exv10w13






Exhibit 10.13




GAS SALES AND PURCHASE CONTRACT




between




RIM OFFSHORE, INC.




“Producer”




and




WESTERN GAS RESOURCES, INC.




“Processor”




Dated: April 12, 1995




Hilight Complex




Campbell County, Wyoming





 









 








	 	 	 	 	 	 	 
	ARTICLE	 	 	 	 	PAGE	 
	I	 	DEFINITIONS
	 	 	3	 
	II	 	COMMITMENTS
	 	 	5	 
	III	 	DELIVERY DATE AND FACILITIES
	 	 	5	 
	IV	 	DELIVERY POINT AND PRESSURE
	 	 	5	 
	V	 	QUALITY
	 	 	5	 
	VI	 	RESERVATIONS OF PRODUCER
	 	 	6	 
	VII	 	RIGHT OF WAY
	 	 	6	 
	VIII	 	METERS AND COMPUTATIONS OF VOLUMES
	 	 	7	 
	IX	 	DETERMINATION OF COMPOSITION
	 	 	8	 
	X	 	ALLOCATION OF LIQUID PRODUCTS AND RESIDUE GAS
	 	 	8	 
	XI	 	PRICE
	 	 	9	 
	XII	 	DRIP
	 	 	11	 
	XIII	 	TITLE
	 	 	11	 
	XIV	 	ROYALTY AND TAXES
	 	 	12	 
	XV	 	FORCE MAJEURE
	 	 	12	 
	XVI	 	UNPROFITABLE GAS
	 	 	12	 
	XVII	 	MAXIMUM QUANTITIES
	 	 	13	 
	XVIII	 	INDEMNITY
	 	 	13	 
	XIX	 	RULES AND REGULATIONS
	 	 	13	 
	XX	 	TERM
	 	 	13	 
	XXI	 	ASSIGNMENT
	 	 	13	 
	XXII	 	UNIFORM DELIVERIES
	 	 	14	 
	XXIII	 	NOTICES
	 	 	14	 
	XXIV	 	BILLING AND PAYMENT
	 	 	14	 
	XXV	 	PRODUCER’S REPRESENTATIVE
	 	 	15	 
	XXVI	 	NON-WAIVER
	 	 	15	 
	XXVII	 	MERGER
	 	 	16	 






 









 





GAS SALES AND PURCHASE CONTRACT




     THIS CONTRACT, made and entered into as of the 12th day of April, 1995 and to be
effective the 1st day of April, 1995, by and between RIM OFFSHORE INC., Inverness Drive
East, Englewood, Colorado 80112, for itself and as agent for MORSE ACQUISITION LIMITED LIABILITY
COMPANY and PASEO RESOURCES LIMITED LIABILITY COMPANY, all successors in interest to GLG ENERGY,
L.P. and hereinafter referred to as “Producer”, and WESTERN GAS RESOURCES, INC., 12200 N. Pecos
Street, Denver, Colorado 80234, hereinafter referred to as “Processor.”



     In consideration of the mutual covenants and agreements contained herein, the parties agree as
follows:



ARTICLE I

DEFINITIONS




     The following terms and expressions herein used are defined as follows:



     1) “Leases” and/or “Lands,” shall mean the lands described on Exhibit “A” and the oil and gas
leases to which they are subject.



     2) “Well” or “Wells” shall mean any oil or Gas Well(s) and the acreage and Gas reserves
attributable thereto which are assigned to such Well(s) pursuant to the regulations of a duly
constituted governmental authority having jurisdiction, or, if no such regulations are established,
then Well(s) shall mean any oil or Gas Well and the acreage and gas reserves attributable thereto
which can reasonably be drawn by such Well(s) pursuant to established spacing practices in the
field where such Well(s) are drilled.



     3) “Gas” or “gas” shall mean all hydrocarbon and non-hydrocarbon substances in a sour phase as
produced, whether produced from the same strata from which oil is produced or produced from gas
wells, as well as gas vaporized from oil production.



     4) “Gas Plant” or “Plant” shall mean all tanks, equipment, pipe, valves, and material of any
kind, owned or controlled by Processor, including appropriate storage, shipping, dehydration, gas
and sulfur recovery facilities, if any, and delivery facilities for Plant Products; all structures
located, or to be located, on the site(s) at which the compressing and processing facilities of
Processor are located; all easements pertaining to the site(s) and operation of those facilities;
and any and all other facilities located, or to be located, on or away from the site(s) deemed by
Processor to be necessary for its performance under this Contract, and any related gas gathering
system, are also included within this definition.



