Exhibit 10.59
[Plains Marketing Canada, L.P Logo]
Sales / Purchase Agreement
Special Provisions
This confirms the following transaction made on 24 April 2002 between:
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Buyer Seller
Plains Marketing Canada, L.P. FX Drilling Company Inc.
Corporate Contact: Corporate Contact:
Donn Wadey Laura Bacon
AND
1400 - 888 -3 Street SW PO Box 379
Calgary, Alberta, Canada T2P 3M9 Oilmont, MT, USA 59466
Phone: 403-298-2100 Phone: 406-337-2050
Contract Fax: 403-261-7444 Fax: 406-337-2061
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PLAINS CONTRACT: 1000 AMENDMENT:
PRODUCT TYPE MONTH VOLUME DELIVERY LOCATION
Montana Sour Crude June 300 BPD Within the counties of
Production location(s) and Glacier and Toole,
delivery quality is described Montana
in the attached "Appendix A"
TERMS: Beginning June 1, 2002 and continuing monthly thereafter until
cancelled by either party with 30 (thirty) days advance
written notice.
PAYMENT: Payable by wire transfer in US funds on or before the 20th day
of the month following production.
PRICE: Plains Marketing Canada, LP monthly average price for
Manyberries crude oil stream, adjusted to 40 degree, 0.5%
sulphur at the international border near Sweetgrass, MT, less
the Milk River tariff (Milk River to the US border), trucking
costs and equalization.
CONTRACT FUNDS: USD
CONDITIONS/COMMENTS:
PLAINS MARKETING CANADA, L.P. General Provisions of Crude Oil Purchase / Sale
Agreement are incorporated herein by reference and form a part hereof. In the
event of a conflict between the Special Provisions and the General Provisions
referenced above, the Special Provisions shall govern.
Please indicate your acceptance of this agreement by signing in the space
provided and returning one copy by facsimile to us for our records.
AGREED TO AND ACCEPTED
THIS 29th DAY OF APRIL, 2002
/s/ M.D. (Mike) Hallahan /s/ J.R. Bacon
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PER: Plains Marketing Canada, L.P. PER:FX Drilling Company Inc.
M.D. (Mike) Hallahan J.R. Bacon
Managing Director, Facilities Vice-President Operations
[Plains Marketing Canada, L.P. Logo]
Appendix A
Contract Details
Date: April 24, 2002
Company Name: FX Drilling Company Inc.
Contract #: 1000
Revisions(s):
Field name Well name Operator Product Volume Unit
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Glacier County Southwest Cutbank Sand unit, Tract FX Drilling Montana Sour Crude 50 BPD
56, T32N, R6W, Sec. 23
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Glacier County Southwest Cutbank Sand unit, Tract FX Drilling Montana Sour Crude 210 BPD
84, T32N, R6W, Sec. 30
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Liberty County Bears Den Swift Sand unit, FX Drilling Montana Sour Crude 15 BPD
Tract(s) 1-6; T36N, R6E, Sections
7, 8, 17, 18
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Glacier County Rieckhoff A, Section 36, T32N, FX Drilling Montana Sour Crude 15 BPD
R6W, lots 2 & 3
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Glacier County Tribal 1466, Section 27, T32N, R6W FX Drilling Montana Sour Crude 5 BPD
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Glacier County Tribal 1186, Section(s) 6 & 7, FX Drilling Montana Sour Crude 5 BPD
T31N, R5W
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Effective Date: June 1, 2002
Price Details: Plains Marketing Canada, LP monthly average price for
Manyberries crude oil stream, adjusted to 40 degree, 0.5%
sulphur at the international border near Sweetgrass, NT, less
the Milk River tariff (Milk River to the US border), trucking
costs and equalization.
Comments
Please advise the undersigned immediately if the information contained in this
agreement does not accurately describe our verbal agreement. If we do not
receive notification within 10 working days of the transmission date, we will
assume that the above terms and conditions are acceptable. This agreement is
subject to Plains Marketing Canada, L.P.'s standard Crude General Terms and
Conditions.
Regards,
Donn Wadey, US Supply
/s/ Mike Hallahan
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Mike Hallahan, Managing Director, Facilities
GENERAL PROVISIONS/OIL PURCHASE CONTRACT
1. PAYMENT: As soon as possible after the close of each calendar month during
which deliveries are made, Seller shall invoice Buyer for the crude oil
delivered. Unless otherwise provided herein, payment for the oil purchased
hereunder shall be made by the twentieth (20th) of the month following the month
of delivery, subject to timely receipt by Buyer of invoice and written
confirmation of invoiced quantity from the receiving facility. If the payment
date falls on a Saturday or Non-Friday bank holiday, payment will be due on the
next succeeding work day. All deliveries hereunder shall be deemed a single
on-going transaction.
