EXHIBIT 10.23
THIS CONTRACT IS
SUBJECT TO THE LAWS
OF THE STATE OF TEXAS
GAS PURCHASE CONTRACT
DATED
JANUARY 30, 1998
BETWEEN
FOUR SEVENS OIL COMPANY, LTD. AND
J W ENERGY COMPANY, LTD.
AS "SELLER"
AND
DYNEGY NGL, INC.
AS "BUYER
February 24, 1998
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS......................................................3
ARTICLE II - DELIVERY OF GAS AND TRANSFER OF TITLE...........................4
ARTICLE III - EFFECTIVE DATE AND TERM........................................4
ARTICLE IV - QUALITY.........................................................5
ARTICLE V- ALLOCATION OF RESIDUE GAS.........................................5
ARTICLE VI - ALLOCATION OF PLANT PRODUCTS....................................6
ARTICLE VII - RIGHTS-OF-WAY..................................................6
ARTICLE VIII - SETTLEMENT TESTS..............................................6
ARTICLE IX - METERS AND MEASUREMENT..........................................7
ARTICLE X - COMPENSATION TO SELLER...........................................8
ARTICLE XI - PAYMENT........................................................10
ARTICLE XII - WARRANTY OF TITLE.............................................10
ARTICLE XIII - ROYALTY AND OTHER INTERESTS..................................10
ARTICLE XIV - FORCE MAJEURE.................................................11
ARTICLE XV - UNECONOMIC GAS.................................................12
ARTICLE XVI - PRIORITY RIGHTS OF SELLER.....................................12
ARTICLE XVII - INDEMNITY....................................................12
ARTICLE XVIII - TAXES.......................................................12
ARTICLE XIX - LIABILITY OF PARTIES..........................................13
ARTICLE XX - MISCELLANEOUS..................................................13
GAS PURCHASE CONTRACT
THIS CONTRACT, made and entered into this 30th day of January, 1998, by and
between FOUR SEVENS OIL COMPANY, LTD. AND J W ENERGY COMPANY, LTD., hereinafter
referred to as "Seller" and WARREN NGL, INC. hereinafter referred to as "Buyer."
WHEREAS, Seller is the owner of certain oil, gas and mineral leases
covering the right to search for and produce all or a part of the oil well gas
and gas well gas, or has the right to sell said oil well and/or gas well gas
underlying the leases described in Exhibit "A" attached hereto and made a part
hereof; and
Whereas, Seller is operating the properties described in Exhibit "A" and
certain wells on said leases are productive, or may be productive, in addition
to oil, of what is termed gas as hereinafter defined, and the Seller desires to
sell the gas which may hereafter be produced from wells located on said
premises; and,
WHEREAS, Buyer desires to purchase the gas produced from said lease(s) in
accordance with all the terms and conditions hereof.
NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) paid by
the Buyer to Seller, receipt of which is hereby acknowledged, and other payments
and covenants hereinafter specified, Seller hereby grants, bargains, sells, and
agrees to deliver to the Buyer and the Buyer agrees to purchase and take from
the Seller, subject to the stipulations and conditions hereinafter specified,
all the gas now or hereafter produced from the well(s) on the leases hereinabove
described.
ARTICLE I - DEFINITIONS
For all purposes of this Contract, the following terms and expressions herein
used are defined as follows:
a. "Btu" shall mean the quantity of heat required to raise the temperature of
one (1) pound, avoirdupois, of pure water one (1) degree on the Fahrenheit
temperature scale (58.5 degrees to 59.5 degrees) at a constant pressure of
14.73 psia.
b. "Delivery Point" shall mean the point(s) at the casingheads of the well(s)
and/or at any other point or points of separation of oil and gas by Seller,
and/or any other mutually agreeable point or points on Buyer's or Seller's
pipeline.
c. "Drip Liquids" shall mean any liquid hydrocarbons accumulating in drips,
separators and/or pipelines which are collected by Buyer from the gathering
system(s); including, without limitation, dirty oil, line drip, scrubber
oil, compression and separator liquids, distillates and condensates; and
such term includes all such liquids regardless of whether they are
deleterious and marketable.
d. "Gas" shall mean casinghead gas, separator gas, or gaseous hydrocarbons
produced from the lease(s) described in Exhibit "A" hereto and shall
include gas produced from well(s) producing gas only, from well(s)
producing gas in association with condensate, and from well(s) producing
gas in association with oil.
e. "GPM" shall mean gallons per one thousand (1000) cubic feet of gas.
f. "Plant" shall mean the CHICO Gas Processing Plant(s), a gas processing
Plant owned and operated by Buyer. Plant may also mean any other gas
processing plant and related facilities into which Buyer may direct
Seller's Gas for processing.
g. "Plant Products" shall mean all liquefiable hydrocarbons or any mixture
thereof that Buyer may condense from, adsorb from, absorb from, separate
out of gas processed in the Plant, including, without limitation, natural
gasoline, butane, propane, and ethane; but such term shall exclude Drip
Liquids.
h. "Residue Gas" shall mean the gaseous portion of gas that remains after
extraction of Plant Products and all other substances and gas used as Plant
fuel.
ARTICLE II - DELIVERY OF GAS AND TRANSFER OF TITLE
The Gas shall be delivered by Seller to Buyer at the Delivery Point at
sufficient pressure to enter Buyer's pipeline. Upon receipt of said Gas by
Buyer, title thereto (including all components thereof) shall pass to and vest
in Buyer at the Delivery Point described herein.
Buyer shall have the exclusive right to process Seller's Gas for the extraction
of liquid hydrocarbons. The extraction of liquid hydrocarbons shall not be
permitted prior to delivery of Gas to Buyer, except that amount normally removed
by standard mechanical oilfield-type separators; or ambient condensation. Seller
specifically agrees not to utilize units designed to remove liquid hydrocarbons
by means of absorption, adsorption, refrigeration, or cryogenic principles.
During the periods when the Gas production from all properties connected to
Buyer's Plant is in excess of the then installed Plant and line capacities,
Buyer shall be obligated to take only that portion of the Gas from the
properties covered hereby which is ratable with its takes from all other
properties connected to its Plant.
ARTICLE III - EFFECTIVE DATE AND TERM
This Contract shall become effective on February 1, 1998 and shall be for a
primary term of Fifteen (15) year(s) from and after the effective date hereof,
and year to year thereafter. Provided, however, either party shall have the
right to terminate this contract at the end of the primary term, or on any
anniversary thereof, by giving to the party thirty (30) days prior written
notice, but shall not give more than ninety (90) days prior written notice,
prior to the termination date, of its intention to do so, after which each party
shall be released from any and all further obligations hereunder.
ARTICLE IV - QUALITY
In the event Seller's Gas delivered hereunder does not meet any one or more of
the following quality specifications, Buyer reserves the right to restrict
delivery volumes of such Gas or cease taking such as for so long as such
condition(s) exists Buyer may elect to take Gas not meeting Quality
Specifications; however, Buyer's election to do so does not constitute a waiver
of the Quality Specifications described herein and in Buyer's sole judgment may
enforce provisions of this article at any time.
Quality Specifications
----------------------
Hydrogen Sulfide 0.25 grains or less per 100 cubic feet
Carbon Dioxide 2.0% or less by volume
Nitrogen 5% or less by volume
Total Sulphur 5.0 grains or less per .100 cubic feet
Oxygen No Oxygen
Water No free water
Foreign Materials Commercially free
Heating Value Not less than one thousand one hundred fifty (1,150)
Btu's per cubic feet.
Temperature Not less than forty degrees (40(degree)) nor more
than one hundred twenty degrees (120(degree))
Fahrenheit.
ARTICLE V- ALLOCATION OF RESIDUE GAS
The Residue Gas attributable to the Gas delivered here under shall be allocated
on a Btu basis, based on a factor, the numerator of which will be Seller's
wellhead delivered Btu's, reduced by subtracting Seller's calculated Btu's
extracted as Plant Products, Seller's Btu's of allocated Plant fuel, and
hydrogen sulfide, and the denominator of which will be the sum of all Plant
wellhead delivered Btu's, reduced by subtracting the calculated Btu's extracted
as Plant Products, actual Btu's of Plant fuel, and hydrogen sulfide, such factor
to be multiplied by the total Plant Residue Gas.
Buyer shall not be obligated to return Residue Gas to Seller's lease for use in
the development and operations of such lease. Seller may use Gas produced from
said lease for the purpose of developing and operating the lease.
ARTICLE VI - ALLOCATION OF PLANT PRODUCTS
The Plant Products attributable to the gas delivered hereunder during each
accounting period shall be the quantities of Plant Products obtained by
multiplying the volume of Gas delivered hereunder by the "Recovered Plant
Product GPM" of such Gas for each Plant Product. The "Recovered Plant Product
GPM" as used herein shall be the "Plant Product GPM" for each Plant Product,
determined as provided for in Article VIII, Settlement Tests, multiplied by the
"Actual Plant Product Recovery Adjustment." The "Actual Plant Product Recovery
Adjustment" shall be a fraction, the numerator of which shall be the actual
Plant recovery of each Plant product saved and sold from Buyer's Plant during
each accounting period; and the denominator of which shall be the theoretical
quantity of that same Plant Product contained in the total volume of gas
delivered to Buyer's Plant during each accounting period. Said Plant total of
the theoretical quantity of each Plant Product shall be the summation of the
volumes of each Plant Product attributable to all gas received by Buyer at all
delivery points for the Plant as determined by multiplying the volumes of such
gas each accounting period by each Plant Product GPM of such gas as determined
in the same manner as provided for in Article VIII, Settlement Tests.
ARTICLE VII - RIGHTS-OF-WAY
Insofar as Seller's lease's subject to and covered by this Contract permits,
Buyer is granted the right to lay and maintain lines and to install any
necessary equipment on said lease(s) and shall have the right to free entry for
any purpose incidental to Plant operations so long as such purpose does not
interfere with lease operations or the rights of owners in fee. Seller warrants
to Buyer peaceable access or ingress and egress to the lease(s) at all times for
the performance of this Contract. All lines and other equipment placed by Buyer
on said lands shall remain the property of the Buyer and, subject to the terms
of this contract, may be removed by Buyer at any time.
