exv10w18






Exhibit 10.18




August 27, 2009




	 	 	 	 	 	 	 
	FROM:

	 	Western Refining Southwest, Inc.
	 	TO:
	 	Resolute Natural Resources Company, LLC
	 

	 	ATTN: Lori Laje, Contract Admin.
	 	 	 	ATTN: Dale Cantwell
	 

	 	123 W. Mills Ave., Suite 200
	 	 	 	1675 Broadway
	 

	 	El Paso, TX 79901
	 	 	 	Denver, CO 80231
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	and
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Navajo Nation Oil and Gas Company
	 

	 	 	 	 	 	ATTN: Wilson Groen
	 

	 	 	 	 	 	P.O. Box 4439
	 

	 	 	 	 	 	Window Rock, AZ 86515






CRUDE OIL PURCHASE AGREEMENT




Western Contract # LP818



This Agreement is entered into between Resolute Natural Resources Company, LLC (“Resolute” or
“Seller”) and Western Refining Southwest, Inc. as Buyer (“Western Southwest” or “Buyer”) for the
sale and purchase of crude oil under the terms and conditions set forth below. This contract
covers volumes of crude oil owned by Seller as well as volumes owned by Navajo Nation Oil and Gas
Company (“NNOGC”) and committed to this Agreement with NNOGC’s acknowledgement and consent as set
forth below.




	 	 	 
	Seller:

	 	Resolute, on behalf of itself and NNOGC
	 
	 	 
	Buyer:

	 	Western Southwest
	 
	 	 
	Quantity:

	 	The percentage of crude oil production owned by Resolute and
NNOGC from the lease units in San Juan County, Utah as reflected
on Exhibit A (the “Lease Units”). The maximum volume to be
purchased pursuant to this Agreement cannot exceed 8,000 barrels
per day without Western Southwest’s written consent to higher
volumes.
	 
	 	 
	Product &

Quality:

	 	
Four Corners Sweet Crude Oil
	 
	 	 
	Term:

	 	One year, commencing on September 1, 2009, and ending on August
31, 2010 (the “Initial Term”). This Agreement will continue
automatically after the Initial Term on a month-to-month basis
unless and until terminated by either Party with ninety (90)
days prior written notice of termination. Under this Agreement
the Initial Term, together with any month-to-month continuation
thereafter shall be referred to collectively as the “Term.”


Notwithstanding the foregoing, at any time after December 30,
2009, during the Term of this Agreement, Western Southwest may
terminate this Agreement upon sixty (60) days written notice to
Seller in the event that either: (i) Western Southwest and/or
Western Refining Pipeline Company (“Western Pipeline”) is unable
to finalize right-of-way agreements with the Navajo Nation
regarding pipelines which Western Southwest and Western Pipeline
utilize in the operation of the Four Corners Refineries; or (ii)
the Navajo Nation takes the position, at any time during the
Term of this Agreement, that any portion of the Western
Southwest and/or Western Pipeline right-of-






1









 






	 	 	 
	 

	 	ways referenced in section (i) above are not valid and Western Southwest and/or
Western Pipeline a) are unable to use such right-of-ways, or, b) the Navajo Nation
asserts that Western Southwest or Western Pipeline is in trespass regarding such
right-of-ways.
	 
	 	 
	 

	 	Seller may terminate this Agreement at any time that the guarantee of Western
Refining, Inc. (“Western”) substantially in the form of Exhibit B is revoked or the
amount guaranteed is less than the amount of exposure to Seller; provided that Seller
has given Buyer and Western written notice that the guarantee is less than the amount
of exposure to Seller and Western has not, within thirty (30) days modified the
guarantee to exceed the amount of exposure to Seller
	 
	 	 
	Price:

	 	The higher of:
	 
	 	 
	 

	 	(i) Western Southwest’s San Juan / Paradox Basin posting; or
	 

	 	(ii) The NYMEX trading days average for WTI crude oil for the current
(delivery) calendar month minus $6.25.
	 
	 	 
	Delivery:

	 	FOB at the Lease Units.
	 
	 	 
	Division 

Order:

	 	
Based on existing Division Orders, which will be provided to Western Southwest by Seller.
	 
	 	 
	Payment:

	 	Due and payable on the 20th day of the month which immediately follows the month of delivery provided
that Seller has submitted all necessary substantiating documents incident to the transaction for each volume
delivered and an invoice for which sums are due. Payment shall be made via wire transfer on or before the due
date to a bank designated on Seller’s invoice in immediately available federal funds.
	 
