# Appendix — California v. Southland Royalty Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1702%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1978 - **Citation:** 436 U.S. 519 ## Text IN THE Supreme Court of the Anited States Ocroser Term, 1977 No. 76-1114 Cauirornia, et al., Petitioners V. SouTHLAND Roya.ty Company, et al. No. 76-1133 Ex Paso Naturat Gas Company, Petitioner " Vv SouTHLAND Rovatry Company, et al. No. 76-1587 FeperaL Power Commission, Petitioner V. SouTHLAND RoraALrr Company, et al. On Writs of Certiorari to the United States Court of Appeals for the Fifth Circuit PETITIONS FOR WRITS OF CERTIORARI FILED February 12 and 16 and May 12. 1977 CERTIORARI GRANTED JUNE 27, 1977 VOLUME! . Pages 1-364 Supreme Court of the United States OcToBEeR TERM, 1977 Nos. 76-1114 et al. CALIFoRNIA, et al., Petitioners v. SovuTHLAND ROvALTY Company, et al. On Writs of Certiorari to the United States Court of Appeals for the Fifth Circuit TABLE OF CONTENTS VoLuuE I Pages 1-364 Votume II Pages 365-746 Record Appendix Item Pagination Pagination Relevant Docket Entries 1 Gulf Oil Corporation Application for Certificate of Public Convenience and Necessity, Docket No. G-7156, re- ceived 11/30/54 ..... cc cccccccveee 636-643 2-8 Notice of Gulf Oil Corporation Ap- lication for Certificate of Public onvenience and Necessity, G-7156, issued 4/19/56. 644-652 9-22 ii Table of Contents—Continued Findings and Order Issuing Certifi- cate of Public Convenience and Neces- sity to Gulf Oil Corporation, Docket No. G-7156, issued 5/28/56 ........ The documents listed below are from Warren Petroleum Co., A Division of Gulf Oil Corp. FPC Gas Rate Sched- ule No. 43: Residue Gas Purchase Agreement Record Appendix Pagination Pagination 653-664 23-40 dated 1/26/51, filed 11/30/54 .... 539-565 40-64 Supplement No. 2, dated 10/30/53, filed 11/30/56. Supplement No. 5, Agreement, dated 9/1/55, filed 5/34/56 ...... Supplement No. 7, Agreement dated 12/15/56, filed 1/29/58 Amendatory ment, dated 10/ 26/59, filed 11/30/59 ...........: Supplement No. 17, Amendment dated 4/17/72, filed 5/11/72 ...... Findings and Order Issuing Certifi- eate of Public Convenience and Nec- essity, G-13445, issued 2/24/58 ..... Warren Petroleum Co., A Division of Gulf Oil Corp. FPC Gas Rate Sched- ule No. 66: Residue Gas Purchase Agreement, dated 3/1/72 ......-.eeeeeeeeee 64-66 571-572 70-72 573-578 173-78 596-598 82-85 582-592 86-97 593-595 98-101 Table of Contents—Continued Notice of Certificates of Public Con- venience and Necessity Issued to Pro- ducer Respondents Pursuant to Opin- ion No. 662 and Designation of FPC Gas Rate Schedules and Gas Rate Schedule Supplements Accepted for Filing, CI-72-760, issued 7/22/74 ... El Paso Natural Gas Company Pe- tition for Issuance of a Declaratory Order, CP75-209, dated 1/17/75, re- eee Notice of Petition for a Declaratory Order, issued 1/30/75 ............ El Paso Corrections to Petition, dated 1/30/75, received 2/3/75 .......... Southern California Gas Company Petition for Permission to Intervene, dated 2/5/75, received 2/6/75 ...... Mobil Oil Corp. Petition for Leave to — dated 2/7/75, received 27 Southwest Gas Corp. Petition for Leave to Intervene, dated 2/12/78, received 2/14/75 ..............0.. State of California Notice of Inter- a dated 2/13/75, received 2/ 1 Exxon Corporation Petition for Leave to Intervene, dated 2/14/75, e ̃ A Texaco Inc. Petition for Leave to In- — dated 2/13/75, received 2/18 Record inn Appendix Pagination Pagination 599-612 102-116 117-191 192-195 196-197 198-201 202-205 206-210 211-212 213-216 217-219 iv Table of Contents—Continued Record Appendix Item Pagination Pagination El Paso Supplement to Petition filed 1/20/75, dated 2/21/75, received 2/ 1 80-82 220-224 Mitchell Energy Corp. Petition for Leave to Intervene, dated 2/20/75, received 2/25. 83-87 225-228 Pacifie Gas and Electric Co. Petition to Intervene, dated 2/26/75, received — 88.92 229-232 Exxon Corp. Answer to Petition for Issuance of Declaratory Order and Request for Briefing Schedule, dated and received 3/3/75... 93-101 233-241 Mineral Interest Owners Petition to Intervene and Answer to Petition for Declaratory Order, dated and re- coived e „„ „„ „„ 1 102-125 242-265 Corrections dated and received 3/5/ PV 126-127 266-268 Gulf Oil Corp. Petition to Intervene and Response, dated 2/27/75, received Dees 128-134 269-276 El Paso Answer to Petition filed last above, dated 3/12/75, received 3/13/ CET 135-140 277-282 Mineral Interest Owners Answer to Petition of Mitchell Energy Corp. for Leave to Intervene, dated and re- ceived 3/17/75 .. 1... eee eeecceees 141-146 283-288 Texaco Inc. Petition for Issuance of a Declaratory Order, CI75-594, dated 4/7/15, received 4/8775 147-159 289-298 Notice of Petition for Declaratory Order, issued 4/2277 160-161 298-300 Table of Contents—Continued v Item Pagination — cornea El Paso Motion for Briefing Schedule and Answer to Petition of Texaco for Issuance of a Declarato Order, dated 4/23/75, received 4/25/75 .... 162-169 301-309 Texaco Ine. Motion to Consolidate te dated 4/28/75, received 7 SE es eae ea a 170-172 310-311 El Paso Petition for Leave to Inter- vene and Answer to filing last above, dated 4/23/75, received 5/6/75 ..... 173-187 312-327 Mineral Interest Owners Response Motion for Briefing Schedule, dated and received 5/7/75 ............... 188-192 328-333 Mineral Interest Owners Petition to Intervene, dated and received 5/12/75 193-198 334-338 Gulf Oil Corp. Petition to Inte and Response to Petition of — dated 5/9/75, received 5/12/75 ..... 199-210 339-349 Northwest Pipeline Petition to Inter- vene, dated and received 5/14/75 .... 211-213 350-352 Phillips Petroleum Co. Petition to In- tervene and dated 5/21/75 and received 5/27/75 ............. 214-220 353-357 Order Consolidating Proceedings Granting Petitions to Intervene, and Prescribing Schedule for Filing of Briefs, issued 6/3/75 ............. 221-225 358-364 Votume II Initial Briefs Filed: Commission Staff ................ 238-253 365-382 State of California ................ 254-263 383-394 vi Table of Contents—Continued Record Appendix Item Pagination Pagination Exxon Corporation 293-305 435-451 Gulf Oil Corporation 306-315 452-465 Mineral Interest Owners 316-340 466-492 Mitchell Energy Cor 341-345 493-498 Texaco Inne 346-353 499-507 Reply Briefs Filed: Commission Staff 354-360 508-514 El Paso Natural Gas Co. .......... 361-376 515-536 Exxon Corporation 377-383 537-545 Mineral Interest Owners 384-404 546-567 Phillips Petroleum Corp. 405-407 568-570 Wr „„ „ 408-414 571-577 Southwest Gas Corp. Answer in Su — of El Paso Brief, dated 67/3/15 - received 6/25/75 ........0-e+0e045 415-418 578-5 Exxon Corporation Motion for Inclu- sion of Protective Order, dated and received 7/2 419-423 580-585 424-426 586-588 Gulf telegram supporting Exxon’s motion, dated and received 7/7/75 .. El Paso Answer to Exxon’s motion, dated and received 7/10/75 ........ 428-433 590-594 Response to El Paso filing last -r 5 .. 434-436 595-597 427 589 * Table of Contents Continued vii Record Appendix Item Pagination Pagination Opinion No. 737, Declaratory Opinion and Order on Termination of Long- Term Leases, issued 7/11/75 ....... 437-447 598-611 Texaco Inc. Applicaton for Rehear- ing, dated 8/1/75, received 8/4/75 .. 448-452 612-615 Mineral Interest Owners Application for Rehearing, dated and received 8/ . 11 453-501 616-674 Exxon Corporation Application for Rehearing, dated and received 8/8/75 502-510 675-685 El Paso Application for Rehearing, dated and received 8/11/75 ........ 511-516 686-691 Gulf Oil Corporation Application for Rehearing, dated 8/8/75, received 8/ U— e 517-523 692-700 Mobil Oil Corp. Application for Re- hearing, dated 8/11/75, received 8/ “!!. ³¹A ˙¹wꝛ- 1 524-530 701-707 Opinion No. 737-A, Opinion and Or- der Denying Rehearing But Adopting Per Curiam, issued 9/3/75 ........ 531-538 708-718 Mineral Interest Owners Application for Rehearing of Limited ys ts of Opinion No. 737-A, dated 10/2/75, re- received 10/3/75 „„ „„ „„ „„ „ 613-623 719-729 Texaco Inc. Response to Application filed last above, received 10/20/75 ... 624-629 730-734 Order Granting Rehearing for Pur- of Further Consideration on imited Issues Relating to Filing Re- quirements, issued 10/31/75 ....... 630-631 735-737 viii Table of Contents Continued Record Appendix Item Pagination Pagination Opinion No. 737-B, Opinion and Or- der Granting Rehearing on Limited Issue Relating to Filing Require- ments, issued 12/18/75 ............ 632-635 738-743 Reference to the Opinion of the Court of A ls for Fifth Circuit. Da ber 13, 1976 .......... 744 Reference to the Judgment of the Court of A Is for the Fifth Cir- cuit. Dated ber 13, 1976 ...... 745 Order Granting Petitions for Writs of Certiorari. Dated June 27, 1977 .. 746 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT (Trrce Omirrep iy Printino) Relevant Docket Entries Ee December 13, 1976 Ee December 13, 1976 [636] UNITED STATES OF AMERICA FEDERAL POWER COMMISSION Docket No. G-7156 In the Matter of the Application for Certificate of Public Convenience and Necessity by Gulf Oil Corporation, an Independent Producer of Natural Gas Application Gulf Oil Corporation hereby makes application un- der — — to §7 of the Natural Gas Act for a Certificate of Public Convenience and Necessity with respect to the sale of natural gas herein specifi- cally deseribed, and, in connection therewith, shows the following: 1 Gulf Oil Corporation, hereinafter referred to as „Applicant“, is a Pennsylvania corporation author- ized to do business in the following states, to wit: Arizona New Mexico California New York ) Colorado North Carolina Connecticut North Dakota Delaware Oklahoma Florida Oregon Georgia Rhode Island Idaho South Carolina Kansas South Dakota Maine Texas 2 637 [637] Maryland Utah Massachusetts Vermont Minnesota Virginia Missouri Washington Montana West Virginia Nebraska Wisconsin New Hampshire Wyoming New Jersey District of Columbia 2 No predecessor in interest of Applicant has, on or since June 7, 1954, had any interest in, or made any sale of, the natural gas covered by the contract which is the subject of this application. 3 Until further notice, all correspondence or commu- nications in regard to this Application may be ad- dressed to Ralph O. Rhoades, Vice President, Gulf Oil Corporation, P.O. Box 1166, Pittsburgh 30, Pennsylvania. 4 A statement of the pertinent facts applicable to the sale of gas for which a certificate is herein sought, is as follows: (a) Kind of gas (indicate one) —◻U◻I˙.ü dry gas, [] eas- inghead gas, [X] residue gas (b) Date of contract—January 26, 1951, as amended (e) Name of purchaser of gas from Applicant— El Paso Natural Gas Company (d) Contract volumes M. C. F. (daily or annually ), indicating pressure base—30,000 MCF per day measured at 14.65 psia 3 [638] (e) Price on June 7, 1954, or commencement date of gas deliveries—10¢ per MCF measured at 14.65 psia (f) Term of contract—20 years (g) Special conditions (if any)—Casinghead gas is gathered, compressed, treated, processed, and de- hydrated by Gulf Oil Corporation, and the resi- due gas is delivered to the El Paso Natural Gas Company at the tailgate of the Plant. Said contract has this date been filed with the Com- mission as a rate schedule and is incorporated by reference. In connection with the gas sale referred to above, Applicant would show the following: (1) Source of the gas produced by Applicant: Field: Dune, Edwards, Sand Hills McKnight, Sand Hills Ordovician, Sand Hills Tubb, University-Waddell Devonian, University- Waddell Ellenburger, and Waddell County or Parish: Crane County State: Texas Delivery Points: At outlet of lease separators Source of gas purchased by Applicant, if any: Field: Dune, Edwards, Sand Hills McKnight, Sand Hills Ordovician, Sand Hills Tubb, University-Waddell Devonian, University- Waddell Ellenburger, and Waddell County or Parish: Crane County State: Texas Delivery Points: At outlet of lease separators Names of Sellers: American Liberty Oil Co., The Atlantic Refining Co., General American 4 Oil Co., Great Western Producers, Inc., Humble [639] Oil and Refining Co., Lario Oil and Gas Co., Magnolia Petroleum Co., Ohio Oil Co., Phillips Petroleum Co., R. F. Windfohr & The Ibex Co., Shell Oil Co., Skelly Oil Co., Samedan Oil Corp., and W. H. Black Oil Co. (n) (Strike one of the following:) Gathering lines of Applicant connect its well or wells to the delivery point or points referred to above. (m1) Applicant did not serve any communities with natural gas on June 7, 1954 at wholesale or retail. (tv) Applicant serves no main line industrial custo- mers with natural gas. (v) Major pertinent properties or facilities, if any, such as compressor stations, gasoline plants, de- hydration plants, purification plants, and gas storage projects: (If any, describe briefly. If not state none.) Gathering system, compressors, tieaters, processing equipment, dehydration equipment, and other gaso- line plant equipment used for processing casinghead gas before the residue gas is delivered to the El Paso Natural Gas Company. [640] 5 Notice of this Application has been served by regis- tered mail upon the agency or person below indicated by an xk“ mark: UI Oil and Gas Conservation Commission of the State of Colorado Denver, Colorado U State Corporation Commission of the State of Kansas Topeka, Kansas UI Montana Oil & Gas Conservation Commission State Capitol Helena, Montana U Governor Robert B. Crosby State of Nebraska State Capitol Lincoln, Nebraska U Oil Conservation Commission State of New Mexico Santa Fe, New Mexico U State Industrial Commission State of North Dakota Bismarck, North Dakota U Oklahoma Corporation Commission Capitol Office Building Oklahoma City, Oklahoma Railroad Commission State of Texas Tribune Building Austin, Texas UI Governor J. Bracken Lee State of Utah State Capitol Salt Lake City, Utah [641] Department of Mines State of West Virginia State Capitol Charleston, West Virginia 6 UI Oil & Gas Conservation Commission State of Wyoming State Capitol Cheyenne, Wyoming 6 Applicant expressly reserves all of its rights and remedies, legal, equitable and administrative, includ- ing its Motion for Rehearing of Order 174-A filed with this Commission on August 16, 1954, to question, contest or oppose in any manner (i) the jurisdiction of the Commission over this Applicant, its properties and operations, including the sale of natural gas here- in set out and any other sales which Applicant may make, and (ii) the validity and reasonableness of Order 174-A entered by this Commission in Docket No. R-138 under the Constitution and statutes of the United States, both in general and as applied to the specific sale herein described; and neither this appli- cation nor the sale of gas following the issuance of a Certificate pursuant hereto shall estop, impair, or prejudice the right of Applicant to pursue or assert any such rights or remedies, or be construed or treated as a waiver or admission of the Commission’s jurisdiction over Applicant or of the validity or reasonableness of its said Order. Gur Or. Corporation Original signed by By M. Bayer H. M. Bayer, Vice President [642] (VERIFICATION OMITTED IN PRINTING) [644] UNITED STATES OF AMERICA FEDERAL POWER COMMISSION (Recetven Aprit 23, 1956) In the Matters of . Docket No. G-3275 Howard W. Fleet, et al. Docket N@™*-4814 thru G-4819, incl. M. F. Powers Docket No. G-5191 John A. Barnett Docket Nos. G-5218, G-5220 and G-5221 Big Chief Drilling Company Docket Nos. G-5291 and G-5292 Havenstrite Oil Company of Texas Docket No. G-5659 Shell Oil Company Docket No. G-5993 Baker and Taylor Drilling Company Docket No. G-6180 The Superior Oil Company Docket Nos. G-6319, G-6321 thru G-6324, incl. Amerada Petroleum Corporation Docket Nos. G-6342, G-6346, G-6353 and G-6355 Continental Oil Company Docket No. G-6378 HIGHWAY MAP SHOWING & PORTION OF S| TEXAS, OKLAHOMA, & NEW MEXICO j Scole = 50 Mites lappros) 2 Pha on Kerr-MeGee Oil Industries, Ine. 2 — etal Docket No. G. 640g 3 of Go Joseph I. O'Neil, Jr. 8 = 9 Docket Nos. G-6406 and G-6407 Southwestern Exploration Company (a Co-partnership) Docket No. G-6429 Bass & Vessels, et al. Docket No. G-6608 Phillips Drilling Corporation Docket Nos. G-6619, G-6620, G-6626 thru G-6656, inel., G-6658 thru G-6664, incl., and G-6670 Sun Oil Company Docket No. G-6825 Cabot Carbon Company Docket No. 6950 Haneo Oil and Gas Company, Ltd. Docket No. G-6994 Sue Reeder Turner Docket Nos. G-7136 thru G-7141, incl., G-7143 thru G-7145, inel., G-7147 thru G-7158, inel. Gulf Oil Corporation Docket No. G-7706 Fraley Gas Company Docket No. G-7734 N. B. Hunt Docket No. G-7738 Wiley Page Docket No. G-7755 W. W. Lechner and R. E. Hubbard Docket No. G-7761 G. B. Cree and H. E. Schwartz 10 —— 2 . 