     5) “Plant Products” shall mean anyone or all of commercial propane, commercial butanes and
natural gasoline, individually or as a mixture, liquid or solid sulfur, and any other products
recovered from gas in Processor’s Plant.



     6) “Residue Gas” shall mean that portion of the gas which remains after shrinkage due to (i)
recovery of liquid Plant Products, (ii) Plant fuel requirements, (iii) normal and



 









 







unaccounted for losses in Plant operations and (iv) acid gas (H2S) and CO2
removal.



     7) “Cubic Foot of “ means the volume of gas contained in one cubic foot of space at
a standard pressure base of 14.73 pounds per square inch absolute and a standard temperature base
of sixty degrees Fahrenheit (60°F).



     8) “MCF” shall mean “Cubic Foot of Gas multiplied by on thousand (1,000). “MMCF” shall mean
“Cubic Foot of Gas” multiplied by one million (1,000,000).



     9) “Accounting Period” shall mean a calendar month commencing at 8: 00 a.m., local time, on
the first day of one calendar month and ending at 8:00 a.m., local time on the first day of the
following calendar month.



     10) “Gas Heating Value” shall mean the product of the gross heat of combustion in (BTU’s) per
cubic foot multiplied by the total cubic feet of gas delivered during an Accounting Period. For
purposes of determining Gas Heating Value, hydrogen sulfide (H2S) is deemed to have no
heating value.



     11) “Product Heating Value” shall mean the product of the gross heat of combustion per gallon
multiplied by the total gallons of the product stream in an Accounting Period. Numerical values for
gross heat per gallon shall be those published in the Standard Table of Physical Constants of
Paraffin Hydrocarbons in GPA Publication 2145 as revised from time to time by the GPA.



     12) “BTU” shall mean British Thermal Unit, and the BTU content of one cubic foot of gas under
“standard conditions” is the number of BTU’s produced by the complete combustion of the gas, at
constant pressure with air of the same temperature and pressure as the gas, when the products of
combustion are cooled to the initial temperature of the gas and air and when the water formed by
such combustion is condensed to a liquid state. The II standard conditions” are gas saturated with
water vapor at sixty degrees Fahrenheit (60°F) under a pressure equivalent to thirty (30) inches of
mercury at thirty-two degrees Fahrenheit (32°F) under standard gravitational force (980.665
centimeters per second per second). “MMBTU” shall mean “BTU” multiplied by one million (1,000,000).



     13) “GPM” of a particular liquid Plant Product shall mean the gallons of that liquid Plant
Product contained in one MCF.



     14) “Producing Unit” shall mean the Central Hilight Unit, the Grady Unit, the
Jayson Unit or the South Hilight Unit as such units are established by the Department of
Conservation for the State of Wyoming.



     15) “Return Volume” shall mean that portion of Residue Gas, up to 100%, attributable to sales
points within a specific Producing Unit that is returned to that Producing Unit for use therein
free of any cost.



4









 





ARTICLE II

COMMITMENTS




     Subject to the conditions of this Contract / Producer hereby commits, sells/ ,and agrees to
deliver to Processor; and Processor agrees to purchase and receive from Producer, all gas produced
from the wells and formations described on Exhibit “A” attributable to interest now owned or
hereafter acquired by Producer unless subject to prior commitments. Prior to delivery hereunder,
Producer shall not process the gas for recovery of liquifiable hydrocarbons other than by
utilization of conventional wellhead gas-liquid separation equipment.



     This Gas Sales and Purchase Contract may be amended at any time, and from time to time, with
the agreement and consent of the parties hereto, to include and cover additional wells which
Producer may drill or acquire an interest in.



ARTICLE III

DELIVERY DATE AND FACILITIES




     Delivery and receipt of gas shall begin upon completion of facilities required to be installed
for those purposes. After commencement of taking of gas hereunder, Processor’s obligation to pay
for it shall be computed as provided herein.



ARTICLE IV

DELIVERY POINT AND PRESSURE




     1) Processor will install and operate gathering lines to receive gas at Producer’s Leases. The
Delivery Point shall be at vapor tight flow tanks and/or the gas outlet of mechanical oil-gas
separators furnished by Producer and/or at the casingheads of the well(s) covered by this Contract.
Processor may, with Producer’s consent, install equipment acceptable to Producer on Producer’s
storage tanks to recover hydrocarbon vapors therefrom.



