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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report
February 23, 2000
NUEVO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
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DELAWARE 0-10537 76-0304436
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or organization) IdIdentification Number)
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1021 Main, Suite 2100
HOUSTON, TEXAS 77002
(Address of principal executive offices)
(713) 652-0706
(Registrant's telephone number, including are code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not applicable
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
Not applicable
ITEM 5. OTHER EVENTS
Nuevo Energy Company announced that it entered into a contract to sell its
California crude oil to Tosco Corporation for 15 years at prices tied to NYMEX
crude oil in the press release attached as Exhibit 99.1 (see Item 7).
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS
Not applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
10. Material Contracts
10.1 Crude Oil Purchase Agreement dated February 4, 2000 between
Nuevo Energy Company and Tosco Corporation.
EX-99.1 Press Release dated February 7, 2000
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Not applicable
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NUEVO ENERGY COMPANY
February 23, 2000 By: /s/ Robert M. King
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Robert M. King
Senior Vice President & Chief
Financial Officer
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND CONSTRUCTION
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1.1 Definitions.............................................................................................................. 1
1.2 Construction............................................................................................................. 4
ARTICLE II QUANTITY
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2.1 Delivery Amount.......................................................................................................... 4
2.2 Disclaimer of Implied Warranties......................................................................................... 9
ARTICLE III PRICING/TAXES
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3.1 Delivery Amount Price.................................................................................................... 9
3.2 Adjustments.............................................................................................................. 9
3.3 Taxes.................................................................................................................... 12
ARTICLE IV PAYMENT
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4.1 General.................................................................................................................. 13
4.2 Interest................................................................................................................. 13
4.3 Accounting Address....................................................................................................... 14
ARTICLE V TITLE WARRANTIES AND TRANSFER
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5.1 General.................................................................................................................. 14
5.2 Specific Fields.......................................................................................................... 14
ARTICLE VI MEASUREMENT
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6.1 Measurement.............................................................................................................. 15
6.2 Meters and Tests......................................................................................................... 15
ARTICLE VII TERM AND TERMINATION
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7.1 Term..................................................................................................................... 15
7.2 Suspension Rights........................................................................................................ 15
7.3 Termination Rights....................................................................................................... 16
ARTICLE VIII REPRESENTATIONS, WARRANTIES AND OTHER COVENANTS
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8.1 Nuevo Representations and Warranties..................................................................................... 17
8.2 Tosco Representations and Warranties..................................................................................... 17
8.3 Covenants................................................................................................................ 18
ARTICLE IX FINANCIAL MATTERS
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9.1 Credit Requirements...................................................................................................... 19
9.2 Financial Responsibility................................................................................................. 19
ARTICLE X DISPUTES
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10.1 Pricing Disputes......................................................................................................... 20
10.2 Other Disputes........................................................................................................... 21
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ARTICLE XI MISCELLANEOUS
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11.1 Notices................................................................................................................. 22
11.2 Confidentiality......................................................................................................... 22
11.3 Assignment.............................................................................................................. 23
11.4 Force Majeure........................................................................................................... 23
11.5 Waiver.................................................................................................................. 23
11.6 Entire Agreement........................................................................................................ 23
11.7 Control................................................................................................................. 24
11.8 Severability............................................................................................................ 24
11.9 Audit................................................................................................................... 24
11.10 Safety.................................................................................................................. 25
11.11 Business Practices...................................................................................................... 25
11.12 Governing Law........................................................................................................... 26
11.13 Entirety of Agreement and Amendments.................................................................................... 26
11.14 Headings................................................................................................................ 26
11.15 General Provisions...................................................................................................... 26
11.16 Further Assurances...................................................................................................... 26
11.17 Time and Performance of the Essence..................................................................................... 26
11.18 No Third Party Beneficiaries............................................................................................ 26
11.19 Hazards and Risks....................................................................................................... 26
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EXHIBIT 10.1
CRUDE OIL PURCHASE AGREEMENT
This Crude Oil Purchase Agreement (this "Agreement") dated as of January 1,
2000, is entered into between Nuevo Energy Company ("Nuevo") and Tosco Corp.
d/b/a Tosco Refining Co. ("Tosco"). Nuevo and Tosco are sometimes collectively
referred to herein as the "Parties" or individually as a "Party."