	 	 
	Late Payment:

	 	
Any amount payable for any of the Product sold hereunder or otherwise payable by Buyer to Seller hereunder shall,
if not paid when due, bear interest from the due date (inclusive) until the date full payment is received by
Seller (exclusive) at a rate equal to the lesser of: (a) one percent (1%) above the prime rate in effect at the
opening of business on the due date at the major lending institutions as quoted in the “Money Rates” section of
the Wall Street Journal; or (b) the maximum rate of interest permitted under applicable law. Buyer shall pay
such interest within five (5) calendar days following its receipt of an invoice for such interest via wire
transfer or immediately available federal funds to Seller’s designated bank. To help ensure payment to Seller
hereunder, Buyer’s ultimate parent will provide a Parent Guaranty in the form of Exhibit B.
	 
	 	 
	Credit:

	 	Open.
	 
	 	 
	Audit rights:

	 	Each Party shall have the right at all reasonable times, upon written request, to audit all records of the other
Party pertinent to this agreement to verify such Party’s compliance with the terms and conditions of this
agreement. Notwithstanding the foregoing, each Party shall be entitled to protect the confidentiality of any
information that it considers proprietary. If any audit conducted pursuant to this section reveals that there
was an inaccuracy or omission in the invoices submitted under this agreement, the Parties shall, within ten (10)
days of a request by either Party therefore, meet to discuss the adjustments and/or payments that would be
necessary to correct such inaccuracy or omission; provided however, that no adjustments and/or payments shall be
made in respect of any inaccuracy or omission first alleged after the second anniversary of the date of the
invoice containing such inaccuracy or omission.






2









 






Contacts:




	 	 	 	 	 	 	 	 	 
	 	 	Western Southwest:	 	SELLER
	 
	Scheduling /

Nominations

	 	Rosie Gil
	 	FAX: 915.534.2653
	 	Dale Cantwell
	 	FAX :303.623.3628
	 
	Contracts /

Documents

	 	Lori Laje
	 	FAX: 915.534.2651
	 	Dale Cantwell
	 	FAX: 303.623.3628
	 
	Invoice /

Payments

	 	Mark Anchondo
	 	FAX: 915.534.2665
	 	Dave Milholm
	 	FAX: 303.623.3628
	 





Miscellaneous:





	A.	 	Where not in conflict with the express terms hereof, this Agreement shall be governed
by the Conoco General Terms and Conditions dated January 1, 1993, as amended by Amendment
dated August 1, 2009 (the “Conoco GTCs”) as appended hereto as Exhibit C, with the term
“Special Terms of this Agreement” meaning the terms of this Agreement other than such
Conoco GTCs. The terms of this Agreement will control to the extent there is any conflict
between the terms of this Agreement and the Conoco GTCs.






	B.	 	Seller represents and warrants unto Buyer that Seller has full right and authority to
enter into this Agreement with respect to all of the crude oil volumes to be delivered
hereunder, and Seller agrees to fully indemnify, defend (using counsel reasonably
acceptable to Buyer) and hold harmless Buyer and its parent, affiliate and subsidiary
entities, from and against any claim, action, suit, demand or complaint (of any nature
whatsoever) which any government entity, any interest owner in any well or lease, or any
other third-party may bring related to this warranty.






	C.	 	This Agreement shall be binding upon and inure to the benefit of the Parties hereto,
and their respective heirs, representatives, successors and permitted assigns.






	D.	 	Neither Party nor any subcontractor or vendor of either Party shall give or receive any
commission, fee, rebate, or gift or entertainment of significant cost or value in
connection with this Agreement, or enter into any business arrangement with any director,
employee or agent of the other Party or its parent or affiliated entities other than as a
representative of the Party to this Agreement, without the other Party’s prior written
agreement. Each Party shall promptly notify the other of any violation of this paragraph.






	E.	 	In the event that either Party is required or desires to give notice to the other Party
under the terms of this Agreement, such notice shall be given by certified or registered
first-class mail, return receipt requested, or by delivery by a nationally recognized
overnight courier (i.e. FedEx) to the addresses listed on page 1 of this Agreement. The
Parties may change the contact addresses upon providing written notice to the other Party.






	F.	 	If any term or provision of this Agreement or the application thereof to any person or
circumstances shall to any extent be invalid or unenforceable, the remainder of this
Agreement or the application of such terms or provisions to persons or circumstances other
than those as to which it is invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.




