July 19, 2002 EQUIVA TRADING COMPANY
▇▇▇▇▇ Petroleum Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇ Equiva Purchase Contract
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ No.: BEP10132LP
Contract Dated: 8/01/02
Gentlemen:
THIS AGREEMENT is made and entered into by and between
EQUIVA TRADING COMPANY, a Delaware General Partnership ("Buyer"),
and ▇▇▇▇▇ PETROLEUM COMPANY, a Delaware Corporation, ("Seller")
acting for itself and in its capacity as the Operator of the
attached listed properties for the benefit of itself, and sets
forth the terms, conditions and provisions under which Seller
will sell and deliver and Buyer will purchase and receive certain
crude oil.
The crude oil that is sold and purchased under this
Agreement is that crude oil produced from the field ▇▇▇▇▇ located
within the area of the leases listed, which area consists of
lands covered by the oil and gas leases and/or other properties
that are specifically described on the Schedule of Covered
Producing Properties that is attached to this Agreement as
Exhibit B, all of which lands are located in California, to the
full extent, but only to the extent that Seller owns such crude
oil production or otherwise controls the right to market and sell
such crude oil production. Seller shall sell and deliver and
Buyer shall purchase and receive all such crude oil during the
delivery term provided for in this Agreement, all in accordance
with and subject to all of the terms, conditions and provisions
of this Agreement. However, nothing in this Agreement shall
obligate Seller to produce any particular volume of crude oil or
to produce any crude oil at all from any of the lands listed.
In addition to the foregoing, the terms, conditions and
provisions of this Agreement consist of and include the Special
Provisions attached to this Agreement as Exhibit A and the TTTI
General Provisions (December 1990), as modified by Buyer and
Seller and attached to this Agreement as Exhibit C. Each of
Exhibit A, Exhibit B, and Exhibit C are incorporated into and
made a part of this Agreement. In the event of any
inconsistencies between Exhibit A and Exhibit C, the terms,
conditions and provisions of Exhibit A (Special Provisions) shall
prevail.
IN WITNESS WHEREOF, Buyer and Seller have caused this
Agreement to be executed in duplicate on the date set forth
opposite their respective signatures.
Please return one fully executed original of this Agreement
to the attention of Contract Administrator.
Very truly yours,
▇▇▇▇▇ PETROLEUM COMPANY EQUIVA TRADING COMPANY
By: s/s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: s/s ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President Manager, Crude Oil Acquisitions
U.S. West Coast
Corporate Development
Date: 30/July/02 By: s/s ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Manager Lease Crude Oil
Acquisitions
Date: 7/30/02
EXHIBIT 10.9 Page 1 of 5
1
BEP10132LP 7/19/2002
Dated: 8/01/02
EXHIBIT A
▇▇▇▇▇ Petroleum Company, Inc
Contact: ▇▇▇ ▇▇▇▇▇ Equiva Contact: ▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ Petroleum Company, Inc Sale and Delivery to Equiva:
Amends Supercedes Contract BEP1011LP Midway Sunset
Supercedes Contract BEP1010LP Placerita
Supercedes Contract BEP1005CP ▇▇▇▇▇▇▇▇
Quality Midway Sunset merchantable oil (approximately
13 gravity).
Placerita merchantable oil (approximately 13
gravity ).
▇▇▇▇▇▇▇▇ merchantable oil (approximately
27gravity).
Quantity Approximately 15,000b/d of oil from Midway
Sunset, Placerita, & Montalvo fields as described
in Exhibit B.
Delivery From lease tankage into Equiva Trading Company
point nominated pipeline, transfer line, or truck crude
carrier. Measurement shall be by appropriate ASTM
designated custody transfer method.
Term This contract shall be in effect August 1,
2002. The new contract pricing set forth below for
all of the volume shall begin on the first day of
the first month the additional Formax volume can be
added to the contract volume. Until such time as
100% of the Formax crude is nominated to Equiva, the
pricing terms defined in contracts BEP1011LP,
BEP1010LP and BEP1005CP shall remain in effect. This
contract shall continue until December 31, 2005 and
month to month thereafter until the first of the
month following either company's sixty (60) day
advanced written notice of termination. The payment
due date shall be on or before the 20th day of the
month following the delivery month.
Pricing All heavy barrels from Midway Sunset &
Midway Sunset Placerita shall be priced monthly at the higher of
& Placerita 1) the Monthly Calendar average NYMEX LESS [*] OR 2)
the average of Chevron, Union 76, Exxon/Mobil, and
Equiva Trading Company's posting for Midway-Sunset
Pricing crude PLUS a premium of [*] per barrel with either
▇▇▇▇▇▇▇▇ price being gravity adjusted from 13 degrees.