645 Docket No. G-7762 H. E. Schwartz, G. B. Cree and Southern Production Company, Inc. Docket No. G-7768 Harold Davidor and R. H. Davidor, d.b.a. Davidor & Davidor Docket Nos. G-7769 and G-7770 Late Oil Company Docket No. G-7811 Orville H. Parker, et al. Docket No. G-7812 Phil D. Phillips, et al. Docket No. G-7813 Clayton A. Woofter, et al. Lease, Roy G. Hildreth, et al., and Roy G. Hildreth, Agent Docket No. G-7815 H. C. Grady, Jr. and J. W. Graham, Jr. Docket Nos. G-7816 and G-7821 J. D. Caruthers Docket No. G-7822 Lisbon Exploration Company, Ine. [645 ] Docket No. G-7823 Maleo Refineries, Inc. Docket No. G-7824 Cree Oil, H. E. Schwartz and D. E. Williams Docket No. G-7825 H. W. Klein 11 Docket No. G-7839 _ 8 Charles N. Compton Oil and Gas Co. — — the Commission and open for public in Docket No. G-7840 A ane | pplicants produce and sell natural gas for trans- Seward Butch Martin Oil and Gas Co. portation in interstate commerce for resale, as indi- Docket No. G-7841 cated below: Blanton Oil and Gas Co. Docket No. G- Location of Field Buyer Docket No. G-7842 3275 Denton Gasoline El Paso Natural Gas H. C. Hall Oil and Gas Co. Plant Company 4814 thru 4817, Hugoton Field, Colorado Interstate Gas Docket No. G-7843 incl., and 4819 Kearney County, Company ; Cities Service Little Rough Oil and Gas Co. Kansas Gas Company ; Kansas- | ‘ Nebraska Natural (ias Docket No. G-7844 * Company Ben Compton Oil and Gas Co. * 4818 Carthage Field, Texas Gas Transmission Panola C ’ Cc i Docket No. G-7851 — ounty orporat ion Louis C. Quin, II. R. Wofford, Jr., and 5191 Spraberry Trend Texas Gas Products Area, Midland and Corporation Arthur F. Graf, Jr. Glasscock Counties, on ä 2 — — K Docket No. G-7852 Texas Goliad Corporation 5218, 5220, Chris Hunt, Hitch Colorado Interstate Gas Docket No. G-808 and 5221 nn a — Company Peerless Oil and Gas Company Keyes Field, Cimar- ron County, April 19, 1956 Oklahoma Notice of Applications and Date of Hearing Take notice that each of the above Applicants has Pembrook Leases in Corporation . ' 5291 and 5292 Anna Wells and Texas Gas Products : : Upton County, Texas filed an application for a certificate of public con- 646 venience and necessity pursuant to Section 7 of the / 646] Natural Gas Act, authorizing Applicants to render ) 5659 Tubb-Blinberry El Paso Natural Gas services as hereinafter described, subject to the juris- eg — County, Company dietion of the Commission, all as more fully repre- sented in their respoetive applications which are on sn — 5 — — 12 13 „ 2 646 Docket No. G- 6180 6319 6342, 6346, Loeation of Field Canyon Largo Unit, Rio Arriba County, New Mexico Ignacio Field, La Plata County, Colorado Langlie-Mattix Field, Lea County, New Mexico Fields in Lea County, New Mexico Eumont-Jalmat, 6353, and 6355 Arrow, Tubb, Blin- 6378 6429 berry, Monument, McKee, and Langmat Fields Lea County, New Mexico Keyes Field, Cimarron County, Oklahoma Jack Herbert Field, Upton County, Texas Hugoton Field, Haskell, Stanton, and Seward Coun- ties, Kansas Greenwood Field, Baca County, Colo- rado, and Morton County, Kansas North Sun Field, Starr County, Texas Allison Unit Area, San Juan County, New Mexico, and La Plata and Archuleta Counties, Colorado 14 Buyer El Paso Natural Gas Company El Paso Natural Gas Company El Paso Natural Gas Company El Paso Natural Gas Company EI Paso Natural Gas Company Colorado Interstate Gas El Paso Natural Gas Company Colorado Interstate Gas Company ; Northern Natural Gas Company Colorado Interstate Gas Company — Tennessee Gas Trans- mission Company El Paso Natural Gas Company Mission Valley Field, Vietoria County, La Gloria Field, Jim Wells County, Texas Various Fields in Starr County, Texas Quinto Creek Field, Jim Wells County, Texas Gyp Hill Field, Brooks County, Texas Placedo Field, Vietoria County, Texas 15 Buyer El Paso Natural Gas Texas Gas Transmission Corporation ; United Gas Pipe Line Company ; Texas Eastern Transmis- sion Corporation ; Ten- nessee Gas Transmission Company ; Southern Natural Gas Company Transcontinental Gas Pipe Line Corporation Transcontinental Gas Pipe Line Corporation Transcontinental Gas Pipe Line Corporation Transcontinental Gas Pipe Line Corporation Transcontinental Gas Pipe Line Corporation Tennessee Gas Trans mission Company Tennessee Gas Trans- mission Company Tennessee Gas Trans- mission Company Tennessee Gas Trans- mission Company Docket No. G- Docket No. G- 7137 Location of Field Ileyser Field, Vie- toria County, Texas Colorado Interstate Gas Company EI Paso Natural Gas Company El Paso Natural Gas (‘om pany Lone Star Gas Company 7139 7140 7141 7143 714 7145 7147 7148 7149 7159 ton 7154 7155 7157 7158 El Paso Natural Gas Phillips Petroleum E! Paso Natural Gas Company El Paso Natural Gas El Paso Natural Gas Company El Paso Natural Gas 650 Docket No. G- 7738 7755 7761 7762 1651 7811 7812 7813 7815 Location of Field North Lansing Field, Fast Panhandle Field, Gray County, Texas West Panhandle Field, Gray County, Texas North Whiteroek Field, Noble County, Oklahoma Langmat Field, Lea County, New Mexico Eumont Field, Lea County, New Mexico Ilugoton Field, Stevens County, Kansas Washington District, Calhoun County, West Virginia Glenville District, Kast Panhandle Field, Gray County, Texas Buyer Louisiana-Nevada Transit Company II. L. Hunt Phillips Petroleum Company Cabot Carbon Company Cities Service Gas Company El Paso Natural Gas Company El Paso Natural Gas Company ; Phillips Petroleum Company Northern Natural Gas Company Godfrey L. Cabot, Ine. Equitable Gas Company » Warren Petroleum Company Docket No. G- 7816, 7821, and 7822 7839 and 7844 7840 Location of Field Lisbon Field, Lin- coln and Claiborne Parishes, Louisiana West Panhandle Field, Gray County, Texas Lisbon Field, Clai- borne and Lineoln Parishes, Louisiana Sucker Creck Field, Pike County, Kentucky Virgie Ficld, Pike County, Kentucky Wolfe Creek Field, Martin Count, Kentucky Right Beaver Creek Field, Knott County, Kentucky Johns Creek Field, Floyd County, Kentucky South Porter Field, Karnes County, Texas Live Oak County, Texas Langmat Pool, Lea County, New Mexico 21 Buyer Mississippi River uel Corporation; Arkansys- Louisiana Gas Company ; II. W. Klein El Paso Natural Gas Company ; Shell Oil Company ; Coltexo Corporation Cities Service Gas Company Arkansas-Louisiana Gas Company Kentucky West Virginia Gas Company United Fuel Gas Company United Fuel Gas Company Kentucky West Virginia Gas Company Kentucky West Virginia Gas Company United Gas Pipe Line Company Transeontinental Gas Pipe Line Corporation El Paso Natural Gas Company These matters should be heard on a consolidated record and disposed of as promptly as possible under the applicable rules and regulations and to that end: Take further notice that, pursuant to the authority contained in and subject to the jurisdiction conferred upon the Federal Power Commission by Sections 7 and 15 of the Natural Gas Act, and the Commission’s Rules of Practice and Procedure, a hearing will be held on May 21, 1956, at 9:30 am. (EDST), in a hearing room of the Federal Power Commission, 441 Street, N.W., Washington, D. C., concerning the matters involved in and the issues presented by such applications: Provided, however, That the Commis- sion may, after a non-contested hearing, dispose of the proceedings pursuant to the provisions of Section 1.30 (e) (J) or (e) (2) of the Commission’s Rules of Practice and Procedure. Under the procedure herein provided for, unless otherwise advised, it will be un- necessary for Applicants to appear or be represented at the hearing. Protests or petitions to intervene may be filed with the Federal Power Commission, Washington 25, D. C., in accordance with the Rules of Practice and Proce- dure (18 CFR 1.8 or 1.10) on or before May 7, 1956. Failure of any party to appear at and participate in the hearing shall be construed as waiver of and con- currence in omission herein of the intermediate de- cision procedure in cases where a request therefor is made. /3/ Leon M. Fuquay Secretary „„ [653 ] UNITED STATES OF AMERICA FEDERAL POWER COMMISSION Before Jerome K. Kuykendall, Chairman; Claude L. Draper, Commissioners: Seaborn I. Digby, Fred- erick Stueck and William R. Connole. In THE MATTERS OF Docket No. G-3275 Howard W. Fleet, et al. Docket Nos. G-4814 thru G-4819, inel. M. F. Powers Docket No. G-5191 John A. Barnett Docket Nos. G-5218, G-5200 and G-5221 Big Chief Drilling Company Docket Nos. G-5291 and G-5292 Havenstrite Oil Company of Texas Docket No. G-5659 Shell Oil Company Docket No. G-5993 Baker and Taylor Drilling Company Docket Nos. G-6319, G-6321 thru G-6324, incl. Docket No. G-6378 Kerr-MeGee Oil Industries, Inc. Docket No. G-6393 Joseph I. O'Neil, Jr. Docket Nos. G-6406 and G-6407 Southwestern Exploration Company (a Co-partnership) Docket No. G-6429 Bass & Vessels, et al. Docket No. G-6608 Phillips Drilling Corporation Docket Nos. G-6619, G-6620, G-6626 hru G-6640, inel., G-6642 thru G-6656, incl., G-6658 thru G-6664, inel., and G-6670 Sun Oil Company Docket No. G-6825 Cabot Carbon Company Docket No. 6950 Haneo Oil and Gas Company, Ltd. Docket No. G-6994 Sue Reeder Turner Docket Nos. G-7136 thru G-7141, inel., G-7143 thru G-7145, inel., G-7147 thru G-7158, inel. Gulf Oil Corporation Docket No. G-7706 Fraley Gas Company Docket No. G-7734 N. B. Hunt Docket No. G-7738 Wiley Page Docket No. G-7755 W. W. Lechner and R. E. Hubbard 32339 8 Docket No. 67761 G. B. Cree and H. E. Schwartz Docket No. G-7762 H. E. Schwartz, G. B. Cree and Southern Production Company, Ine. Docket No. G-7768 Harold Davidor and R. H. Davidor, d.b.a. Davidor & Davidor Docket Nos. G-7769 and G-7770 Late Oil Company Docket No. G-7811 Orville H. Parker, et al. Docket No. G-7812 Phil D. Phillips, et al. 1654 Docket No. G-7813 Clayton A. Woofter, et al. Lease, Roy G. Hildreth, et al., and Roy G. Hildreth, Agent Docket No. G-7815 H. C. Grady, Jr., and J. R. Graham, Jr. Docket Nos. G-7816 and G-7821 J. D. Caruthers Docket No. G-7822 Lisbon Exploration Company, Ine. Docket No. G-7823 Maleo Refineries, Ine. Docket No. G-7824 Cree Oil, H. E. Schwartz and D. K. Williams Docket No. G-7825 H. W. Klein Docket No. G-7839 Charles N. Compton Oil and Gas Co. Docket No. G-7840 Applicants produce and sell natural gas for trans- portation in interstate commerce for resale, as indi- cated below. Applicants are hereinafter referred to as Seward Butch Martin Oil and Gas Co. Docket No. G-7841 Blanton Oil and Gas Co. Docket No. G-7842 H. C. Hall Oil and Gas Co. Docket No. G-7843 Little Rough Oil and Gas Co. Docket No. G-7844 Ben Compton Oil and Gas Co. Docket No. G-7851 Louis C. Quin, H. R. Wofford, Jr., and Arthur F. Graf, Jr. Docket No. G-7852 Goliad Corporation Docket No. G-8083 Peerless Oil and Gas Company (Issued May 28, 1956) Each of the above Applicants has filed an applica— tion for a certificate of public convenience and neces- sity pursuant to Section 7 of the Natural Gas Act, authorizing Applicants to render services as herein- after described, subject to the jurisdiction of the Commission, all as more fully represented in their respective applications which are on file with the Commission and open for public inspection. Applicant. Docket No. G- Location of Field Buyer 3275 Denton Gasoline El Paso Natural Gas Plant Company 4814 thru 4817, Hugoton Field, Colorado Interstate Gas inel., and 4819 Kearney County, Company ; Cities Service Kansas Gas Company ; Kansas- Nebraska Natural Gas Company 4818 Carthage Field, Texas Gas Transmission Panola County, Corporation Texas 1655 5191 Spraberry Trend Texas Gas Products Area, Midland and Corporation Glasscock Counties, Texas 5218, 5220, Chris Hunt, Hitch Colorado Interstate Gas and 5221 Gray, and Stanolind- Company Wiggins Leases in Keyes Field, Cimar- ron County, Oklahoma 5291 and 5292 Anna Wells and Texas Gas Products Pembrook Leases in Corporation Upton County, Texas 5659 Tubb-Blinberry El Paso Natural Gas Field, Lea County, Company New Mexico 5993 Acreage in Lea El Paso Natural Gas County, New Mexico Company Docket No. G- 6319 6393 [656] Location of Field Ignacio Field, La Plata County, Colorado Langlie-Mattix Field, Lea County, New Mexico Fields in Lea County, New Mexico Keyes Field, Cimarron County, Oklahoma Jack Herbert Field, Upton County, Texas IIugoton Field, Haskell, Stanton, and Seward Coun- ties, Kansas Greenwood Field, Baca County, Colo- rado, and Morton County, Kansas North Sun Field, Starr County, Texas Allison Unit Area, San Juan County, New Mexico, and La Plata and Archuleta Counties, Colorado Buyer El Paso Natural Gas Company El Paso Natural Gas Company El Paso Natural Gas Company Colorado Interstate Gas EI Paso Natural Gas Company Colorado Interstate Gas Company ; Northern Natural Gas Company Colorado Interstate Gas Company Tennessee Gas Trans- mission Company El Paso Natural Gas Company 