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Exhibit 10.20
Contract No. 33209000
Firm Transportation Service Agreement
Rate Schedule TF-1
between
COLORADO INTERSTATE GAS COMPANY
and
PETROGLYPH ENERGY, INC.
Dated: JULY 1, 1998
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FIRM TRANSPORTATION SERVICE AGREEMENT
RATE SCHEDULE TF-1
------------------------------------------------------------------------------
The Parties identified below, in consideration of their mutual promises,
agree as follows:
1. TRANSPORTER: COLORADO INTERSTATE GAS COMPANY
2. SHIPPER: PETROGLYPH ENERGY, INC.
3. APPLICABLE TARIFF: Transporter's FERC Gas Tariff, First Revised Volume No.
1, as the same may be amended or superseded from time to time ("the
Tariff").
4. CHANGES IN RATES AND TERMS: Transporter shall have the right to propose to
the FERC changes in its rates and terms of service, and this Agreement
shall be deemed to include any changes which are made effective pursuant to
FERC Order or regulation or provisions of law, without prejudice to
Shipper's right to protest the same.
5. TRANSPORTATION SERVICE: Transportation Service at and between Primary
Point(s) of Receipt and Primary Point(s) of Delivery shall be on a firm
basis. Receipt and Delivery of quantities at Secondary Point(s) of Receipt
and/or Secondary Point(s) of Delivery shall be in accordance with the
Tariff.
6. POINTS OF RECEIPT AND DELIVERY: Shipper agrees to Tender gas for
Transportation Service, and Transporter agrees to accept Receipt Quantities
at the Primary Point(s) of Receipt identified in Exhibit "A." Transporter
agrees to provide Transportation Service and Deliver gas to Shipper (or for
Shipper's account) at the Primary Point(s) of Delivery identified in
Exhibit "A."
7. RATES AND SURCHARGES: As set forth in Exhibit "B."
8. NEGOTIATED RATE AGREEMENT: N/A
9. PEAK MONTH MDQ:
MDQ (DTH/D) EFFECTIVE DATE FROM IN-SERVICE DATE*
------------ ------------------------------------
0 In-Service Date through year 3
8,000 End of year 3 through year 4
16,000 End of year 4 through year 13
8,000 Year 14
* The "In-Service Date" of the Cucharas Lateral is defined as the first day of
the month following the date the Cucharas Lateral is completed and in service.
(a) Shipper shall have the right, prior to an anniversary date of the
In-Service Date to reduce or eliminate the increment of MDQ scheduled to go
into effect on the upcoming anniversary date. Provided, however, (1)
Shipper may do so only if it determines in good faith that it will not have
sufficient Additional Available Production (as defined in Exhibit B, Note 1
[b]) to utilize the additional MDQ specified, and (2) Shipper must give
Transporter notice whether it wishes to reduce or eliminate (and, if so,
the new level of MDQ desired) or whether it wishes to maintain the MDQ at
the scheduled level. Shipper shall provide such notice at least six months
before the effective date of the applicable MDQ increment shown above.
Within 30 days of Transporter's receipt of such notification, Transporter
shall notify Shipper, as provided in subparagraph (b) below, whether the
MDQ level desired by Shipper can be accommodated without the construction
of additional facilities.
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(b) If, in order to accommodate any portion of the MDQ or any change in MDQ,
Transporter is required to construct new facilities, Transporter's notice
to Shipper provided for in subparagraph (a) above shall include such
information and Transporter's estimate of the date when such additional
facilities will be ready for service. Further, should Transporter determine
that it is not economic to construct such facilities, such notice shall so
state, notwithstanding any other provision of this Agreement.