The ▇▇▇▇▇▇▇▇ light barrels produced from the
▇▇▇▇▇▇▇ 4 Pool lease shall be priced at the monthly
calendar average of postings by Union 76 and Equiva
Trading Company for Ventura Avenue Crude, gravity
adjusted from 28 degrees, PLUS a premium of [*] per
barrel. ▇▇▇▇▇▇▇▇ light barrels in excess of 100 BOPD
monthly average shall incur a transportation charge
of [*] per barrel.
[*] represents confidential material which
has been redacted. A Confidential
Treatment Request, including the redacted
material, has been filed separately with
the Commission pursuant to Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.
New Volumes The approximate volume of the total purchase is
15,000 b/d +/- as described in Exhibit ▇. ▇▇▇▇▇▇▇▇
lease light oil is being added to this contract.
▇▇▇▇▇ Petroleum shall have the right to add
additional volumes of San ▇▇▇▇▇▇▇ Valley heavy crude
of similar type and quality as the crude being
produced from ▇▇▇▇▇'▇ Midway Sunset properties ("New
Volume"). [*] In the event of New Volume there
shall be no transportation charge for delivery from
the ▇▇▇▇▇ Central Facility and delivery from any
other point may incur a transportation charge as the
parties may mutually agree at the time any New
Volume is added to this Contract to reflect added
distance to the Shell pipeline compared to distance
from the ▇▇▇▇▇ Central Facility to the Shell
pipeline.
[*] represents confidential material which
has been redacted. A Confidential
Treatment Request, including the redacted
material, has been filed separately with
the Commission pursuant to Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.
Assignment Should ▇▇▇▇▇ Petroleum Company be acquired or
and merged into another entity, this contract shall
Succession remain in effect for the succeeding entity. Should
Equiva Trading Company be acquired or merged into
another entity, this contract shall remain in effect
for the succeeding party. Neither Party shall assign
the Agreement or its rights hereunder without prior
written consent of the other Party.
All Other All other terms and conditions shall remain
Terms the same.
2 EXHIBIT 10.9 Page 2 of 5
Equiva Purchase Contract No.: BEP10132LP
Dated: 8/01/02
EXHIBIT B
CUSTOMER NAME: ▇▇▇▇▇ Petroleum Company, Inc
EQUIVA TRADING COMPANY
ETCO CONTRACT NO.:
CONTRACT DATE: 9/01/02
APPROX.
LEASE LEASE August 2002
NUMBER PROPERTY NAME COUNTY FIELD TERMS TOTAL DELIVERY TRANSPORTATION METHOD
52485 Central ▇▇▇▇ Midway SS 8/1/02- 7000 Equiva design. PPL
Facility 12/31/05
01817 Formax ▇▇▇▇ Midway SS 8/1/02- 3200 Equiva design. PPL
12/31/05
Various NMWSS ▇▇▇▇ Midway SS 8/1/02 - 550 Equiva designated PPL
12/31/05
▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇ SS 8/1/02- 125 Equiva design. PPL
12/31/05
52312 Placerita Los Angeles Placerita 8/1/02- 3,000 Equiva design. trucks
12/31/05
52329 ▇▇▇▇▇▇▇ #4 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 8/1/02- 50 Equiva design. trucks
12/31/05
EXHIBIT 10.9 Page 3 of 5
ATTACHMENT C ETCO CONTRACT NO.: BEP10132LP CONTRACT DATE:
8/01/02
TEXACO TRADING & TRANSPORTATION, INC.
GENERAL PROVISIONS
SPECIFIC TERMS: The specific terms of the Contracts between the
Buyer and the Seller, including a description of the crude oil,
condensate and/or natural gas liquids (`liquid hydrocarbons")
subject thereto, quantity, price, shipment and payment terms, are
set forth in specific Agreements between the Buyer and the
Seller, which, together with the printed terms below, constitute
integrated Contracts between the parties. In the event of any
inconsistency between the printed terms below and such specific
terms, the specific terms shall prevail.
WARRANTY/TAXES: The Seller warrants good title to all liquid
hydrocarbons delivered pursuant to this Contract and warrants
that such shall be free from all royalties, liens, encumbrances
and all applicable foreign, Federal, State and local taxes that
are imposed upon the production and/or removal of liquid
hydrocarbons from the premises through the point of delivery.