187 125 bes Mission Valley Field, La Gloria Field, Jim Wells County, Texas Various Fields in Starr County, Texas Quinto Creek Field, Jim Wells County, Texas N. Government Wells Field, Duval County, Texas Brayton Field, Nueces County, Texas (iyp Hill Field, Brooks County, Texas Placedo Field, Vietoria County, Texas Buyer El Paso Natural Gas Company Texas Gas Transmission Corporation ; United Gas Pipe Line Company ; Texas Eastern Transmis- sion Corporation Ten- nessee Gas Transmission Company ; Southern Natural Gas Company Transcontinental Gas Pipe Line Corporation Transcontinental (as Pipe Line Corporation Transeontinental Gas Pipe Line Corporation Transeontinental Gas Pipe Line Corporation Transcontinental Gas Pipe Line Corporation Tennessee Gas Trans- mission Company Tennessee Gas Trans- mission Company Tennessee Gas Trans- mission Company Tennessee Gas Trans- mission Company Eumont Field, Lea County, New Mexico North Bay City and North Markham Fields, Matagorda County, Texas Keyes Field, Texas County, Oklahoma San Juan Basin, Rio Arriba County, New Mexico Acreage in San Juan County, New Mexico Winnsboro Field. Wood County, Texas 6588 Buyer Texas Eastern Trans mission (Corporation El Paso Natural Gas Company Southern Natural Gas Company El Paso Natural Gas Company United Gas Pipe Line Company Permian Basin Pipe Line (Company Transcontinental Gas Pipe Line Corporation Colorado Interstate Gas Company El Paso Natural Gas Company El Paso Natural Gas Lone Star Gas Company 7140 714¹ 7143 7144 7145 [659] 7147 7148 7149 7150 7151 Docket No. G- 7152 7153 7154 7157 7155 Loeation of Field Carson Field, Gray County, Texas Sweetie Peck Field, Midland County, Texas S. Fullerton Field, Andrews County, Texas Denton Field, Lea County, New Mexico Waddell, Edwards, Sand Hills, t niver- sity- Waddell, and Dune Fields, Crane County, Texas Jaek Herbert (Penn) Field, Upton County, Texas Arrowhead, Blinber- ry, Brunson, Drink- ard, Hair, S. Hair, MeCormick. Paddock and Penrose-Skelly Fields, Lea County, New Mexico Fields in Wayne County, West Virginia Fields in Lea County, New Mexico North Lansing Field, Harrison County, Texas North Lansing Field, Harrison County, Texas Buyer Phillips Petroleum Company El Paso Natural Gas Company II Paso Natural Gas Company EI Paso Natural Gas Company Kl Paso Natural Gas Company Kl Paso Natural Gas Company Fi Paso Natural Gas Company United Fuel Gas (Company El Paso Natural Gas (Company Louisiana-Nevada Transit Company ih. I. Hunt Docket No. G- 7761 7762 7768 7769 7770 7811 7812 7813 781 7821, And 7822 7023 l tion of Field Kast Panhandle Field, Gray County, Texas West Panhandle Field, Gray County, Texas North Whiterock Field, Noble County, Oklahoma Langmat Field, Lea County, New Mexico Humont Field, Lea (County, New Mexico ITugoton Field, Stevens County, Kansas Washington District, Calhoun County, West Virginia Glenville District, Gilmer County, West Virginia ast Panhandle Field, Gray County, Texas Lishon Field. Lin- coln Claiborne Parishes, Louisiana Ignacio Field, La Plata County, Colorado Wasson Field, Yoakum County, Texas Buyer Phillips Petroleum Company Cabot Carbon Company Cities Service Gas Company El Paso Natural Gas Company El Paso Natural Gas Company ; Phillips Petroleum Company Northern Natural Gas (‘ompany (iodfrey I. Cabot, Ine. P.quitable Gas Company Warren Petrolenm Company Mississippi River Fuel Corporation ; Arkansas- Louisiana Gas Company; H. W. Klein El Paso Natural Gas Company; Shell Oil Company ; Coltexo Corporation 661 Doeket No. G- Location of Field Buyer 7824 West Panhandle Cities Service Gas Field, Gray County, Company Texas 7825 Lisbon Field, Clai- Arkansas-Louisiana Gas horne and Lincoln Company Parishes, Louisiana 7839 and 7844 Sucker Creek Field, Kentucky West Virginia Pike County, Gas Company Kentucky [661] 7840 Virgie Field, Pike United Fuel Gas County, Kentueky Company 7841 Wolfe Creek Field. United Fuel Gas Martin County, Company Kentucky 7842 Right Beaver Creek Kentueky West Virginia Field, Knott County, Gos Company Kentucky 7843 Johns Creek Field, Kentucky West Virginia Floyd County, Gas Company Kentucky 7851 South Porter Field, United Gas Pipe Line Karnes County, Company Texas 7852 Live Oak County, Transeontinental Gas | Texas Pipe Line Corporation 03 Langmat Pool, Lea Paso Natural Gas County, New Mexico (‘ompany Pursuant to due notice, a public hearing was held in Washington, D.C., on May 21, 1956, respecting the mat- ters involved in and the issues presented by the appli- cation. No petition to intervene or protest to the grant- ing of the application has been received. Staff counsel moved orally at the hearing that the intermediate de- cision procedure be omitted and the Commission render a decision herein pursuant to Section 1.30 (e) (1) of the Commission’s Rules of Practice and Procedure. The Commission finds: (1) Applicant, an independent producer of nat- ural gas, is engaged in the sale of natural gas in interstate commerce for resale for ultimate publie consumption, subject to the jurisdiction of the Commission, and is, therefore, a ‘‘nat- ural-gas company’’ within the meaning of the Natural Gas Act. (2) The sale of natural gas hereinbefore described, as more fully described in the application, is made in interstate commerce, subject to the jurisdiction of the Commission, and such sale by Applicant, together with the operation of any facilities subject to the jurisdiction of the Commission necessary therefor, is subject to the requirements of subsections (c) and (e) of Section 7 of the Natural Gas Act. (3) Applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Nat- ural Gas Act, and the requirements, rules and regulations of the Commission thereunder. [662] (4) The sale of natural gas by Applicant, to- gether with the construction and operation of any facilities subject to the jurisdiction of the Commission necessary therefor, is required by the public convenience and necessity, and a certificate therefor should be issued as here- inafter ordered and conditioned. 36 (5) A request during the public hearing by Staff Counsel for omission of the intermediate de- cision procedure under Section 1.30 (e) of the Commission’s Rules of Practice and Proce- dure, was unopposed by any party of record and, not having been denied by the Commis- sion, is granted pursuant to Section 1.30 (e) (1) of said Rules. The Commission orders: (A) A certificate of public convenience and neces- sity be and is hereby issued, upon the terms and conditions of this order, authorizing the sale by Applicant of natural gas in interstate commerce for resale, together with the opera- tion of any facilities, subject to the jurisdic- tion of the Commission, used for the sale of natural gas in interstate commerce, as here- inbefore described and as more fully de- scribed in the application and exhibits in this proceeding. (B) The certificate issued herein shall be deemed accepted and of full force and effect, unless refused in writing and under oath by Appli- cant within 30 days from issuance of this order. (C) The certificate is not transferable and shall be effective only so long as Applicant continues the acts or operations hereby authorized in accordance with the provisions of the Nat- ural Gas Act, and the applicable rules, regu- lations and orders of the Commission. 37 (D) The grant of the certificate herein shall not be construed as 2 waiver of the requirements of Section 4 of the Natural Gas Act, or of See- tion 154 of the Commission’s Rules and Reg- ulations thereunder requiring the filing of rate schedules for the service herein author- ized, and is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceed- ing now pending [663] or hereafter insti- tuted by or against the Applicant. Further, our action in this proceeding shall not fore- close nor prejudice any future proceedings or objection relating to the operation of any price or related provision in the gas purchase contracts herein involved. By the Commission. Commissioner Digby concurring, subject to the statement attached. /s/ Leon M. Fvevay Leon M. Fuquay Secretary [664] Dicsy, Commissioner, concurring: I concur in the order granting a certificate of public convenience and necessity to sell natural gas. I object to any reference in the order concerning the issuance of a certificate of public convenience and necessity for the facilities of the independent producer or gatherer of gas. A certificate of public convenience and necessity is neither required nor properly issued for construction and operation of facilities of a producer or gatherer. The action of a majority of this Commission issuing a certificate for facilities is improper for it represents an assertion of power denied to us by Congress. We have recognized the absence of power over facili- ties when, in Order No. 174 and Order No. 174-A, we failed to provide any procedure whereby application could be made for a certificate authorizing their con- struction and operation. We did promulgate procedural rules to enable filing of applications for certificates au- thorizing a sale or transportation. There was not even a suggestion that at some later time we would authorize or require authorization for construction and operation of facilities. The action heretofore taken, insofar as it made no provision with respect to facilities, was wholly con- sistent with the declarations of the Supreme Court in Federal Power Commission v. Panhandle Eastern Pipe Line Company, 337 U.S. 498, 505; Colorado Interstate Gas Co. v. Federal Power Commission, 324 U.S. 581, 598 ; Interstate Natural Gas Company v. Federal Power Commission, 331 U.S. 682, 690-691, and Phillips Petro- leum Company v. State of Wisconsin, 74 Sup. Ct. 794. 797-798. The language of the Court in these cases is clear and unambiguous. In Federal Power Commission v. Panhandle Eastern Pipe Line Company, supra, the Court stated that the natural and clear meaning“ of production or gathering contained in Section 1(h) of the Act encompassed the producing properties and gathering facilities of a natural-gas company.“ In Colorado Interstate Gas Co. v. Federal Power Commis- sion, supra, the Court stated that the production or gathering exemption applies to the physical activities, facilities and properties used in the production and gathering of natural gas. In Interstate Natural Gas Company v. Federal Power Commission, supra, the Court stated that effect must be given to the exemption of producing and gathering, and indicated clearly that facilities, properties and activities of a producer and gatherer were exempted. The Court, in Phillips Petro- leum Company v. State of Wisconsin, supra, held only that a sale in interstate commerce for resale was not within the exemption of Section 1(b). The discussion with respect to facilities and the recitation of the above- cited cases represents clear recognition of the intended Scope and effect of the exemption as regards facilities. The issue to be resolved is whether the Natural Gas Act requires that a certificate of public convenience and necessity issue for construction and operation of the facilities necessary to effect a sale by a producer or gatherer in interstate commerce for resale. The issue is not whether a sale of gas in interstate commerce for resale can be made without facilities. It cannot be doubted that facilities necessary to effect a sale of natural gas in interstate commerce are facilities used in interstate commerce. Recognition of this fact can- not, however, create power in this Commission to issue, much less to require, certificates authorizing construc- tion and operation of such facilities. 15391 Residue Gas Purchase Agreement Tuts AGREEMENT, made and entered into as of the 26th day of January, 1951, by and between Gur 0m. CORPORATION, a Pennsylvania corporation, hereinafter referred to as Seller“, and Et Paso NATURAL ‘tas 40 CoMPANY, a Delaware corporation, hereinafter referred to as Buyer’”’. WHUITNFESSETH: W HEREAS, Seller owns and operates a natural gaso- line extraction plant, located in Section 25, Block B-26, Publie School Lands, Crane County, Texas, processing easinghead gas produced in the area; and Wuereas, Seller has available at the plant and ex- pects to continue to have a quantity of surplus residue gas not heing sold to others; and Wuereas, Buyer desires to purchase such surplus residue gas. Now, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, Seller and Buyer do hereby contract, covenant and agree with each other as follows, to wit: 4540 ARTICLE I DEFINITIONS As used in this agreement, the following terms shall have the meanings herein stated: a. Gasoline Plant or Plant shall mean that natural gasoline extraction plant, together with the necessary related facilities for compression and treatment of gas, located in Section 25, Block B-26, Public School Lands, Crane County, Texas, owned and operated by Seller, as such plant and related facilities may exist from time to time, including any and all additions and alterations thereto. h. Casinghead Gas shall mean the gas issuing from oil wells, whether produced from the same strata from 41 which oil is produced or from any other strata, or whether recovered as a result of gas injection, and gas vaporized from oil after production. c. Residue Gas shall mean the gas which remains after casinghead gas has been processed in the Gaso- line Plant, less the varying amounts of gas required in or consumed in the operation of the Plant. d. Surplus Residue Gas shall mean the residue gas in excess of the varying quantities required (1) for the operation and development of Seller's properties in the vicinity of said Plant, including but not by way of limitation residue gas for gas injection purposes; (2) to meet its obligations to its lessors under the terms of its oil, gas and mineral [541] leases in the area in which the Plant is located; (3) to meet its obligations under the terms of its casinghead gas purchase con- tracts relating to the Plant, ineluding but not by way of limitation residue gas for gas injection purposes ; (4) to supply fuel for the drilling of wells in the area served by said Plant, although located on leases not owned by Seller nor under easinghead gas purchase contracts to Seller; (5) for fuel in the heating and maintenance of Seller’s facilities, including the Plant and camp and any additions and alterations thereto; and (6) to meet Seller’s obligations under that certain contract between Seller and Cabot Carbon Company, dated August 18, 1949, and any extension or renewal thereof, by virtue of which Seller has agreed to sell to Cabot Carbon Company an average quantity of Twenty Million (20,000,000) cubic feet“ of gas per day. „ Pressure base sixteen and four-tenths (16.4) pounds per square inch absolute. 