EXHIBIT 10.2
April 9, 2003
Joe Kimmel
Manager Marketing & Transportation
Shell Exploration & Production Company, and on behalf of all
Shell Producer Entities
200 North Dairy Ashford
Houston, TX 77079
RE: Letter Agreement Concerning Sections 6.6 and 11.1 of the Sixth Amendment to
the Conveyance of Gas Processing Rights effective March 1, 2003, between
Enterprise Gas Processing, LLC, and Shell Oil Company and Other Shell
Producer Entities
Dear Joe:
Enterprise Gas Processing, LLC ("Processor") and the undersigned Shell
Exploration & Production Company, Shell Oil Company, Shell Offshore Inc.
(including Shell Deepwater Development Inc. and Shell Deepwater Production Inc.,
which were merged into Shell Offshore Inc.), Shell Consolidated Energy Resources
Inc., Shell Land & Energy Company, Shell Frontier Oil & Gas Inc. and Shell Gulf
of Mexico Inc. (the foregoing Shell entities collectively herein "Producers")
are parties to that certain Sixth Amendment to the Conveyance of Gas Processing
Rights, effective as of March 1, 2003 (the "Conveyance Agreement").
This letter agreement ("Letter Agreement") sets forth the agreement between
Processor and Producers regarding Section 6.6 (Consideration Adjustment Outside
of Normal Operations) and its subparts ("Section 6.6") of the Conveyance
Agreement and regarding Section 11.1 (Mutual Agreement Not to Curtail or
Withhold) of the Conveyance Agreement. Capitalized terms used in this Letter
Agreement that are not defined herein shall have the same meaning ascribed to
such terms in the Conveyance Agreement.
In consideration of the premises, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the undersigned
parties agree as follows.
1. For the five calendar year period beginning March 1, 2008 and ending
February 28, 2013, and for each five calendar year period thereafter during
the term of the Conveyance Agreement (i.e., March 1, 2013 through February
28, 2018, etc.) (hereinafter a "Five Year Period"), Processor and Producers
(all Producers collectively and not individually or less than all
Producers; Processor and all Producers collectively each being referred to
herein as a "Party") shall have the right to renegotiate with the other
Party the provisions of Section 6.6 by delivering to the other Party
written notice thereof ("Renegotiation Notice"). The Renegotiation Notice
shall be delivered no more than 120 days nor less than 90
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days prior to (i) March 1, 2008, for the initial Five Year Period and/or
(ii) the date on which any subsequent Five Year Period commences (March 1
of the first calendar year). Any Renegotiation Notice shall be provided in
accordance with Section 18.6 of the Conveyance Agreement.
2. If, following delivery of a timely Renegotiation Notice, a definitive
agreement for a renegotiated Section 6.6 is reached and fully executed by
Processor and all Producers prior to the date of commencement (March 1 of
the first calendar year) of the applicable Five Year Period, the new
provisions thereof shall be effective at and as of the commencement of the
applicable Five Year Period.
3. If, following delivery of a timely Renegotiation Notice, a definitive
agreement for a renegotiated Section 6.6 is not reached and fully executed
by Processor and all Producers prior to the date of commencement (March 1
of the first calendar year) of the applicable Five Year Period, the whole
of Section 6.6 and this Letter Agreement (including paragraph 4 herein
pertaining to Section 11.1 of the Conveyance Agreement) shall terminate
effective at and as of the commencement of the applicable Five Year Period.
4. The Parties agree that, as used in Section 11.1 of the Conveyance
Agreement, "good faith reason" shall not include economic hardships.
5. If neither Party timely delivers a Renegotiation Notice with respect to a
Five Year Period, Section 6.6 shall continue in full force and effect for
such Five Year Period.
6. The provisions of this Letter Agreement are personal to each Party and
shall not be assigned by a Party except to an Affiliate of a Party. In any
event, this Letter Agreement is not applicable to and shall be of no force
or effect as to any assignees of a Dedicated Lease that is subject to the
Conveyance Agreement.
7. Nothing in this Letter Agreement, whether express or implied, is intended
to confer any rights or remedies under or by reason of this Letter
Agreement on any person other than the undersigned parties.
8. Each Party agrees that this Letter Agreement and its provisions are
confidential and shall not be disclosed by a Party, without the written
consent of the other Party, to a third party (excluding Affiliates of a
Party and the Party's and its Affiliates' employees, agents, contractors,
attorneys, accountants, lenders, consultants or other advisors who have
agreed to keep such terms confidential) except to the extent necessary to
comply with any applicable law, order, regulation or exchange rule
(including, without limitation, the rules of the Securities and Exchange
Commission and the New York Stock Exchange).
9. The Dispute Resolution provisions of the Conveyance Agreement, Sections
16.1 through 16.4, inclusive, are incorporated by this reference as though
fully set forth herein and shall apply to this Letter Agreement.
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10. This Letter Agreement shall be governed by and enforced in accordance with
the laws of the State of Louisiana without giving effect to its principles
regarding conflicts of laws.
In witness whereof, the undersigned parties have caused this Letter Agreement,
effective March 1, 2003, to be executed by their duly authorized representative
on the dates indicated below.
PROCESSOR PRODUCER
ENTERPRISE GAS PROCESSING, LLC SHELL OIL COMPANY
By: /s/ W. Ordemann By: /s/ B. K. Garrison
--------------------------- ---------------------------
Name: W. Ordemann Name: B. K. Garrison
Title: Sr. Vice President Title: Attorney-in-Fact
Date: April 9, 2003 Date: April 9, 2003
SHELL OFFSHORE INC.
By: /s/ J. W. Kimmel
---------------------------
Name: J. W. Kimmel
Title: Attorney-in-Fact
Date: April 9, 2003
SHELL CONSOLIDATED ENERGY RESOURCES INC.
By: /s/ B. K. Garrison
---------------------------
Name: B. K. Garrison
Title: Attorney-in-Fact
Date: April 9, 2003
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SHELL LAND & ENERGY COMPANY
By: /s/ B. K. Garrison
---------------------------
Name: B. K. Garrison
Title: Attorney-in-Fact
Date: April 9, 2003
SHELL FRONTIER OIL & GAS INC.
By: /s/ J. W. Kimmel
---------------------------
Name: J. W. Kimmel
Title: Attorney-in-Fact
Date: April 9, 2003
SHELL EXPLORATION & PRODUCTION COMPANY
By: /s/ R. M. Restucci
---------------------------
Name: R. M. Restucci
Title: President & CEO
Date: April 9, 2003
SHELL GULF OF MEXICO INC
By: /s/ J. W. Kimmel
---------------------------
Name: J. W. Kimmel
Title: Attorney-in-Fact
Date: April 9, 2003
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