This Agreement, together with the Conoco GTCs, represents the entire agreement of the
Parties and there are no other promises, representations, warranties, or reciprocal agreements
affecting, incidental to, conditional upon, or related to this agreement and all previous
understandings and agreements,


3









 






whether oral or written, regarding the subject matter hereof are superseded by and merged into this
Agreement, including but not limited to the Crude Purchase Agreement (Western Southwest Contract
#P0803131FC) dated March 17, 2008, between Resolute and Western Southwest.



Please confirm acceptance of this agreement by return fax to: Attn: Lori Laje, at (915)
534-2651. Thank you for your help in arranging for this Agreement.




	 	 	 	 	 	 	 
	BUYER:

	 	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 
	Western Refining Southwest, Inc.	 	Resolute Natural Resources Company, LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Jeff Stevens
	 	By:
	 	/s/ James M. Piccone
	 

	 	 
	 	 	 	 
	Printed Name:

	 	Jeff Stevens
	 	Printed Name:
	 	James M. Piccone
	 

	 	 
	 	 	 	 
	Title:

	 	President & COO
	 	Title:
	 	President
	 

	 	 
	 	 	 	 
	Date:

	 	8/27/09
	 	Date:
	 	8/27/09
	 

	 	 
	 	 	 	 




Navajo Nation Oil and Gas Company, a/k/a Navajo Nation Oil & Gas Company, Inc. (“NNOGC”) hereby
acknowledges and agrees that its crude oil volumes covered by this Agreement are validly committed
to sale pursuant to the terms of this Agreement.




	 	 	 	 	 
	 	 	Navajo Nation Oil and Gas Company
	 
	 	 	 	 
	 

	 	By:	 	/s/ Wilson Groen
	 

	 	 	 	 
	 

	 	Printed Name:	 	Wilson Groen 
	 

	 	 	 	 
	 

	 	Title:	 	President & CEO 
	 

	 	 	 	 
	 

	 	Date:	 	27 August 2009
	 

	 	 	 	 






4









 








EXHIBIT A




	 	 	 	 	 	 	 	 	 	 	 
	Lease Name	 	County/State	 	Percentage	 	Approximate BPD
	Aneth Unit

	 	San Juan, Utah
	 	 	0.74503856	 	 	 	2400	 
	McElmo Creek Unit

	 	San Juan, Utah
	 	 	0.82136043	 	 	 	3100	 
	Ratherford Unit

	 	San Juan, Utah
	 	 	0.68012156	 	 	 	1700	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	7200	 






Effective January 1, 1993

Supersedes November 1983 General Provisions





 









 








EXHIBIT B




FORM OF CONTINUING GUARANTY OF WESTERN REFINING, INC.




GUARANTY




     IN CONSIDERATION of Resolute Natural Resources Company, LLC and all its subsidiaries and
affiliates (hereinafter referred to as “Creditor”), extending credit to Western Refining Southwest,
Inc. and all its subsidiaries, affiliates, and divisions, including Western Refining Wholesale,
Inc., (hereinafter referred to as “Debtor”), and other good and sufficient consideration to the
undersigned accruing, the undersigned hereby gives this Guaranty to Creditor for payment in full of
any and all indebtedness of the said Debtor to the said Creditor whether on open account or
evidenced by note, secured or unsecured, due and owing at the present time, or that may hereafter
be due and owing by said Debtor to said Creditor up to a maximum amount at any time due and owing
of Fifty Million Dollars ($50,000,000). And, it is further agreed that if said bills are not paid
when due, subject to all defenses the Debtor has, excluding insolvency and/or bankruptcy, the
undersigned will pay the same upon notice and demand. The undersigned’s obligation under this
Guaranty is a guaranty of payment and not of collection.



     The undersigned, Western Refining, Inc., a Delaware corporation (the “Guarantor”) for itself,
its successors and assigns, agrees that it is financially interested in the said Debtor and agrees
to be held responsible for said obligations, precisely as if the same had been contracted and due
and owing by the undersigned itself, and agrees to pay said obligations upon notice and on demand,
for any balance that may be due and payable at any time for the products sold and furnished by said
Creditor to the said Debtor, subject to all defenses the Debtor has, excluding insolvency and/or
bankruptcy. This Guaranty shall extend to and cover all renewals of any claims or demands
guaranteed under this instrument, or the extension of time of payment thereof, or any other
modification of terms between Debtor and Creditor.