ARTICLE VIII - SETTLEMENT TESTS
Buyer shall, at its expense, test the Gas to be delivered hereunder to determine
the Plant Product composition, and specific gravity as hereinafter provided:
A. Plant Product Composition of the Gas: Buyer shall obtain a spot sample of
the Gas delivered hereunder while the Gas is being produced under normal
operating conditions. Analysis of such sample shall be made by Buyer at
Buyer's election by gas chromatography or other industry approved method,
and the results reported as galloons per thousand cubic feet (GPM) of each
Plant Product (the "Plant Product GPM"). The calculations of Plant Products
GPM's determined from said analysis shall be made by utilizing applicable
conversion factors (corrected to the measurement conditions herein stated)
as contained in Gas Processor's Association Standard 2261, Analysis of
Natural Gas and Similar Gaseous Mixtures by Gas Chromatography, as revised
from time to time.
B. Specific Gravity: The specific gravity of the Gas shall be determined by
the use of a gravitometer of the Ranarex type, gas chromatography, or other
mutually acceptable industry approved method.
The testing for Plant Product composition and specific gravity provided above
shall be made semiannually. Either party hereto may request in writing that
special tests be made, at the expense of the party requesting same, when, in its
opinion, the Plant Product composition or specific gravity of the Gas has
changed materially.
Buyer shall notify the Seller in writing ten (10 days previous to the settlement
tests in order that it may have a representative present to witness said tests
and/or make joint tests with its own appliances.
ARTICLE IX - METERS AND MEASUREMENT
The Gas delivered hereunder shall be measured by an orifice meter, or other
industry acceptable metering device, of standard make to be furnished,
installed, and kept in repair by Buyer to measure the delivery volume at each
Delivery Point herein. The installation and operation of metering equipment, and
the calculation of volumes shall be in accordance with the prescribed
recommendations of API Manual of Petroleum Measurement Standards (MPMS, Chapter
14, Natural Gas Fluids Measurement, Section 3, Concentric, Square-Edged Orifice
Meters, Parts 1,2,3,& 4. 1991 Edition or latest revision. Revisions to such
Edition shall apply to computations and operation of meter installations but
shall not be construed to require major modifications to or replacement of said
equipment.
The amount of Gas so metered shall be computed in cubic feet on the basis of
pressure of 14.65 pounds per square inch absolute and at a base temperature of
sixty degrees (60(degree)) Fahrenheit. The flowing temperature shall be assumed
to be sixty degrees (60(degree)) Fahrenheit; however, Buyer may, at its option,
install a recording thermometer at each point of measurement to measure the
actual flowing temperature of the Gas being delivered and apply a correction for
such flowing temperature to the volume calculations as provided herein. The
barometric pressure will be the appropriate pressure in pounds per square inch
absolute determined by actual test or calculated based on the elevation. A
correction shall be made for any deviation from Boyle's law in accordance with
MPMS as hereinabove described.
Buyer shall periodically test the accuracy of the metering equipment, but not
less frequent than specified in the settlement Tests provision of this Contract.
If at any time the Gas measuring or testing equipment is found to be out of
service or registering inaccurately in any percentage, it shall be adjusted at
once to read accurately, within the limits prescribed by the manufacturer. Such
equipment will be judged incorrect if inaccurate by an amount exceeding two
percent (2%) at a reading corresponding to the average rate of flow for the
period since the last test. If such equipment is out of service or incorrect,
then any previous readings of such equipment shall be corrected to aero error
for any period which is known definitely or agreed upon; but in case the period
is not known definitely or agreed upon, such correction shall be for a period
equal to one-half (1/2) of the time elapsed since the last test, not to exceed
ninety (90) days.
In the event a meter is out of service or registering inaccurately, the volume
of Gas shall be estimated by one of the following methods, in order of priority:
(1) using the registration of accurate check meters if installed and registering
accurately, (2) correcting the error if the percentage error is ascertainable by
calibration or mathematical computation, (3) using historical data, (4) using
volume balance data, or (5) using other mutually agreeable methods. No
correction for prior periods will be made for recorded inaccuracies of two
percent (2%) or less.
Buyer and Seller shall have the right to inspect equipment installed or
furnished by the other, and the charts and other measurement or testing data of
the other, at all times during business hours; but the reading, calibration, and
adjustment of all Gas metering equipment and changing of charts shall be done
only by the party installing and furnishing the same. In case any question
arises as to the accuracy of the Buyer's meter measurement, said meter, or
meters, shall be tested upon the demand of either party. The expense of such
tests shall be borne by the party demanding same if the meter is found to be
correct and by the Buyer if found incorrect. Corrections and adjustments for any
errors will be made as outlined above. If requested, Buyer shall send the charts
to Seller for checking. Said charts are to be returned to Buyer within thirty
(30) days from receipt thereof.
ARTICLE X - COMPENSATION TO SELLER
Buyer shall pay to Seller as total compensation for the Gas delivered hereunder
the sum of the values computed in accordance with subsections A., B., C., D.,
and E. of this Article.
A. Plant Products - An amount equal to Seller's allocated gallons of Plant
Products (determined as provided in the Allocations of Plant Products
provision hereof) times Eighty Percent (80%) times the "current weighted
average net sales price" of such Plant Products.
The "current weighted average net sales price" of each Plant Product shall
be determined by dividing the total gallons of such product produced and
sold during the accounting period involved into the "Net proceeds f.o.b.
Plant" received from sales of such Plant Product for such period by Buyer.
"Net proceeds f.o.b. Plant" shall be the total gross proceeds received by
Buyer from the sale of each Plant Product during each accounting period
less any charges for tank car rental, sales commissions, taxes, pipeline
transportation costs, and similar costs and expenses incurred or made in
connection with the sale, transportation, and delivery of such Plant
Product.
When Buyer sells Plant Products through its own marketing organization, the
sales commissions shall be commensurate with the current commission being
charged in the industry by independent brokers handling like products;
B. Residue Gas - An amount equal to Eighty Percent (80%) of the net proceeds
received from the sale of such Residue Gas.
The volume of "Residue Gas" shall be determined by application of the
Allocation of Residue Gas provision thereof. "Net proceeds" as herein used
shall mean the total gross proceeds received by Buyer form the sale of
surplus Residue Gas during each accounting period less any costs incurred
by Buyer for transporting or compression required to market the Residue
Gas.
C. Notwithstanding the provisions of A. and B. above, commencing July 1, 1998
and each six (6) month period thereafter, on January 1 and July 1 the
percentages for determining compensation in A. and B. above will be based
on Average Daily Contract Volume for the prior six (6)-month period and
will conform to the table as shown below. For the Average Daily Contract
Volume of Gas delivered hereunder, the percentages for determining
compensation in accordance with subsections A. and B, above shall be:
- ----------------------------------------------- --------------- -------------
A. B.
AVERAGE DAILY CONTRACT VOLUME PLANT PRODUCTS RESIDUE GAS
- ----------------------------------------------- --------------- -------------
Less than 1000 mcf/d 65% 65%
- ----------------------------------------------- --------------- -------------
Greater than or equal to 1000 Mcf/d but Less 70% 70%
than 2500 Mcf/d.
- ----------------------------------------------- --------------- -------------
Greater than or equal to 2500 Mcf/d but Less 75% 75%
than 4000 Mcf/d
- ----------------------------------------------- --------------- -------------
Greater than or equal to 4000 Mcf/d but Less 80% 80%
than 5500 Mcf/d
- ----------------------------------------------- --------------- -------------
5500 Mcf/d or /greater 85% 85%
- ----------------------------------------------- --------------- -------------
D. Plant Products - Take-In-Kind Option - Seller shall have the option, ;and
has exercised that option, to take-in-kind its percentage (less Buyer's
share) of the Plant Products recovered from Seller's Gas beginning March 1,
1998. Prior to exercising the Take-In-Kind option on the Plant Products,
Seller must provide Buyer with copy of agreement between Seller and
Warren's Liquid Marketing Department covering transportation and
fractionation of said products. If said agreement is not provided, this
option will not be valid. In order to exercise a change in such right,
Seller shall give Buyer written notice no later than thirty (30) days prior
to January 1, 1999, or any six (6) month period thereafter commencing on
July 1, or January 1. Take-In-Kind if Seller's Plant Products shall remain
in effect for a minimum period of six (6) months and thereafter for periods
of six (6) months. Seller's Take-In-Kind option shall remain in effect if
Seller fails to notify Buyer in writing at least thirty (30) days prior to
any six (6) month period of Seller's desire to cease its taking of gas.
E. Residue Gas - Take-In-Kind Option - Seller shall have the option, and has
exercised that option, to take-in-kind its percentage (less Buyer's share)
of the Residue Gas attributable to the gas delivered hereunder beginning
March 1, 1998. In order to exercise a change in such right, Seller shall
give Buyer written notice no later than thirty (30) days prior to such
right, Seller shall give Buyer written notice no later than thirty (30)
days prior to January 1, 1999, or any six (6) month period thereafter
commencing on July 1, or January 1. Take-In-Kind of Seller's Residue Gas
shall remain in effect for a minimum period of six (6) months and
thereafter for periods of six (6) months. Seller's Take-In-Kind option
shall remain in effect if Seller fails to notify Buyer in writing at least
thirty (30) days prior to any six (6) month period of Seller's desire to
cease its taking of Gas.
ARTICLE XI - PAYMENT
Payment shall be made by the Buyer not later than the last day of each month for
all Gas purchased hereunder during the preceding month. Seller shall be
furnished a separate statement showing full details of the accounts.
Examination by the Seller of the books of account kept by the buyer respecting
said Gas account shall be permitted by the Buyer at any and all reasonable hours
within two (2) years from date of payment. If any such examination reveals any
inaccuracy in such statements, charge, credit computation, tests, or delivery,
the necessary adjustment shall be made promptly. Any statement not questioned in
writing by Seller, within a two (2) year period commencing with the first day of
the calendar year succeeding the calendar year in which said statement is
received shall be final and not subject to dispute.
ARTICLE XII - WARRANTY OF TITLE
Seller warrants title to the Gas and that Seller has the right to sign this
Contract on behalf of one hundred percent (100%) of the working interest owners
in the well(s) under the lease(s) covered by this Contract as shown on Exhibit
"A" as it may be amended from time to time. Seller agrees to indemnify Buyer and
its affiliates and the directors, officers, agents, and employees of Buyer and
its affiliates, and save them harmless from all suits, actions, debts,
accounting, damages, costs, losses, and expenses arising from or out of all
liens or adverse claims of any and all persons to said Gas or to royalties,
taxes, license fees, or charges thereon which are applicable before the title
passes to Buyer. Upon request, Seller shall furnish Buyer abstracts of title,
and Buyer shall not be required to make payment until Seller shall have
furnished such abstracts covering the land described, showing good and
merchantable title to the Gas. If Seller's title is questioned or involved in
litigation, Buyer shall have the right to withhold payment without interest
during the pendency of such litigation, or until such title is freed from such
question, or until Seller furnishes a bond conditioned to save Buyer harmless
wit surety acceptable to Buyer.