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.1 Definitions. When used in the Agreement, the terms listed below and
any grammatical variation thereof have the following meanings:
"API" means the American Petroleum Institute.
"Arbitrator" shall have the meaning set forth in Section 10.1(a).
"ASME" means the American Society of Mechanical Engineers.
"ASTM" means the American Society of Testing Materials.
"Average Delivery Amount" shall have the meaning set forth in Section
2.1(c).
"Barrel" means 42 U.S. gallons of 231 cubic inches per gallon
corrected to 60 degrees Fahrenheit.
"BS&W" means basic sediment and water.
"Business Day" shall mean any calendar day other than a Saturday,
Sunday or other calendar day on which banks are authorized to be closed in
Texas.
"Committed Volumes" shall have the meaning given that term in Section
11.6(a).
"Daily Crude Index Price Average" means, for each Day during a
Delivery Month, which Day has been designated as an effective date for
prices published in Platt's, the amount, in dollars per barrel, equal to
the midpoint of the price spread listed under the heading of "ANS(Cal)," in
the table entitled "U.S." in the section entitled "Crude Price Assessments"
in the issue of Platt's designating such Day as an effective date.
"Daily Product Index Price Average" means, for each Day during a
Delivery Month, which Day has been designated as an effective date for
prices published in Platt's, the amount, in dollars per Barrel, equal to
the average of the following:
(i) the midpoint of the price spread (in cents per gallon) listed
under the heading of "Unl 87,"
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(ii) the midpoint of the price spread (in cents per gallon)
listed under the heading of "CARB Unl," and
(iii) the midpoint of the price spread (in cents per gallon)
listed under the heading of "CARB Diesel,"
in each case as listed in the column entitled "San Francisco(b)" in the
table entitled "West Coast Pipeline" in the section entitled "Product Price
Assessments" in the issue of Platt's designating such Day as an effective
date (or such replacement component as the Parties may mutually agree if
any such component is no longer published in Platt's).
"Day" means any complete 24 hour period during the term of this
Agreement, commencing at 7:00 a.m. Pacific Time on a given calendar day and
ending at 6:59 a.m Pacific Time on the succeeding calendar day. The
reference date for a given Day shall be the calendar day on which such Day
begins.
"Delivery Amount" shall have the meaning set forth in Section 2.1(a).
"Delivery Amount Price" shall have the meaning set forth in Section
3.1(a).
"Delivery Month" means each complete monthly period during the term of
this Agreement, commencing at 7:00 a.m. Pacific Time on the first calendar
day of a given calendar month and ending at 6:59 a.m. Pacific Time on the
first calendar day of the following calendar month. The reference date for
a given Delivery Month shall be the calendar month in which such Delivery
Month begins.
"Estimated Amount" shall have the meaning set forth in Section 2.1(b).
"Event of Default" shall mean any of the following:
(i) failure to make any payment within five (5) Business Days
of when due under this Agreement;
(ii) failure by Nuevo to deliver the Delivery Amount for ten
(10) consecutive calendar days beyond the time that such performance
is due where such failure is not due to Force Majeure;
(iii) failure by Tosco to provide financial assurance pursuant
to Section 9.1 of this Agreement;
(iv) a material breach by a Party of any other covenant or
provision of this Agreement by such Party;
(v) initiation of proceedings (voluntarily or involuntarily) by
or with respect to a Party under the bankruptcy or insolvency laws of
any jurisdiction, which proceedings are not dismissed within sixty
(60) calendar days after filing; written admission of inability to pay
debts generally as they come due; the making of an assignment for the
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benefit of creditors; an application of reappointment of a receiver,
custodian or trustee; or the passing of a resolution for winding up or
liquidation by or on behalf of a Party; or
(vi) any representation or warranty made in this Agreement by a
Party being false or misleading in any material respect at the time it
was made or deemed to have been made.