     This Guaranty shall be a continuing guaranty, unless the Guarantor shall have given notice of
revocation in writing to the Creditor addressed as follows: “Resolute Natural Resources Company,
LLC, 1675 Broadway, Suite 1950, Denver, CO 80202, Attention: James M. Piccone,” and such notice
shall have been received by the Creditor from the Guarantor. Such revocation, when made, shall
have no effect on the Guarantor’s obligations with respect to transactions previously entered into,
and shall apply only to obligations incurred by Debtor after thirty (30) days following actual
receipt of such notice of revocation, and any payments thereafter made by Debtor shall be applied
as the Creditor may elect. This Guaranty shall also terminate upon termination of the Crude Oil
Purchase Agreement and payment of all amounts due under that contract to Creditor. This Guaranty
supersedes and replaces any prior Guaranties signed by the undersigned parties or their predecessor
entities, related to the same obligations hereunder.



     Guarantor hereby waives (a) notice of acceptance of the Guaranty by Creditor, (b) notice of
purchases, sales, and deliveries of oil and/or condensate by or to Debtor, the amounts and terms of
such transactions, and any modifications thereof, (c) notice of any extension of



 









 







time for the payment of sums due and payable to Creditor and (d) suretyship defenses otherwise
available to the undersigned. This Guaranty shall inure to the benefit of the Creditor, its
successors and assigns, and can be modified only by a written instrument signed by Creditor and the
undersigned. This Guaranty shall be governed by and construed in accordance with the Laws of the
State of Texas.



     IN WITNESS WHEREOF, the undersigned corporation has signed this Guaranty as Guarantor this
27th day of August, 2009.



	 	 	 	 	 
	 	WESTERN REFINING, INC.

(a Delaware corporation)

 	 
	 	By:  	/s/ Jeff Stevens
 	 
	 	 	Jeff Stevens 	 
	 	 	President and COO 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                         /s/ Mark B. Cox
 	 
	 	 	Mark B. Cox 	 
	 	 	Senior Vice President, Treasurer,

Investor Relations 	 
	 




 









 








EXHIBIT C




CONOCO’S GENERAL TERMS AND CONDITIONS




GENERAL PROVISIONS

DOMESTIC CRUDE OIL AGREEMENTS



A. Measurement and Tests: All measurements hereunder shall be made from static tank gauges on 100
percent tank table basis or by positive displacement meters. All measurements and tests shall be
made in accordance with the latest ASTM or ASME-API (Petroleum PD Meter Code) published methods
then in effect, whichever apply. Volume and gravity shall be adjusted to 60 degrees Fahrenheit by
the use of Table 6A and 5A of the Petroleum Measurement Tables ASTM Designation D1250 in their
latest revision. The crude oil delivered hereunder shall be marketable and acceptable in the
applicable common or segregated stream of the carriers involved but not to exceed 1% S&W. Full
deduction for all free water and S&W content shall be made according to the API/ASTM Standard
Method then in effect. Either party shall have the right to have a representative witness all
gauges, tests and measurements. In the absence of the other party’s representative, such gauges,
tests and measurements shall be deemed to be correct.





B. Warranty: The Seller warrants good title to all crude oil delivered hereunder and warrants that
such crude oil shall be free from all royalties, liens, encumbrances and all applicable foreign,
federal, state and local taxes.




     Seller further warrants that the crude oil delivered shall not be contaminated by chemicals
foreign to virgin crude oil including, but not limited to chlorinated and/or oxygenated
hydrocarbons and lead. Buyer shall have the right, without prejudice to any other remedy available
to Buyer, to reject and return to Seller any quantities of crude oil which are found to be so
contaminated, even after delivery to Buyer.




C. Rules and Regulations: The terms, provisions and activities undertaken pursuant to this
Agreement shall be subject to all applicable laws, orders and regulations of all governmental
authorities. If at any time a provision hereof violates any such applicable laws, orders or
regulations, such provision shall be voided and the remainder of the Agreement shall continue in
full force and effect unless terminated by either party upon giving written notice to the other
party hereto. If applicable, the parties hereto agree to comply with all provisions (as amended)
of the Equal Opportunity Clause prescribed in 41 C.F.R. 60-1.4; the Affirmative Action Clause for
disabled veterans and veterans of the Vietnam Era prescribed in 41 C.F.R. 60-250.4; the Affirmative
Action Clause for Handicapped Workers prescribed in 41 C.F.R. 60-741.4; 48 C.F.R. Chapter 1 Subpart
19.7 regarding Small Business and Small Disadvantaged Business Concerns; 48 C.F.R. Chapter 1
Subpart 20.3 regarding Utilization of Labor Surplus Area Concerns; Executive Order 12138 and
regulations thereunder regarding subcontracts to women-owned business concerns; Affirmative Action
Compliance Program (41 C.F.R. 60-1.40); annually file SF-100 Employer Information Report (41
C.F.R. 60-1.7); 41 C.F.R. 60-1.8 prohibiting segregated facilities; and the Fair Labor Standards
Act of 1938 as amended, all of which are incorporated in this Agreement by reference.