ARTICLE XIII - ROYALTY AND OTHER INTERESTS
Seller shall account and pay to the persons entitled thereto all royalties, oil
payments, overriding royalties, etc., due under leases or other agreements in
accordance with the provisions thereof for their share; if any, of the
compensation due Seller for the Gas delivered hereunder.
Buyer assumes no liability of any kind for the payments of royalties, oil
payments, overriding royalties, etc., due on the compensation due Seller for the
Gas delivered hereunder. Seller hereby agrees to indemnify and hold Buyer
harmless against any and all claims, demands, and causes of action of any kind,
together with all losses, damages, liabilities, costs and expenses (including
court costs and attorney fees) arising out of the payments made by Seller or
required to be made by Seller hereunder.
ARTICLE XIV - FORCE MAJEURE
In the event either Seller or Buyer is rendered unable, wholly or in part, by
force majeure to carry out its obligations under this Contract, on such party's
giving notice and reasonably full particulars of such force majeure in writing
or by facsimile to the other party as soon as possible after the occurrence of
the cause relied on, the obligations of the party giving such notice, so far as
and to the extent that they are affected by such force majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period, and such cause shall so far as possible be remedied with all reasonable
dispatch.
The term "force majeure" as used herein shall mean acts of God, strikes,
lockouts, or other industrial disturbances; acts of the public enemy, wars,
blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fires, storms, floods, washouts, laws, rules and regulations, arrests and
restraints of the government, either federal or state, civil or military, civil
disturbances, breakage of lines of pipe or transmission facilities, temporary
cleaning or testing of facilities, freezing of the wells or lines of pipe,
temporary failure of Gas supply, inability of either party to obtain necessary
materials, temporary or permanent failure of Gas markets, and any other cause,
whether of the kind herein enumerated or otherwise, which is not reasonably
within the control of the party claiming suspension; such term shall likewise
include (a) in those instances where either party hereto is required to obtain
servitude, right-of-way grants, permits, or licenses to enable such party to
fulfill its obligations hereunder, the inability of such party to acquire, or
the delays on the part of such party in acquiring, at reasonable cost and after
the exercise of reasonable diligence, such servitude, right-of-way grants,
permits or licenses; and (b) in those instances where either party hereto is
required to furnish materials and supplies for the purpose of constructing and
maintaining facilities or is required to secure permits or permission from any
governmental agency to enable such party to fulfill its obligations hereunder,
the inability of such party to acquire, or the delays on the part of such party
in acquiring, at reasonable cost and after the exercise of reasonable diligence,
such materials and supplies, permits and permissions. The settlement of strikes
or lockouts shall be entirely within the discretion of the party having the
difficulty, and that the above requirement that any force majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of opposing party when such
course is inadvisable in the discretion of the party having the ability.
ARTICLE XV - UNECONOMIC GAS
In the event the Gas from any well or wells or from any point of separation of
the oil and Gas on said lease for any reason becomes uneconomic to Buyer in
Buyer's sole opinion, due to price, volume, quality, or other cause, Buyer shall
have the right to cease taking such Gas so long as such condition exists. It is
further provided that if at any time the price, volume, or quality of the Gas
available to Buyer, or any cause beyond Buyer's control, shall render the
operation of Buyer's Plant uneconomic in Buyer's sole opinion, Buyer may, by
thirty (30) days written notice and payment or tender to Seller of Ten Dollars
($10.00), cancel this Contract. In the event Buyer shall fail to take Seller's
said uneconomical gas for a period of more than thirty (30) consecutive days,
Buyer agrees to release said uneconomical gas upon receipt of Seller's thirty
(30) day written request.
ARTICLE XVI - PRIORITY RIGHTS OF SELLER
As said premises are being operated primarily for the production of oil, the
taking of Gas by the Buyer shall be subservient to said oil operations. The
Seller may, at any time, without liability to Buyer, clean out, deepen or
abandon any well or wells on the properties described in Exhibit "A" hereof, or
may use any efficient modern or improved method for the production of oil.
Before any well or wells are taken out of service for any reason whatsoever,
Seller agrees to first shut off the same from communication with Buyer's
gathering pipelines.
ARTICLE XVII - INDEMNITY
Seller releases and agrees to defend, protect, indemnify, and hold Buyer and its
parent company, subsidiaries, and affiliates, and the directors, officers,
agents, and employees of Buyer and its parent company, subsidiaries and
affiliates (collectively referred to herein as the "Buyer Indemnitees") harmless
from and against all claims, liabilities, losses, damages, and expenses,
including attorney's fees in connection therewith, arising out of Seller's
performance or nonperformance of this Contract, except for such as may be caused
by the negligence of any "Buyer Indemnitee." Likewise, Buyer releases and agrees
to defend, protect, indemnify, and hold Seller harmless from and against all
claims, liabilities, losses, damages, and expenses, including attorney's fees in
connection therewith, arising out of Buyer's performance or nonperformance of
this Contract, except for such as may be caused by the negligence of Seller, its
agents or employees.
ARTICLE XVIII - TAXES
Seller agrees to bear and to pay or cause to be paid all taxes on the Gas
delivered hereunder which are lawfully levied prior to its delivery to Buyer,
and Buyer agrees to bear and pay or cause to be paid all taxes lawfully levied
on such Gas after its receipt by Buyer.
ARTICLE XIX - LIABILITY OF PARTIES
As between Buyer and Seller, Seller shall be in control and possession of the
Gas sold and purchased hereunder and responsible for any damage or injury caused
thereby until the same shall have been delivered to Buyer at the Delivery
Point(s). As between Buyer and Seller, Buyer shall be in control and possession
of the Gas sold and purchased hereunder and responsible for any damage or injury
caused thereby after the same shall have been delivered to Buyer at the Delivery
Point(s).
ARTICLE XX - MISCELLANEOUS
1. REGULATORY BODIES - This Contract shall be subject to all valid statutes,
rules and regulations of any duly constituted federal or state regulatory
body or bodies having jurisdiction herein.
2. ASSIGNMENT - All of the rights and duties herein contained shall inure to
and be binding upon the respective heirs, successors, and assigns of the
parties hereto; provided, however, that no conveyance or transfer of an
interest of either party shall be binding upon the other party until such
other party has been furnished with written notice thereof.
3. PRODUCTION IN CONFORMANCE WITH FLOW SCHEDULE - In order to maintain maximum
Plant efficiency on a 24-hour operating schedule, it is desired by the
parties hereto to maintain a reasonably uniform rate of flow of Gas to said
Plant over each 24-hour period. It is, therefore, agreed that Seller shall,
at its option, either (1) regulate its producing schedule so that the Gas
shall be supplied from Seller's lease at a reasonably uniform rate of flow;
or (2) accept and follow a producing schedule to be established by Buyer
for all wells connected to Buyer's Plant, provided that Buyer shall
consider the wishes of Seller in establishing the producing schedule for
seller's well or wells. Anything else contained in this contract to the
contrary notwithstanding, Seller hereby agrees that in the event it fails
to comply with the above provisions of this Article, such failure shall
give Buyer the right, at its option, to refuse to accept delivery of
Seller's casinghead Gas during any period of such non-compliance.
4. WAIVER OF DEFAULTS - No waiver by Buyer or Seller of any default of the
other under this contract shall operate as a waiver of any future default,
whether of a like or a different character.
5. NOTICES - Every notice, request, or statement provided for in this Contract
shall be in writing and shall be directed, made, or delivered as follows:
NOTICES TO BUYER: Warren NGL, INC.
Contract Administration
1000 Louisiana, Suite 5800
Houston, Texas 77002-5050
NOTICES TO SELLER: FOUR SEVENS OIL COMPANY, LTD. AND
J W ENERGY COMPANY, LTD.
1090 Fort Worth Club Tower
777 Taylor Street
Fort Worth, Texas 76102
or at such other post office address as such party shall from time to time
designate as the address for such purpose by registered letter addressed to
other party.
6. TERMINATION OF PRIOR CONTRACTS AND RELEASE - This Contract terminates and
supersedes any and all prior contracts between the parties hereto to the
extent that such contracts cover the purchase and sale of gas covered by
this Contract. In consideration of the covenants herein contained, Seller
hereby acknowledges takes of all required volumes and payment in full by
Buyer of all sums owed Seller by Buyer for Gas, whether from an oil well or
gas well, produced from the properties described in Exhibit "A" and any
other sums owed Seller related to any contract which is hereby terminated
or superseded, and Seller hereby releases and waives any and all causes of
action related thereto.
IN WITNESS WHEREOF, the parties have hereunto executed this Contract the
day and year first above written; provided, however, that said Contract shall
not valid or binding on either party until fully executed by Buyer.
WITNESS SELLER
FOUR SEVENS OIL COMPANY, LTD., AND
/s/ Brad Cunningham J W ENERGY COMPANY, LTD.
/s/ Mary Lowe
By /s/ [illegible]
Title Partner
BUYER
WARREN NGL, INC.
By /s/ R. Len Hesseltine
R. Len Hesseltine
Vice President
Warren Petroleum Company Letterhead
Limited Partnership
An NGC Company
Four Sevens Oil Company, Ltd.
& J.W. Energy Company, Ltd.
1090 Fort Worth Club Tower
Forth Worth, TX 76102
Attention: Dick Lowe
Subject: Amendment to Gas Purchase Contract
Dated: January 30, 1998
Lease(s) Various
Warren #42095-03043
Dear Mr. Lowe:
Under date of January 30, 1998, a Gas Purchase Contract was entered into by
and between FOUR SEVENS OIL COMPANY, LTD. & J.W. ENERGY COMPANY, LTD. (Seller)
and WARREN NGL, INC (Buyer) for the sale and purchase of gas produced from
various leases located in Wise County, Texas.
It is the desire of the parties hereto and both parties do hereby agree,
for and in consideration of the mutual benefits expressed herein and for other
good and valuable consideration, to amend the above referenced Contract as
hereinafter provided.
The existing EXHIBIT "A" shall be amended to include the following
additional leae located in Jack County, Texas:
LEASE NAME DESCRIPTION
Roy Cherryhomes F-2 2,204' FNL & 500' FEL of T.G. Box Survey, A-35,
Jack County, Texas
The effective date of this Amendment shall be June 4, 1998.
Except as herein provided, all other terms and provisions of the referenced
Contract shall remain in full force and effect for the term thereof.