Seller further warrants that such liquid hydrocarbons have been
produced, handled and transported to the point of delivery in
accordance with all applicable laws, rules and regulations of all
Federal, State and local authorities. Seller further warrants
that all liquid hydrocarbons will be merchantable. Merchantable
liquid hydrocarbons are defined as unrefined liquid hydrocarbons
of the type set forth in the specific Agreements between the
parties which are suitable for normal refinery processing, meet
the specifications of delivering carriers and are free of foreign
contaminants and chemicals including but not limited to
chlorinated and oxygenated hydrocarbons. Buyer shall be liable
for and shall remit to the proper government authorities any new
or additional Federal, State, municipal or other regulatory
body's taxes, inspection fees, transfer taxes or fees, occupation
taxes or other like assessments or charges that may be applicable
to liquid hydrocarbons after the point of delivery. If any tax
imposed by 26 U.S.C. Sec. 4611 (the tax on petroleum under the
Superfund Amendments and Reauthorization Act of 1986) shall be
applicable after the point of delivery to a purchase, sale or
exchange pursuant to this Contract, the Buyer shall be liable for
payment and shall be responsible for remittance of such tax to
the appropriate governmental authority.
TITLE AND RISK OF LOSS: Title to, possession of and risk of loss
of liquid hydrocarbons shall pass to the Buyer as the liquid
hydrocarbons pass from equipment or location owned or controlled
by the Seller or owned or controlled by a Party designated to
make delivery on behalf of the Seller, into equipment owned or
controlled by the Buyer or owned or controlled by a Party
designated to take delivery on behalf of the Buyer. Provided,
however, that in cases of line transfers, title to, possession of
and risk of loss of liquid hydrocarbons shall pass to Buyer as
the liquid hydrocarbons are deemed transferred. Such shall be
deemed transferred to Buyer upon completion of each in line
transfer with quantity determined when available in accordance
with the transfer statement or other receipt issued by the
carrier or storage facility.
EQUAL DELIVERIES: For purposes of determining price, liquid
hydrocarbons delivered during any given month hereunder shall be
deemed to have been delivered in equal daily quantities during
such month.
MEASUREMENTS AND TESTS: All measurement hereunder shall
represent one hundred percent (100%) volume with such volume and
gravity adjusted to sixty degrees (60) Fahrenheit temperature.
Procedures for measuring and testing, except for deliveries
through positive displacement-type delivery, shall be according
to ASTM published methods then in effect. Procedures for such
metered-type delivery shall be according to latest ASME-API
published methods then in effect. The liquid hydrocarbons
delivered hereunder shall be merchantable and acceptable to the
carriers involved, and full deduction shall be made for all BS&W
content according to the latest ASTM standard method then in
effect. Should either Party hereto fail to have a representative
present during such measuring and testing, the measurements and
tests of the other Party will be accepted.
CONFIRMATION OF DELIVERY: Confirmation of delivery shall be
based on run tickets evidencing such delivery or allocations
statements issued by the carriers involved.
CONFIRMATION OF EXCHANGE BALANCES: If this Contract is for the
exchange of liquid hydrocarbons and is in effect within sixty
(60) days after delivery thereunder is completed, each Party
agrees to confirm in writing to the other Party the status in
barrels of liquid hydrocarbons of mutual and reciprocal
obligations to deliver liquid hydrocarbons.
DIVISION ORDERS: In the event either Party signs a division
order in favor of the other Party pertaining to the object of
this Contract, the terms of this Contract shall supersede the
terms of such division order to the extent there may be a
conflict between the two.
FINANCIAL RESPONSIBILITY: Should Buyer's credit or financial
responsibility become unsatisfactory to Seller at any time while
a Contract is in effect between the parties, cash payments or
security satisfactory to Seller may be required by Seller before
proceeding. In the event either Party (the "Non-Performing
Party") shall (I) make an assignment or any general arrangement
for the benefit of credits, (II) default in the payment or
performance of any Contract between the parties, (III) file a
petition or otherwise commence or authorize the commencement of a
proceeding or case under any bankruptcy or similar law for the
protection of creditors or have such petition filed or proceeding
commenced against it, (IV) otherwise become bankrupt or insolvent
(however evidenced), (V) be unable to pay its debts as they fall
due, or (VI) fail to give adequate security for or assurance of
its ability to perform its obligation under any Contract between
the parties within 48 hours of a reasonable request therefor,
then in any such event, the other Party (the "Performing Party")
shall have the right to (I) withhold shipments or terminate any
or all Contracts between the parties without notice, and/or (II)
immediately liquidate any or all forward Contracts then
outstanding between the parties by closing out each such forward
Contract by buying from the Non-Performing Party the material
purchased and sold thereunder and calculating market damages
equal to the differences, if any, between the value specified in
such Contract and the then prevailing market rates as reasonable
determined by the Performing Party, setting off all market
damages so determined and payable by each of the parties to the
other, setting off all margin held by either Party to secure the
obligations of the other Party, (including all payments due the
other Party with respect to deliveries received from such other
Party, which payments, prior to payment, shall be deemed to be
held by each Party as margin to secure the other Party's
obligations from time to
EXHIBIT 10.9 Page 3 of 5
time incurred), whereupon all such
amounts shall be aggregated or netted to a single liquidated
amount payable within one business day by the Party owing the
greater such amount to the other. The exercise by either Party
of any right reserved under this section shall be in addition to
and not in limitation or exclusion of any other rights which such
Party may have (whether by operation of law or otherwise)
including any rights and remedies under the Uniform Commercial
Code.