D. Hazard Communication: Seller shall provide its Material Safety Data Sheet (“MSDS”) to Buyer.
Buyer acknowledges the hazards and risks in handling and using crude oil. Buyer shall read the
MSDS and advise its employees, its affiliates, and third parties, who may purchase or come into
contact with such crude oil, about the hazards of crude oil, as well as the precautionary
procedures for handling said crude oil, which are set forth in such MSDS and any supplementary MSDS
or written warning(s) which Seller may provide to Buyer from time to time.




E. Force Majeure: Except for payment due hereunder, either party hereto shall be relieved from
liability for failure to perform hereunder for the duration and to the extent such failure is
occasioned by war, riots, insurrections, fire, explosions, sabotage, strikes, and other labor or
industrial disturbances, acts of God or the elements, governmental laws, regulations, or requests,
acts in furtherance of the International Energy Program, disruption or breakdown of production or
transportation facilities, delays of pipeline carrier in receiving and delivering crude oil
tendered, or by any other cause, whether similar or not, reasonably beyond the control of such
party. Any such failures to perform shall be remedied with all reasonable dispatch, but neither
party shall be required to supply substitute quantities from other sources of supply. Failure to
perform due to events of Force Majeure shall not extend the terms of this Agreement.




     Notwithstanding the above, and in the event that the Agreement is an associated purchase/sale,
or exchange of crude oil, the parties shall have the rights and obligations described below in the
circumstances described below:




     (1) If, because of Force Majeure, the party declaring Force Majeure (the “Declaring Party”) is
unable to deliver part or all of the quantity of crude oil which the Declaring Party is obligated
to deliver under the Agreement or associated contract, the other party (the “Exchange Partner”)
shall have the right but not the obligation to reduce its deliveries of crude oil under the same
Agreement or associated contract by an amount not to exceed the number of barrels of crude oil that
the Declaring Party fails to deliver.




     (2) If, because of Force Majeure, the Declaring Party is unable to take delivery of part or
all of the quantity of crude oil to be delivered by the Exchange Partner under the Agreement or
associated contract, the Exchange Partner shall have the


Effective January 1, 1993

Supersedes November 1983 General Provisions




 









 







right but not the obligation to reduce its receipts of crude oil under the same Agreement or
associated contract by an amount not to exceed the number of barrels of crude oil that the
Declaring Party fails to take delivery of.




F. Payment: Unless otherwise specified in the Special Provisions of this Agreement, Buyer agrees
to make payment against Seller’s invoice for the crude oil purchased hereunder to a bank designated
by Seller in U.S. dollars by telegraphic transfer in immediately available funds. Unless otherwise
specified in the Special Provisions of this Agreement, payment will be due on or before the 20th of
the month following the month of delivery. If payment due date is on a Saturday or New York bank
holiday other than Monday, payment shall be due on the preceding New York banking day. If payment
due date is on a Sunday or a Monday New York bank holiday, payment shall be due on the succeeding
New York banking day.




     Payment shall be deemed to be made on the date good funds are credited to Seller’s account at
Seller’s designated bank.




     In the event that Buyer fails to make any payment when due, Seller shall have the right to
charge interest on the amount of the overdue payment at a per annum rate which shall be two
percentage points higher than the published prime lending rate of Morgan Guaranty Trust Company of
New York on the date payment was due, but not to exceed the maximum rate permitted by law.




G. Financial Responsibility: Notwithstanding anything to the contrary in this Agreement, should
Seller reasonably believe it necessary to assure payment, Seller may at any time require, by
written notice to Buyer, advance cash payment or satisfactory security in the form of a Letter or
Letters of Credit at Buyer’s expense in a form and from a bank acceptable to Seller to cover any or
all deliveries of crude oil. If Buyer does not provide the Letter of Credit on or before the date
specified in Seller’s notice under this section, Seller or Buyer may terminate this Agreement
forthwith. However, if a Letter of Credit is required under the Special Provisions of this
Agreement and Buyer does not provide same, then Seller only may terminate this Agreement forthwith.
In no event shall Seller be obligated to schedule or complete delivery of the crude oil until said
Letter of Credit is found acceptable to Seller.




     Each party may offset any payments or deliveries
due to the other party under this or any other agreement between the parties.