42 . Day shall mean the period of 24 consecutive hours beginning at 7:00 A.M. on one calendar day and end- ing at 7:00 A.M. on the following calendar day. f. Month shall mean a period commenci ‘ing at 7:00 A.M. on the first day of a calendar month and ending at 7:00 A.M. on the first day of the following calendar 9. Year, except where expressly stated otherwise, shall mean a period of 365 consecutive days beginning at 7:00 A.M. on the day and year first above written or en any anniversary thereof, provided that any such year which contains a date of February 29 shall con- sist of 366 consecutive days. [542] K. Contract Volume shall mean seven mil lion (7,000,000) cube feet of surplus residue gas per — from the Gasoline Plant, unless and until the con- ract volume is changed under the provisions of this agreement. In case the term “contract volume“ is used in relation to any period greater than a day, the num- ber of cubic feet of gas constituting the contract vol- ume as above defined shall be multiplied by the number of days ineluded in such period. ARTICLE II Depic aTIon Seller hereby dedicates to the i ; performance of its obligations under this agreement and for the term hereof all of Seller’s surplus residue gas as hereia ARTICLE III QUANTITY Section 1. Until such time as Seller shall notify Buyer in writing that Seller is in position to, and does by such notice, effectively dedicate to the performance of this agreement not less than seven twenty-sevenths (7/27) of the total quantity of residue gas available for sale from the Plant, Buyer shall purchase a por- tion of the surplus residue gas from the Plant but shall be under no obligation to purchase the full contract volume of surplus residue gas hereunder. The amount of surplus residue gas which Buyer shall purchase and receive and Seller will sell and deliver hereunder will vary from time to time and will depend upon operating conditions [543] of Buyer, upon the quantity of gas being purchased by Buyer from other sources, Buyer's marketing requirements and other conditions pertinent to Buyer's operations. Section 2. Effective thirty (30) days after receipt by Buyer from Seller of the notice provided for in Section 1 of this Article III. the quantity of surplus residue gas to be sold and delivered by Seller and pur- chased and received by Buyer hereunder shall be gov- erned by the provisions of Sections 3 to 8, inclusive, of this Article IIT. Section 3. Subject to the provisions of this agree- ment, Seller agrees to sell and deliver and Buyer agrees to purchase and receive or to pay for whether or not received, commencing May 1, 1951 (delay due to force majeure excepted), the contract volume from time to time in effect hereunder, averaged annually, during such annual periods as Seller has such volume of sur- 44 plus residue gas available for sale. Seller shall not be required to deliver hereunder in any one day a volume of gas in excess of one and one-tenth (1.1) times the contract volume then in effect. It is understood that Buyer may find it necessary to adjust its purchases of gas hereunder from time to time during each year to meet the fluctuating demands of Buyer’s markets, but Buyer agrees to take and Seller agrees to deliver gas hereunder as nearly as practicable at uniform hourly and daily rates of flow. The quantity of gas purchased by Buyer during the preceding twelve (12) months period, or lesser period in the case of the first such determination, shall be [544] determined on July 1 of each year, and if such quantity is found to be less than the contract volume in effect during the preceding twelve (12) months pe- riod, then the difference between the total quantity of gas purchased and received during said period and the total contract volume in effect during said period shall be regarded as the ‘‘deficient volume or as “deficient gas If on any July I it shall be determined that a deficient volume of gas exists, then Buyer shall have the right during the following twelve (12) months period ending as of 7:00 A.M. on the next July 1, as and if surplus residue gas is available during said twelve (12) months period, to purchase and receive over and above the contract volume then in effect a volume of surplus residue gas not greater than the deficient volume. Buyer al, pay for deficient gas so taken at the weighted average price paid to Seller here- under for gas taken during the twelve (12) months period such deficiency occurred. Within thirty (30) days after the end of the aforesaid twelve (12) months period, Buyer shall y Seller for all such deficient — — for during the twelve (12) months period, at the weighted average price paid to Seller hereunder for gas taken during the twelve (12) months period such deficiency occurred. In determining the amount which Buyer is obligated to pay Seller for such deficient gas, there shall be eredited against the price per one thousand (1000) eubie feet which Buyer would otherwise be obligated to pay hereunder the price received by Seller for any such gas not taken by Buyer which Seller disposes of to any other purchaser, up to but not in exeess of the price per one thousand (1000) cubie feet in effect under [545] this agreement; provided that any additional expense incurred by Seller in the sale of such gas for treating, compression and delivery, which is in excess of the normal expense in the sale of gas to Buyer, shall be deducted from the price received from such other purehaser before crediting the amount thereof against the price which Buyer would otherwise be obligated to pay hereunder. Section 4. Any volume of surplus residue gas from said Gasoline Plant, which may from time to time be taken by Buyer from Seller in excess of the contract volume at the time in effect, shall be subject to all of the terms and provisions of this agreement, and except for gas taken to make up deficiencies as provided in Sec- tion 3 above shall be paid for at the price then appli- eable. Section 5. In the event that on any day the deliveries of surplus residue gas hy Seller hereunder are, by rea- son of non-availability of gas or causes within the con- trol of Seller or force majeure intervention, less than the volume which Buyer is otherwise entitled to receive hereunder on such day, then for purposes of determin- ing the average daily volume of gas taken by Buyer hereunder during the twelve (12) months period in which such day occurs, there shall] be taken, in lieu of the volume of gas (if any) actually delivered to Buyer during such day, a volume equal to one and one-tenth (1.1) times the contract volume at the time in effect hereunder, or the quantity Buyer is ready and willing to take, whichever quantity is the lesser. Section 6. If, at any time or times during the term of this agreement, Seller shall have or expect to have available at the Plant an average daily volume of sur- plus residue gas in [546] excess of the contract vol- ume then in effect, Seller agrees that it will notify Buyer of that fact, specifying the amount of such addi. tional volume of gas, the time when the same will be available for delivery, and the period during which Seller expects such additional volume to be available. Buyer agrees that it will purchase from Seller such additional volume of gas to the extent that Buyer has a market therefor and has facilities (exclusive of neces- sary stand-by equipment) installed for receiving, trans- porting and marketing such gas, the purchase thereof by Buyer to commence not later than sixty (60) days after the receipt by Buyer of such notice from Seller. unless a later date is specified in such notice for the commencement of deliveries of such additicgal vol- umes; and upon such commencement date, the contract volume previously in effect hereunder shall be in- creased by an amount equal to the additional volume 47 of gas tendered by Seller which Buyer is able to accept as aforesaid. If Seller shall so notify Buyer of the availability or prospective availability of additional volumes of sur- plus residue gas from the Plant as in this Section 6 provided, and if Buyer at that time does not have a market for such additional volumes or does not have facilities installed to enable it to receive, transport and market the same, then Buyer shall have the right to elect, by notice served upon Seller within sixty (60) days after the receipt by Buyer of said notice from Seller, to purchase all or any part of such additional volume of gas for which Buyer does not then have a market or available facilities. If Buyer makes such election, it will promptly upon service of said notice to Seller proceed with all reasonable dispatch, if facilities 547] are needed, to acquire, construct, install or otherwise provide for the facilities required to enable Buyer to receive, transport and market the additional volume of gas so elected to be purchased by it, or if a market is needed, to acquire a market for said volume of gas, and shall commence taking such additional vol- ume from Seller as soon as said facilities are completed or said market is obtained, as the case may be, but in no event later than one (1) year after the date of Buyer’s said notice. Upon the commencement of deliv- eries of such additional volume of gas, or the expiration of one (1) year from the giving of said notice, which- ever is the earlier date, the contract volume previously in effect hereunder shall be increased by the amount of such additional volume of gas which Buyer shall have elected to purchase as aforesaid, up io but not in excess 48 f { of the additional volume tendered in Seller’s notice to Buyer as to the availability of such additional gas. Section 7. If, at any time or times during the term of this agreement, Seller shall have additional volumes of surplus residue gas available for sale from the Plant, and upon tender of such gas to Buyer, Buyer does not have a market for such gas or does not have the neces- sary facilities installed to receive, transport and mar- ket such gas, and does not elect as hereinabove provided to install said facilities or obtain a market to enable it to purchase and receive said additional volume of gas, then Seller shall be free to sell to others all or any part of such additional volume which Buyer is not obligated hereunder to purchase or does not elect to purchase as hereinbefore provided, [548] but all such sales to others shall be subject and subservient to the rights of Buyer under this agreement. Section 8. If at any time the average daily deliveries of surplus residue gas by Seller to Buyer from the Plant shall be reduced by as much as ten percent (10% ) below the contract volume at the time in effect hereunder for a period of five (5) months duration, then Buyer at its option shall have the right to serve notice on Seller reducing the contract volume at the time in effect hereunder by such amount as Buyer shall specify in said notice, up to but not exceeding such deficiency in the aggregate average daily deliveries to Buyer from said Plant during such period; and Buyer shall have a like right on each successive occasion that the average daily deliveries of surplus residue gas by Seller to Buyer from the Plant are reduced by as much as ten percent (10%) below the contract volume at the 49 time in effect hereunder for a period of five (5) months duration. ARTICLE IV DELIVERY POINT AND PRESSURE Section 1. The point of delivery for all gas sold and purchased hereunder shall be at the inlet of the meter station to be installed and operated by Buyer near the property line on the discharge side of the Plant. Title to all gas purchased and received hereunder shall pass from Seller to Buyer at the point of delivery. Section 2. All gas deliverable hereunder at said de- livery point shall be delivered at the pressure necessary [549] to enable said gas to enter Buyer’s pipe line system, provided that Seller shall never be required to deliver gas at a pressure greater than six hundred and twenty-five pounds (625#) per square inch gauge. ARTICLE V QUALITY Section 1. All gas delivered by Seller under the terms of this agreement shall conform to the following specifications: a. Oxygen: The gas shall not at any time have an oxygen content in excess of two-tenths (0.2) of one per- cent (1%) by volume, and Seller shall make every rea- sonable effort to keep the gas free of oxygen. b. Liquids: The gas shall be free from hydrocarbons in liquid form and shall be dehydrated to the extent that it will contain not more than nine pounds (9#) of water per one million (1,000,000) cubie feet of gas. 50 c. Hydrogen Sulphide: The gas shall not contain more than twen.y-five hundredths (25/100) of one (1) grain of hydrogen sulphide per one hundred (100) cubic feet. d. Organic Sulphur: The gas shall not contain more than five (5) grains of organic sulphur (mereaptans) per one hundred (100) cubic feet. e. Carbon Dioxide: The gas shall not have a carbon dioxide content in excess of one percent (1%) by volume. [550] f. Dust, Gums, etc.: The gas shall be com- mercially free of dust, gums and other solid matter. g. Heating Value: From the date of commencement of deliveries of gas hereunder until January 1, 1956, the total gross heating value of the gas deliverable here- under, to be paid for at the rates specified in Article IX hereof, shall not be less than one thousand and fifty (1050) British Thermal Units per cubie foot. If the total gross heating value of the gas delivered in any month prior to January 1, 1956, falls below one thou- sand aud fifty (1050) British Thermal Units per cubic foot, then the price payable by Buyer for such gas shall be reduced by an amount determined by multiplying the sum which would otherwise be payable hereunder for such gas by a fraction, the numerator of which shall be the deficiency in total British Thermal Units per cubie foot below one thousand and fifty (1050) and the denominator of which shall be one thousand and fifty (1050). From and after January 1, 1956, the total gross heating value of the gas deliverable hereunder, to be paid for at the rates specified in Article LX hereof, 51 shall not be less than one thousand (1000) British Thermal Units per cubic foot. Section 2. Within the limits of the minimum heating value specifications set forth above, Seller shall have the right before delivery of gas to Buyer to remove from the gas delivered hereunder any constituent thereof other than methane, and shall have the right to remove such [551] methane as is necessarily re- moved from the gas in the process of removing other constituents. Section 3. Notwithstanding any other provision hereof, if the total gross heating value of the gas de- livered hereunder falls below one thousand (1000) British Thermal Units per eubic foot, Buyer shall have the right to refuse to accept further deliveries