ASSIGNMENT: Neither Party shall assign this Contract without the
prior written consent of the other.
TERMINATION AGREEMENT: The parties agree that any quantity of
liquid hydrocarbons due and owing or to become due from one Party
to the other pursuant to this Contract may be waived or otherwise
settled by mutual agreement of the parties, in writing.
FORCE MAJEURE: Neither Party shall be liable to the other for
failure or delay in making or accepting delivery hereunder to the
extent that such failure or delay may be due to compliance with
acts, orders, regulations or requests of any Federal, State or
local civilian or military authority or any other persons
purporting to act therefor; riots; strikes; labor difficulties;
action of the elements; transportation difficulties; or any other
cause reasonably beyond the control of such Party, whether Seller
or not. For the purposes of this section, the term "Party" shall
be defined to include Seller's supplier and Buyer's receiver.
Seller shall not be obligated to make up any deliveries omitted
as a result of any of the causes enumerated in this section
except that Seller and Buyer are required to reconcile or balance
zero value exchanges. In the event either Party is claiming
(Telex or other electronic communication acceptable) with as much
advance notice as is possible the underlying circumstances of the
particular cause(s) of Force Majeure and the expected duration
thereof and notwithstanding the provisions of this section, Buyer
shall not be relieved of any obligation to make payments with
regard to liquid hydrocarbons that have been delivered hereunder.
GOVERNING LAW AND JURISDICTION: This Contract shall be construed
and governed by the laws of the State of California to the
exclusion of any other legal system, and each Party expressly
submits to the jurisdiction venue of the courts of the State of
California or the federal courts in Colorado for the purposes of
litigation.
NEW OR CHANGED REGULATIONS: Each of the parties hereto is
entering this Contract in reliance on the laws, taxes, fees,
duties, rules, regulations, decrees, agreements, concessions and
arrangements with government or governmental instrumentalities
(the "Regulations") in effect on the date of this Contract which
directly or indirectly affect the oil sold and to be delivered
hereunder insofar as these Regulations affect the Seller, the
Seller's supplier, the Buyer or the receiver.
In the event that during the term of this Contract any of the
Regulations or changed or new Regulations become effective and
the effect of such new or changed Regulations is not covered by
any other provision of this Contract and said change has a
material adverse economic impact upon the parties named above,
the Party affected or if the Seller's supplier, the Seller, or if
the Buyer's receiver, the Buyer, in the exercise of good faith
shall have the option to request renegotiations of the prices
and/or other relevant terms of this Contract with respect to
deliveries not yet made. In the event the Buyer or Seller is in
good faith dissatisfied with the results of the renegotiation,
either Party will have the right to cancel this Contract if
notice of such cancellation is given in writing to the other
Party within thirty (30) days of the effective date of (I) the
change of the Regulations or (II) the new Regulations.
PAYMENT: Seller and Buyer shall use as a basis for payment for
the liquid hydrocarbons delivered run tickets or any acceptable
ASTM measurement method. Those tickets shall be delivered by the
responsible party as soon as possible after the close of each
calendar month during which deliveries are made but not later
than five business days prior to payment due date. Payment shall
be in immediately available US Dollars. Payments due on Saturday
or bank holidays shall be made on the preceding business day,
unless such holiday is a Monday in which case payment shall be
made on the following business day; payments due on Sunday shall
be made on the following business day. Past due accounts shall
accrue interest at the published rate for commercial loans quoted
by ▇▇▇▇▇▇ Guaranty Trust Company of New York.
RIGHTS OF SETOFF: In the event that either Party shall default
in any payment or other performance under this or any other
Contract existing by and between the parties hereto, or if any
suit, claim, demand, action or cause of action shall be
instituted involving any sums due under this or any other such
Contract, then and in any of these events, the other Party, at
its option, shall have the right to withhold any payments or any
deliveries of liquid hydrocarbons due under this or any other
such Contract, or offset and deduct from any payments of
deliveries due under this or any other such Contract.
AUDIT: Each Party and its duly authorized representatives shall
have access to the accounting records and other documents
maintained by the other Party which relate to this Contract, and
shall have the right to audit such records at any reasonable time
or times within three years after termination of this Contract.
WAIVER: No waiver by either Party of any breach of any of the
covenants or conditions herein contained to be performed by the
other Party shall be construed as a waiver of any succeeding
breach of the same or of any covenant or condition hereof.
TIMING: References to calendar dates set forth in this Contract
and any amendments hereto, shall mean 7:00 A.M. of the dates
indicated.
EXHIBIT 10.9 Page 5 of 5