     2) Producer shall deliver gas to Processor at the Delivery Point against the operating
gathering line pressures in Processor’s gathering line as they, from time to time, exist; provided,
Processor shall not operate its gathering line at the Delivery Point at a pressure exceeding 50
psig; and further provided, Producer shall not operate its treater pressure in excess of 5 psig
above Processor’s gathering line pressure.



     3) Title to all gas shall pass from Producer to Processor at the Delivery Point. Processor
shall be solely liable and responsible for the gas from and after the Delivery Point.



ARTICLE V

QUALITY




     Processor may, but shall not be obligated to, accept any gas that:



5









 





          (a) is not commercially free from dust, gum, gum-forming constituents, condensate, free water,
diluents, and other liquids and solids which may become separated from the gas;




          (b) contains oxygen in excess of ten (10) ppm (parts per million) by volume, and Producer
shall make every effort to keep gas free from oxygen;




          (c) contains more than one-fourth (1/4) grain of hydrogen sulfide per one hundred (100) Cubic
Feet of Gas;




          (d) contains more than twenty (20) grains of total sulphur, including sulphur in hydrogen
sulfide and mercaptans per one hundred (100) Cubic Feet of Gas;




          (e) contains total inerts, including but not limited to nitrogen and carbon dioxide, in excess
of five percent (5%) by volume;




          (f) has a temperature in excess of one hundred twenty Fahrenheit (120oF) or twenty degrees
Fahrenheit (20oF) above ambient temperature.




ARTICLE VI

RESERVATIONS OF PRODUCER




     1) Producer reserves the right to withhold from delivery any gas as the lessee is required to
deliver to its lessors under the terms of the Lease(s) subject to this Contract.



     2) Producer may, at any time, without liability to Processor or to Producer, clean out,
deepen, shut-in, or abandon any well(s) on Producer’s Leases, or may use any efficient, modern or
improved method for the production of gas; provided however, that before any well(s) are taken out
of service for any reason, Producer agrees to first shut-off the well(s) connection with
Processor’s gas gathering lines.



     3) Producer reserves the right to pool, combine and unitize Leases hereunder with other
properties and alter the pooling combination or units; in which event, this Contract will cover
Producer’s allocated interest in the unitized production insofar as that interest is attributable
to the Leases covered by this Contract.



     4) Producer reserves the right to the Return Volume attributable to each Producing Unit for
use within the Producing Unit.



ARTICLE VII

RIGHT OF WAY




     To the extent Producer’s Lease(s) permits, Processor is granted the right to lay and maintain
lines and to install any equipment on the Lease and shall have the right to free entry for purposes
incidental to Processor’s operations so long as those purposes do not interfere with Lease
operations or the rights of owners in fee. All line and other equipment placed by Processor



6









 







on the Lands shall remain the property of the Processor and may be removed by Processor at any
time.



ARTICLE VIII

METERS AND COMPUTATIONS OF VOLUMES




     1) All gas delivered hereunder shall be measured by a suitable orifice meter or meters of
standard make, or by other facilities or methods accepted as accurate by the industry, or as
mutually agreed to by both Producer and Processor, to be furnished, installed, operated and kept in
repair by Processor at each Delivery Point. Processor shall, in addition, pay for all tests
provided for in this ARTICLE VIII, unless otherwise stated. However, Producer may, at its expense,
install and operate meters to check Processor’s meter provided that the check meter installation in
no way interferes with the proper operation of Processor’s meter. The computation of all gas
volumes measured by orifice meters shall be based on the latest basic flange tap orifice factors
published by the American Gas Association corrected to a base pressure of 14.73 pounds per square
inch absolute and to a base temperature of sixty degrees Fahrenheit (60°F), using either an assumed
atmospheric pressure of 12.7 pounds per square inch absolute (regardless of actual atmospheric
pressure at which the gas is measured), or actual atmospheric pressure depending on the type of
measurement that Processor utilizes. No correction shall be made for any variation of the flowing
temperature from the base temperature. The Reynold’s Number Factor and the Expansion Factor shall
be one.



     2) The specific gravity of the gas shall be determined by spot tests analyzed by gas
chromatography, or by other methods as shall be agreed upon. The specific gravity shall be
determined at least once each six (6) months, or as often as either party requests, provided that
tests more frequent than once every six (6) months shall be paid for by the party requesting the
test. The results obtained from each test shall be the specific gravity of the gas delivered until
the next test is made.



