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EXHIBIT 10.7
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FIRST AMENDMENT TO THE GAS SALES AGREEMENT
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BETWEEN
PETROLEUM AUTHORITY OF THAILAND
AND
B8/32 PARTNERS LIMITED
THAIPO LIMITED
THAI ROMO LIMITED
PALANG SOPHON LIMITED
NOVEMBER 12th, 1997
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THE FIRST AMENDMENT TO THE GAS SALES AGREEMENT (the GSA) dated November 7th,
1995 is hereby made this November 12th, 1997.
BETWEEN
(1) PETROLEUM AUTHORITY OF THAILAND having its principal office at 555
Vibhavadi Rangsit Road, Bangkok 10900 (hereinafter called "PTT") and
(2) THAIPO LIMITED, a company duly incorporated and existing under the laws of
Thailand and having its registered office at 18th Floor, B.B. Building, 54
Asoke Road, Sukhumvit 21, Bangkok 10110 (hereinafter called "THAIPO"); and
(3) THAI ROMO LIMITED, a company duly incorporated and existing under the laws
of Thailand and having its registered office at 19th Floor, B.B. Building, 54
Asoke Road, Sukhumvit 21, Bangkok 10110 (hereinafter called "THAI ROMO"); and
(4) PALANG SOPHON LIMITED, a company duly incorporated and existing under the
laws of Thailand and having its registered office at 19th Floor, B.B. Building,
54 Asoke Road, Sukhumvit 21, Bangkok 10110 (hereinafter called "SOPHON"); and
(5) B8/32 PARTNERS LIMITED., a company duly incorporated and existing under
the laws of Thailand and having its registered office at 19th Floor, B.B.
Building, 54 Asoke Road, Sukhumvit 21, Bangkok 10110 (hereinafter called "B8/32
PARTNERS").
THAIPO, THAI ROMO and SOPHON hereinafter all collectively called "Original
Concessionaire")
WHEREAS:
(A) The Original Concessionaire has indicated to PTT that additional Natural
Gas has been found in the Concession Area at the Benchamas/Pakakrong Fields as
defined in the First Schedule, Part II, as hereinafter amended, and that such
Natural Gas can be developed in conjunction with the Natural Gas being
developed in the Tantawan Field in the GSA Area, and
(B) The parties involved at the Benchamas/Pakakrong Fields include B8/32
PARTNERS who is not and Original Concessionaire under the GSA, and
(C) The Original Concessionaire has indicated to PTT that they and the B8/32
PARTNERS wish to sell the Natural Gas from the Benchamas/Pakakrong Fields to
PTT and PTT has indicated its willingness to purchase Natural Gas from the
Benchamas/Pakakrong Fields.
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NOW IT IS HEREBY AGREED AS FOLLOWS THAT THE GSA SHALL BE AMENDED BY THIS FIRST
AMENDMENT TO REFLECT:
1. That the Concessionaire under the GSA shall include, as of the Effective
Date of this First Amendment, B8/32 PARTNERS.
2. That recital (A) of the GSA shall be amended by the addition of the
following words; "and on the fourth (4th) day of September, 1995, the
Supplementary Petroleum Concession No.2 to Petroleum Concession
1/2534/36".
3. That Clause 1.5 of the GSA shall be amended by the addition of the
following words; "and Supplementary Petroleum Concession No.2 to Petroleum
Concession No.1/2534/36, dated September 4, 1995",
4. That Clause 1.19 of the GSA shall be amended by the addition of the
following words; "Delivery Point shall include either Delivery Points
described in the amended Fourth Schedule or both Delivery Points as the
context requires".
5. That Clause 1.25 shall be amended to read "GSA Area means that part of the
Concessionaire Area described in the First Schedule, as amended by the
First Amendment Part II, and dedicated to the service of the GSA."
6. That Clause 4.1 (line 1) the "Delivery Point" shall be amended to read the
"Delivery Points".
7. That Clause 5.1 the "Delivery Point" (line 1 and 4) shall be amended to
read the "Delivery Points".
8. That Clause 6.3 shall be amended to read as follows:
"An initial Run-In Period shall follow the Date of Commencement of
Delivery (DCD) and a Run-In Period shall also commence the effective date
of each increase in the DCQ pursuant to Subclause 6.6(iv), and such Run-In
Period shall terminate at the earlier of the completion of the
seventy-two (72) hour test or three (3) months. The first day following
the initial Run-In Period shall be referred to as the Contractual Delivery
Date (CDD). The Run-In Period shall be for the purpose of proving the
facilities required for the performance of the initial obligations of both
the Concessionaire and PTT and during such Run-In Period both the
Concessionaire and PTT shall use reasonable endeavours respectively to
deliver and take Sales Gas."