here- under so long as the total gross heating value of the gas remains below one thousand (1000) British Ther- mal Units per cubic foot. Buyer shall also have the right to refuse to accept any gas which at any time does not meet any of the other specifications set forth in this Article V. ARTICLE VI METERING Section 1. Buyer, at its sole cost and expense, shall install and maintain at the point of delivery hereunder a standard type orifice meter or meters for measuring the volume of all gas purchased by Buyer from the Gasoline Plant, and Buyer shall cause said meters to be read each day. The meters and other facilities so installed at the point of delivery shall be constructed and installed in accordance with the specifications pre- 52 scribed by Report No. 2 of the Gas Measurement Com- mittee of the American Gas Association dated Maw 6, 1935, and appendix thereto. Section 2. Said meters and all meter readings and meter charts shall be accessible at all reasonable times [552] to inspection and examination by Seller, but the reading, calibration and adjustment of Buyer’s meter and the changing of charts shall be done by Buyer. Section 3. Each such meter shall be calibrated at least once each thirty (30) days by and at the expense of Buyer, but in the presence of Seller’s representative. Buyer shall give Seller notice of each such calibration test in sufficient time to enable Seller to have its rep- resentative present. If upon any such test the measur- ing equipment is found to be no more than two percent (2%) erroneous, previous readings of such equipment shall be considered correct in computing the deliveries of gas hereunder, but such equipment shall be adjusted at once to read accurately. If upon any test the measur- ing equipment shall be found to be inaccurate in the aggregate by an amount exceeding two percent (2% ) at a reading corresponding to the average rate of flow for the period since the last preceding test, then any previous readings of such equipment shall be corrected to zero error for any period which is known definitely or agreed upon, but in case the period is not known definitely or agreed upon, then for a period extending back one-half (14) of the time elapsed since the date of the last test. If for any reason any meter is out of service or out of repair, so that the volume of gas purchased cannot be ascertained or computed from the reading thereof, the volume of gas purchased during 53 the period such meter is out of service or out of repair [553] shall be estimated and agreed upon by the parties hereto on the basis of the best data availabie, using the first of the following methods which is feasible: | a. By using the registration of Seller’s check me- ter, if installed and accurately registering ; b. By correcting the error in Buyer’s meter, if the percentage of error is ascertainable by cali- bration test or mathematical calculation; c. By estimating the volume of delivery, by using as a basis the volumes delivered during preced- ing periods under similar conditions when the meter was registering accurately. Section 4. Seller may install, maintain and operate such check measuring equipment as it desires, provided that such check meter and equipment shall be so in- stalled as not to interfere with the operation of the meters to be installed and maintained by Buyer at or near the point of delivery, as provided in Section 1 of this Article VI. ARTICLE VII Units or VoLUME Section 1. The unit of volume for all purposes here- under (except for computation of quality“ values under the provisions of Article V) shall be one (1) eubie foot at an [554] absolute pressure of fourteen and sixty-five hundredths pounds (14.65) per square — at a temperature of sixty (60) degrees Fahren- eit. Section 2. The unit of volume for the determination of heating value under sub-paragraph g of Section 1 of 54 — — — — — Article V hereof shall be the amount of gas, saturated with water vapor, which would occupy a volume of one (1) eubie foot at a temperature of sixty (60) degrees Fahrenheit and under a pressure equivalent to thirty (30) inches of mercury at thirty-two (32) degrees Fahrenheit. Section 3. The unit of volume for determination of quality values under sub-paragraphs b, c and d of Section 1 of Article V hereof shall be one (1) cubie foot at a temperature of sixty (60) degrees Fahrenheit and under a pressure equivalent to thirty (30) inches of mercury at thirty-two (32) degrees Fahrenheit. ARTICLE VIII MEASUREMENT Section 1. All measurement of gas hereunder shall be in accordance with the recommendations for mea- suring gas contained in Report No. 2 of the Gas Mea- surement Committee of the American Gas Association dated May 6, 1935, including the appendix thereto, ap- plied in a practical and appropriate manner, and cor- rection shall be made for deviation from Boyle’s Law. Deviation from Boyle’s Law will be computed in ac- cordance with Bulletin TS 461 of the California Nat- ural Gasoline Association, 1947, or such other method as the parties may hereafter agree upon. [555] Section 2. For the purpose of measurement, the average atmospheric (barometric) pressure shall be assumed to be thirteen and two-tenths pounds (13.2#) per square inch absolute, irrespective of the actual elevation or location of the point of delivery with respect to sea level or of variations in such baro- metric pressure from time to time. 55 Section 3. The temperature of the gas flowing through the meter or meters shall be determined by the use of a recording thermometer of standard mannufac- ture, installed by Buyer so that it may properly record the temperature of the gas flowing through Buyer’s meter or meters at the point of delivery. The arith- metrical average of the twenty-four (24) hour record, or of that portion of the twenty-four (24) hours dur- ing which gas was passing if gas had not been passing during the entire period, from the recording thermom- eter shall be taken to be the gas temperature for the day and shall be used to make proper corrections in volume computations. Section 4. The specific gravity of the gas delivered hereunder shall be determined by the use of a record- ing gravitometer to be installed, maintained and oper- ated by Buyer at the point of delivery. The arithmeti- cal average of the hourly specific gravity during each twenty-four (24) hour period, or during that period which gas was actually passing, shall be used to make proper correction in volume computations. [556] Section 5. The gross heating value of the gas shall be determined by Buyer at intervals of three (3) months or by means of recording calorimeters of the Thomas type, at the option of Buyer. ARTICLE IX PRICE Section 1. The price per one thousand (1000) cubic feet to be paid by Buyer to Seller for all gas sold and delivered hereunder shall be as follows: a. For the first five (5) year period, beginning with the initial date of delivery of gas hereunder, six point six nine nine eight cents (6.6998¢). b. For the second five (5) year period, seven point five nine three one cents (7.5931¢). c. For the third five (5) year period, eight point four eight six four cents (8.4864¢). d. For the fourth five (5) year period and so long as this agreement is in effect, the weighted average price per one thousand (1000) cubic feet, quality and pres- sure considered, being paid at the commencement date of such five (5) year period for all gas sold and deliv- ered from all gasoline plants located within a radius of two hundred and fifty (250) miles of the Town of An- drews, Texas (exciuding, however, the following counties in the State of Texas: Carson, Potter, Gray, Wheeler, Hutchinson, Sherman, Hansford, and Moore), exclusive of sales to Buyer, but not less than nine point three seven nine seven cents (9.3797¢) per one thousand (1000) cubic feet. [557] Section 2. If, at any time or times subse- quent to the date of this agreement and so long as gas is delivered hereunder, there shall be in effect any agreement between Buyer and any other party or parties providing for the purchase of gas by Buyer at a point located within a radius of two hundred and fifty (250) miles of the Town of Andrews, Texas (ex- cluding, however, the following counties in the State of Texas: Carson, Potter, Gray, Wheeler, Hutchinson, Sherman, Hansford, and Moore), at a price per one thousand (1000) cubic feet higher than the price at the same time payable by Buyer to Seller for gas hereun- 57 — — der, Buyer shall forthwith notify Seller of such fact and of the amount of such higher price, and thereupon the price at the time payable to Seller for gas here- under shall be immediately increased so that it will equal the price payable at the same time under such other agreement, and such higher price hereunder shall continue in effect so long as, but only so long as, any such higher price is payable for gas by Buyer under any such other agreement. In determining whether the price payable under any such other agreement is ‘“*higher”’ than the price payable to Seller hereunder, due consideration shall be given to the provisions of this agreement as compared with the provisions of such other agreement as to quantity and quality of gas, de- livery pressure, gathering and compressing arrange- ments, provisions regarding measurement of gas in- cluding deviation from Boyle’s Law, taxes payable on or in respect of the gas delivered, and all other perti- nent factors. [558] ARTICLE X BILLING Section 1. On or before the tenth (10th) day of each calendar month, Buyer shall render Seller a statement showing the total volume of gas purchased during the preceding calendar month, and on or before the twen- tieth (20th) day of each calendar month, Buyer shall tender Seller its check payable to Seller or order for all such volumes so purchased. It is understood, how- ever, that such statements and payments will be based upon Buyer’s measurements and computations, and that the receipt and acceptance thereof shall not bind bind Seller or prevent Seller from correcting any er- rors in any such statement or payment or any errors in measurement or computation upon which such state- ment or payment is based, until the expiration of one (1) year after rendition of such statement. Buyer shall be entitled to deduct from the amount due Seller all taxes upon or in respect to the surplus residue gas de- livered hereunder, which are required to be borne by Seller under the provisions of Article XIV hereof, but which are required by law or regulation to be paid by Buyer. Seller shall account to and pay the royalty owners having interest in the gas delivered hereunder. Section 2. Upon the request of Seller, Buyer shall furnish Seller with meter charts showing all volumes measured in any calendar month. Seller shall return to [559] Buyer all charts after they have been in- spected, after which return the charts shall be kept on file by buyer for the mutual use of both parties for a period of six (6) years, and after expiration of said period of six (6) years Buyer may destroy said charts. ARTICLE XI TITLE Seller hereby warrants the title to the gas delivered hereunder and that the same will be free from all liens and adverse claims. ARTICLE XII RESPONSIBILITY Buyer shall not be responsible for the gas deliver- able hereunder and shall be held harmless against any damage or injury caused thereby until same shall have been delivered to Buyer at the delivery point specified in Article IV hereof, after which delivery Buyer shall be deemed in exclusive control and possession thereof and responsible for and shall hold Seller harmless against any injury or damage caused thereby. ARTICLE XIII Force MaJEURE Section 1. Except for Buyer’s obligation to make payments for gas delivered hereunder, neither party [560] hereto shall be liable for any failure to per- form the terms of this agreement when such failure is due to force majeure“ as hereinafter defined. The term force majeure“ as employed in this agreement shall mean acts of God, strikes, lockouts or industrial disturbances, civil disturbances, arrests and restraint from rulers and people, interruptions by government or court orders, present and future valid orders of any regulatory body having proper jurisdiction, acts of the puble enemy, wars, riots, blockades, insurrections, in- ability to secure materials or labor, epidemics, land- slides, lightning, earthquakes, fire, storms, floods, wash- outs, explosions, breakage or accident to machinery or lines of pipe, freezing of wells or pipe lines, inability to obtain right of way, partial or entire failure of gas supply, or any other cause, whether of the kind herein enumerated or otherwise, not reasonably within the control of the party claiming force majeure. Nothing herein contained, however, shall be construed to require either party to settle a strike against its will. Section 2. It is understood that either ma without liability to the other party, —5 — — ations of its plants or pipe line system for the purpose 881 of making necessary alterations or repairs thereto, but that such interruptions shall be for only such time as may be reasonable. The party interrupting operations shall give the other party reasonable notice, except in case of emergency, of its intention so to interrupt op- erations and of the [561] estimated time during which no surplus residue gas will be taken or delivered, as the case may be. ARTICLE XIV TAXES Seller shall bear all taxes assessed upon or in re- spect of the surplus residue gas delivered hereunder up to the delivery thereof to Buyer, and Buyer shall bear all taxes upon or in respect of such surplus resi- due gas on and after such delivery; provided that three-fourths (34) of any and all increases after the date of execution of this agreement, in taxes of any kind (except ad valorem taxes on properties and in- come taxes) upon or with respect to the surplus residue gas delivered hereunder up to the delivery thereof by Seller to Buyer or upon the sale thereof by Seller to Buyer, shall be borne by Buyer, and one-fourth (14) shall be borne by Seller, regardless of whether the in- crease results from an increase in the taxes now in ex- istence or from the levy of new or additional taxes; provided that Buyer shall not be obligated to bear that part of any new or additional tax or taxes, which part is based upon or measured by the natural gasoline or other liquefied hydrocarbon content extracted from the gas before its delivery to Buyer hereunder. 