     3) At least once each six (6) months, Processor shall verify the accuracy of its measuring
equipment. If either party shall notify the other that it desires a special test on any measuring
equipment, the parties shall cooperate to secure a prompt verification of the accuracy of the
equipment. Processor shall give Producer notice of the time of all tests of meters reasonably in
advance of, but in no event less than ten (10) days prior to the conduct of such test in order that
the Producer may conveniently have its representative present. Cost of special tests shall be borne
by the party requesting them if measuring equipment is found to be registering accurately. In the
event a meter is out of service or in the event that either Processor or Producer finds that a
meter is registering inaccurately, the volume of gas delivered hereunder shall be estimated by the
first of the following methods which is feasible:




	 	a.	 	Using the registration of any check meter or meters if
installed and accurately registering, or
	 
	 	b.	 	By correcting the error if the percentage of error can be
accurately ascertained by calibration or mathematical computation, or




7









 






	 	c.	 	Determining the volume of gas delivered during any such period
when meter is out of service or registering inaccurately by multiplying the
number of barrels of oil produced ruing such period from the wells from which
gas is delivered through the meter by the average volume of gas delivered
hereunder per barrel of oil produced during the ninety (90) day period to the
last test of the meter reflecting accurate measurement.





     4) If, upon rest, any measuring equipment is found to be in error of more than two percent
(2%), then the equipment shall be adjusted to record correctly, and any previous recordings of that
equipment shall be corrected to zero error for any period which is known definitely or agreed upon
or, if the period is not definitely known, the correction shall be for a period extending over
one-half of the time elapsed since the last preceding test. The meter or meters shall be open to
inspection at all times by Producer in the presence of Processor. Processor shall preserve for a
period of two (2) years all test data, charts and other similar records for auditing. Thereafter
same shall conclusively be deemed to be true and correct. If requested, Processor shall send the
meter charts to Producer for inspection, after which they shall be returned to Processor within
sixty (60) days following receipt by Producer.



ARTICLE IX

DETERMINATION OF COMPOSITION




     Representative determinations for acid gases and propane and heavier hydrocarbon content shall
be determined by Processor by gas chromatography, or other industry accepted methods for
determining the composition of the gas, including acid gas content, at least once every six (6)
months, or as often as either party to the Contract requests; provided, that tests more frequent
than once every six (6) months shall be paid for by the party requesting same. These tests and
measurements shall be the basis for determining the price for gas purchased.



ARTICLE X

ALLOCATION OF LIQUID PRODUCTS AND RESIDUE GAS




     1) That portion of each liquid Plant Product produced at Processor’s Plant which is
attributable to each Delivery Point shall be determined by multiplying the total Plant production
of that Plant Product by a fraction, the numerator of which is the theoretical gallons of the Plant
Product in Producer’s gas at the Delivery Point and the denominator of which is the theoretical
gallons of the Plant Product attributable to all points delivering gas to Processor.



     2) Theoretical gallons of the Plant Product attributable to each Delivery Point shall be
computed by multiplying Producer’s gas volume delivered into Processor’s gathering system at each
Delivery Point by the applicable content (GPM) for that meter location for the Accounting Period.
The theoretical gallons of that Plant Product attributable to all gas processed in the Plant shall
be the summation of the theoretical gallons of those Plant Products attributable to all delivery
points.



     3) That portion of Residue Gas Heating Value at Processor’s Plant which is attributable to
each of Producer’s Delivery Points shall be determined by multiplying the total



8









 







Gas Heating Value of Residue Gas delivered by Processor at the outlet of Processor’s plant by
a fraction, the numerator of which shall be the Gas Heating Value delivered to Processor’s
gathering system at each Delivery. Point, less that Delivery Point’s share of the Product Heating
Value of Plant Products allocated to the Delivery Point, Plant fuel Gas Heating Value, and field
compression fuel Gas Heating Value, and the denominator of which shall be the total of all Gas
Heating Value delivered at all points delivering gas to Processor, less the total Product Heating
Value of all Plant Products, Plant fuel Gas Heating Value and field compression fuel Gas Heating
Value attributable to all points delivering gas to Processor.



     4) That portion of Plant fuel Gas Heating Value attributable to each Producer’s Delivery Point
shall be determined by multiplying the total Plant fuel Gas Heating Value by a fraction, the
numerator of which is the amount of liquid products allocated to each Delivery Point, and the
denominator of which is the total amount of liquid products from all points delivering gas to
Processor.



     5) That portion of field compressor fuel Gas Heating Value attributable to each Delivery Point
utilizing the field compressor shall be determined, for each field compressor, by multiplying the
total field compressor fuel Gas Heating Value, for that field compressor, by a fraction, the
numerator of which is the Producer’s gas volume delivered at each Delivery Point utilizing that
field compressor and the denominator of which is the total volume of gas delivered at all points
delivering gas to Processor utilizing that field compressor.



