EXHIBIT 10.3

     
Attention:
  President
 
   
Facsimile Number:
  (832) 636-___
 
   
Date:
  [                    ]
 
   
Reference:
  WES [                    ]

Commodity Swap
CONFIRMATION
The purpose of this facsimile (this “Confirmation”) is to confirm the terms and
conditions of the commodity swap transaction entered into between Anadarko
Petroleum Corporation (“Anadarko”) and Western Gas Partners, LP (the
“Counterparty”) on the Trade Date specified below (the “Transaction”). This
Confirmation supersedes any previous Confirmation or other written communication
with respect to the Transaction described below and evidences a complete binding
agreement between you and us as to the terms of the Transaction described below.
This Confirmation constitutes a “Confirmation” as referred to in the Agreement
specified below.
The definitions and provisions contained in the Commodity Definitions as such
term is defined in the Agreement (the “Commodity Definitions”), are incorporated
into this Confirmation. In the event of any inconsistency between those
definitions and provisions and this Confirmation, this Confirmation will govern
for purposes of the Transaction. Capitalized terms used in this Confirmation and
not defined in this Confirmation or the Commodity Definitions shall have the
respective meanings assigned in the Agreement. Each party hereto agrees to make
payment to the other party hereto in accordance with the provisions of this
Confirmation and of the Agreement.
This Confirmation supplements, forms a part of, and is subject to the ISDA
Master Agreement dated as of December 19, 2008, as amended and supplemented from
time to time (the “Agreement”) between you and us. All provisions contained in
the Agreement govern this Confirmation except as expressly modified below.
The terms of the particular Transaction to which this Confirmation relates are
as follows:

     
General Terms:
   
 
   
Trade Date:
  [                    ]
 
   
Effective Date:
  [                    ]
 
   
Termination Date:
  [                    ]
 
   
Commodity:
  [Natural Gas] [Ethane, Propane, Is Butane, Normal Butane, Natural Gasoline,
Condensate]
 
   
Total Notional Quantity:
  Sum of Notional Quantities in each Calculation Period

 

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Notional Quantity per Calculation Period:
  [Actual volumes, in MMBTUs, purchased by Western Gas Partners, LP to comply
with its keep whole obligations under the [                     Contracts]. Such
keep whole volumes (the “Keep Whole Volumes”) shall be equal to the amount
during a Calculation Period by which the total natural gas required to be
redelivered to the producers under the [                     Contracts] exceeds
the Producer Provided Natural Gas for such Calculation Period. For purposes of
this Confirmation the “Producer Provided Natural Gas” shall be equal to sum of
(a) the natural gas Counterparty receives as compensation for services provided
by Counterparty pursuant to the [                     Contracts] plus (b) the
amount of residue natural gas remaining following gathering, services,
processing, conditioning and transporting of the natural gas originally
delivered by the producers to Western Gas Partners, LP pursuant to the
[                     Contracts]. For purposes of this Confirmation the
“[                     Contracts]” shall be all natural gas or natural gas
liquids gathering, services, processing, conditioning, transporting or similar
contracts with respect to the [                    ] Gathering System and/or
[                    ] Plants and all amendments, modifications, restatements or
replacements thereof. For purposes of this Confirmation the
“[                    ] Gathering System” and “[                    ] Plants”
shall have the meanings given to such terms in the Contribution Agreement which
conveys such system and plants to Western Gas Partners, LP, on or about the
Trade Date hereof. If during any Calculation Period the Producer Provided
Natural Gas exceeds the natural gas required to be redelivered to the producers
under the [                     Contracts], then for such Calculation Period
this Confirmation shall be applicable in accordance with its other terms subject
to the following three modifications: (i) Counterparty shall be the Floating
Price Payer, (ii) Anadarko shall be the Fixed Price Payer and (iii) The Notional
Quantity shall be the amount by which the Producer Provided Natural Gas exceeds
the natural gas required to be redelivered to the producers under the
[                     Contracts]. or [Actual volumes, in MMBTUs, retained by
Western Gas Partners, LP as payment from the percentage of proceeds contracts at
the [                    ] facilities ]] [Actual volumes, in barrels, retained
by Western Gas Partners, LP as compensation for services provided by Western Gas
Partners, LP pursuant to the [                     Contracts], (the “Liquids
Volumes”). For purposes of this Confirmation the “[                    
Contracts]” shall be all natural gas or natural gas liquids gathering, services,
processing, conditioning, transporting or similar contracts with respect to the
[                     Gathering System] and/or [                     Plants] and
all amendments, modifications, restatements or replacements thereof. For
purposes of this Confirmation the “[                    ] Gathering System” and
“[                    ] Plants” shall have the meanings given to such terms in
the Contribution Agreement which conveys such system and plants to Western Gas
Partners, LP on or about the Trade Date hereof. or [Actual volumes retained by
Western Gas Partners, LP as net payment from the [                    ]
facilities.]]
 