(1) The portion of the MDQ or MDQ change related to such required
additional facilities shall not become effective until such additional
facilities, if any, are in service; and
(2) Should Transporter determine that it is not economic to construct such
facilities, then such portion of the MDQ or MDQ change shall not become
effective. In such event, Shipper shall have the options: (A) to
increase the MDQ and/or the timing of schedule MDQ increases to a level
which makes construction of additional facilities economic for
Transporter; (B) postponing the MDQ increase or change; and/or (C)
utilizing the Interruptible and/or Authorized Overrun services [as
described in Exhibit B, Note 1(c)].
(c) Provided capacity is available without construction of additional
facilities: (1) upon prior written notice to Transporter, Shipper may
commence the term for the MDQ increments shown above at any time prior to
the dates shows, and (2) Shipper shall have the right at any time during
the term of this Agreement and following any relinquishment of any capacity
by Shipper under this Agreement to regain such relinquished capacity.
(d) Transporter shall have the right to request Shipper to forego some or all
the MDQ which has not yet become effective under the Above table.
Transporter may make such request(s) at any such time(s) as Transporter
receives other requests for service which Transporter determines may not be
fully satisfied except by the use of some or all of the capacity covered by
this Agreement. In the event that Transporter so requests Shipper to forego
some of all of such MDQ, Shipper may agree to amend this Agreement to
reduce the MDQ which is not yet effective as necessary to allow Transporter
to provide capacity to other shippers. Shipper is under no obligation to
agree to Transporter's request. However, to the extent that Transporter
requests Shipper to relinquish some ora part of such MDQ, and Shipper does
not agree to do so, then (except as provided in subparagraph (b) above)
from the effective date of the request for service by other shipper(s) for
the capacity which Transporter is not able to accommodate due to this
Agreement, the portion of the MDQ under this Agreement that has not yet
become effective and which Shipper has declined to reduce shall then become
effective and the reservation charges associated therewith shall thereafter
become applicable.
10. TERMS OF AGREEMENT: Unless terminated earlier in accordance with the terms
of this Agreement, the term of this Agreement shall
commence on the In-Service Date of the Cucharas Lateral
and shall remain in effect for 14 years thereafter.
11. NOTICES, STATEMENTS, AND BILLS:
TO SHIPPER:
INVOICES FOR TRANSPORTATION:
Petroglyph Energy, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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ALL NOTICES:
Petroglyph Energy, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
TO TRANSPORTER:
See Payments, Notices, Nominations, and Points of Contact sheets
in the Tariff.
12. SUPERSEDES AND CANCELS PRIOR AGREEMENT: N/A
13. ADJUSTMENT TO RATE SCHEDULE TF-1 AND/OR GENERAL TERMS AND CONDITIONS: Any
conveyance or other assignment by Shipper, its successors or assigns of an
interest in all or substantially all the leases or other gas rights
underlying Available Production shall include an assignment of this
Agreement to the extent of the interests conveyed. Shipper's rights and
obligations under this Agreement shall not otherwise be assignable without
Transporter's written consent, which consent shall not be unreasonably
withheld. Shipper agrees to execute an instrument suitable for recording in
the real property records of Huerfano and Las Animas counties reflecting
this provision.
14. INCORPORATION BY REFERENCE: This Agreement in all respects shall be subject
to the provisions of Rate Schedule TF-1 and to the applicable provisions of
the General Terms and Conditions of the Tariff as filed with, and made
effective by, the FERC as same may change from time to time (and as they
may be amended pursuant to Section 13 of the Agreement).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
TRANSPORTER: SHIPPER:
COLORADO INTERSTATE GAS COMPANY PETROGLYPH ENERGY, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇.▇. ▇▇▇▇▇
------------------------------- -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
▇.▇. ▇▇▇▇▇
Approved -----------------------------------
for Execution (Print or type name)
By [illegible] Executive Vice President
----------------- ----------------------------------
Legal Dept. (Print or type title)
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EXHIBIT "A"
Firm Transportation Service Agreement
between
COLORADO INTERSTATE GAS COMPANY
and
PETROGLYPH ENERGY, INC.
