exhibit10-36.htm


    Exhibit 10.36

     

    FIRST AMENDMENT
TO

     

    GATHERING AND COMPRESSION
AGREEMENT

     

    (KENTUCKY
OPERATIONS)

     

    


    THIS FIRST AMENDMENT TO GATHERING AND
COMPRESSION AGREEMENT (the “First Amendment”) is effective as of March 1, 2009,
and is by and among VINLAND ENERGY GATHERING, LLC, a Delaware limited liability
company (“VEG”); and VANGUARD NATURAL GAS, LLC, a Kentucky limited liability
company (“VNG”), and its subsidiary TRUST ENERGY COMPANY, LLC, a Kentucky
limited liability company (“TEC”).  VNG and TEC are sometimes
collectively referred to as “VANGUARD.”

     

    WITNESSETH:

     

    WHEREAS, VANGUARD and VEG, along with
Vinland Energy Eastern, LLC, are parties to that certain Gathering and
Compression Agreement (Kentucky Operations) dated as of January 5, 2007 (the
“Gathering Agreement’), whereby the parties thereto made certain agreements
concerning the gathering, compression, and re-delivery of certain natural gas in
which TEC owns an interest, all as set forth more fully therein;
and

     

    WHEREAS, VANGUARD and VEG now desire to
amend and/or replace certain terms, provisions or conditions of the Gathering
Agreement as provided in and for the duration of this First
Amendment.

     

    NOW
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged; the parties agree as
follows:

     

    1.           The
term of this First Amendment shall commence on March 1, 2009 and shall continue
in full force and effect until December 31, 2009.  After December 31,
2009, the term of this First Amendment shall be extended automatically from
month to month thereafter, unless VEG or VANGUARD gives the other written notice
of its intention to terminate this First Amendment at the next following monthly
renewal which is at least thirty (30) days after the notice is
given.  Upon the termination of this First Amendment, all of the
original terms and conditions of the Gathering Agreement, including those terms
amended herein, shall be and remain in full force and effect in accordance with
such terms and conditions.

    


    2.           For the duration of this First
Amendment Sections 8.1, 8.2 and 8.3 of the Gathering Agreement are hereby
deleted in their entirety and replaced with the following
provisions:

     

    8.1  For VEG’s services
pursuant to this Agreement in gathering, compressing and re-delivering the
Delivery Point(s) gas from the wells listed on Exhibit “A”, or wells drilled and
completed by or for Vanguard after the date of this Agreement, VANGUARD shall
pay VEG a fee calculated as set forth in this Article VIII (the
“Fee”).  The Fee shall be paid on a per-Mcf basis and shall be paid on
each Mcf of gas in which Vanguard owns an interest delivered by VEG to an end
user or a third party pipeline (“Delivered Mcf”).  The Fee shall
consist of two components: (a) a portion of the Monthly Actual Cost (the “Cost
Component”); and (b) a fixed payment of Five Cents ($.05) per Delivered
Mcf.  For purposes of this Agreement, the “Monthly Actual Cost” shall
be the total cost incurred by VEG to operate the Facilities during the relevant
production month divided by the total number of Mcfs of gas delivered by VEG to
a third party pipeline or an end user during the relevant production
month.  The Cost Component of the Fee for each Delivered Mcf of shall
be determined by multiplying the Actual Cost times the working interest owned by
TEC, VNG or any affiliate in the well which produced the Delivered
Mcf.

     

    8.2           VANGUARD
and VEG acknowledge that VEG may be able to reduce the Monthly Actual Cost,
which would inure to the benefit of all of the parties hereto.  As an
incentive to VEG to reduce the Monthly Actual Cost, VANGUARD will pay to VEG the
“Incentive Payment” described below.  For each Five Cents ($.05)
reduction in the Monthly Actual Cost below Fifty Five Cents ($.55), VANGUARD
shall pay to VEG an Incentive Payment equal to One Cent ($.01) per Delivered
Mcf.  In no event, however, shall the Incentive Payment exceed Ten
Cents ($.10) per Delivered Mcf.

     

    8.3.           Consistent
with the original terms of the Gathering Agreement, it is expressly agreed and
understood that VEG shall not transport any gas volumes owned by a third
party,  other than volumes attributable to wells owned by Vinland
Energy Eastern, LLC (“VEE”), if the transportation of such third party gas
negatively impacts the production of TEC on the VEG system.

     

    3. The
parties hereto agree that except as expressly modified herein, all of the terms
and conditions of the Gathering Agreement shall remain in full force and
effect.

     

    


    WITNESS
the authorized signatures of the parties hereto, hereunto subscribed and affixed
effective as of the day and year first hereinabove written.

    


    


    (“VANGUARD”)

     

    VANGUARD
NATURAL GAS, LLC

     

    By: /s/ Scott W.
Smith­­­­­____________________

    Its: __President_________________________­

    


    TRUST
ENERGY COMPANY, LLC

    


    By:
Vanguard Natural Gas, LLC

    Its: Manager

    By: /s/ Scott W.
Smith­­___________________

    Its:_
President_________________________

    


    


    WITNESS
the authorized signatures of the parties hereto, hereunto subscribed and affixed
effective as of the day and year first hereinabove written.

    


    


    (“VEG”)

     

    VINLAND ENERGY GATHERING,
LLC

     

    By: _/s/ Majeed S. Nami_________________

    Its: _President_________________________

    


    


    


    


    


    


     

    30520277.4

     

    5/8/2009
4:06 PM