If the above meets with your approval, please secure execution of this
Amendment in duplicate, and return both originals to Warren NGL, Inc. Attention:
Kathy Bissell, (Room 6401A), 1000 Louisiana, Suite 5800, Houston, TX 77002-5050.
A fully executed original will be forwarded to you for your files upon final
execution by Warren. Yours very truly,
WARREN NGL, INC.
/s/ Bobby J. McGuire
Bobby J. McGuire
Director, Gas Supply
Accepted and agreed to this 19th
Day of May, 1998
FOUR SEVENS OIL COMPANY, LTD.
& J.W. ENERGY COMPANY, LTD.
By /s/ [Illegible]
Title Partner
BJM/kb
[DYNEGY MIDSTREAM, INC. LETTERHEAD]
July 24, 1998
Four Sevens Oil Company, Ltd. &
J.W. Energy Company Ltd.
1090 Fort Worth Club Tower
777 Taylor Street
Fort Worth, TX 76120
Attention: Dick Lowe
Subject: Amendment to Gas Purchase Contract
Dated: January 30, 1998
Lease(s) Various
Dynegy # 42095-03043
Dear Mr. Lowe:
Under date of January 30, 1998, a Gas Purchase contract was entered into by
and between FOUR SEVENS OIL COMPANY, LTD. & J. W. ENERGY COMPANY, LTD. (Seller)
and DYNEGY MIDSTREAM, INC. (formerly known as Warren NGL, Inc.) (Buyer) for the
sale and purchase of gas produced from various leases located in various
counties in Texas.
It is the desire of the parties hereto and both parties do hereby agree,
for and in consideration of the mutual benefits expressed herein and for other
good and valuable consideration, to amend the above referenced Contract as
hereinafter provided.
The existing EXHIBIT "A" shall be amended to include the following
additional lease(s) located in Wise County, Texas:
LEASE NAME DESCRIPTION
---------- -----------
Ashe A-6 See Attached
The effective date of this Amendment shall be the day of first delivery of
Gas from the Ashe A-6.
Except as herein provided, all other terms and provisions of the referenced
Contract shall remain in full force and effect for the term thereof.
If the above meets with your approval, please secure execution of this
Amendment in duplicate, and return both originals to Dynegy Midstream, Inc.,
Attention: Kathy Bissell, (Room 6401A), 1000 Louisiana, Suite 5800, Houston, TX
77002-5050. A fully executed original will be forwarded to you for your files
upon final execution by Dynegy.
Yours very truly,
DYNEGY MIDSTREAM, INC.
/s/ Bobby J. McGuire
Bobby J. McGuire
Director, Gas Supply
Accepted and agreed to this 21
day of Sep., 1998
FOUR SEVENS OIL COMPANY, LTD. &
J. W. ENERGY COMPANY LTD.
By: /s/ Hunter Enis
Title: Partner
[GRAPHIC OMITTED]
Cap [Illegible] (Consolidated Congl)
Operator of Lease/Unit: OXY USA Inc.
Name of Lease: Ashe A
Well No.: 6
Total Acres in Lease/Unit: 586
Description of Property: [Illegible]
County: Wise
Field: Booneville
Scale: 1" - 1000'
All information on this plat is true to the best of my belief and knowledge.
/s/ Hunter Enis
Hunter Enis, Partner
JW Energy Co., LTD.
[DYNEGY MIDSTREAM, INC. LETTERHEAD]
August 11, 1998
Four Sevens Oil Company, Ltd. &
J.W. Energy Company Ltd.
1090 Fort Worth Club Tower
777 Taylor Street
Fort Worth, TX 76120
Attention: Dick Lowe
Subject: Amendment to Gas Purchase Contract
Dated: January 30, 1998
Lease(s) Various
Dynegy # 42095-03043
Dear Mr. Lowe:
Under date of January 30, 1998, a Gas Purchase contract was entered into by
and between FOUR SEVENS OIL COMPANY, LTD. & J. W. ENERGY COMPANY, LTD. (Seller)
and DYNEGY MIDSTREAM, INC. (formerly known as Warren NGL, Inc.) (Buyer) for the
sale and purchase of gas produced from various leases located in various
counties in Texas.
It is the desire of the parties hereto and both parties do hereby agree,
for and in consideration of the mutual benefits expressed herein and for other
good and valuable consideration, to amend the above referenced Contract as
hereinafter provided.
The existing EXHIBIT "A" shall be amended to include the following
additional lease(s) located in Jack County, Texas:
LEASE NAME DESCRIPTION
---------- -----------
Tarrant B #6 See Attached
The effective date of this Amendment shall be the day of first delivery of
Gas from the Tarrant B #6.
Except as herein provided, all other terms and provisions of the referenced
Contract shall remain in full force and effect for the term thereof.
If the above meets with your approval, please secure execution of this
Amendment in duplicate, and return both originals to Dynegy Midstream, Inc.,
Attention: Kathy Bissell, (Room 6401A), 1000 Louisiana, Suite 5800, Houston, TX
77002-5050. A fully executed original will be forwarded to you for your files
upon final execution by Dynegy.
Yours very truly,
DYNEGY MIDSTREAM, INC.
/s/ Bobby J. McGuire
Bobby J. McGuire
Director, Gas Supply
Accepted and agreed to this 14
day of Sep., 1998
FOUR SEVENS OIL COMPANY, LTD. &
J. W. ENERGY COMPANY LTD.
By: /s/ Hunter Enis
Title: Partner
BJM/kb
[GRAPHIC OMITTED]
[DYNEGY MIDSTREAM, INC. LETTERHEAD]
September 9, 1998
Four Sevens Oil Company, Ltd. &
J.W. Energy Company Ltd.
1090 Fort Worth Club Tower
777 Taylor Street
Fort Worth, TX 76120
Attention: Dick Lowe
Subject: Amendment to Gas Purchase Contract
Dated: January 30, 1998
Lease(s) Various
Dynegy # 42095-03043
Dear Mr. Lowe:
Under date of January 30, 1998, a Gas Purchase contract was entered into by
and between FOUR SEVENS OIL COMPANY, LTD. & J. W. ENERGY COMPANY, LTD. (Seller)
and DYNEGY MIDSTREAM, INC. (formerly known as Warren NGL, Inc.) (Buyer) for the
sale and purchase of gas produced from various leases located in various
counties in Texas.
It is the desire of the parties hereto and both parties do hereby agree,
for and in consideration of the mutual benefits expressed herein and for other
good and valuable consideration, to amend the above referenced Contract as
hereinafter provided.
The existing EXHIBIT "A" shall be amended to include the following
additional lease(s) located in Jack County, Texas:
LEASE NAME DESCRIPTION
---------- -----------
Sealy C #4 See Attached
The effective date of this Amendment shall be the day of first delivery of
Gas from the Sealy C #4.
Except as herein provided, all other terms and provisions of the referenced
Contract shall remain in full force and effect for the term thereof.
If the above meets with your approval, please secure execution of this
Amendment in duplicate, and return both originals to Dynegy Midstream, Inc.,
Attention: Vicki Hopson, (Room 6403D), 1000 Louisiana, Suite 5800, Houston, TX
77002-5050. A fully executed original will be forwarded to you for your files
upon final execution by Dynegy.
Yours very truly,
DYNEGY MIDSTREAM, INC.
/s/ Bobby J. McGuire
Bobby J. McGuire
Director, Gas Supply
Accepted and agreed to this 21
day of Sep., 1998
FOUR SEVENS OIL COMPANY, LTD. &
J. W. ENERGY COMPANY LTD.
By: /s/ Hunter Enis
Title: Partner
BJM/vh
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[DYNEGY MIDSTREAM, INC. LETTERHEAD]
DYNEGY
November 2, 1998
Four Sevens Oil Company, Ltd. &
J.W. Energy Company, Ltd.
1090 Fort Worth Club Tower
777 Taylor Street
Fort Worth, TX 76102
Attention: Dick Lowe
Subject: Gas Purchase Contract
Dated: January 30, 1998
Lease(s): Various
Dynegy #: 42095-03043
Dear Mr. Lowe:
Under date of January 30, 1998, a Gas Purchase Contract was entered into by
and between FOUR SEVENS OIL COMPANY, LTD. & J. W. ENERGY COMPANY, LTD. (Seller)
and DYNEGY MIDSTREAM, INC. (formerly known as Warren NGL, Inc.) (Buyer) for the
sale and purchase of gas produced from various leases located in Jack and Wise
Counties, Texas.
It is the desire of the parties hereto and both parties do hereby agree,
for and in consideration of the mutual benefits expressed herein and for other
good and valuable consideration, to amend the above referenced Contract as
hereinafter provided.
The existing EXHIBIT "A" shall be amended to include the following
additional lease(s) located in Jack County, Texas:
LEASE NAME DESCRIPTION
---------- -----------
Tarrant B-7 See attached
Tarrant A-6 See attached
Tarrant A-7 See attached
Tarrant A-8 See attached
The effective date of this Amendment shall be the day of first delivery of
Gas from the subject leases.
Except as herein provided, all other terms and provisions of the referenced
Contract shall remain in full force and effect for the term thereof.
If the above meets with your approval, please secure execution of this
Amendment in duplicate, and return both originals to Dynegy Midstream, Inc.,
Attention: Vicki Hopson (Room 6428-A), 1000 Louisiana, Suite 5800, Houston, TX
77002-5050. A fully executed original will be forwarded to you for your files
upon final execution by Dynegy.
Yours very truly,
DYNEGY MIDSTREAM, INC.
/s/ Bobby J. McGuire
Bobby J. McGuire
Director, Gas Supply
BJM/vh
Accepted and agreed to this 16
Day of Nov., 1998
FOUR SEVENS OIL COMPANY, LTD. &
J.W. ENERGY COMPANY, LTD.
