Exhibit 10.2
 
 

*PORTIONS OF THIS ETHANOL PURCHASE AGREEMENT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
 

 
Encore Energy Services, Inc.  
11807 Q Street, Suite 1
Omaha, NE 68137   
Confirming Order Date: April 12, 2012 
 
Base Agreement #:  1146
Confirming Order #: 1149
Account #: 00010513
Page 1
           

 
                                                                                                        :

CONFIRMING ORDER
 
Between Encore Energy Services, Inc. (Seller or Encore) and
 
Southwest Iowa Renewable Energy LLC (Buyer or SIRE)
 
Site(s) Covered
Tax Status
Facility Name:  Southwest Iowa Renewable Energy LLC
Street Address: 2101 42nd Avenue
City, State, Zip: Council Bluffs, IA  51501-8409
Utility: N/A
Utility Account #: N/A
Tax Exempt:                                    T Yes            £ No
Inside City Limits:                                    £ Yes            T No
County:  Pottawattami
 
Note:  Invoices will include tax unless an exemption certificate has been
provided for each site.
Term
Delivery Type
 
From:  May 1, 2012                                   To: October 31, 2013 
MDQ
T Firm  900                          £ Secondary
Firm                                       £ Interruptible
£ Firm  10,000                          T Secondary
Firm                                       £ Interruptible
 
Deliveries will be made on:  T Buyer’s Transport (first)
T Seller’s Transport (second)
Delivery Point:
Delivery Data
£ Into-the-Pipe
£ LDC City Gate
£ Burner Tip
T See Special Provisions
 
£ Pooled                 T Stand Alone
 
Pipe Name:  Northern Natural Gas
Zone/Line Segment:  ABC
POI/TBS Number:  78970
City/State:  Council Bluffs, IA
Buyer’s Transport Contract Number:  N/A
Estimated Volumes to Delivery
Point                                                                           Volumes
in:  T Monthly MMBtu
(Default)                                                                           £
Daily MMBtu
Billable Volume:  T Actual Consumption
(Default)                                                                                           £
Nominations
 
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
2012
       
248,000
240,000
248,000
248,000
240,000
248,000
240,000
248,000
1,960,000
2013
248,000
224,000
248,000
240,000
248,000
240,000
248,000
248,000
240,000
248,000
   
2,432,000
2014
                         
Total
                       
4,392,000
 
Price at the Delivery
Point                                                                           Prices
are in:  T US $                                                              £
Other
 
 
All services, prices, definitions, terms and conditions stated in the “Term
Sheet” attached hereto as Exhibit A are applicable and made part of this
“Confirming Order”.
The default gas cost applicable to the “Estimated Volumes to Delivery Point”
stated above shall be that described in Section 2.b) of the attached “Term
Sheet”.  For clarification purposes -  1) The “Gas Daily Index” shall
specifically mean the Daily Midpoint price posted in Platts Gas Daily
publication for Northern, Ventura.  2) The transportation rate applicable to
Section 2 b) shall equal Northern’s TF – 12 tariff rate for the first 900 MMBtu
per day, and then an annual average rate of $* per MMBtu for any volumes in
excess of 900 MMBtu per day *.  In addition to the foregoing, Buyer’s total
“Price at the Delivery Point” will include Northern’s tariff fuel percentage and
Seller’s “Balancing” charge of $*/MMBtu.
 
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
Buyer may transact a “fixed-price” at any time for all or part of its Estimated
Volumes for a term not to exceed 12-months.  In the event Buyer transacts a
“fixed-price”, then a new Confirming Order will be issued documenting the
specific price, volumes, and term agreed to by Buyer and Seller.

 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Encore Energy Services, Inc.  
11807 Q Street, Suite 1
Omaha, NE 68137   
Confirming Order Date: April 12, 2012 
 
Base Agreement #:  1146
Confirming Order #: 1149
Account #: 00010513
Page 2
   

 
 

agreed to by Buyer and Seller.
Fuel Loss
Fuel loss charges will be calculated based on:
T The index price for gas delivered to the Delivery Point specified herein
£ The fixed price for gas delivered to the Delivery Point specified herein

 

 
 

--------------------------------------------------------------------------------

 

 
 
Encore Energy Services, Inc.  
11807 Q Street, Suite 1
Omaha, NE 68137   
Confirming Order Date: April 12, 2012 
 
Base Agreement #:  1146
Confirming Order #: 1149
Account #: 00010513
Page 3
     

 
 
 
Evergreen Pricing Provision
 
This Confirming Order and its rates, terms and conditions will automatically
extend past October 31, 2013 for continuous one (1) year extension terms unless
canceled by either Party giving written notice to the other Party at least sixty
(60) days prior to the end of the applicable term.
 
Monthly Imbalance Cash-out Provisions
 
Monthly Imbalances managed
by:                                                                T Encore per
the provisions
below                                                                £ Pipeline
per tariff £ Utility per tariff
 
    -       If Buyer only transacts natural gas purchases based on the Gas Daily
Index, then no imbalance will be created and thus there will be no monthly
cash-out.
    -       If Buyer transacts a “Fixed-Price”, “Basis”, or “First of the Month
Index” and the amount hedged (“Monthly Volumes”) does not equal the actual
consumption during any given month, then the Monthly Imbalance will be
cashed-out pursuant to the following :
 
For volumes consumed above the Monthly Volumes, Seller shall charge Buyer a
price per MMBtu equal to the Gas Daily Index published in Gas Daily’s “Daily
Price Survey” for deliveries to Northern Natural Gas – * per MMBtu plus
applicable pipeline fuel, transportation, and Balancing associated with the
delivery of gas to the Delivery Point.
For volumes unutilized below the Monthly Volumes , Seller shall credit Buyer a
price per MMBtu equal to the Gas Daily Index price as published in Gas Daily’s
“Daily Price Survey” for deliveries to Northern Natural Gas - * per MMBtu.
 