ARTICLE XI

PRICE




     The price paid to Producer at the Delivery Point for 100% of the gas is shown in Paragraph 1)
below.



     1) Processor shall pay Producer an amount equal to forty percent (45%) of the “Current Actual
Net Value” of that portion of all Plant Products saved and sold at Processor’s. Plant which are
attributable to Producer’s gas purchased hereunder, plus an amount equal to seventy-five percent
(75%) of the “Net Sales Proceeds Received for Residue Gas” attributable to Producer’s gas purchased
hereunder that is in excess of Producer’s Return Volume, this compensation entitling Processor to
use sufficient gas for Plant fuel free of additional cost.



     In the event that Processor acquires additional gas commitments from any party(s) equal to or
greater than fifteen percent (15%) of the gross interests in the Production Units covered by this
Agreement, the payment percentage applicable to Plant Products above shall be increased from
forty-five percent (45%) to fifty percent (50%).



          (i) The “Current Actual Net Value” of each Plant Product shall, for each Accounting
Period, be obtained by multiplying the “Current Weighted Average Net Sales Price” of the
Plant Product by the number of gallons thereof produced and sold from Processor’s Plant by
Processor.




          (ii) The “Current Weighted Average Net Sales Price” of each Plant Product shall be determined
by dividing the total gallons of that Plant Product produced and sold during




9









 







the Accounting Period into the “Net Proceeds F.O.B. Plant II received from sales of the Plant
Products for each period by Processor.




          (iii) “Net Proceeds F.O.B. Plant II shall be the total gross proceeds received by Processor
from the sale of each Plant Product during each Accounting Period, less any charges for tank car
rental, taxes (excluding income, franchise and ad valorem taxes), pipeline transportation and
fractionation costs and similar costs and expenses incurred or made in connection with the sale,
transportation and delivery of such Plant Product.




          (iv) “Net Sales Proceeds Received for Residue Gas II means the total proceeds received by
Processor, during each Accounting Period, from its residue gas purchaser (s), less any
transportation, storage charges or third party fees assessed Processor and required for the
disposition of residue gas.




     2) In Lieu of receiving payment for Residue Gas, Producer may receive its share of Residue gas
in kind at a mutually agreeable point at or near Producer’s lease, for Producer’s use in the
development of Producer’s leases committed hereunder. In such case that the total residue gas
remaining from gas delivered by a Producing Unit covered hereunder is insufficient in quantity for
the purposes of development and operation of said Producing Unit, Processor shall nevertheless
deliver sufficient gas to said leases to meet Producer’s development and operating requirements.
Such gas shall first be delivered from Producer’s share of available residue gas remaining from
other Producing Units covered hereunder. If additional gas is required, Processor agrees to sell
such gas to Producer at a price equal to the “Net Weighted Average Sales Price” for all residue gas
sold at Processor’s Plant during the month such gas is required plus a fee equal to fifteen cents
per MMBtu ($0.15/MMBtu). However, Processor shall not be obligated to provide a volume exceeding
30,000 MCF of gas sales to Producer each month.



     Processor shall deduct any gas sales made to Producer hereunder from payments otherwise due to
Producer hereunder.



     3) For any gas delivered hereunder containing in excess of one quarter (1/4) grain of
H2S per one hundred standard cubic feet (100 SCF) or in excess of three percent (3%) by
volume CO2, Producer will be charged a base treating fee of $0.030 per MCF plus a
variable fee of $0.056 per MCF for each mole percent of total acid gas content in excess of three
percent (3%). Any fractional portion of a mole percent acid gas shall bear its proportionate share
of the variable treating fee. The total treating fee above shall be adjusted from payments
otherwise due Producer hereunder. Any fractional portion of a mole percent acid gas will bear its
proportional part of the $0.056 variable treating fee. The treating fee indicated above shall be
adjusted each month by multiplying a factor, the numerator of which shall be the most current
Producer Price Index for Oil and Gas Field Service (SIC 138) as published by the U. S. Department
of Labor and the denominator of which shall be said Price Index as published for the month in which
gas was first delivered into Processor’s gathering system under this Gas Sales and Purchase
Contract. Under no circumstances will the treating fee be less than the fee shown above. Processor
shall deduct any and all treating fee due hereunder from payments otherwise due Producer hereunder.