61 [562] ARTICLE XV TERM This agreement shall be effective from the date here- of, and shall continue in force for a term of twenty (20) years from the date of initial delivery of surplus residue gas hereunder, and thereafter from year to year until cancelled by either party upon written no- tice given to the other party, not less than one hundred and eighty (180) days prior to the expiration of said twenty (20) years of any anniversary date thereof. ARTICLE XVI SUCCESSORS AND ASSIGNS This agreement shall bind and benefit the parties hereto and their respective successors and assigns, and shall be a covenant running with the Gasoline Plant; provided that no conveyance or transfer of any interest of either party shall be binding upon the other party until such other party has been furnished with written notice and true copy of such conveyance or transfer; provided, further, that either Buyer or Seller, or both, may assign its right, title and interest in, to and by virtue of this agreement, including any and all exten- sions, renewals, amendments and supplements thereto, to a trustee or trustees, individual or corporate, as se- curity for bonds or [563] other obligations or se- curities, without such trustee or trustees assuming or becoming in any respect obligated to perform any of the obligations of the assignor, and provided, further if any such trustee be a corporation, then such trustee may accept said assignment without its being reyuired 62 by the parties hereto to qualify to do business in the State of Texas. ARTICLE XVII NOTICES Section 1. Notices to be given hereunder shall be in writing and shall be deemed sufficiently given and served when and if deposited in the United States Mail, postage prepaid and registered, addressed to Gulf Oil Corporation, Post Office Box 1290, Fort Worth, Texas, or to El Paso Natural Gas Company, Post Office Box 1492, El Paso, Texas, as the case may be, or to such other address as either party shall respectively here- after designate in writing. Section 2. Routine communications, including monthly statements and payments, shall be considered as duly delivered when mailed, postage prepaid, by either registered mail or ordinary first class mail. [564] In Witness WuHereor, the parties hereto have caused this agreement to be executed, in duplicate originals, as of the day and year first above written. Gur Or. CORPORATION „Seller“ /s/ By H. M. Crata, Vice President Attest: /s/ H. M. CAU, Assistant Secretary EL. Paso NATURAL Gas COMPANY „Buyer“ /s/ By C. L. PERKINS, Vice President Attest: /s/ A. C. Marre, Assistant Secretary 63 585 [565] (VINTIcATION OmITTED IN PRINTING) 1566] EL PASO NATURAL GAS COMPANY Tenth Floor Bassett Tower El Paso, Texas October 30, 1953 Gulf Oil Corporation P. O. Drawer 1290 Fort Worth 1, Texas Attention: Mr. Gordon H. Fisher Re: Gulf Oil Corporation Waddell Plant Residue Gas Contract Gentlemen: By letter dated October 19, 1953, Gulf Oil Corpora- tion, hereinafter called Gulf“, advised El Paso Nat- ural Gas Company, hereinafter called“ El Paso“, that effective as of July 1, 1954, Gulf will dedicate the total quantity of residue gas available for sale from its Waddell, Crane County, Texas, gasoline plant to the performance of that certain residue gas purchase agreement dated January 26, 1951, between Gulf, as Seller therein, and El Paso, as Buyer therein. Since El Paso will have a market and facilities for such gas, the same shall be covered by said residue gas purchase agreement, and this letter will serve to evidence the following amendments to said residue gas purchase agreement, all of which shall become effecti July 1, 1954: 2 64 1. Subsection d. of Article 1 of said residue gas pur- chase agreement shall be amended to be and read as follows: „Ad. Surplus Residue Gas shall mean the residue gas in excess of the varying quantities required (1)for the operation and development of Seller’s properties in the vicinity of said Plant, including but not by way of limitation residue gas for injec- tion purposes; (2) to meet its obligations to its lessors under the terms of its oil, gas and mineral leases in the area in which the Plant is located; (3) to meet its obligations under the terms of its casinghead gas purchase contracts relating to the Plant, including but not by way of limitation resi- due gas for gas injection purposes; (4) to supply fuel for the drilling of wells in the area served by said [567] Plant, although located on leases not owned by Seller nor under casinghead gas purchase contracts to Seller; and (5) for fuel in the heating and maintenance of Seller’s facilities, including the Plant and Camp and any additions and alterations thereto.”’ 2. Subsection h. of Article I of said residue gas pur- chase agreement shall be amended to be and read as follows: ‘th. Contract Volume shall mean thirty million (30,000,000) cubie feet of surplus residue gas per day from the Gasoline Plant, unless and until the contract volume is changed under the provisions 65 of this agreement. In case the term contract vol- ume’’ as used in relation to any period greater than a day, the number of cubic feet of gas con- stituting the contract volume as above defined shall be multiplied by the number of days included in such period.“ If the above correctly states Gulf’s understanding concerning the matters covered herein, please indicate Gulf’s agreement to the amendments above provided by executing two of the enclosed copies of this letter in the space provided below and returning the same to El Paso, attention Mr. D. H. Tucker, Vice President. Very truly yours, EL Paso NATURAL Gas CoMPANY /s/ By D. H. Tucker, Vice President ACCEPTED AND AGREED To: Gur Or CoRPORATION /s/ By: G. U. Fisuer, Attorney-in-Fact 1568] Agreement (Recetvep May 23, 1956) Tus AGREEMENT, made and entered into as of the Ist day of September, 1955, by and between EL. Paso NaturaL Gas Company, a Delaware corporation, with offices in El Paso, Texas, hereinafter referred to as „EI Paso“, and Gulf Oil Corporation, a Pennsylvania corporation, with an office in Fort Worth, Texas, here- inafter called Gulf“, WITNESSETH : Wuenreas, heretofore under date of January 26, 1951, El Paso and Gulf entered into an agreement, sub- sequently amended from time to time, providing for the sale by Gulf to El Paso and the purchase by El Paso from Gulf of certain residue gas available from Gulf’s Waddell Plant, located in Crane County, Texas, and Wuereas, Gulf has available at said Waddell Plant volumes of gas in excess of the volumes now provided in the residue agreement, and Gulf desires to sell to El Paso and El Paso desires to purchase from Gulf such additional gas; Now, THEREFORE, El Paso and Gulf agree as follows: It is recognized that, in order for El Paso to re- ceive delivery of the quantities of gas provided for in the residue agreement, as the residue agreement is amended and supplemented by this agreement, it will be necessary for El Paso to make application to the Federal Power Commission for a Certificate of Public 67 Convenience and [569] Necessity authorizing the con- struction of additional facilities to take delivery of the gas. El Paso shall proceed with due diligence and dis- patch in an attempt to obtain such a certificate. If such a certificate is obtained by El Paso in form acceptable to it, El Paso shall then proceed with due diligence and dispatch to construct the necessary facilities in order to enable it to perform its obligation under the residue agreement, as the residue agreement is amended and supplemented by this instrument. The date when such facilities shall have been completed and placed in op- eration is hereinafter called the effective date“. 2. If, at the expiration of one(1) year from the date of this agreement, El Paso shall not have obtained from the Federal Power Commission a Certificate of Public Convenience and Necessity in form acceptable to it cov- ering the construction of its facilities contemplated hereunder, this agreement shall terminate at such time, and neither party hereto shall have any further lia- bility to the other. 3. On the effective late Subsection h. of Article T of said residue gas purchase agreement shall be amended to thereafter and read as follows: . Contract Volume shall mean forty million (40,000,000) cubie feet of surplus residue gas per day from the Gasoline Plant, unless and until the contract volume is changed under the provisions of this agreement. In case the term ‘contract 68 570 [570] volume’ as used in relation to any period greater than a day, the number of cubic feet of gas constituting the contract volume as above defined shall be multiplied by the number of days ineluded in such period.“ 4. As hereby amended and supplemented, the residue gas purchase agreement dated January 26, 1951, shall remain in full force and effect. In TestrMony WHEREOF, this instrument is executed on this 17th day of October, 1955. Ex Paso NATURAL Gas COMPANY /s/ By D. II. Tucker Vice President Gur Ou. CorPOGATION /s/ Iegible -. -- ---- -- -- -- -- Vice President ATTEST : /s/ V. M. PLUMMER Ass’t. Secretary ATTEST : /s/ B. M. Crate Ass’t. Secretary 571 [571] Agreement (RECEIVED January 29, 1958) THIS AGREEMENT, made and entered into as of the 15th day of December, 1956, by and between EL Paso NaTuraL Gas Company, a Delaware corporation, with offices in El Paso, Texas, hereinafter referred to as El Paso“, and Gut Ou. CorPoraTION, a Pennsylvania corporation, with an office in Fort Worth, Texas, here- inafter called Gulf“, WITNESSETH : WHereas, heretofore under date of J anuary 26, 1951, El Paso and Gulf entered into an agreement, sub- sequently amended from time to time, providing for the sale by Gulf to El Paso and the purchase by El Paso from Gulf of certain residue gas available from Gulf’s Waddell Plant, located in Crane County, Texas, and WuHereas, Gulf has available at said Waddell Plant volumes of gas in excess of the volumes now provided in the residue agreement, and Gulf desires to sell to El Paso and El Paso desires to purchase from Gulf such additional gas; Now, THEREFORE, El Paso and Gulf agree as follows: 1, It is recognized that, in order for El Paso to receive delivery of the quantities of gas provided for in the residue agreement, as the residue agreement is amend- ed and supplemented by this agreement, it will be 70 necessary for El Paso to make application to the Fed- eral Power Commission for a Certificate of Public Convenience and Necessity authorizing the construe- tion of additional facilities to take delivery of the gas. El Paso shall proceed with due diligence and dispatch in an attempt to obtain such a certificate. If such a certificate is obtained by El Paso in form acceptable to it, El Paso shall then proceed with due diligence and dispatch to construct the necessary facilities in order to enable it to perform its obligation under the resi- due agreement, as the residue amendment is amended and [572] supplemented by this instrument. The date when such facilities shall have been completed and placed in operation is hereinafter called the effective date. 2. If, at the expiration of one (1) year from the date of this agreement, El Paso shall not have obtained f rom the Federal Power Commission a Certificate of Public Convenience and Necessity in form acceptance to it covering the construction of its facilities contemplated hereunder, this agreement shall terminate at such time, and neither party hereto shall have any further lia- bility to the other. 3. On the effective date Subsection h. of Article I of said residue gas purchase agreement shall be amended to thereafter be and read as follows: h. Contract Volume shall mean eighty million 000,000) eubie feet of surplus residue gas per sn from the Gasoline Plant, unless and until the 71 contract volume is changed under the provisions of this agreement. In case the term ‘contract volume’ is used in relation to any period greater than a day, the number of cubic feet of gas constituting the contract volume as above defined shall be mul- tiplied by the number of days included in such period. 4. As hereby amended and supplemented, the residue gas purchase agreement dated January 26, 1951, shall remain in full force and effect. Ex Paso NATURAL Gas CoMPANy /s/ By D. H. Tucker Vice President Gur Ou. CoRPoRATION /s/ By H. M. Bayer Vice President ATTEST : /s/ V. M. PLuMMeER Ass’t. Secretary [573] Amendatory Agreement This Amendatory Agreement made and entered into as of the 26th day of October, 1959, by and be- tween El, Paso NATURAL Gas Company, a Delaware corporation with an office in El Paso, Texas, herein- after referred to as El Paso“, and Warren Perro- LEUM CorporaTION with an office in Tulsa, Oklahoma, hereinafter referred to as “‘Warren”’, WHITNFSSETH: Wurn s, El Paso and Gulf Oil Corporation are parties to a certain Gas Purchase Agreement dated January 26, 1951, as amended, covering the sale of Residue gas by Gulf as Seller“, to El Paso as „Buxer“ from the Waddell Plant located in Crane County, Texas, which contract as amended is herein- after referred to as the Waddell Contract“, and Wuereas, Warren Petroleum Corporation has ac— quired the interest from Gulf Oil Corporation in said Waddell Contract, and Wuereas, the Waddell Contract contains a Fa- vored Nations“ clause, and Whereas, El Paso desires to eliminate such Fa- vored Nations“ clause for the purpose of stabilizing its gas purchase prices in the Permian Basin area of West Texas and Southeastern New Mexico, and Wrereas, it is recognized that the continuance of the life of said Waddell Plant and the continuance of supplies of residue gas for delivery therefrom under said Waddell Contract as hereby being supplemented 73 and amended will be dependent upon the renewal [574] of existing Casinghead Gas Contracts and the obtaining of additional Casinghead Gas Contracts; and it is recognized by the parties that, in order for Warren to make such renewals and obtain such new contracts, the prices received by it for gas under said Waddell Contract as hereby supplemented and amended must be such that it will be competitive with other present and prospective Casinghead Gas purehasers ; Now, THEREFORE, El Paso and Warren agree as follows: Effective as of January 1, 1960, the Waddell Con- tract shall be amended as follows: A. There is hereby added to Article II of said Waddell Contract the following unnumbered para- graph as follows: As a part of the consideration of this agreement, Seller agrees diligently and continually to undertake to renew the existing Casinghead Gas Contracts serv- ing said Waddell Plant as such contracts expire and to obtain new contracts on supplies of gas available to said plant not previously contracted to Seller; provided that Seller shall not be required to obtain any new Casinghead Gas Contracts or renew any existing Casinghead Gas Contracts covering gas which, in its judgment, will be uneconomical for it to gather and process in said Waddell Plant.’’ B. Article IX shall be deleted in its entirety and the following substituted therefor: 74 “ARTICLE IX Prick Section 1. The price to be paid by Buyer to Seller per one thousand (1,000) cubic feet for all gas sold hereunder shall be as follows: [575] (a) For the period from January 1, 1960, until August 1, 1964, seventeen cents (17¢). (b) For the five (5) year perod beginning August 1, 1964, eighteen cents (18¢). (e) For the five (5) year period beginning August 1, 1969, and for each succeeding five (5) year period thereafter, the price for gas shall be increased one cent (Ie) per one thousand (1,000) cubie feet over the price in effect during the preceding five (5) year period. Section 2. Seller shall have the right, at its option, to require a redetermination of the prices provided for in subparagraph (c) of Section 1 of this article. If Seller shall desire to exercise such option Seller shall give Buyer written notice of such desire not earlier than one hundred eighty (180) days nor later than one hundred twenty (120) days prior to August 1, 1969. If Seller shall make such request representa- tives of Buyer and Seller shall promptly meet and attempt to determine the price to be paid for the gas to be delivered under the provisions of this agreement foi each of the five (5) year periods re- ferred to in said subparagraph (c). The price for each such five (5) year period so determined at such time, or determined by arbitration as provided in Article XVIII hereof, shall represent, in the best 575 judgment of the parties making such determination, the probable fair market price for such gas at the beginning of each such period, but in no event shall the price for any such period be less than the price provided in said subparagraph (c). In making such determination consideration shall be given to all [576] pertinent factors.“ O, The following Article XVIII, Arbitration, shall be added: “ARTICLE XVIII ARBITRATION If after negotiations pursuant to the provisions of Section 2 of Article IX Buyer and Seller shall be unable to agree on said prices, the same shall be determined by arbitration in the following manner: Buyer shall appoint one arbitrator and Seller shall appoint one arbitrator and the two arbitrators so appointed shall select a third arbitrator. If either Buyer or Seller shall fail to appoint an arbitrator within ten (10) days after a request for such ap- pointment is made by the other party in writing, or if the two arbitrators so appointed shall fail within ten (10) days after the appointment of the second of them to agree on a third arbitrator, the arbitrator or arbitrators necessary to complete a board of three arbitrators shall be appointed upon application by either party therefor by the United States District Judge, senior in point of service, of a Federal Ju- dicial District in which some part of the property covered by this agreement is situated. In the event such judge shall fail or refuse to act, then either party hereto may request the American Arbitration 76 577 Association to select the arbitrator or arbitrators to complete the board of three. After three arbitrators are appointed pursuant to the foregoing provisions of this article they shall meet, hear the parties with respect to the matter of said prices, and arrive at a determination of said prices, Any determination agreed to in writing by at least two of said arbitra- tors shall be final and binding on [577] the parties hereto, subject to the provisions of Section 2 of Arti- cle IX. All arbitrators appointed pursuant to this article shall be individuals experienced in the oil and gas industry and competent to pass on the matter of said prices. The fees and expenses of the arbitra- tors shall be borne equally by the parties hereto.” D. Article XV, Term“, is hereby amended so that the portion thereof reading from the date of initial delivery of surplus residue gas hereunder“', is deleted, and the words from January 1, 1960,“ substituted therefor. E. It is agreed that the tax reimbursement provi- sions of Article XIV of the Waddell Contract are effective as to all increases in taxes specified oecur- ring from and after January 1, 1950. F. It is recognized that this Amendatory Agree- ment, when properly executed and filed with the Federal Power Commission, will become a supple- ment to Seller’s Rate Schedule No. 43 on file with said Commission, and Seller agrees to make such filings. Seller further agrees to furnish Buyer copies of all Federal Power Commission filings made pur- suant hereto, and shall furnish Buyer copies of all 77 orders, communications, ete., that Seller may receive from the Commission with respect thereto. Except as herein specifically supplemented and amended, all [578] other terms of the Waddell Contract shall remain in full force and effect. In Witness Wnuereor, the parties hereto have caused this agreement to be executed in duplicate originals, on this day and year first above written. Ext Paso NATURAL Gas Company By /s/ D. H. Tucker D. H. Tucker Vice President WARREN PETROLEUM CORPORATION By /s/ (Illegible) President ATTEST : „ (Illegible) Assistant Secretary ATTEST : , Don M. Marrock Secretary 579 ! Amendment of Residue Gas Purchase Agreement THis AGREEMENT, made and entered into as of the 17th day of April, 1972, by and between Ex Paso Natura. Gas Company, a Delaware corporation, here- inafter called Buyer,“ and WARN PerrTROLEUM Company, A Division or Gurt Ou. Corporation, here- inafter called Seller,“ WIHUITNESSETH : Wuereas, Buyer and Seller are parties to that cer- tain Residue Gas Purchase Contract dated January 26, 1951, covering the sale of surplus residue gas by Seller to Buyer from the Waddell Gasoline Plant, Crane County, Texas, which said contract, as hereto- fore amended and supplemented, is hereinafter re— ferred to as the ‘Waddell Plant Contract“; and WuHereas, the Waddell Plant Contract is in full force and effect; and Wuereas, Buyer and Seller now desire to further amend the Waddell Plant Contract in the particulars hereinafter set forth: Now, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, Buyer and Seller agree as follows: 1. Effective as of the date hereof, the Waddell Plant Contract shall be amended as follows: A. Section 2 of Article IX., Price, shall be de- leted in its entirety and the following substituted therefor. 79 [580] ‘Section 2. If the Federal Power Commis- sion, or any successor governmental authority [581] C. Article XVIII, Arbitration,“ shall be deleted in its entirety and be of no further force or having jurisdiction in the premises, shall at any effect. time hereafter prescribe a rate for the purchase 2. and sale of gas of a similar quality in the area As herein specifically supplemented and amended, in which Seller’s said Plant is situated higher the Waddell Plant Contract shall remain in full force than the price herein provided to be paid, then and effect in accordance with its terms. the price to be paid by Buyer to Seller for sur- : g wrod gene tad gas hereunder shall be increased In WITNESS Wuerror, the — 9 2 effective as of the date such higher rate is pre- caused this agreement to be 3 gull — N seribed to equal such higher rate; provided, how- originals on this day and year first above written. ever, that Buyer shall have the right, at its ‘*Buyer”’ option, to intervene in any rate proceeding held ;' to give consideration to any rate higher than 2 those provided for herein, to oppose therein any By /s/ A. M. Derrick such higher rate, and in the event such higher A. M. Derrick rate is prescribed, to seek relief therefrom in Asst. Vice President any regulatory agency or any court having juris- geln diction, but such relief, if obtained, shall not , result in a price hereunder which is less than WarREN PrrroLeuM CoMPANY, the price set out in this article. Whenever the A Drviston or Gtr On. Corporation provisions of this Section 2 effectuate an increase By /s/ L. W. MILLER in price, such increased price shall thereupon be ; Vice President substituted for and become the applicable con- ATTEST: tract price hereunder and shall thereafter be „ (Ilegible) subject to the same future periodic increases in Assistant Secretary the contract price as provided in Section 1 of this Article.“ ATTEST: S Brian E. HarRpen B. The phrase from January 1, 1960” appearing Assistant Secretary in the first paragraph of Article XV. Term,“ shall be deleted in its entirety and the phrase from Janu- ary 1. 19727 substituted therefor. 596 UNITED STATES OF AMERICA FEDERAL POWER COMMISSION Before Commissioners: Jerome K. Kuykendall, Chair- man; Frederick Stueck, William R. Connolo and Arthur Kline. Docket No. G-13445 In the Matter of GuLFr Or CoRPORATION (Issued February 24, 1958) On October 14, 1957, Gulf Oil Corporation (Appli- cant), an independent producer of natural gas, filed in Docket No. G-13445 an application pursuant to Section 7(c) of the Natural Gas Act for a certificate vf public convenience and necessity authorizing the sale of an additional 40,000 Mef of residue natural gas per day to El Paso Natural Gas Company from er 's Waddell Gasoline Plant in Crane County, exas. It appears that additional capacity at Waddell Plant will become operative in January 1958, making this additiona! supply available. Temporary authorization to make the additional sale of natural gas as requested in this proceeding — granted to Gulf Oil Corporation on January 2, ; Pursuant to due notice, a public hearing was held in Washington, D.C., on February 13, 1958, respect- 82 ing the matters involved in and the issues presented by this application. No petition to intervene or pro- test to the granting of the application has been re- ceived. Staff counsel moved orally at the hearing that the intermediate decision procedure be omitted and that the Commission render a decision herein pur- suant to Section 1.30 (¢)(1) of the Commission’s Rules of Practice and Procedure. The Commission finds: (1) Gulf Oil Corporation, an independent producer of natural gas, is engaged in the sale of natural gas in interstate commerce for resale for ultimate public consumption, subject to the jurisdiction of the Com- mission, and is, therefore, a natural-gas company!“ within the meaning of the Natural Gas Act. (2) The sale of natural gas hereinbefore described, as more fully [597] described in the application herein, will be made in interstate commerce, subject to the jurisdiction of the Commission, and such sale by Applicant, together with the construction and operation of any facilities subject to the jurisdiction of the Commission necessary therefor, is subject to the requirements of subsections (e) and (e) of Sec- tion 7 of the Natural Gas Act. (3) Applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Natural Gas Act and the requirements, rules and regulations of the Com- mission thereunder. (4) The sale of natural gas by Applicant, together with the construction and operation of any facilities 83 subject to the jurisdiction of the Commission neces- sary therefor, is required by the publie convenience and necessity, and a certificate therefor should be issued as hereinafter ordered and conditioned. (5) A request during the public hearing by staff counsel for omission of the intermediate decision pro- cedure was unopposed by any party of record and, not having been denied by the Commission, is granted pursuant to Section 1.30 (e) (1) of the Commission’s Rules of Practice and Procedure. The Commission orders: (A) A certificate of public convenience and neces- sity be and the same is hereby issued, upon the terms and conditions of this order, authorizing the sale by Gulf Oil Corporation of natural gas in interstate commerce for resale, together with the construction and operation of any facilities subject to the juris- diction of the Commission used for the sale of natural gas in interstate commerce, as hereinbefore described and as more fully described in the application and exhibits in this proceeding. (B) The certificate issued herein shall be deemed accepted and of full force and effect unless refused in writing and under oath by Applicant within 30 days of the date of issuance of this order. (C) This certificate is not transferable and shall be effective only so long as Applicant continues the acts or operations hereby authorized in accordance with the provisions of the Natural Gas Act and the applicable rules, regulations and orders of the Com- mission. 84 (D) The grant of the certifieate herein shall not be construed as a waiver of the requirements of Sec- tion 4 of the Natural Gas Act or of Section 154 of the Commission's Regulations thereunder requiring the filing [598] of rate schedules for the service herein authorized; and is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against the Applicant. Further, our action in this proceeding shall not foreclose nor prejudice any future proceed- ings or objections relating to the operation of any price or related provision in the gas purchase con- tract herein involved. By the Commission /s/ Josern II. Gurrive Joseph H. Gutride, Secretary *_* * ttt ee eee sees eee eee see sessel — „ [583] Residue Gas Purchase Agreement THis AGREEMENT, made and entered into as of the Ist day of March, 1972, by and between Kt. Paso Natura. Gas Company, a Delaware corporation, hereinafter called Buyer,“ and Warren PerrRoLeumM Company, A Division of Gulf Oil Corporation, here- inafter called Seller,“ WHITNESSETH : Wuereas, Seller owns and operates the Waddell Gasoline Plant located in Crane County, Texas, which plant is hereinafter referred to in this agreement as the ** Waddell Plant“ or the said Plant’’; and Wurms, Seller sells and delivers to Buyer and Iuyer purchases and receives from Seller volumes of surplus residue gas from said Plant pursuant to the terms and provisions of that certain Residue Gas Purchase Agreement between Seller and Buyer dated January 26, 1951, which agreement, together with all amendments thereto, is hereinafter referred to in this agreement as the Waddell Plant Residue Gas Pur- chase Agreement“; and Whereas, in order to assure a continuing supply of ra®& gas to the Waddell Plant for processing there- in and the delivery to Buyer of the resultant volumes of surplus residue gas attributable thereto, Seller, in eontemplation of this agreement, has either entered into or will enter into certain new Waddell Plant Producer Supply Gas Purchase Contracts and con- templates that it will, by virtue of this agreement, be able to renew or extend certain other [584] of 87 its Waddell Plant Producer Supply Gas Purchase Contracts and to acquire additional new Waddell Viant Producer Supply Gas Purchase Contracts; and Wuereas, Buyer and Seller have agreed on the purehase and sale of the aforesaid resultant volumes of surplus residue gas under the terms and provi- sions of this agreement ; Now, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, Buyer