By /s/ Hunter Enis
Title Partner
[GRAPHIC OMITTED]
EXHIBIT "A" TO GAS PURCHASE CONTRACT
BETWEEN FOUR SEVENS OIL COMPANY, LTD. & J W ENERGY COMPANY, LTD (SELLER)
AND WARREN NGL, INC. (BUYER)
DATED JANUARY 30, 1998
SCHEDULE OF INTERESTS
Working Interests
ASHE A
7-4202079
Wise County, Texas
OXY LEASE NUMBER: 6-4214522/4214522
DATED: April 26, 1949
LESSOR: Eugene Ashe
LESSEE: F. H. Scott
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 60, Page 95
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 776.12
acres out of Cochran and Collins Survey, GH&HRR Co. Survey
No. 20, George Ramsdale Survey, and R. A. Nelson Survey,
more fully described in the oil and gas lease dated April
26, 1949, recorded in Book 60, Page 95, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Gas Contract dated December 21, 1992 (#373200) with Warren Petroleum
ASHE B
7-4202100
Wise County, Texas
OXY LEASE NUMBER: 6-4214523/4214523
DATED: April 26, 1949
LESSOR: Eugene Ashe
LESSEE: F. H. Scott
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 60, Page 75
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
all of the E. T. RR Co. Survey No. 1, Patent No. 526,
Volume 8, and contains 640 acres, more or less and
described as follows: beginning at the Northwest
Corner of the Levi Howard Survey thence South with
Howard's West line 1900 VRS thence West 1900 VRS thence
North 1900 VRS thence East 1900 VRS to place of
beginning, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Gas Contract (42-C-8200) dated August 19, 1994 with Warren Petroleum
ASHE C
7-4202121
Wise County, Texas
OXY LEASE NUMBER: 6-4214526/4214526
DATED: April 26, 1949
LESSOR: Eugene Ashe
LESSEE: F. H. Scott
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 60, Page 85
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
134 acres of Anderson Angel Survey, 160 acres of R. B.
Dwight Survey, 84 acres of the J. J. Lang Survey, and
105 acres of Samuel Hewes Survey, more fully described
in the oil and gas lease dated April 26, 1949, recorded
in Book 60, Page 85, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Gas Contract (42-C-8200) dated August 19, 1994 with Warren Petroleum.
ASHE D
7-4202142
Wise County, Texas
OXY LEASE NUMBER: 6-4214524/4214524
DATED: April 26, 1949
LESSOR: Eugene Ashe
LESSEE: F. H. Scott
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 60, Page 73
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
542.51 acres of the E. T. RR Co. Survey No. 2 known as
the A. Devereux Survey, Patent 148, Certificate No.
17296, more fully described in the oil and gas lease
dated April 26, 1949, recorded in Book 60, Page 73,
Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Gas Contract (42-C-8200) dated August 19, 1994 with Warren Petroleum
ASHE E
7-4202163
Wise County, Texas
The following leases total to:
OXY NUMBER: 6-4214525/4214525
DATED: April 26, 1949
LESSOR: Eugene Ashe
LESSEE: F. H. Scott
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 60, Page 87
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 420.23
acres of the Levi Howard Survey, more fully described in the
oil and gas lease dated April 26, 1949, recorded in Book 60,
Page 87, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Gas Contract (42-C-8200) dated August 19, 1994 with Warren Petroleum.
BERRY D
7-4204550
Wise County, Texas
The following leases total to:
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
OXY LEASE NUMBER: 6-4228132/4212815
DATED: November 27, 1946
LESSOR: Aura Terrell
LESSEE: John M. Mouser
RECORDING DATA: Book 48, Page 147
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 70
acres on the SDL of this C. W. Edgery Survey Abstract
268, more fully described in the oil and gas lease
dated November 27, 1946, recorded in Book 48, Page 147,
Wise County, Texas.
OXY LEASE NUMBER: 6-4228121/4212724
DATED: December 4, 1946
LESSOR: Walter Berry
LESSEE: Cities Service Oil Company
RECORDING DATA: Book 48, Page 121
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 135
acres of the EH&W Thompson Survey Abstract 1149, more fully
described in the oil and gas lease dated December 4, 1946,
recorded in Book 48, Page 121, Wise County, Texas.
OXY LEASE NUMBER: 6-4212768/4212768
DATED: November 15, 1946
LESSOR: J. W. Berry
LESSEE: John M. Mouser
RECORDING DATA: Volume 47, Page 543
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
all of the West Half (W/2) of GH&H RR Co. Survey No. 2,
lying North of the Center line of the old
Jacksboro-Chico Public Road containing 75 acres of
land, more or less, Wise County, Texas.
OXY LEASE NUMBER: 6-4212562/4212562
DATED: June 18, 1946
LESSOR: M. T. Berry
LESSEE: John M. Mouser
RECORDING DATA: Book 46, Page 599
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 90
acres in the EH&W Thompson Survey, Abstract No. 1149, more
fully described in the oil and gas lease dated June 18,
1946, recorded in Book 46, Page 599, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Declaration of Unit dated January 10, 1967
2. Gas Contract dated November 12, 1992 (#374900) with Warren Petroleum
CHICO CONGLOMERATE UNIT WEST
7-4213545
Wise County, Texas
The following leases total to:
WORKING INTEREST 66.896%
NET REVENUE
INTEREST 57.45769%
OXY LEASE NUMBER: 6-4212762/4212768
DATED: November 15, 1946
LESSOR: J. W. Berry
LESSEE: John M. Mouser
RECORDING DATA: Book 47, Page 549
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
all of the West Half of the GH&H RR Co. Survey No. 2,
lying North of the Center Line of the old
Jacksboro-Chico Public Road, containing 75 acres of
land, more or less, Wise County, Texas.
OXY LEASE NUMBER: 6-4212843/4212843
DATED: December 15, 1946
LESSOR: Sealy & Smith Foundation
LESSEE: John M. Mouser
RECORDING DATA: Book 48, Page 24
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
Section 3, GH&H RR Co. Survey, Abstract 34E, Patent
208, volume 25, Wise County, Texas.
OXY LEASE NUMBER: 6-4228121/4212724
DATED: December 4, 1946
LESSOR: Walter Berry
LESSEE: Cities Service Oil Company
RECORDING DATA: Book 48, Page 121
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 135
acres of the EH&W Thompson Survey Abstract 1149, more fully
described in the oil and gas lease dated December 4, 1946,
recorded in Book 48, Page 121, Wise County, Texas.
OXY LEASE NUMBER: 6-4228132/4212815
DATED: November 27, 1946
LESSOR: Aura Terrell
LESSEE: John M. Mouser
RECORDING DATA: Book 48, Page 147
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 70
acres on the SBL of the C. W. Edgery Survey, Abstract
268, more fully described in the oil and gas lease
dated November 27, 1946, recorded in Book 48, Page 147,
Wise County, Texas.
OXY LEASE NUMBER: 6-4254594/4254594
DATED: November 15, 1947
LESSOR: Ima Pearl Garrett, et al.
LESSEE: K. W. Kilpatrick
RECORDING DATA: Volume 49, Page 227
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 95
acres, more or less, being part of the C. W. Edgery
Survey, Patent No. 1048, Volume 3, A-268, more fully
described in the oil and gas lease dated November 15,
1974, recorded in Book 49, Page 227, Wise County, Texas.
OXY LEASE NUMBER: 6-4254595/4254595
DATED: November 12, 1947
LESSOR: L. L. Roberts, et ux
LESSEE: K. W. Kilpatrick
RECORDING DATA: Volume 48, Page 524
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern
65.28 acres, more or less, out of the C. W. Edgery
Survey Patent No. 1048, Volume 3, A-268, more fully
described in lease dated November 12, 1947, recorded in
Book 48, Page 524, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. That certain Operating Agreement (42-C-1155) dated June 19, 1958 between
Cities Services Oil and Gas Company, Operator and Bridwell Oil Company, et
al, Non-operator.
2. Subject to Gas Contract dated November 12, 1992 (#374500) with Warren
Petroleum
DAVENPORT "A"
7-4220115
Wise County, Texas
OXY LEASE NUMBER: 6-4239159/4222956
DATED: August 16, 1977
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Company
WORKING INTEREST 53.125%
NET REVENUE
INTEREST 46.45439%
RECORDING DATA: Book 208, Page 361
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 196.84
acres in the GH&H RR Co. Survey #1 Abstract 349, more fully
described in the oil and gas lease dated August 16, 1977,
recorded in Book 208, Page 361, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. That certain Operating Agreement (42-C-4319) dated January 8, 1955 between
Cities Service Company, Operator and Eagle Oil & Gas Company, et al.,
Non-operator.
2. Subject to Gas Contract #ou 57-00 dated August 15, 1983 with Warren
Petroleum
DAVENPORT "B"
7-4220139
Wise County, Texas
The following leases total to:
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
OXY LEASE NUMBER: 6-4222956/4222956
DATED: August 15, 1946
LESSOR: Mrs. Cora L. Davenport
LESSEE: John M. Mouser
RECORDING DATA: Volume 47, Page 355
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said leases shall concern all of
the GH&H RR Co. Survey #1, Abstract 349, except rights down
to 5800 feet in the Westerly 196.84 acres, Wise County,
Texas.
OXY LEASE NUMBER: 6-4229732/4222956
DATED: November 29, 1946
LESSOR: James V. Anderson
LESSEE: John M. Mouser
RECORDING DATA: Volume 48, Pages 651
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 444
acres of the East part of the GH&H RR Co. Survey, more fully
described in the Oil and Gas Lease dated November 29, 1946
recorded in Book 43, Page 651, Wise County, Texas
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements:
1. This certain Gas Purchase Contract (W373200) dated October 21, 1992 with
Warren Petroleum.
HALMAN-SMITH A-2 CADDO
HALMAN-SMITH A-2 BOONEVILLE
7-4233602
7-4233601
Wise County, Texas
OXY LEASE NUMBER: 6-4212785/4212785
DATED: November 22, 1946
LESSOR: Tarrant County Water Control
LESSER: Cities Service Oil Company
WORKING INTEREST
BPO 99.28024%
NET REVENUE
INTEREST BPO 84.375%
WORKING INTEREST
APO 65.625%
RECORDING DATA: Book 47, Page 571
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 1179.58
acres of the JGW Clayton and C.D. Mixon Surveys, James
Vetntioner Survey, James Tarltorn Survey more fully
described in the oil and gas lease dated November 22, 1946,
recorded in Book 47, Page 571, except gas rights down to
5890 feet in the West 93 acres of a 305.89 acre tract in the
JGW Clayton survey, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements:
1. Subject to Operating Agreement 42-C-2141 dated September 6, 1962 and
42-C-2141-1 dated July 18, 1982 as amended.
2. Subject to Declaration of Unit effective September 6, 1962 covering
Boonesville Bend Conglomerate.