Dated: JULY 1, 1998
1. Shipper's Maximum Delivery Quantity ("MDQ"): See Paragraph 9.
PRIMARY POINT(S) OF MAXIMUM RECEIPT
PRIMARY POINT(S) OF RECEIPT RECEIPT QUANTITY PRESSURE
(NOTE 1) (DTH PER DAY) (NOTE 2) P.S.I.G.
-------------------------------------- ---------------------- --------------------
New meter station to be constructed by Same as MDQ At a pressure
Transporter in the north half of sufficient to enter
Township 29S, Range 67W, the Cucharas Lateral
Huerfano County, CO (up to the MAOP of
the Cucharas
Lateral)
PRIMARY POINT(S) OF MAXIMUM RECEIPT
PRIMARY POINT(S) OF RECEIPT RECEIPT QUANTITY PRESSURE
(NOTE 1) (DTH PER DAY) P.S.I.G.
-------------------------------------- ---------------------- --------------------
▇▇▇▇▇ (Note 3) Same as MDQ 650
NOTES: (1) Information regarding Point(s) of Receipt and Point(s) of Delivery,
including legal descriptions, measuring parties, and interconnecting
parties, shall be posted on Transporter's electronic bulletin board.
Transporter shall update such information from time to time to
include additions, deletions, or any other revisions deemed
appropriate by Transporter.
(2) Each Point of Receipt Quantity may be increased by an amount equal to
Transporter's Fuel Reimbursement percentage. Shipper shall be
responsible for providing such Fuel Reimbursement at each Point of
Receipt on a pro rata basis based on the quantities received on any
Day at a Point of Receipt divided by the total quantity Delivered at
all Point(s) of Delivery under this Transportation Service Agreement.
(3) Shipper shall not be restricted from designating another delivery
point(s) as Primary Delivery Point(s) should another point(s) become
available during the term of this Agreement as specified in the
Tariff. However, unless otherwise agreed, the rate for transportation
service to another Point(s) of Delivery shall be Transporter's
maximum rate.
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EXHIBIT "B"
Firm Transportation Service Agreement
between
COLORADO INTERSTATE GAS COMPANY
and
PETROGLYPH ENERGY, INC.
Dated: JULY 1, 1998
PRIMARY PRIMARY R1
POINT(S) OF POINT(S) OF RESERVATION COMMODITY FUEL
RECEIPT DELIVERY RATE RATE TERM OF RATE REIMBURSEMENT SURCHARGES
-------------- ----------- ----------- --------- --------------- ------------- ----------
New meter ▇▇▇▇▇ (Note 1) (Note 1) 14 years from (Note 2) (Note 3)
station to be In-Service Date
constructed by of Cucharas
Transporter in Lateral
the north half
of Township
29S, Range
67W,
Huerfano
County, CO
PRIMARY PRIMARY R1
POINT(S) OF POINT(S) OF RESERVATION COMMODITY FUEL
RECEIPT DELIVERY RATE RATE TERM OF RATE REIMBURSEMENT SURCHARGES
-------------- ------------- ----------- --------- --------------- ------------- ----------
New meter Barbwire, Big (Note 1) (Note 1) 14 years from (Note 2) (Note 3)
station to be Blue, In-Service Date
constructed by Cattleguard, of Cucharas
Transporter in ▇▇▇▇▇▇▇ Lateral
the north half County,
of Township Tannery, and
29S, Range Tumbleweed
67W,
Huerfano
County, CO
All All (Note 4) (Note 4) 14 years from (Note 2) (Note 3)
In-Service Date
of Cucharas
Lateral
NOTES: (1) (a) Except as provided in subparagraph (b) below, the rate ("Fixed
Rate") for all gas transported under this Agreement (up to the
volume of the MDQ) shall be $.2877 per Dth on a 100 percent
load factor basis plus fuel, L&U, GRI ( if applicable), and all
other surcharges applicable to Transporter's Rate Schedule
TF-1. Should Transporter's Maximum Rate as defined below, when
computed on a 100% load factor basis exceed $0.2877 per Dth,
except as provided in subparagraph (b) below, the Fixed Rate
shall nevertheless be applicable. Should Transporter's Maximum
Rate or rate components be set at a level such that Transporter
is unable to collect the Fixed Rate, then Shipper
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agrees to an increase in the MDQ or to other lawful
arrangements, such that the Parties are placed in the same
economic position as if Transporter had collected the Fixed
Rate.
