement) is hereby amended to read as follows:
All leasehold royalties, overriding royalties and other payments out
of production from wells subject to the Operating Agreement. The
following royalty payments shall be billed in full to MESA without
allocation: (1) royalty payments under Paragraph 2(a) of the
"Compromise and Settlement Agreement" in Cause No. CA-2-76-131 dated
as of December 31, 1981 between Amarillo Oil Company ("AOC"), CIG and
the royalty owners defined therein as "Lessor" and the contemporaneous
letter agreement between AOC and CIG: (2) royalty payments under
paragraph 2(a) of the "Compromise and Settlement Agreement" in Cause
No. CA-2-75-68 dated as of December 31, 1981, between AOC, CIG and the
royalty owners defined therein as "Lessor"; and (3) royalty payments
defined as "MESA Additional Royalty" in the "Accounting Agreement"
attached as Exhibit "A" to the "Royalty Agreement" dated October 1,
1988, between MESA, CIG and the royalty owners defined therein as
"Lessor."
Except as amended herein, the Operating Agreement dated the 8th day of
January, 1988, including the Accounting Procedure attached thereto as
Exhibit "C", shall remain in full force and effect.
WHEREFORE, the parties hereto have executed this Amendment this _____
day of November, 1989.
COLORADO INTERSTATE GAS COMPANY
Attest:
- ------------------------------ By /s/ C. S. Hobbs
----------------------------
C. S. Hobbs, Senior Vice President
MESA OPERATING LIMITED PARTNERSHIP
By Pickens Operating Company, the
General Partner
Attest:
- ------------------------------ By -------------------------------
(COLORADO INTERSTATE GAS COMPANY LOGO AND STATIONERY)
C. Scott Hobbs
Senior Vice President (Stationery Heading)
July 15, 1990
Claude B. Jenkins
Vice President-Marketing
Mesa Operating Limited Partnership
One Mesa Square
P. O. Box 2009
Amarillo, TX 79189-2009
Re: Amendment to Gathering Agreement
Dated July 15, 1990
Dear Claude:
This letter is to confirm the agreement of Colorado Interstate Gas Company
("CIG") and Mesa Operating Limited Partnership ("Mesa') concerning the
referenced Amendment.
CIG and Mesa agree that Mesa may deliver volumes of gas, at a daily rate of
flow up to 10 MMcfd, to CIG from July 15 through October 31, 1990, as a
partial payment in kind for Mesa's pro rata share of fuel gas to be used in
calendar year 1990. Mesa shall deliver any such fuel reimbursement volumes
from its or Mesa Midcontinent Limited Partnership's interests in Oklahoma
which are currently connected to CIG, and from any other mutually agreeable
delivery points listed on Exhibit "A" to the Amendment to the Gathering
Agreement, dated July 15, 1990. Mesa shall also provide daily and monthly
volume nominations for any fuel reimbursement volumes delivered to CIG
during this period. These volume nominations shall be consistent with
Article VI of the Storage Service Agreement between CIG and Mesa dated July
15, 1990.
Mesa shall pay, based on CIG's WACOG, for its pro rata share of fuel
actually used during the calendar year 1990 which was not delivered as a
payment in kind referenced above. Mesa's payments based on CIG's WACOG
shall be consistent with the terms more fully described for purchased fuel
volumes in the referenced Amendment.
If the foregoing is in accordance with Mesa's understanding of our
agreement, please so indicate by signing in the space provided below and
returning one original for our file.
Sincerely,
COLORADO INTERSTATE GAS COMPANY
By: /s/ C. Scott Hobbs
---------------------------
C. Scott Hobbs
Senior Vice President
CSH:sjm
Accepted and agreed to
this 11th day of July, 1990.
---- ----
MESA OPERATING LIMITED PARTNERSHIP,
Acting On Behalf of Itself and
As Agent for Mesa Midcontinent
Limited Partnership
By: Pickens Operating Co.,
General Partner
By: /s/ Claude B. Jenkins
------------------------------
Claude B. Jenkins
Vice President - Marketing