     If a party to this Agreement (the “Defaulting Party”) should (1) become the subject of
bankruptcy or other insolvency proceedings, or proceedings for the appointment of a receiver,
trustee, or similar official, (2) become generally unable to pay its debts as they become due, or
(3) make a general assignment for the benefit of creditors, the other party to this Agreement may
withhold shipments without notice.



H. Liquidation:




     (1) Right to Liquidate. At any time after the occurrence of one or more of the events
described in the third paragraph of Section G, Financial Responsibility, the other party to the
Agreement (the “Liquidating Party”) shall have the right, at its sole discretion, to liquidate this
Agreement by terminating this Agreement. Upon termination, the parties shall have no further
rights or obligations with respect to this Agreement, except for the payment of the amount(s) (the
“Settlement Amount” or “Settlement Amounts”) determined as provided in Paragraph (3) of this
section.




     (2) Multiple Deliveries. If this Agreement provides for multiple deliveries of one or more
types of crude oil in the same or different
delivery months, or for the purchase or exchange of crude oil by the parties, all deliveries under
this Agreement to the same party at the same delivery location during a particular delivery month
shall be considered a single commodity transaction (“Commodity Transaction”) for the purpose of
determining the Settlement Amount(s). If the Liquidating Party elects to liquidate this Agreement,
the Liquidating Party must terminate all Commodity Transactions under this Agreement.




     (3) Settlement Amount. With respect to each terminated Commodity Transaction, the Settlement
Amount shall be equal to the contract quantity of crude oil, multiplied by the difference between
the contract price per barrel specified in this Agreement (the “Contract Price”) and the market
price per barrel of crude oil on the date the Liquidating Party terminates this Agreement (the
“Market Price”). If the Market Price exceeds the Contract Price in a Commodity Transaction, the
selling party shall pay the Settlement Amount to the buying party. If the Market Price is less
than the Contract Price in a Commodity Transaction, the buying party shall pay the Settlement
Amount to the selling party. If the Market Price is equal to the Contract Price in a Commodity
Transaction, no Settlement Amount shall be due.




     (4) Termination Date. For the purpose of determining the Settlement Amount, the date on
which the Liquidating Party terminates this Agreement shall be deemed to be (a) the date on which
the Liquidating Party sends written notice of termination to the Defaulting Party, if such notice
of termination is sent by telex or facsimile transaction; or (b) the date on which the Defaulting
Party receives written notice of termination from the Liquidating Party, if such notice of
termination is given by United States mail or a private mail delivery service.




     (5) Market Price. Unless otherwise provided in this Agreement, the Market Price of crude oil
sold or exchanged under this Agreement shall be the price for crude oil for the delivery month
specified in this Agreement and at the delivery location that corresponds to the delivery location
specified in this Agreement, as reported in Platt’s Oilgram Price Report (“Platt’s”) for the date
on which the Liquidating Party terminates this Agreement. If Platt’s reports a range of prices for
crude oil on that date, the Market Price shall be the arithmetic average of the high and low prices
reported by Platt’s. If Platt’s does not report prices for the crude oil being sold under this
Agreement, the Liquidating Party shall determine the Market Price of such crude oil in a
commercially reasonable manner, unless otherwise provided in this Agreement.




     (6) Payment of Settlement Amount. Any Settlement Amount due upon termination of this
Agreement shall be paid in immediately available funds within two business days after the
Liquidating Party terminates this Agreement. However, if this Agreement provides for more than one
Commodity Transaction, or if Settlement Amounts are due under other agreements terminated by the
Liquidating Party, the Settlement Amounts due to each party for such Commodity Transactions and/or
agreements


Effective January 1, 1993

Supersedes November 1983 General Provisions



 









 







shall be aggregated. The party owing the net amount after such aggregation shall pay such net
amount to the other party in immediately available funds within two business days after the date on
which the Liquidating Party terminates this Agreement.




     (7) Miscellaneous. This section shall not limit the rights and remedies available to the
Liquidating Party by law or under other provisions of this Agreement. The parties hereby
acknowledge that this Agreement constitutes a forward contract for purposes of Section 556 of the
U.S. Bankruptcy Code.




I. Equal Daily Deliveries: For pricing purposes only, unless otherwise specified in the Special
Provisions, all crude oil delivered hereunder during any calendar month shall be considered to have
been delivered in equal daily quantities during such month.