   
Calculation Period(s):
  Each consecutive calendar month, from and including the Effective Date, to and
including the Termination Date.
 
   
Payment Date(s):
  In respect of each Calculation Period, the fifth Business Day following the
Pricing Date in such Calculation Period.
 
   

 

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Fixed Amount Details:
   
 
   
Fixed Price Payer:
  [                    ]
 
   
Fixed Price:
  USD [                    ] per [MMBTU] [per barrel]
 
   
Floating Amount Details:
   
 
   
     Floating Price Payer:
  [                    ]
 
   
     Floating Price:
  [A price per MMBTU equal to (a) the actual net proceeds paid for the Keep
Whole Volumes of natural gas for the applicable Calculation Period divided by
(b) the Notional Quantity for such Calculation Period.] [A price per barrel with
respect to the applicable commodity equal to (a) the actual amount received as
payment by the Floating Price Payer from the sale of the Liquids Volumes of the
applicable commodity for the applicable Calculation Period divided by (b) the
Notional Quantity of the applicable commodity for such Calculation Period.]
 
   
     Delivery Date:
  In respect of each Calculation Period, the calendar month and year
corresponding to such Calculation Period.
 
   
     Pricing Date(s):
  In respect of each Calculation Period, the date 20 days after the end of such
Calculation Period.
 
   
Offices:
   
 
   
     Anadarko:
  1201 Lake Robbins Drive, The Woodlands, TX 77380
     Counterparty:
  1201 Lake Robbins Drive, The Woodlands, TX 77380

 

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Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
two (2) Business Days by promptly signing in the space provided below and faxing
the signed copy to Anadarko.

          For and on behalf of
Anadarko Petroleum Corporation
                 Name:           Authorized Signatory
Date:        For and on behalf of
Western Gas Partners, LP
      By:   Western Gas Holdings, LLC, its general partner         Name:        
  Authorized Signatory
Date:     

 

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[Renewal provisions for Powder River Hedges:
Renewal Option:
During the last month of the Calculation Period, Floating Price Payor shall have
the right but not the obligation to enter into a new transaction with the same
terms as this confirmation except as follows:
The new Trade Date shall be the date of the new transaction;
The new Effective Date shall be two (2) years or four (4) years, as applicable,
from the Effective Date set forth in this Confirmation;
The new Termination Date shall be two (2) years or four (4) years, as
applicable, from the Termination Date set forth in this Confirmation; and
The new Fixed Price shall be the forward market price at the new Trade Date,
where the forward market price shall be deemed to be
[the NYMEX-Henry Hub settlement price less the CIG basis two (2) Business Days
prior to the new Trade Date for the twelve (12) month period ending with the new
Termination Date. The forward market price will be further reduced by the
weighted average of the transportation expense (for any periods that fall within
a portion of the period from the Trade Date through the new Termination Date),
set forth in the then existing contracts between MIGC, on the one hand, and
Anadarko and/or its affiliates including Western Gas Resources, Inc. and
Anadarko Energy Services Company, on the other hand.]
[the amount calculated by the following formula: (a) the NYMEX-WTI settlement
price two (2) business Days prior to the new Trade Date for the twelve
(12) month period ending with the new Termination Date, multiplied by (b) a
fraction, the numerator of which is (i) the average price for such commodity for
the thirty-six (36) month period ending with the new Trade Date, and the
denominator of which is (ii) the average NYMEX-WTI price for the thirty-six
(36) month period prior to the new Trade Date, less (c) Enterprise’s posted
tariff for liquids transportation from southwest Wyoming delivered to Mont
Belvieu for the twelve (12) month period ending with the new Termination Date
and less (d) a fractionation fee equal to the weighted average of the contracted
fractionation fees (for any periods that fall within a portion of the period
from the Trade Date through the new Termination Date), set forth in the Mont
Belvieu fractionation contracts in place on the Trade Date with Anadarko and/or
its affiliates.]
Floating Price Payor’s exercise of the Renewal Option with respect to a
transaction outstanding under this confirmation (“Extended Transaction”) shall
be subject to the following:
1. The Renewal Option can only be exercised with respect to an Extended
Transaction on December 15, [___], and December 15, [___], as applicable.
2. The Renewal Option shall terminate immediately and shall be of no further
force or effect if at any time (a) Fixed Price Payor shall cease to own,
directly or indirectly, 51% of the voting membership interest of Floating Price
Payor’s general partner or (b) Floating Price Payor’s general partner shall
cease to either be or control the sole general partner of Floating Price Payor.]