     4) Subject to the conditions hereof, Producer, at this option, may take, in-kind, the
applicable percentage specified in Paragraph 3 of this ARTICLE XI, above, of the liquid



10









 







products which are attributable to Producer’s gas purchased hereunder in lieu of receiving
that percentage of the “Current Actual Net Value” received for those Liquid Products. Provided,
however, should Producer elect, Producer shall make its election by giving Processor at least sixty
(60) days advance written notice of that election. Any election shall take effect at the
expiration of any then existing Plant product sales contracts and shall be for a minimum period of
one (1) year, unless the parties agree to the contrary. Any additional expenses incurred by virtue
of Producer’s taking in-kind shall be paid by Producer. Should Producer elect to take in-kind,
Producer shall only be entitled to utilize its proportionate part of Plant storage capacity; and,
should Producer utilize more than its proportionate share of storage, Processor shall have the
right, without notice to Producer, to dispose of the Plant Products utilizing more than Producer’s
proportionate share of storage and remit to Producer the “Net Proceeds F.O.B. Plant” for those
Plant Products. Further, should Producer elect to take in-kind, it shall not cease taking in-kind
until it has first provided ninety (90) days advance written notice to Processor of its decision to
cease taking in-kind and then Producer shall not be permitted to resume taking those Plant Products
in-kind for a period of six (6) months following the date it ceased taking in-kind. Producer’s
resumption of taking in-kind shall be subject to the notice requirements provided above.



ARTICLE XII

DRIP




     The Processor shall keep its Gathering System, reasonably clear of obstruction and the
hydrocarbon liquids, “Drip”, collected in that System shall be owned by Processor.



ARTICLE XIII

TITLE




     1) Producer warrants title to all gas delivered to Processor and that it has good right to
sell that gas to Processor. If the title to gas delivered by Producer hereunder is questioned or is
involved in any legal action, Processor shall have the right to withhold payment, to the extent of
the interest questioned or involved in legal action, during the pendency of the action or until
title is freed from the question, or until Producer furnishes, or causes to be furnished, bond
conditioned to save Processor harmless from all claims arising out of the question or action, with
surety acceptable to the Processor.



     2) Notwithstanding anything in this Contract to the contrary, it is agreed and understood that
Processor shall not .be required to disburse any payments due for gas sold hereunder until Producer
furnishes Processor with a division order executed by Producer, based upon a title opinion prepared
by an attorney on behalf of Producer and supplied to Processor at no expense to Processor which
division order specifically describes Producer’s gross working interest in the gas sold hereunder,
on a well by well basis, and specifically indemnifies Processor against and holds Processor
harmless from any and all claims made by any party due to Processor’s disbursement of proceeds in
accordance with that division order.



     3) Processor acknowledges that as of the date of this Contract Producer is in a pay status and
that, absent a title dispute, no additional title option for currently producing properties
is required.



11









 





ARTICLE XIV

ROYALTY AND TAXES




     Producer agrees to pay, or cause to be paid, all taxes and assessments lawfully levied and
imposed upon Producer with respect to the gas delivered hereunder prior to its delivery to
Processor. Processor agrees to pay, or cause to be paid, all taxes and assessments lawfully levied
and imposed upon Processor with respect to the gas delivered hereunder after its receipt by
Processor. Neither party shall be responsible or liable for any taxes or other statutory charges
levied or assessed against any of the facilities of the other party used for the purpose of
carrying out the provisions of this Contract.



ARTICLE XV

FORCE MAJEURE




     1) In the event that any party hereto is rendered unable, wholly or in part, by force majeure
to carry out its obligations under this Contract, other than the obligation to make payment of
amounts due hereunder, upon that party’s giving notice and reasonable full particulars of the force
majeure to the other party hereto within a reasonable time after the occurrences of the cause
relied upon, the obligations of the party giving the notice, so far as they are affected by the
force majeure, shall be suspended during the continuance of the inability, and the cause of the
force majeure, as far as possible, shall be remedied with all reasonable dispatch.



     2) The term “force majeure” means any cause, or condition not reasonably within the
control of the party claiming suspension.



     3) The settlement of strikes, lockouts and other labor difficulty shall “be entirely within”
the “discretion of the party having the difficulty. The above requirement that any force majeure
shall be remedied with all reasonable dispatch shall not require the settlement of strikes,
lockouts or other labor difficulty by acceding to the demands of opponents therein when that is
inadvisable in the discretion of the party having the difficulty.



ARTICLE XVI

UNPROFITABLE GAS




     In the event the purchase of gas from any well(s) from Producers Lease(s), for any reason,
becomes unprofitable in Processor’s sole judgment, Processor shall have the right to refuse to take
or cease taking the gas so long as such condition exists and no payment will be due hereunder. It
is further provided that if, at any time, the purchase of gas from all sources available to.
Processor, or if any cause beyond its control shall render the operation of its Plant unprofitable,
in Processor’s sole judgment, Processor may cancel this Contract by giving thirty (30) days written
notice to Producer.