J. Exchange Balancing: If volumes are exchanged, each party shall be responsible for maintaining
the exchange in balance on a month-to-month basis, as near as pipeline or other transportation
conditions will permit. In all events upon termination of this Agreement and after all monetary
obligations under this Agreement have been satisfied, any volume imbalance existing at the
conclusion of this Agreement of less than 1,000 barrels will be declared in balance. Any volume
imbalance of 1,000 barrels or more, limited to the total contract volume, will be settled by the
underdelivering party making delivery of the total volume imbalance in accordance with the delivery
provisions of this Agreement applicable to the underdelivering party, unless mutually agreed to the
contrary. The request to schedule all volume imbalances must be confirmed in writing by one party
or both parties. Volume imbalances confirmed by the 20th of the month shall be delivered during
the calendar month after the volume imbalance is confirmed. Volume imbalances confirmed after the
20th of the month shall be delivered during the second calendar month after the volume imbalance is
confirmed.




K. Delivery, Title, and Risk of Loss: Delivery, title, and risk of loss of the crude oil delivered
hereunder shall pass from Seller to Buyer as follows: For lease delivery locations, delivery of the
crude oil to the Buyer shall be effected as the crude oil passes the last permanent delivery flange
and/or meter connecting the Seller’s lease/unit storage tanks or processing facilities to the
Buyer’s carrier. Title to and risk of loss of the crude oil shall pass from Seller to Buyer at the
point of delivery.




     For delivery locations other than lease/unit delivery locations, delivery of the crude oil to
the Buyer shall be effected as the crude oil passes the last permanent delivery flange and/or meter
connecting the delivery facility designated by the Seller to the Buyer’s carrier. If delivery is
by in-line transfer, delivery of the crude oil to the Buyer shall be effected at the particular
pipeline facility designated in this Agreement. Title to and risk of loss of the crude oil shall
pass from the Seller to the Buyer upon delivery.




L. Term: Unless otherwise specified in the Special Provisions, delivery months begin at 7:00 a.m.
on the first day of the calendar month and end at 7:00 a.m. on the first day of the following
calendar month.




M. Governing Law: This Agreement and any disputes arising hereunder shall be governed by the laws
of the State of Texas.




N. Necessary Documents: Upon request, each party agrees to furnish all substantiating documents
incident to the transaction, including a Delivery Ticket for each volume delivered and an invoice
for any month in which the sums are due.




O. Waiver: No waiver by either party regarding the performance of the other party under any of the
provisions of this Agreement shall be construed as a waiver of any subsequent performance under the
same or any other provisions.




P. Assignment: Neither party shall assign this Agreement or any rights hereunder without the
written consent of the other party unless such assignment is made to a person controlling,
controlled by or under common control of assignor, in which event assignor shall remain responsible
for nonperformance.




Q. Entirety of Agreement: The Special Provisions and these General Provisions contain the entire
Agreement of the parties; there are no other promises, representations or warranties. Any
modification of this Agreement shall be by written instrument. Any conflict between the Special
Provisions and these General Provisions shall be resolved in favor of the Special Provisions. The
section headings are for convenience only and shall not limit or change the subject matter of this
Agreement.




R. Definitions: When used in this Agreement, the terms listed below have the following meanings:




     “API” means the American Petroleum Institute.




     “ASME” means the American Society of Mechanical Engineers.




     “ASTM” means the American Society for Testing Materials.




     “Barrel” means 42 U.S. gallons of 231 cubic inches per gallon corrected to 60 degrees
Fahrenheit.




     “Carrier” means a pipeline, barge, truck, or other suitable transporter of crude oil.




     “Crude Oil” means crude oil or condensate, as appropriate.




     “Day,” “month,” and “year” mean, respectively, calendar day, calendar month, and calendar
year, unless otherwise specified.




     “Delivery Ticket” means a shipping/loading document or documents stating the type and quality
of crude oil delivered, the volume delivered and method of measurement, the corrected specific
gravity, temperature, and S&W content.




     “Invoice” means a statement setting forth at least the following information: The date(s) of
delivery under the transaction; the location(s) of delivery; the volume(s); price(s); the specific
gravity and gravity adjustments to the price(s) (where applicable); and the term(s) of payment.




     “S&W” means sediment and water.