II. SET-OFFS: In the event either party shall fail to make timely delivery of
any crude oil and/or condensate or other applicable products due and owing to
the other party, or in the event that either party shall fail to make timely
payment of any monies due and owing to the party, the other party may set off
any deliveries or payments due under this or any other agreement between the
parties. "Party" for the purposes of this paragraph shall include for each party
its affiliates (including, but not limited to, both parent and subsidiary
companies). It is the intent of the parties to this contract to treat each party
hereto and its respective affiliates (including, but not limited to, both parent
and subsidiary corporate entities) as a single legal entity for the purposes of
set-off regarding debts and claims.
III. RIGHT TO AUDIT: In the event the price of the crude oil or condensate sold
hereunder is based on an average acquisition cost, Seller agrees to maintain and
retain all pertinent books, records and documents relating to the transactions
hereunder for a period of not less than two (2) years following termination of
this agreement, and Buyer or its duly authorized representatives shall have
access to such records, and the right to audit the same, at all reasonable times
during the existences of this Contract, and for such two (2) year period
following its termination.
IV. MEASUREMENTS AND TEST: Quantities of oil delivered hereunder shall be
determined from tank gauges on 100% tank table basis or by the use of mutually
acceptable automatic measuring equipment. Volume and gravity of said quantities
shall be corrected for temperature to 60 degrees Fahrenheit in accordance with
the latest A.S.T.M. I.P. Petroleum Measurement Tables. The oil delivered
hereunder shall be merchantable and acceptable to the carriers involved but not
to exceed one percent (1%) S&W. Full deduction shall be made for all S&W content
as determined by tests conducted according to the latest A.S.T.M. standard
method in effect. Tests for quality shall be made at regular intervals by Seller
in accordance with recognized procedures. Each party shall have the right to
have a representative or independent inspector (which cost shall be shared
equally between the parties hereto) present to witness all gauges, tests and
measurements.
V. WARRANTY: Seller warrants title, free and clear of all taxes, liens and
encumbrances which are customarily paid by Seller prior to delivery, to the oil
sold and delivered hereunder and warrants that said oil has been produced,
handled and transported to the delivery point hereunder in accordance with the
laws, rules and regulations of all local, state or federal authorities having
jurisdiction thereof. In this regard, Seller agrees to provide Buyer with any
transaction documentation requested.
VI. FORCE MAJEUR: Continued performance by either party of any obligation except
as to payment due hereunder, may be suspended immediately to the extent caused
or contributed to by acts of God, fire, labor or trade disturbance, war, civil
commotion or act of the public enemy, unavailability of transportation, storage,
manufacturing, refining or distributing facilities, compliance in good faith
with any applicable foreign or domestic regulation or order, whether or not it
later proves to be invalid, or any cause beyond the reasonable control of either
Buyer or Seller whether similar or dissimilar to the enumeration contained
herein, except inability to discharge financial obligations when due. The party
suspending performance under this clause shall give prompt notice and shall use
its best efforts to cure promptly the cause for such suspension. Upon cessation
of the cause for suspension, performance shall resume (or commence) immediately.
However, if any given Force Majeure condition continues beyond ninety (90) days,
the party not claiming said condition shall have the option of terminating this
contract upon the giving of written notice thereof to the other party.
VII. TITLE AND RISK OF LOSS: Title and risk of loss to crude oil delivered into
storage, tankers, barges, tank trucks, and/or pipeline facilities shall pass to
Buyer as the crude oil enters the intake pies of such equipment of the receiving
facility, or is in-line transferred.
VIII. ENTIRETY OF AGREEMENT, MODIFICATION, WAIVER, AND ASSIGNMENT: This Contract
and amendments constitute the entire understanding of the parties relating to
the sale of the crude oil specified herein. There shall be no modification or
amendment of this Contract except by writing, signed by both parties hereto.
Waiver of performance of any obligations by either party of default by the other
hereunder shall not operate as a waiver of performance of any other obligation
or a future waiver of the same obligation or a waiver of any future default.
Neither party shall assign this Contract to a person or firm except upon written
consent of the other party, such consent, however, shall not be unreasonably
withheld. This Contract shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto.
IX. EQUAL DAILY DELIVERIES: Except for delivery truck tanker, for the purpose of
invoicing, any crude oil delivered hereunder shall be deemed to have been
delivered in equal daily quantities during the calendar month in which
deliveries occur.
X. CHOICE OF LAW: This Contract shall be constructed in accordance with, and
governed by, the law of, and Buyer and Seller consent to the jurisdiction of the
courts of, the State of Texas.
XI. DEFAULT: In the event Seller shall fail to make timely deliveries due Buyer
under this Contract, or if Seller is otherwise in default hereunder, Buyer may,
on written notice to Seller terminate this contract or suspend performance of
all obligations hereunder during default.
XII. NOTICE: Any notice required or permitted hereunder shall be deemed give n
when deposited in the U.S. Mail as registered or certified mail, return receipt
requested, postage prepaid, and addressed to the party to whom the notice is
being given at the address set forth on the first page hereof (or such other
address as is provided by written notice in accordance with this provision).
During the terms of this Contract Seller herein agrees to notify Buyer
immediately in writing upon Seller's corporate reorganization, merger, or
acquisition by another, or any other similar corporate structural change.