3. those certain Gas Purchase contracts dated April 11,1983 Number E-5400 and
August 15, 1983, Number OU57-00 with Warren Petroleum
HALMAN-SMITH A
7-4233604
WISE COUNTY, TEXAS
The following lesses total to:
WORKING INTEREST
BPO 76.46355%
NET REVENUE
INTEREST BPO 65.625%
WORKING INTEREST
APO 75%
NET REVENUE
INTEREST APO 65.625%
OXY LEASE NUMBER 6-4251140/4251140
DATED: February 11, 1985
ASSIGNOR: Cities Service Oil and Gas Corporation
RECORDING DATA: N/A
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern oil
rights in Bend Conglomerate interval, same being defined as
Southeast of interval between base of Caddo Line and top of
Marble Falls Lime, as shown on Schlumberger electric log
dated March 15, 1956 from Citler #1 Tarrant E, more fully
described in assignment dated December 9, 1985, Wise County,
Texas
OXY LEASE NUMBER: 6-4212785/4212785
DATED: November 22, 1946
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
RECORDING DATA: Book 47, Page 571
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 1179.58
acres of the JGW Clayton and C.D. Mixon Surveys, James
Ventioner Survey, James Tarltorn Survey more fully described
in the oil and gas lease dated November 22, 1946, recorded
in Book 47, Page 571, except gas rights down to 5890 feet in
the West 93 acres of a 305.89 acre tract in the JGW Clayton
Survey, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements:
1. That certain Operating Agreement (42-C-2141-1) dated September 21, 1987,
Cities Service Oil Company, as Operator;
2. that certain Gas Purchase contracts dated April 11, 1983, Number E-5400 and
August 15, 1983, Number OU57-00 with Warren Petroleum.
HALMAN-SMITH McCOMMONS
7-4233604
WISE COUNTY, TEXAS
The following lesses total to:
WORKING INTEREST
BPO 75%
NET REVENUE
INTEREST BPO 65.625%
OXY LEASE NUMBER 6-4212785/4212785
DATED: November 22, 1946
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil and Gas Corporation
RECORDING DATA: Book 47, Page 571
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 1179.68
acres of the JGW Clayton and C. D. Mixon surveys, James
Ventioner Survey, James Tarltorn Survey more fully described
in the oil and gas lease dated November 22, 1946, recorded
in Book 47, Page 571, except gas rights down to 5890 feet in
the West 93 acres of a 305.89 acre tract in the JGW Clayton
Survey, Wise County, Texas, ONLY INSOFAR as it covers 250
acres described in that certain Amendment to Lease to
authorize April dated April 27, 1962, recorded in Book 137,
Page 462, Lease Records of Wise County, Texas as to gas from
the Boonsville Bend Conglomerate.
OXY LEASE NUMBER 6-4222241/4222241
DATED: January 2, 1959
LESSOR: Ruth McNair
LESSEE: McCommons Oil Company
RECORDING DATA: Book 112, Page 261
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern listed
out of JGW Clayton Survey, A-750, more sully described in
the oil and gas lease dated January 2, 1959, recorded in
Book 112, Page 261, Wise County, Texas as to gas from the
Boonsville Bend Conglomerate formation.
OXY LEASE NUMBER: 6-4229618/4222241
DATED: January 2, 1959
LESSOR: Lewis Kirk, et al
LESSEE: McCommons Oil Company
RECORDING DATA: Book 112, Page 45
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern land
out of the JGW Clayton Survey, more fully described in the
oil and gas lease dated January 2, 1959, recorded from the
Boonsville Bend Conglomerate formation.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements:
1. That certain Operating Agreement dated July 18, 1982 between McCommons Oil
Company, Operator and Cities Service Petroleum Company, et al, as
Non-operator, covering 321.5 acres out of the JGW Clayton, A-150 Survey as
amended by letter dated July 13, 1982.
2. That certain Declaration of Unit dated September 6, 1962, unitized 321.5
acres in the JGW Clayton Survey as to gas production from the Boonsville
Bend Conglomerate.
3. That certain Agreement dated August 2, 1982. 4. Subject to a Letter
Agreement dated July 13, 1982.
KEMPNER A
7-4243365
Jack County, Texas
The following leases total to:
WORKING INTERST 50%
NET REVENUE
INTERST 43.75%
OXY LEASE NUMBER: 6-4228400/4214572
DATED: September 13, 1954
LESSOR: J. H. Kempner
LESSEE: D. L. Johnson
RECORDING DATA: Book 195, Page 109
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern all
rights in G. W. Isbell Survey, except part in NE/C, a tract
of 23 acres designated as second tract insofar as it covers
a 132.5 acre tract being all of the G. W. Isbell Survey,
A-1692, more fully described by meter and bounds in said
lease, Jack County, Texas.
OXY LEASE NUMBER: 6-4214572/4214572
DATED: March 10, 1949
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
RECORDING DATA: Book 139, Page 183
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 630.69
acres, Tract 1 designated by Tarrant County Water Control
and ID No. 1 being out of the Hedgecoke, Shelton. Simon,
Isabell, Walling, Welch and McKinley Surveys, more fully
described in the oil and gas lease dated March 10, 1949,
recorded in Book 139, Page 183, Jack County, Texas.
In addition to the agreements noted at the end of this working section, the
foregoing Properties are subject to following specific agreement:
1. That certain Operating Agreement (42-C-729) dated November 23, 1954 between
Cities Service Oil Company, Operator and D. L. Johnson, et al, Non-operator
covering 132.5 acres being all the G. W. Isbell Survey A-1692 described by
meters and bounds in oil and gas lease recorded in Book 139, Page 183.
2. That certain Gas Purchase Contract Number 303200 dated April 18, 1956, with
Warren Petroleum.
SEALY A
7-4270975
Jack County, Texas
OXY LEASE NUMBER: 6-4214572/4214572
DATED: March 10, 1949
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 139, Page 183
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 630.69
ACRES, Tract 1, designated by the Tarrant County Water
Control and Improvement District No. 1 being of the
Hedgecoke, Shelton, Simon, Isbell, Walling, Welch and
McKinley Surveys, more fully described in oil and gas lease
dated March 10, 1949, recorded in Book 139, Page 183, Jack
County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements.
1. That certain Surface Use Agreement dated November 1, 1984 between the Boy
Scouts of America and Cities Service Oil and Gas Corporation.
2. That certain Gas Purchase Contract number 48200 dated August 18, 1994 with
Warren Petroleum.
SEALY B
7-4270980
Wise County, Texas
OXY LEASE NUMBER: 6-4223030/4223030
DATED: June 29, 1953
LESSOR: Sealy & Smith Corporation
LESSEE: Cities Production Companies
WORKING INTERST 100%
NET REVENUE
INTEREST 82.03125%
RECORDING DATA: Book 74, Page 40
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 502.38
acres being all of Survey No. 19, Abstract No. 352,
originally granted to GH&H RR Co. under Certificate 32/233,
more fully described in the oil and gas lease dated June 29,
1953, recorded in Book 74, Page 40, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreement:
1. Declaration of Unit dated December 16, 1965.
2. Subsurface Easement dated May 10, 1984 between the Sealy Smith Foundation
and Mitchell Energy Corporation.
3. That certain Surface Use Agreement dated November 1, 1984 between the Boy
Scouts of America and Cities Services Oil and Gas Corporation.
SEALY C
7-4270982
Wise County, Texas
The following leases total to:
WORKING INTERST 100%
NET REVENUE
INTEREST 87.5%
OXY LEASE NUMBER: 6-4223030/4223030
DATED: June 29, 1953
LESSOR: Sealy & Smith Corporation
LESSEE: Cities Production Companies
RECORDING DATA: Book 74, Page 40
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 502.38
acres being all of Survey No. 19, Abstract No. 352,
originally granted to GH&H RR Co. under Certificate 32/233,
more fully described in the oil and gas lease dated June 29,
1953, recorded in Book 74, Page 40, Wise County, Texas.
OXY LEASE NUMBER: 6-4214522/4214522
DATED: April 26, 1949
LESSOR: Eugene Ashe
LESSEE: F. H. Scott
RECORDING DATA: Book 60, Page 95
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 776.12
acres out of the Cochran & Collins Survey, GH&H RR Co.
Survey No. 20, George Ramsdale Survey, and R. A. Nelson
Survey, more fully described in the oil and gas lease dated
April 26, 1949, recorded in Book 60, Page 95, Wise County,
Texas.
SLAY A
7-4274130
Wise County, Texas
OXY LEASE NUMBER: 6-4223019/4223019
DATED: April 10, 1953
LESSOR: Clyde Blay
LESSEE: F. H. Scott
WORKING INTERST 100%
NET REVENUE
INTEREST 84.7656%
RECORDING DATA: Book 72, Page 475
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 301
acres out of the G&B Nav. Co. Survey and 487 acres of the
Barney Lowe Survey, more fully described in the oil and gas
lease dated April 10, 1953, recorded in Book 72, Page 475.
Also, a 60 acre tract out of the Galveston Brazos Navigation
Survey, A-350, acquired by ratification dated December 9,
1961, Wise County, Texas.
In addition to the Agreements noted at the end of this working interest section,
the forgoing Properties are subject to following specific agreements, liens,
easements, and similar encumbrances.
1. That certain Road Lease dated October 11, 1989 between Ozell C. Smith,
Lessor and OXY USA Inc., Lessee.
2. That certain Gas Purchase Contract #428200 dated August 19, 1994 with
Warren Petroleum Company.
TARRANT A
7-4279863
Jack County, Texas
OXY LEASE NUMBER: 6-4214574/4214574
DATED: March 10, 1949
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
WORKING INTERST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 139, Page 149
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 539.43
acres described in Deed from Mrs. M. M. Laird, et al to
Tarrant County Water Control and Improvement District No. 1,
recorded in Volume 78, Page 20, Deed Records of Jack County,
Texas and more fully described in the oil and gas lease
dated March 10, 1949, recorded in Book 139, Page 149, Jack
County, Texas.
In addition to the agreements noted at the end of the working interest section,
the foregoing Properties are subject to following specific agreements and
easements:
1. That certain Road use and Maintenance Agreement dated June 14, 1993 between
OXY USA Inc. and Threshold Development Company.
2. That certain ROW Agreement dated June 24, 1993 between the Collins
Childrens Trust and OXY USA Inc. 3. That certain Gas Purchase Contract
#428200 dated August 19, 1994 with Warren Petroleum Company.
TARRANT B&C
7-4279884
Jack County, Texas
The following leases total to:
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
OXY LEASE NUMBER: 6-4214576/4214576
DATED: March 10, 1949
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
RECORDING DATA: Book 141, Page 57
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 637.44
acres being all D. W. Campbell Survey, Abstract 146, more
fully described in the oil and gas lease dated March 10,
1949, recorded in Book 141, Page 57, Jack County, Texas.