and Seller agree as follows: ARTICLE I ApoptTion By REFERENCE To the extent not in variance with the terms and provisions of this agreement, all terms and provi- sions of the Waddell Plant Residue Gas Purchase Agreement are hereby adopted by reference, insofar as such terms and provisions pertain to the delivery by Seller and receipt by Buyer of volumes of sur- plus residue gas hereunder from said Plant with the same effect as though copied herein at this point. ARTICLE II (GJOVERN MENTAL AUTHORIZATIONS Section 1. Buyer represents that it holds a Certifi- cate of Public Convenience and Necessity issued by the Federal Power Commission (or otherwise has the necessary authority) covering the construction, ownership, and operation of the facilities necessary in order for Buyer to perform its obligations under the provisions of this agreement. Promptly after the date of this agreement and [585] from time to time thereafter as may be necessary, Seller shall make such applications and filings to and with the Federal Power Commission as may be required on the part of Seller in order to procure such Certifi- cate of Publie Convenience and Necessity and other approvals as may be necessary in order for Seller to effect delivery of surplus residue gas under the provisions of this agreement or to otherwise perform its obligations hereunder. Seller further agrees to firnish to Buyer copies of all such filings and copies of all orders that Seller may receive from such Com- mission with respect to the sale of surplus residue gas hereunder. Section 2. In the event Seller shall not have re- ceived and accepted the Certificate of Public Con- venience and Necessity referred to in Section 1 of this Article within a period of ninety (90) days from the date of filing of its application therefor, then either Buyer or Seller may at any time thereafter while such condition continues, give written notice to the other party that it desires to terminate this agree- ment. If any such notice is given, this agreement shall terminate thirty (30) days after the date on which such notice is given, unless at the end of such thirty (30) day period Seller shall have received and accepted said Certificate of Publie Convenience and Necessity. If this agreement shall terminate pursu- ant to the provisions of this Section, neither Buyer nor Seller shall thereafter have any further liability under this agreement to the other. Section 3. If Seller shall receive and accept the Certificate of Public Convenience and Necessity re- ferred to in Section 1 [586] of this Article prior to any termination of this agreement pursuant to the provisions of Section 2 of this Article, it shall so notify Buyer and first deliveries of surplus resi- due gas shall commence hereunder on the date Seller shall have tendered surplus residue gas for sale to Buyer hereunder. ARTICLE III COMMITMENT Seller represents that, in contemplation of this agreement and in furtherance of its continuing en- deavors to deliver volumes of surplus gas to Buyer from said Plant, Seller has either entered into or will enter into certain new Waddell Plant Producer Supply Gas Purchase Contracts and contemplates that it will renew or extend certain other of its existing Waddell Plant Producer Supply Gas Purchase Con- tracts and that it will acquire additional new Wad- dell Plant Producer Supply Gas Purchase Contracts. Accordingly, Seller hereby commits to the perform- ance of its obligations under this agreement all vol- umes of surplus residue gas attributable to raw gas delivered to and processed in said Plant from the raw gas sources set forth in Exhibit A“ hereto under such renewed, extended and new Waddell Plant Producer Supply Gas Purchase Contracts and as may be set forth in said Exhibit A“ as subse- quently amended in the manner hereinafter provided. Said commitment shall also include all volumes of surplus residue gas attributable to raw gas delivered to and processed in said Plant from those properties owned by Gulf Oil Corporation (Gulf), as may be 90 set forth in said Exhibit“ A“ as subsequently amend- ed in the manner hereinafter provided, which [587] are developed by Gulf from and after the date of this agreement, provided that Seller shall have the right to at any time limit any further such commit- ments by subjecting such commitments to an agree- ment with Buyer of similar content and purpose hereof. The applicable Waddell Plant field gas me- tering stations and numbers assigned thereto by which such raw gas is measured and subsequently delivered to said Plant for processing as of the date of this agreement are described on Exhibit A“ hereto. Seller shall have the continuing right from time to time and at any time to amend said Exhibit „A“ by giving Buyer written noice of its desire to so amend, specifying in such notice those Waddell Plant field gas metering stations and numbers as- signed thereto along with other data consistent with the requirements of said Exhibit A“ applicable to any new and/or renegotiated Waddell Plant Pro- ducer Supply Gas Purchase Contracts entered into by Seller subsequent to the date of this agreement, or those field metering stations and numbers assigned thereto along with such other required data appli- cable to raw gas from properties owned and devel- oped by Gulm as aforesaid. Upon receipt of any such notice by Buyer, said Exhibit A“ shall be deemed amended accordingly. 91 ARTICLE IV Resipve Gas ALLOCATION Computation of the volumes of surplus residue gas delivered to Buyer from the Waddell Plant un- der this agreement and the volumes of surplus resi- due gas delivered to Buyer from said Plant under the Waddell Plant Residue Gas Purchase Agreement requires an allocation of the combined surplus resi- due gas stream delivered to Buyer from [588] said Plant. It is agreed that the volumes of surplus resi- due gas delivered to Buyer by Seller from said Plant under this agreement and under the Waddell Plant Residue Gas Purchase Agreement, as well as any future agreements of similar content and purpose, shall be determined in accordance with the alloca- tion procedures set forth in Exhibit B“ hereto at- tached and made a part hereof. Alteration of or ad- dition to these procedures may become desirable dur- ing the term hereof. However, no such alterations or additions shall be effective except as mutually agreed between the parties. ARTICLE V PRICE Section 1. The price to be paid by Buyer to Seller per one thousand (1,000) cubie feet of surplus resi- due gas sold and delivered from said Plant under this agreement shall be as follows: (a) For the period commencing on the date of first delivery of residue gas hereunder and continuing until January 1, 1973, thirty cents (30¢). 92 (b) For the one (1) year period commencing January 1, 1973, and continuing until January 1, 1974, thirty-one cents (31¢). (e) For the next one (1) year period and for each succeeding one (1) year period thereafter, the price to be paid by Buyer to Seller shall be increased one cent (Ie) over the price herein provided to be paid during the preceding one (1) year period, In the event the average total gross heating value each month of [589] surplus residue gas shall be either more or less than one thousand (1,000 British thermal units per cubic foot, then the price otherwise payable pursuant to either (a), (b), or (e) above for surplus residue gas shall be either increased or re- duced. Such reduced or increased price shall be de- termined by multiplying the price otherwise payable pursuant to either (a), (b), or (e) above by a frae- tion, the numerator of which is the actual total gross heating value of such gas, expressed in British ther- mal units per cubie foot, and the denominator of which is one thousand (1,000). The actual total gross heating value of surplus residue gas, measured at the point of delivery hereunder, shall be determined each month. The unit of volume for the determination of such total gross heating value shall be the amount of gas, on a dry basis, which would oceupy a volume of one (1) eubie foot at a temperature of sixty (60) degrees Fahrenheit and under a pressure equivalent to thirty (30) inches of mereury at thirty-two (32) degrees Fahrenheit. Section 2. If the Federal Power Commission, or any successor governmental authority having juris- diction in the premises, shall at any time hereafter prescribe a rate for the purchase and sale of gas of a similar quality in the area in which Seller’s said Plant is situated higher than the price herein pro- vided to be paid, then the price to be paid by Buyer to Seller for surplus residue gas hereunder shall be inereased effective as of the date such higher rate is prescribed to equal such higher rate; provided, however, that Buyer shall have the right, at its op- tion, to intervene in any rate proceeding held to give consideration to any rate higher than those [590] provided for herein, to oppose therein any such higher rate, and in the event such higher rate is preseribed, to seek relief therefrom in any regu- latory agency or any court having jurisdiction, but such relief, if obtained, shall not result in a price hereunder which is less than the price set out in this article. Whenever the provisions of this Section 2 effectuate an increase in price, such increased price shall thereupon be substituted for and become the applicable coutract price hereunder and shall there- after be subject to the same future periodic increases in the contract price as provided in Section 1 of this article. ARTICLE VI TERM This agreement shall become effective as of the date hereof and, unless sooner terminated in accord- anee with the provisions of Article II hereof, shall remain in force and effect for a term ending January 1, 1987. 94 In WITNESS WHEREOF, the parties hereto have caused this agreement to be executed in duplicate originals as of the day and year first above written. „Burn“ El. Paso NATURAL Gas Company By /s/ A. M. Derrick A. M. Derrick Asst. Vice President ‘*SELLER”’ WarrREN Perro_eum COMPANY, A Dtviston or Gur On. Corporatiox By s L. W. Men Vice President ATTEST: „ (INegible) Assistant Secretary ATTEST : „ Brian E. Harpven Assistant Secretary 591 [591] Exhibit “A” (Attached to Residue Gas Purchase Agreement of March 1, 1972, between Warren Petroleum Company, a Division of Gulf Oil Corporation, and El Paso Natural Gas Company) WADDELL PLANT Meter Station Lease Lease Lease Number Operator Name Description 64-769 Amoco Prod. Co. J. MeGee ‘‘A’’ All See. i, Bik. 32, PSL Crane County, Texas (New contract dated 2-7-72. Replaces old contract dated 9-27-66. Firm term of new contract is for period of ten years beyond firm term of old contract). 64-640 Amoco Prod. Co. University SW /4 Sec. 3, Blk. 31 AH“ University Land Crane County, Texas (New contract dated 2-7-72. Replaces old contract dated 9-6-56. Firm term of new contract is for period of ten years beyond firm term of old contract). 64-774 Gulf Oil Corp. State EC“ NE/4 See. 4, Blk. 30, University Lands State EI“ NW/4 Sec. 3, Bik. 30, University Lands 64-772 Gulf Oil Corp. State ED“ SW/4 & W/2 SE/4 See. 3, Blk. 30, University Lands 64-700 Gulf Oil Corp. State EE“ SE/4 Sec. 9, Bik. 30, University Lands Meter Station Lease Lease Lease Number Operator Name Description 64-467} Gulf Oil Corp. State EF“ N/2 See. 10, Blk. 30, ] University Lands 64-699] 64-698] Gulf Oil Corp. State EG 8/2 See. 10, Blk. 30 ] University Lands 64-466] 64-700A Gulf Oil Corp. State EA SW /4 Sec. 9, Bik. 30 University Lands Crane County, Texas (New contract as to Amoco Prod. Co.’s 50% interest in above leases dated 2-7-72. Replaces old contract dated 4-24-63. Firm term of new contract is for period of ten years beyond firm term of old contract). [592] 64-617 Gulf Oil Corp. McKnight- SW/4 SW/4 & 8/2 Crowley (below NW/4 SW/4 & S/2 a depth of NE/4 SW4 & NE/4 3,800 feet) NE/4 SW/4 & N/2 SE/4SW/4&SW/4 SE/4 SW/4 See. 10, Bik. B-21 Publie School Land Crane County, Texas (New contract as to W. H. Black, et al, 50% interest in above lease dated 2-7-72. Replaces old contract dated 9-6-56. Firm term of new contract is for period of ten years beyond firm term of old contract). 64-705 W. Ridley J. H. Edwards N/2NW/4&S/2 Wheeler Estate NE/4 Sec. 19, Blk. B-17 Public School Land Crane County, Texas (New contract as to 71.875% interest dated 2-23-72. Replaces old contract dated 4-20-64. Firm term of new contract is for period of ten years beyond firm term of old contract). 97 [593] Exhibit B“ (Attached To Residue Gas Purchase Agreement Dated As Of March 1, 1972, Between El Paso Natural Gas Company And Warren Petroleum Company, A Division Of Gulf Oil Corporation.) ReEsIpuE Gas ALLOCATION PROCEDURE The volume of ‘‘residue gas remaining’’ from the gas delivered to Seller’s gas processing plant from each lease connected thereto shall be determined by (1) multiplying the volume of such gas delivered from such lease by the applicable theoretical percent- age as shown in the following table, the result being the ‘theoretical volume of residue gas remaining“ from the gas delivered from such lease, (2) dividing the ‘‘total actual volume of residue gas remaining“ (determined in the manner hereinafter provided) from all gas delivered to said plant by the total ‘‘the- oretical volume of residue gas remaining“ from all gas delivered to said plant (the latter being the sum of the theoretical volumes for all leases from which gas is delivered to said plant) and expressing the results in percentage, and (3) multiplying the ‘‘the- oretical volume of residue gas remaining’’ from such lease by said last mentioned percentage. The total actual volume of residue gas remaining“ from all gas delivered to said plant as used herein shall mean that volume of residue gas remaining, after the ex- traction of liquefiable hydrocarbons, from all gas processed in said plant, less the volume of residue gas necessary for plant operation. Said ‘‘total actual volume of residue gas remaining“ shall be measured 98 by suitable orifice meters of standard make to be in- stalled and kept in repair by Seller at the various points where the gas is delivered to producers and to purchasers (if not measured by purchasers) and to flare. It is provided, however, that Seller shall not be required to measure deliveries [594] of small quantities of gas which would not, in Seller’s judg- ment, justify a meter installation; and the volumes of such deliveries shall he estimated by Seller in ac- cordance with methods followed generally in the nat- ural gasoline industry. The volume of residue gas available for sale from the gas delivered from each lease shall be the re- mainder obtained by subtracting the volume, deter- mined eith [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1702%3A02. Public record. Not legal advice.