(b) Transporter and Shipper agree that no reserve dedication, well
dedication, or acreage dedication exists. However, Transporter
is agreeing to the Fixed Rate in recognition of Shipper's
agreement to tender to Transporter for transportation under
this Agreement:
(1) Under that Firm Transportation Service Agreement between
Transporter and Shipper (CIG Contract No. 33206000), all
Available Production (other than Local Consumption) up to
the MDQ in Contract No. 33206000 as well as only Available
Production; and
(2) Under this Agreement, all additional Available Production
(other than Local Consumption) up the MDQ under this
Agreement.
For any period of time in which Shipper fails to satisfy both
conditions (1) and (2) above (as well as the additional condition set
forth in subparagraph (c) below, if applicable), then, at Transporter's
option, the rate for service under this Agreement shall be the
then-effective maximum reservation and commodity rates for firm
transportation service under Transporter's Rate Schedule TF-1, plus
fuel, L&U, GRI (if applicable), ACA and all other surcharges applicable
to Transporter's Rate Schedule TF-1 ("Maximum Rate"). In addition, the
rate for any volumes transported under this Agreement which do not
qualify as Available Production shall, at Transporter's option, either
be the Fixed Rate or the Maximum Rate. "Available Production" means the
monthly average daily volume of gas produced from leases and lease
positions owned, hereafter acquired or controlled by operation, by
Shipper or a Shipper affiliate in the geographic area described on
Exhibit "C" hereto, excluding lease use gas, line loss and gas used as
gathering fuel. "Additional Available Production" means the volume of
Available Production up to 32,000 Dth/day (other than the volume of
Available Production up to the MDQ under Contract No. 33206000). "Local
Consumption" means a volume of Available Production which Shipper
delivers from its gathering system for local consumption. Should there
exist Local Consumption, the 100% load factor rate for the first
volumes transported by Transporter up to a volume equal to such Local
Consumption shall be $.3122/Dth. Notwithstanding anything to the
contrary in this Agreement, Shipper shall have the full and complete
right to determine when and to what extent such leases and lease
positions will be developed and gas produced therefrom.
(c) Should Additional Available Production exceed the specified
MDQ level at any time (up to that volume of Additional
Available Production which causes total Available
Production to equal 32,000 Dth/day), as an additional
condition to Shipper's right to receive the Fixed Rate,
Shipper must either: (1) agree to an increase in the MDQ to
accommodate such excess volume; or (2) tender such excess
volume to Transporter for transportation as Interruptible
volumes or as Authorized Overrun volumes. The rate for such
Interruptible and Authorized Overrun services shall be
$0.2877/Dth, plus fuel, L&U, GRI, if applicable, ACA and
all other surcharges applicable to Transporter's Rate
Schedules TI-1 and TF-1.
(2) Fuel Reimbursement shall be as stated on Transporter's Schedule of
Surcharges and Fees in the Tariff, as they may be changed from time
to time, unless otherwise agreed between the Parties.
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EXHIBIT "C"
Firm Transportation Service Agreement
between
COLORADO INTERSTATE GAS COMPANY
and
PETROGLYPH ENERGY, INC.
Dated: JULY 1, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ of Leases
▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇
T27S, R68W
T28S, R67W
T29S, R67W
T30S, R67W
T28S, R68W
T29S, R68W
T30S R68W
All in Huerfano and Las Animas Counties, Colorado
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