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ARTICLE XVII

MAXIMUM QUANTITIES




     During periods when gas production from all the properties connected to Processor’s Plant
exceeds the capacity of Processor’s Plant, Processor shall only be obligated to take ratably as to
quantity from all lands connected to Processor’s Plant. It will be Processor’s intent to expand its
Plant to accommodate larger rates within economic limits.



ARTICLE XVIII

INDEMNITY




     Producer shall indemnify and hold Processor harmless against any claims for damages growing
out of Producer’s operations prior to delivery of the gas hereunder. Processor shall indemnify and
hold Producer harmless against any claims for damages growing out of Processor’s operations after
delivery of the gas hereunder.



ARTICLE XIX

RULES AND REGULATIONS




     This Contract shall be subject to all valid laws, orders, rules and regulations, both present
and future, of any duly constituted State or Federal authority having jurisdiction of the
production, transportation, purchase, sale or resale of gas, and any and all failures of Producer
to deliver, and of Processor to and of Processor to receive gas hereunder, caused by those laws,
orders, rules and regulations, shall be deemed excused under the provisions of ARTICLE XV, FORCE
MAJEURE, hereof.



ARTICLE XX

TERM




     Unless otherwise terminated as provided above, this Contract shall be effective as of the date
and year first above written and shall remain in full force and effect for the life of the oil and
gas lease(s) or Producer or any extension or renewal thereof.



ARTICLE XXI

ASSIGNMENT




     This Contract shall extend to and be binding upon the parties hereto, their heirs,
administrators, successors and assigns, but no transfer of or succession to the interest of either
party hereunder, wholly or partially, shall affect or bind the other party until it shall have been
furnished with a copy of the executed instrument effecting such transfer of interest.



13









 





ARTICLE XXII

UNIFORM DELIVERIES




     The parties hereto recognize the desirability of maintaining a uniform rate of flow of gas to
the Plant and Producer agrees to use its best efforts to regulate its producing schedule so that
gas shall be made available to the Plant from Producer’s property at as uniform rate of flow as is
practicable.



ARTICLE XXIII

NOTICES




     Except as herein otherwise provided, all notices, reports, payments and other communications
hereunder shall be deemed to have been properly given or delivered when delivered personally or
when sent by mail, with all postage or charges prepaid, and addressed to the parties respectively,
as follows:




	 	 	 	 
	 	PRODUCER:

	 	RIMOFFSHORE, INC.
	 	 

	 	5 Inverness Drive East
	 	 

	 	Englewood, Colorado 80112
	 	 
	 	 
	 	PROCESSOR:

	 	WESTERN GAS RESOURCES, INC.
	 	 

	 	12200 N. Pecos Street, Suite 230
	 	 

	 	Denver, Colorado 80234
	 	 

	 	Contract Administration





The date of service by mail shall be the date on which the written notice or other communication is
deposited in the United States Post Office, addressed as provided above. Each party shall have the
right to change its address by notifying the other party in writing.




ARTICLE XXIV

BILLING AND PAYMENT




     1) After delivery of gas has commenced, Processor shall, on or before the last day of each
Month, render to Producer a statement showing the quantity of gas delivered during the preceding
Month and any adjustments made by Processor. Processor shall make payment to Producer for the
amount due for all such gas on or before the last day of each Month, for gas purchased the
preceding Month. Processor, at its election, may deduct from its payment to Producer undisputed
sums, if any, due by Producer to Processor under the terms of this Contract.



     2) Each party hereto shall have, at its expense, the right at all times to examine the books
and records of the other party during normal working hours upon thirty (30) days notice, to the
extent necessary to verify the accuracy of any statement, charge, computation, or demand made upon
or pursuant to this Contract. However, neither party shall audit the other more frequently than
once each calendar year. Each party agrees to keep records and books of account in accordance with
generally accepted accounting principles in the industry. Any statement shall be final as to both
parties unless questioned within two (2) years after payment thereof has been
made.