OXY LEASE NUMBER: 6-4214573/4214573
DATED: March 10, 1949
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
RECORDING DATA: Book 141, Page 49
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 771.99
acres described in Deeds from Will Laird, et al, June 12,
1931, Volume 78, Page 31, J. M. Morrow, et al, July 3, 1931,
Volume 78, Page 35, more fully described in the oil and gas
lease dated march 10, 1949, recorded in Book 141, Page 49,
Jack County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements and
easements.
1. That certain Gas Purchase Contract #428200 dated August 19, 1994 with
Warren Petroleum Company.
TARRANT E
7-4279968
Wise County, Texas
OXY LEASE NUMBER: 6-4212785/4212785
DATED: November 22, 1946
LESSOR: Tarrant County Water Control
LESSEE: Cities Service Oil Company
WORKING INTEREST 100%
NET REVENUE
INTEREST 87.5%
RECORDING DATA: Book 47, Page 571
DESCRIPTION: INSOFAR AND ONLY INSOFAR as said lease shall concern 1179.68
acres out of the JGW Clayton & C. D. Mixon Surveys, James
Vendoner Survey, James Tarlton Survey, more fully described
in the oil and gas lease dated November 22, 1946, recorded
in Book 47, Page 571, except gas rights down to 5, 390 feet
in the West 93 acres of a 305.89 acre tract out of the JGW
Clayton Survey, Wise County, Texas.
In addition to the agreements noted at the end of this working interest section,
the foregoing Properties are subject to following specific agreements and
easements.
1. That certain Gas Purchase Contract #428200 dated August 19, 1994 with
Warren Petroleum Company.
Notwithstanding anything herein to the contrary, and in addition to the specific
agreements noted above with respect to individual properties or units, all of
the working interest properties described above are subject to all agreements,
liens, easements, and similar encumbrances contained or referenced in Seller's
files, recorded or referenced in the County Records for Wise County, Texas filed
with the Secretary of State of the State of Texas, with regard to said Purchased
Properties or otherwise known to Buyer including, but not limited to, the
following:
1. That certain Agreement for the Purchase and Sale of Domestic Crude Oil
executed the 31st day of August, 1983, by and between Occidental Petroleum
Corporation, et al, and Citgo Petroleum Corporation, et al.
2. That certain Master Agreements on Gas Processing dated August 30, 1993, but
and between OXY USA Inc. and Trident NGL, Inc.
Amendment to Gas Purchase Contract
WG Energy ("Seller") and Dynegy Midstream Services, Limited Partnership
("Buyer") entered into a Gas Purchase Contract with the effective date of
February 1, 1998. Seller and Buyer now wish to amend the Contract, as set forth
herein.
Now therefore, in consideration of the premises and other valuable
consideration, Seller and Buyer agree as follows:
The paragraph entitled "ARTICLE XVIII - TAXES" shall be deleted in its entirety
and replaced by:
TAXES
Seller agrees to bear and to pay or cause to be paid all excise, severance,
production, sales and other taxes applicable to Seller's Gas delivered to Buyer
hereunder. In addition, Seller agrees to bear all taxes assessed on Seller's
settlement share of the Plant Products and Residue Gas extracted from Seller's
Gas (or the Proceeds attributable thereto, as the case may be) and any fuel use
or Processing taxes which may be assessed against Buyer. As an accommodation to
Seller, Buyer agrees to disburse any such taxes, and Buyer shall deduct the
amounts so paid from any amounts due Seller hereunder or shall invoice Seller
for same if no payment is due Seller or if the payment due Seller is
insufficient to cover such taxes and/or assessments. Each Party agrees to make
all tax reports which it is obligated to make to the applicable taxing
authorities.
Neither Party hereto shall be responsible or liable for any taxes or other
statutory charges levied or assessed against any of the facilities of the other
Party used for the purpose of carrying out the provisions of this Agreement.
Each Party shall pay any and all ad valorem, employment, occupation, income and
other taxes of like nature levied, assessed or collected on or with respect to
that Party's property or operations or shall furnish to the other Party all tax
exemption certificates exempting such Party from the obligation to pay any such
taxes.
The effective date of this Amendment is February 1, 2001.
All other provisions of the Contract shall remain in full force and effect.
New Contract No. 010451 - Ref. No. 095 was formerly known as Contract No.
42095-03043.
Accepted and Agreed to: Accepted and Agreed to:
WG Energy Dynegy Midstream Services,
Limited Partnership
By: Dynegy Midstream G.P., Inc., its
General Partner
By: /s/ Lisa Evans By: /s/ Bobby McGuire
Printed Name: Lisa Evans Printed Name: Bobby McGuire
Title: Vice President, Land Title: Director, Gas Supply
Date: 2/13/01 Date: 2/9/01
Owner's Federal Tax ID Number: Dynegy's Federal Tax ID Number: 76-0507891
75-2883589
Address Address
550 W. Texas Ave., Suite 300 1000 Louisiana Suite 5800
Midland, TX 79701 Houston, TX 77002
Amendment to Gas Purchase Contract
WG Energy ("Seller") and Dynegy Midstream Services, Limited Partnership
("Buyer") entered into a Gas Purchase Contract with the effective date of
February 1, 1998. Seller and Buyer now wish to amend the Contract, as set forth
herein.
Now therefore, in consideration of the premises and other valuable
consideration, Seller and Buyer agree as follows:
The provision entitled "EXHIBIT A" is hereby amended to include the following:
(moved from Contract No(s) 013198):
------------------ -------------------------
LEASE NAME LEASE DESCRIPTION
------------------ -------------------------
Davenport A-3 See Exhibit A-1
Davenport A-4 See Exhibit A-1
Halman-Smith A See Exhibit A-1
Halman-Smith A2 See Exhibit A-1
The effective date of this Amendment is January 1, 2002.
All other provisions of the Contract shall remain in full force and effect.
New Contract No. 010451 - Ref. No. 095 was formerly known as Contract No.
42095-03043.
New Contract No. 010451 replaces Contract number(s) 013198.
Accepted and Agreed to: Accepted and Agreed to:
WG Energy Dynegy Midstream Services,
Limited Partnership
By: Dynegy Midstream G.P., Inc., its General
Partner
/s/ Michael J. Grella
By: Michael J. Grella By: /s/ Bobby McGuire
Printed Name: Printed Name: Bobby McGuire
Title: President Title: Director, Gas Supply
Date: 12/21/01 Date: 11/26/01
Owner's Federal Tax ID Number: Dynegy's Federal Tax ID Number: 76-0507891
75-2883589
Address Address
550 W. Texas Ave., Suite 300 1000 Louisiana Suite 5800
Midland, TX 79701 Houston, TX 77002
EXHIBIT A-1
County Wise
State TX
Legal Description: Insofar and only insofar as said leases shall concern 196.84
acres in the GH&H RR Co. Survey #1 Abstract 349, more fully
described in the Oil & Gas Lease dated August 16, 1977,
recorded in Book 208, Page 361, Wise County, TX
Existing Wells: Davenport A-3
Supplier's Gross
Working Interest 100%
County Wise
State TX
Legal Description: Insofar and only insofar as said leases shall concern 196.84
acres in the GH&H RR Co. Survey #1 Abstract 349, more fully
described in the Oil & Gas Lease dated August 16, 1977,
recorded in Book 208, Page 361, Wise County, TX
Existing Wells: Davenport A-4
Supplier's Gross
Working Interest 100%
County Wise
State TX
Legal Description: Insofar and only insofar as said lease shall concern oil
rights in Bend Conglomorate Interval, same being defined as
Southeast of Interval between base of Caddo Limo and top of
Marble Falls Line, as shown on Schlumberger electric log
dated March 15, 1956, from Cities #1 Tarrant E, more fully
described in assignment dated December 9, 1985, Wise County,
TX
Existing Wells: Halman-Smith A
Supplier's Gross
Working Interest 100%
County Wise
State TX
Legal Description: Insofar and only insofar as said lease shall concern oil
rights in Bend Conglomorate Interval, same being defined as
Southeast of Interval between base of Caddo Limo and top of
Marble Falls Line, as shown on Schlumberger electric log
dated March 15, 1956, from Cities #1 Tarrant E, more fully
described in assignment dated December 9, 1985, Wise County,
TX
Existing Wells: Halman-Smith A2
Supplier's Gross
Working Interest 100%
ATTACHMENT 1 - GAS NOMINATIONS
Seller shall provide Buyer with a written nomination of the volume per Day of
Gas that it desires Buyer to receive at the Delivery Point during the Month of
delivery and subsequently redeliver to the transporting pipeline. Such
nomination shall be due from Seller via facsimile transmission on or before the
earlier of (1) two (2) Business Days prior to the beginning of the Month of
delivery; or (2) at least twenty-four (24) hours before nominations to the
downstream pipeline utilized by Seller to transport Seller's allocated share of
Residue Gas from the Redelivery Point are due in order to achieve first Day of
the Month flow. Such nomination shall include, but not be limited to, the name
of transporter, name of purchaser, Transportation Service Contract Number, name
and phone number of Seller's Gas Control Contact, the nominated quantity of Gas
that will be delivered by Seller at the Delivery Point, nominated quantity for
redelivery at the Redelivery Point, and the effective dates of flow. Seller
shall notify Buyer in writing of any changes in volume or the designated
pipeline carrier for its Residue Gas immediately upon Seller's knowledge of such
changes. Should Buyer, at any time, not Process all of the Gas delivered to
Buyer by Seller, Buyer will advise Seller as soon as reasonably possible in
order that Seller may make proper nomination adjustments with Seller's
designated pipeline carrier. In no event shall Buyer be held responsible for any
penalties or imbalance charges assessed by the receiving/transporting pipelines.
Buyer agrees to be responsible for confirmation and delivery to the transporting
pipeline. Under no circumstances shall Buyer be required to confirm or deliver
more than the estimated available volume, which will be based on the average of
the latest three Months of production as reasonably determined by Buyer. With
respect to the situation where this Agreement is a keep whole Agreement or is
based on keep whole economics ("Keep Whole Agreements"), any imbalance between
the Gas allocated by Buyer at the Delivery Point and the volumes of Seller's Gas
actually available at the Delivery Point shall be handled in accordance with the
provisions set forth below. In all other situations, any imbalance between the
volumes of Gas allocated at the Redelivery Point and the volumes available for
redelivery at the Redelivery Point shall be handled in accordance with the
provisions set forth below.