9. That Clause 6.3(i) shall be amended by the deletion of the first paragraph
and the addition of the following paragraph:
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"The Concessionaire shall, during the Run-In Period, complete a test of
seventy-two (72) consecutive hours. During the Run-In Period,
Concessionaire shall notify PTT that the Concessionaire is ready to attempt
a seventy-two (72) hour test and PTT shall nominate the rate of delivery
in accordance with Clause 6.12 and the Concessionaire shall offer
continuously to PTT Sales Gas of quality and at pressure consistent with
the PTT nomination. If the Concessionaire is unable, for whatever reason
other than PTT's inability to take, to complete the continuous seventy-two
(72) hour period, the test shall be restarted after the Concessionaire
notifies PTT of its desire to restart the seventy-two (72) hour test."
10. That Subclause 6.3(i) shall be amended the last paragraph to read as
follows;
"During the initial Run-In Period, Sales gas shall be paid for at a price
of seventy-five (75) percent of Current Price as calculated. During all
other Run-In Periods Sales Gas delivered in excess of the DCQ immediately
preceding the increased DCQ referred to in Subclause 6.6(iv) shall be paid
for at a price of seventy-five (75) percent of Current Price as
calculated."
11. That Subclause 6.6(ii) shall be amended by the addition of the following
sentence; "In no event, shall the DCQ be less that 125 million Cubic Feet."
12. That Subclause 6.6(iii) shall be amended to change "one hundred and
twenty-five (125)" to "three hundred (300)".
13. That Subclause 6.6(iv) shall be amended by the addition of the following
paragraph;
"Notwithstanding the above paragraph, the date of commencement for the
Run-In Period for the DCQ, including the reserves from Benchamas/Pakakrong
Fields, shall be the date of completion of the facilities necessary for
Concessionaire to produce gas from the Benchamas/Pakakrong Fields, which
date shall be August 1, 1999. Such date may be adjusted by up to 60 days
by Concessionaire informing PTT twelve (12) months in advance of the date
of commencement for the Run-In Period. The DCQ, as determined under
Clause 6.6 (ii) above, shall become effective the date following the Day
the Concessionaire successfully completes the seventy-two (72) hour test
of two (2) months from the date of commencement of the Run-In Period,
whichever is earlier."
14. That Clause 6.17 shall be amended to change "eighty-five (85)" to "one
hundred twenty-five (125)".
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15. That Article VIII shall be amended by the addition of the following
paragraph;
"The Concessionaire or PTT, as mutually agreed, shall be responsible for
the building and testing of the pipeline for the delivery of
Benchamas/Pakakrong Field Sales Gas to the PTT 24-inch pipeline. The cost
and expense incurred in the design, procurement, fabrication, installation,
testing and commissioning of the pipeline shall be shares by the
Concessionaire and PTT on a 65/35 basis respectively."
16. That Clause 10.3 the last word of second paragraph shall be amended to
change "earlier" to "later".
17. That Clause 14.3 shall be amended to include the words "at the relevant
Delivery Point" immediately after the words "delivering Sales Gas" and the
word "relevant" added ahead of "Delivery Point".
18. That subject to confirmation and acceptance by PTT that the combined Field
Reserves of the Tantawan and Benchamas/Pakakrong Fields equals or exceed
five hundred (500) billion cubic feet Clauses 15.7 and 18.5 shall no longer
have any cause or effect.
19. That Clause 25.4 shall be amended by changing "The Sophonpanich Co., Ltd."
to read "Palang Sophon Limited", with the following change of address:
Palang Sophon Limited
19th Floor, B.B. Building
54 Asoke Road, Sukhumvit 21
Bangkok 10110, Thailand
Fax No.: (66-2) 260-7247
Tel No.: (66-2) 260-7310
20. That Clause 25.4 shall be amended to include:
B8/32 PARTNERS LIMITED,
18th Floor, B.B. Building
54 Asoke Road
Bangkok 10110, Thailand
Fax No.: (66-2) 260-7150
Tel No.: (66-2) 260-7151
21. That the First Schedule Part II shall be amended to include those parts of
the Concession Area containing the Benchamas/Pakakrong Field. Such amended
schedule is attached to this First Amendment at First Schedule Part II GSA
Area (First Amendment).