-Encore will utilize its best efforts to minimize Buyer’s monthly imbalance
volume.
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
Responsibility for Nominations, Scheduling, and Daily Balancing
 
Buyer
Seller
Not applicable
Nominations
£
T
£
Scheduling
£
T
£
Daily Balancing
 
£
T
£
Special Provisions
Notwithstanding anything to the contrary in this Confirming Order or the Base
Agreement, the Delivery Point shall be (i) “Into the Pipe” at the applicable
receipt point for Buyer owned transportation (900/day) being utilized to
effectuate this transaction; and (ii) at “customer’s direct connect meter” for
Seller owned transportation above 900/day) being utilized to effectuate this
transaction.
This Confirming Order is subject to and incorporates the Terms and Conditions of
the NAESB Base Contract between Buyer and Seller.
Buyer
/s/ Brian T. Cahill
 
President and CEO
4-25-12
Signature
Title
Date
Seller
 
/s/ Ken Graeber
President and CEO
4-25-12
Signature
Title
Date

 

 
 
 

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Encore Energy Services, Inc.  
11807 Q Street, Suite 1
Omaha, NE 68137   
Confirming Order Date: April 12, 2012 
 
Base Agreement #:  1146
Confirming Order #: 1149
Account #: 00010513
Page 4
     

 
 
IF ANY OF THE TERMS STATED ABOVE ARE CONTRARY TO YOUR UNDERSTANDING, PLEASE
NOTIFY US IN WRITING WITHIN TWO (2) BUSINESS DAYS STATING YOUR OBJECTIONS.
 

 

 
 

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“Exhibit A”
 
Term Sheet
 
for
 
Southwest Iowa Renewable Energy and Encore Energy Services
 

 
1.
No Notice Peaking Service:

 
 
(a)
This “Service” allows for up to 10,000 MMBtu per day of natural gas to be
delivered to the SIRE facility without any prior notice.  This “Service” is 100%
firm for the period April 1st through October 15th and will be accommodated on a
“Best Efforts” basis from October 16th through March 31st.  It is expressly
understood that the “Service” is not available in the event Northern Natural Gas
invokes a “Critical Day”.

 
 
(b)
The Demand fee for the “No Notice Peaking Service” shall be $* annually paid in
twenty four bi-monthly increments of $*.  Said amount shall be due consistent
with bi-monthly prepayment arrangement.

 
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
2.
Gas Cost:

 
 
(a)
No notice Gas- As defined will be any gas purchased or consumed with less than
26-hours advanced notice to Encore. The price for such gas shall not exceed the
“Gas Daily Index” for the following day in which the gas was used plus(+) $* per
MMBtu plus applicable fuel and transportation*.

 
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
 
(b)
Next Day Gas- As defined will be any gas that is purchased with at least 26-hour
advanced notice to Encore (i.e. by 7:00AM the day preceding the gas day starting
at 9:00AM for which the purchased gas will be consumed). The price for such gas
shall be “Gas Daily Index” plus(+) $* per MMBtu plus applicable fuel and
transportation*.

 
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
 
(c)
Term Gas- As defined will be any forward gas purchase SIRE wishes to transact up
to a term of 12-months. All term gas will be sold on a “fixed-price” basis
inclusive of applicable fuel and transportation*.

 
 
(d)
Other Transactions- SIRE may, at their discretion, sell put options at or near
their steam cost for any length of term up to 12-months.

 
*Applicable Transportation shall mean interstate transportation on the pipeline
system of Northern Natural Gas Co. (NNG) for the express purpose of delivering
gas from the receipt point to the SIRE facility. The price of said
transportation will in no event exceed the then current applicable tariff rate
as defined in NNG’s FERC approved tariff This specifically includes, but is not
limited to, Schedules TF, TFX, IT, TF Overrun, and Daily Firm. In all instances,
SIRE’s existing TF-12 transportation contract will be fully utilized before any
incremental transportation is obtained by Encore on behalf of SIRE.
 
3.
Term: The term of the transaction is for 18-months commencing May 1, 2012 and
concluding October 31, 2013.

 
4.
Balancing:  Notwithstanding “No Notice Gas” events during the “Best Efforts”
period described above, Encore will ensure that SIRE remains in balance on a
daily and monthly basis such that SIRE will receive NO daily penalties or be

 

 
 

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Encore Energy Services, Inc.  
11807 Q Street, Suite 1
Omaha, NE 68137   
Confirming Order Date: April 12, 2012 
 
Base Agreement #:  1146
Confirming Order #: 1149
Account #: 00010513
Page 6
     

 
subject to a punitive monthly cash-out. The charge for said “Balancing” service
is $* per MMBtu. This Charge is in addition to the “Gas Cost” detailed in
Section 2 above.

 
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.