Buyer shall have the right to maintain an "over and short account" for Residue
Gas deliveries for Seller's account. By no later than the last Day of each
Month, Buyer shall send a statement to Seller which will identify any over or
short deliveries for the preceding Month and the cumulative over and short
deliveries to Seller's receiving pipeline. Buyer shall endeavor to keep the over
and short volumes as much in balance as possible by making flow adjustments
Monthly.
Should an imbalance exist when the take-in-kind rights provided for in this
Letter Agreement terminate, then Buyer shall have the option to pay Seller for a
"short" balance at an average market price at the Plant for the prior three (3)
Months or by delivering the "short" balance in-kind over the subsequent three
(3) Months. Seller shall pay Buyer for an "over" balance at an average market
price at the Plant for the prior three (3) Months.
Amendment to Gas Purchase Contract
WG Energy, Inc. ("Seller") and Dynegy Midstream Services, Limited Partnership
("Buyer") entered into a Gas Purchase Contract dated January 30, 1998.
Seller and Buyer now wish to amend the Contract, as set forth herein.
Now therefore, in consideration of the premises and other valuable
consideration, Seller and Buyer agree as follows:
The provision entitled "ARTICLE X - COMPENSATION TO SELLER" shall be revised to
add:
D. Residue Gas - Take-In-Kind Option - Seller shall have the option to
take-in-kind its percentage (less Buyer's share) of the Residue Gas
attributable to the gas delivered hereunder by giving Buyer written notice
no later than thirty (30) days prior to January 1, 2003, or any six (6)
month period thereafter commencing on July 1 or January 1. Take-In-Kind of
Seller's Residue Gas shall remain in effect for a minimum period of six (6)
months and thereafter for periods of six (6) months. Seller's Take-In-Kind
option shall remain in effect if Seller fails to notify Buyer in writing at
least thirty (30) days prior to any six (6) month period of Seller's desire
to cease its taking of Gas.
The provisions attached hereto as Attachment 1, "GAS NOMINATIONS" shall be
applicable when Seller is taking-in-kind its percentage share of Residue
Gas.
The effective date of this Amendment is October 1, 2002.
All other provisions of the Contract shall remain in full force and effect.
Accepted and Agreed to: Accepted and Agreed to:
WG Energy Ltd. Dynegy Midstream Services,
Limited Partnership
By: Dynegy Midstream G.P., Inc., its
General Partner
By: /s/ Michael J. Grella By: /s/ Bobby J. McGuire
Printed Name: Michael J. Grella Printed Name: Bobby J. McGuire
Title: President Title: Director, Gas Supply
Date: Date:
Owner's Federal Tax ID Number: Dynegy's Federal Tax ID Number: 76-0507891
75-2883589
Address Address
550 W. Texas Ave., Suite 300 1000 Louisiana Suite 5800
Midland, TX 79701 Houston, TX 77002
Amendment to Gas Purchase Contract
WG Energy, Inc. successor to JW Energy Co. LTD. ("Seller") and Dynegy Midstream
Services, Limited Partnership ("Buyer") entered into a Gas Purchase Contract
dated January 30, 1998.
Seller and Buyer now wish to amend the Contract, as set forth herein.
Now therefore, in consideration of the premises and other valuable
consideration, Seller and Buyer agree as follows:
Effective January 1, 2001 the provision entitled "ARTICLE X - COMPENSATION TO
SELLER" is hereby amended to change the compensation or pricing as follows:
Under A. Plant Products - the compensation for Plant Products shall be
changed from Eighty Percent (80%) to Eighty-Five Percent (85%).
Under B. Residue Gas - the compensation for Residue Gas shall be changed
from eighty Percent (80%) to Eighty-Five percent (85%).
Under B. Residue Gas, second paragraph, the language beginning with "Net
Proceeds" and ending with "Residue Gas" shall be deleted and replaced with
the following:
The Residue Gas price shall be based on the monthly first-of-the-month
Delivered Spot-Gas Price ($MMBtu) for Houston Ship Channel/Beaumont
Index (large packages only) as published in "INSIDE FERC'S GAS MARKET
REPORT", less twelve (12) cents per MMBtu. Should said publication
cease to report such index price, both parties shall mutually agree on
a replacement publication or other price methodology.
Effective February 1, 2001, the provision entitled "ARTICLE X - COMPENSATION TO
SELLER" is hereby amended as follows:
Under C., the first date shall be changed to January 1, 2002. The second
and third dates shall be changed to July 1 and January 1, respectively.
D. - Plant Products - Take-in-Kind Option and E. - Residue Gas -
Take-in-Kind Option shall be deleted in their entirety.
All other provisions of the Contract shall remain in full force and effect.
New Contract No. 010451 - Ref. No. 095 was formerly known as Contract No.
42095-03043.
Accepted and Agreed to: Accepted and Agreed to:
WG Energy, Inc. Dynegy Midstream Services,
Limited Partnership
By: Dynegy Midstream G.P., Inc., its
General Partner
By: /s/ Michael J. Grella By: /s/ Bobby McGuire
Printed Name: Michael J. Grella Printed Name: Bobby McGuire
Title: President Title: Director, Gas Supply
Date: 2/2/01 Date:
Owner's Federal Tax ID Number: Dynegy's Federal Tax ID Number: 76-0507891
75-2883589
Address Address
550 W. Texas Ave - Suite 300 1000 Louisiana Suite 5800
Midland, TX 79701 Houston, TX 77002
Amendment to Gas Purchase Contract
WG Energy, Inc. ("Seller") and Dynegy Midstream Services, Limited Partnership
Buyer entered into a Gas Purchase Contract dated January 30, 1998.
Seller and Buyer now wish to amend the Contract, as set forth herein.
Now therefore, in consideration of the premises and other valuable
consideration, Seller and Buyer agree as follows:
Effective January 1, 2002 the provision entitled "ARTICLE X - COMPENSATION TO
SELLER" is hereby amended to change the compensation or pricing as follows:
Under A. Plant Products - the compensation for Plant Products shall be
changed from Eighty-Five Percent (85%) to Eighty Percent (80%).
Under B. Residue Gas - the compensation for Residue Gas shall be changed
from Eighty-Five Percent (85%) to Eighty percent (80%).
The above to remain in effect through June 30, 2002. At that time,
compensation for Plant Products and Residue Gas will revert to the current
scaled pricing as described in the Contract.
The effective date of this Amendment is January 1, 2002.
All other provisions of the Contract shall remain in full force and effect.
Accepted and Agreed to: Accepted and Agreed to:
WG Energy Ltd. Dynegy Midstream Services,
Limited Partnership
By: Dynegy Midstream G.P., Inc., its
General Partner
By: /s/ Michael J. Grella By: /s/ Bobby J. McGuire
Printed Name: Michael J. Grella Printed Name: Bobby J. McGuire
Title: President Title: Director, Gas Supply
Date: 3/12/02 Date: 3/06/02
Owner's Federal Tax ID Number: Dynegy's Federal Tax ID Number: 760507891
75-2883589
Address Address
550 W. Texas Ave., Suite 300 1000 Louisiana Suite 5800
Midland, TX 79701 Houston, TX 77002
[TARGA RESOURCES, INC LOGO AND LETTERHEAD]
November 8, 2005
WG Energy Ltd
PO Box 10076
Midland, TX 79702
Attention: Targa (Dynegy) Account Manager
As a follow up to the proposed transaction that was announced in August 2005,
Targa Resources, *Inc. has completed its acquisition of Dynegy Midstream
Services. I would like to take this opportunity to introduce you to our company
and provide you with some information about your billing procedures.
Headquartered in Houston, Texas with operations around the country, Targa is an
integrated natural gas and NGL midstream energy company. We understand the
importance of effective and efficient relationships with our vendors and
suppliers and, importantly, their role in helping us serve our customers. The
company as a whole is committed to a positive and productive business
partnership with you - both throughout our near-term transition period and in
our everyday approach.
Please note that any accounts that you have in the name of Dynegy Midstream
Services, Limited Partnership are to be changed to Targa Midstream Services
Limited Partnership. Your contacts for the sales of goods and services and our
procurement/contracting processes remain the same. Telephone and fax numbers
will change in the future; however, these remain the same until further notice.
we do not expect any interruption to our payment or invoicing process. If your
invoice is related to a purchase order, please direct it to the address listed
below to the attention of Accounts Payable. Please make sure to include the
Targa purchase order number on the invoice to assure timely processing.
Our corporate logistics are as follows:
Targa Resources, Inc.
1000 Louisiana Street, Suite 4700
Houston, Texas 77002
Corporate main telephone number is 713.584.1000. My direct dial number is
713.584.1040. Additional information about our company can be found at
www.targaresources.com.
We will communicate updates and provide additional contact information as our
transition continues. In the meantime, should you have any questions, please
don't hesitate to get in touch with your Procurement Representative.
Thank you in advance for your cooperation. We look forward to continuing our
relationship with you.
Sincerely,
/s/ Michael A. Heim
Executive Vice President and
Chief Operating Officer
[TARGA LOGO AND LETTERHEAD]
March 1, 2006
TO: ALL PRODUCERS AND CONTRACT PARTIES
RE: Notice of Transfer
Ladies and Gentlemen:
As you know, Dynegy Midstream Services, Limited Partnership was acquired by
Targa Resources, Inc. ("Targa") on October 31, 2005. Since the acquisition, the
name of Dynegy Midstream Services, Limited Partnership has been changed to Targa
Midstream Services Limited Partnership ("Targa Midstream"). Furthermore, Targa
is undergoing an internal restructuring by which a significant amount of the
assets of Targa Midstream in North Texas will be transferred to a newly formed,
wholly owned subsidiary of Targa named Targa North Texas LP, a Delaware limited
partnership ("Targa North Texas").
Accordingly, effective December 1, 2005, Targa Midstream has caused all of its
assets located in North Texas to be conveyed to Targa North Texas, which has
assumed all of Targa Midstream's obligations under the various contracts and
agreements.
Inasmuch as the contracts and agreements between you, or your company, and Targa
Midstream were included, if permitted, in the assets transferred to Targa North
Texas, this letter constitutes written notice of the subject transfer and
assumption. Please take this opportunity to update your records to properly
reflect the transfer from Targa Midstream to Targa North Texas. At this time,
there will be no change in address for notices purposes.
Please note that you will continue to receive monthly settlement statements,
payments, payment details and advance volume reports (if applicable) from Targa
Midstream until such time as the name can be updated in our systems.
Should you have any questions, please contact Vicki Hopson, Senior Contract
Administrator, at vhopson@targaresources.com or call her at 713-584-1319. Thank
you for your continued cooperation and assistance!