Effective January 1, 1993

Supersedes November 1983 General Provisions





 









 








Amendments to

ConocoPhillips 1993 General Provisions for Domestic Crude Oil Agreements

Effective August 1, 2009




*****



E. Force Majeure: Except for payment due hereunder, either party hereto shall be relieved from
liability for failure to perform hereunder for the duration and to the extent such failure is
occasioned by war, riots, insurrections, fire, explosions, sabotage, strikes, and other labor or
industrial disturbances, acts of God or the elements, governmental laws, regulations, or requests,
acts in furtherance of the International Energy Program, disruption or breakdown of production or
transportation facilities, delays of pipeline carrier in receiving and delivering crude oil
tendered, or by any other cause, whether similar or not, reasonably beyond the control of such
party. Neither party shall be required to supply substitute quantities from other sources of
supply. Failure to perform due to events of Force Majeure shall not extend the term of this
Agreement; except the extent necessary to comply with the provisions of Section J (“Buy/Sell and
Exchange Balancing”). The party affected by a force majeure situation (the “Affected Party”) shall
take commercially reasonable steps to ameliorate the cause of such force majeure event to enable it
to resume performance during the term of this Agreement.



In addition to the above, and in the event substantially similar volumes are intended to be bought
and sold or exchanged under this Agreement, the parties shall have the rights and obligations set
forth in the circumstances described below:





     (1) If, because of Force Majeure, the Affected Party is unable to deliver part or all of the
quantity of crude oil which it is obligated to deliver under this Agreement, the other party shall
have the right, but not the obligation, to reduce its deliveries of crude oil under this Agreement
to match the volume actually delivered by the Affected Party.



     (2) If, because of Force Majeure, the Affected Party is unable to take part or all of the
quantity of crude oil which it is obligated to take under this Agreement, the other party shall
have the right, but not the obligation, to reduce its receipts of crude oil under this Agreement to
match the volume actually taken by the Affected Party.



*****



J Buy/Sell and Exchange Balancing: The terms of this Section J shall only apply to this Agreement
if substantially similar volumes are intended to be bought and sold or exchanged under this
Agreement:




     (1) Each party shall be responsible for maintaining the volumes bought and sold or exchanged
in balance on a month-to-month basis, as near as reasonably possible.



     (2) If, for any reason (including events of force majeure), a party complies with the
requirements of Section J(1) but fails to deliver or accept delivery of the contractually specified
volume during any month (an “Imbalance Month”), then the


Effective January 1, 1993

Supersedes November 1983 General Provisions




 









 







party that delivered the lesser volume during the Imbalance Month (the “Underdelivering Party”)
shall deliver to the other party a volume of crude oil equal to the difference between (a) the
volume delivered by the Underdelivering Party during the Imbalance Month, and (b) the volume
delivered by the other party during the Imbalance Month (such difference being the “Imbalance
Volume”). The Imbalance Volume shall be delivered as soon after the Imbalance Month as is
reasonably practicable it being understood that the parties shall endeavor to cause the Imbalance
Volumes confirmed by the 20th day of the Imbalance Month to be delivered during the immediately
following calendar month, and the Imbalance Volumes confirmed after the 20th day of the Imbalance
month to be delivered during the second calendar month after the Imbalance Month, except to the
extent prevented by a new or continued event of force majeure.



     (3) When a party fails to deliver or accept delivery of the contractually specified volume
during an Imbalance Month due to an event of force majeure, if the Imbalance Volume has not been
delivered before the end of the second calendar month after the Imbalance Month, and if no other
resolution of the Imbalance Volumes has been agreed between the Parties, during the third month
after the Imbalance Month, the Underdelivering Party shall deliver, and the other party shall take,
an amount of crude oil equal to the Imbalance Volume, and such delivery shall be of the same type
of crude oil, at the same location and (except as provided in Section J(4) below) at the same price
as the crude oil received by the Underdelivering Party during the Imbalance Month.



     (4) To the extent that an Imbalance Volume is delivered after the Imbalance Month, and except
as provided in the Special Provisions of this Agreement: (1) if the price specified in this
Agreement is a fixed price or a formula price based on the price of crude oil on a date or during a
specified range of dates (e.g., “April 12, 2009,” or “April 12-19, 2009”), the price of the
Imbalance Volumes shall be equal to such price without regard to the month of actual delivery; and
(2) if the price specified in this Agreement is a formula price based on the price of crude oil on
a date or during a range of dates that is not tied to a specific date or range of dates (e.g.,
“bill of lading date,” “month of delivery,” “NYMEX trade month” or “calendar month average”), the
price for the Imbalance Volumes will be calculated according to such formula for the actual month
the Imbalance volume is delivered.



     (5) The foregoing notwithstanding, the obligation of either party to deliver or take an Imbalance
Volume less than 1000 barrels at the end of this Agreement shall be excused.


Effective January 1, 1993

Supersedes November 1983 General Provisions