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22. That the Second Schedule: "MERCURY: NIL" shall be amended to read "MERCURY:
contain not more than 50 micrograms per cubic meter (by weight) with 12
months to rectify any excess amount."
23. That the Fourth Schedule shall be amended by changing "single Delivery
Point" to "two Delivery Points" in the first paragraph and in the second
paragraph changing "Delivery Point: to "Tantawan Delivery Point".
24. That at the end of the Fourth Schedule a new paragraph will be added to
state: "The Benchamas/Pakakrong Delivery Point shall be agreed between
Concessionaire and PTT within 120 days of the Effective Date of this First
Amendment. If additional time is required to agree and confirm a mutually
acceptable location, both parties agree to use reasonable endeavours to
promptly achieve and confirm an acceptable location."
25. That the Fifth Schedule (Parental Guarantee) attached to this First
Amendment is a Parental Guarantee of performance under the GSA for B8/32
PARTNERS.
26. The provisions of this Amendment shall constitute a supplement to the GSA.
To the extent that there is any conflict or inconsistency between the terms
of the GSA and the terms of this First Amendment, the terms of this First
Amendment shall prevail.
27. Except as amended hereby the GSA shall remain in full force and effect.
28. This First Amendment shall be governed by and construed in accordance with
the laws of Thailand.
29. This First Amendment shall be effective from the execution date.
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IN WITNESS WHEREOF this First Amendment has been signed by the duly authorized
representatives of the parties on the day and year first above written.
[ILLEGIBLE] [ILLEGIBLE]
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Signed for and on behalf of Witness
PETROLEUM AUTHORITY OF THAILAND
[ILLEGIBLE] [ILLEGIBLE]
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Signed for and on behalf of Witness
THAIPO LIMITED
[ILLEGIBLE] [ILLEGIBLE]
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Signed for and on behalf of Witness
THAI ROMO LIMITED
[ILLEGIBLE] [ILLEGIBLE]
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Signed for and on behalf of Witness
PALANG SOPHON LIMITED
[ILLEGIBLE] [ILLEGIBLE]
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Signed for and on behalf of Witness
B8/32 PARTNERS LTD.
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ATTACHMENTS:
First Schedule Part II
Fifth Schedule
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FIRST SCHEDULE PART II
GSA AREA
(FIRST AMENDMENT)
TANTAWAN FIELD:
POINT LATITUDE LONGITUDE
CODE DEG MINS SEC DEG MINS SEC
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A 10 18 00.00"N 101 24 00.0"E
B 10 18 00.00"N Intersecting with the Declared
Cambodian
Continental Shelf (1972)
C 10 16 50.00"N 101 29 30.0"E
D 10 09 00.00"N 101 30 00.0"E
E 10 09 00.00"N 101 27 00.0"E
F 10 00 00.00"N 101 28 20.0"E
G 10 00 00.00"N 101 24 00.0"E
BENCHAMAS/PAKAKRONG FIELD:
POINT LATITUDE LONGITUDE
CODE DEG MINS SEC DEG MINS SEC
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A 10 39 00.00"N 101 14 00.0"E
B 10 31 00.00"N 101 14 00.0"E
C 10 31 00.00"N 101 12 00.0"E
D 10 28 00.00"N 101 12 00.0"E
E 10 28 00.00"N 101 11 30.0"E
F 10 21 30.00"N 101 11 30.0"E
G 10 21 30.00"N 101 14 00.0"E
H 10 22 00.00"N 101 14 00.0"E
I 10 22 00.00"N 101 16 00.0"E
J 10 22 30.00"N 101 16 00.0"E
K 10 22 30.00"N 101 20 00.0"E
L 10 39 00.00"N 101 20 00.0"E
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PARENTAL GUARANTEE
November 7, 1997
TO PETROLEUM AUTHORITY OF THAILAND
Dear Sirs:
In consideration of your entering into an Agreement with B8/32 Partners Limited
and others for the purchase from them of natural gas on the terms and conditions
therein mentioned, we guarantee the due performance by B8/32 Partners Limited
of all its obligations under the said Agreement.
Yours faithfully,
Thai Romo Holdings, Inc.
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/s/ DAVID F. CHAVENSON
by: David F. Chavenson
Vice President
Pogo Producing Company
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/s/ RONALD B. MANNING
by: Ronald B. Manning
Vice President
Palang Sophon Ltd.
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/s/ SIRITAS-PRASERT-MANUKITCH /s/ CHOTE SOPHONPANICH
[SEAL OF PALHNG SOPHON LIMITED]
by: Siritas-Prasert-Manukitch Chote Sophonpanich
President Director