14









 





ARTICLE XXV

PRODUCER’S REPRESENTATIVE




     Producer hereby appoints RIM OPERATING, INC. the Operator of the wells drilled or to be
drilled upon the Leases committed hereunder and in which Producer owns an interest, as its
Representative with respect to all matters under this Agreement, including but not limited to the
following:




	 	1.	 	To give and receive all notices;
	 
	 	2.	 	To receive all payments;
	 
	 	3.	 	To make and witness any tests to be made of the gas and
measuring equipment and adjustments to such equipment;
	 
	 	4.	 	To obtain, execute and, deliver to Processor such division
order title opinions and division orders as may be required by Processor
hereunder; and
	 
	 	5.	 	To comply with the requirements, rules and regulations of any
duly constituted authority having jurisdiction.




Processor may act, and shall be fully protected in acting, in reliance upon any and all acts and
things done and performed by or agreements made with respect to all matters dealt with herein by
said Representative on behalf of Producer as fully and with the same effect as though Producer had
done, performed, made or executed the same. Producer may change its Representative designated
above, or designate a new Representative from time to time by delivery of written notice of change
and designation of Representative to Processor, provided that any such new Representative shall be
the same Producer as designated by all such Producers. The Representative so designated shall have
and may exercise all power and authority therein granted with like effect as though names as such
representative herein in the first instance.




ARTICLE XXVI

NON-WAIVER




     The failure of either party at any time to exercise any right or to require performance by the
other party of any provision hereof shall in no way affect the right of such party thereafter to
enforce the same, nor shall the waiver by either party hereto of any breach of any provision hereof
by the other party be a waiver of any other breach of such provision, or as a waiver of the
provision itself.



15









 





ARTICLE XXVII

MERGER




     This Contract constitutes the entire agreement between the parties hereto and supersedes all
prior agreements and negotiations, whether oral or written, pertaining to the subject matter
hereof. All amendments and modifications to this Contract shall be in writing and shall be executed
by duly authorized representative of both parties.



THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK




16









 








     IN WITNESS WHEREOF, this Contract may be executed in any number of counterparts, each of which
shall be considered an original. Execution of this Contract by any of those included in the title
Producer shall be binding on him when accepted by Processor whether or not all included in the
title Producer execute the same.



	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PRODUCER:	 	 
	 	 	 	 	 	 	RIM OFFSHORE, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

Name:

	 	/s/ Robert L Vesco
 

Robert L. Vesco
	 	 	 	By:

Name:
	 	/s/ Stephen W Rector
 

Stephen W. Rector
	 	 
	Title:

	 	Secretary
	 	 	 	Title:
	 	President	 	 






	 	 	 	 	 	 	 
	STATE OF Colorado

	) 	 		 	 	 
	 
	 	 	 	 	 	 
	COUNTY OF Arapahoe

	) 	 		 	 	 






     The
foregoing instrument was acknowledged before me this 27th day of
March, 1995, by  Rita A Schmisek in the capacity therein stated.




	 	 	 	 	 	 	 
	 

	 	Witness my hand and official seal.	 	 	 	 
	 

	 	My commission expires:
	 	2/17/99
 

/s/ Rita A Schmisek
 

Notary Public
	 	  






17









 






	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PROCESSOR:	 	 
	 	 	 	 	 	 	WESTERN GAS RESOURCES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/  John C. Walter
 

	 	 	 	By:
	 	/s/ Edward Aabak
 

	 	 
	Name:

	 	John C. Walter
	 	 	 	 	 	Edward A. Aabak	 	 
	 

	 	Secretary
	 	 	 	 	 	V.P. Rocky Mountain Region	 	 






	 	 	 	 	 	 	 
	STATE OF COLORADO

	) 	 		 	 	 
	 

	) 	 		 	 	 
	COUNTY OF Adams

	) 	 		 	 	 






     The foregoing instrument was acknowledged before me this 12th day of April, 1995, by Edward A.
Aabak in the capacity therein stated.




	 	 	 	 	 	 	 
	 

	 	Witness my hand and official seal.	 	 	 	 
	 

	 	My commission expires:
	 	8/23/1998
 

/s/ Elizabeth C. Frye
 

12000 N. Pecos Street, Suite 230
	 	  
	 

	 	 	 	Denver, CO 80234	 	 







18









 








EXHIBIT “A”




to




GAS SALES AND PURCHASE CONTRACT




between




RIM OPERATING, INC.




“Producer”




and




WESTERN GAS RESOURCES, INC.




“Processor”




DATED:
April 12, 1995




WELLS DEDICATED TO THIS CONTRACT




ALL PRODUCER’S INTEREST IN ACREAGE AND WELLS WITHIN THE CENTRAL




HILIGHT UNIT, JAYSON UNIT, SOUTH HIGHLIGHT UNIT, AND GRADY UNIT,




CAMPBELL COUNTY, WYOMING.