"Force Majeure" means any war, riots, insurrections, fire, explosions,
sabotage, strikes, and other labor or industrial disturbances, acts of God
or the elements, governmental laws or regulations, disruption or breakdown
of production or transportation facilities, delays by unaffiliated pipeline
carriers in receiving and delivering Sales Volumes tendered, or any other
event reasonably beyond the control of a Party claiming such Force Majeure,
but does not include mere economic loss or hardship to such Party or the
shut down of facilities that are no longer considered economic to operate.
"Major Poster" means any of Chevron Products Company, Exxon Mobil
Corporation, Tosco Refining Company (as published under its Union 76
posting), and Equiva Trading Company, or in each case such successor
thereto or affiliate thereof or such joint venture with such company or its
affiliate that provides crude oil postings.
"Monthly Crack Slider Adjustment" means, for each Delivery Month, the
Delivery Amount Price adjustment corresponding to the range in which the
Refinery Crack Spread Margin for such Delivery Month falls on the table set
forth in Exhibit 5.
"Monthly Crude Index Price Average" means, for each Delivery Month,
the average of all Daily Crude Index Price Averages during such Delivery
Month.
"Monthly Product Index Price Average" means, for each Delivery Month,
the average of all Daily Product Index Price Averages during such Delivery
Month.
"New Field Pre-Agreement Period" shall have the meaning set forth in
Section 2.1(d).
"New Fields" shall have the meaning set forth in Section 2.1(d).
"New Volume Pre-Agreement Period" shall have the meaning set forth in
Section 2.1(e).
"New Volumes" shall have the meaning set forth in Section 2.1(e).
"NYMEX Price" means, for a given Delivery Month, the average of the
daily settlement prices for the current month contract on the New York
Mercantile Exchange for light sweet crude oil during the calendar month for
which such Delivery Month is referenced. For example, the NYMEX Price for
Delivery Amounts delivered in January shall be the average of the daily
settlement contracts on the New York Mercantile Exchange for February
futures contracts (until such time as settlement prices cease to be
published for February, and thereafter for March futures contracts) for
light sweet crude oil as published from January 1 through January 31.
"Platt's" means Platt's Oilgram Price Report, as currently published
by McGraw-Hill Companies, or such replacement publication as the Parties
may agree to in writing if such
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publication ceases to be published or such publication ceases to provide
the information to be obtained therefrom pursuant to this Agreement.
"Posting Group" shall mean any one of the five groups of Subject
Fields having the same designated "Posting Group" in Exhibit 4, which
Posting Group shall have the name so designated in Exhibit 4.
"Refinery Crack Spread Margin" means, for each Delivery Month, the
difference obtained by subtracting the Monthly Crude Index Price Average
for such Delivery Month from the Monthly Product Index Price Average for
such Delivery Month.
"Rules shall have the meaning set forth in Section 10.1(a).
"Sales Volumes" shall mean hydrocarbons in a liquid state under
ordinary production and transportation operating conditions (e.g. not
including natural gas or liquefied petroleum gas) produced and saved and
not combined with other hydrocarbons except when such combining occurs in
connection with ordinary or customary production, gathering or
transportation operations.
"Set Aside Volume" shall have the meaning set forth in Section 2.1(c).
"Subject Fields" means, collectively (i) the fields and/or leases
described in Exhibit 1 to this Agreement, and (ii) the fields and leases
added to this Agreement pursuant to Section 2.1(d).
"Year" means a period of 12 consecutive calendar months according to
the Gregorian calendar, beginning on the first calendar day of the first
such calendar month and ending on the last calendar day of the twelfth such
calendar month.
1.2 Construction. This agreement has been prepared jointly by the Parties
with the advice and participation of counsel, and shall not be interpreted
against one Party in favor of the other.
ARTICLE II
QUANTITY
2.1 Delivery Amount. (a) Subject to the terms and conditions hereof and
subject to Nuevo's rights under Section 2.1(c), Nuevo agrees to sell and deliver
to Tosco, and Tosco agrees to receive and purchase from Nuevo, one hundred
percent (100%) of Nuevo's owned and controlled interest in Sales Volumes
produced from the Subject Fields, other than the Committed Volumes, which
production is currently estimated to be 48,000 Barrels per calendar day (the
"Delivery Amount").
(b) Not later than ten (10) calendar days prior to the commencement of
each Delivery Month, Nuevo will notify Tosco of its then current good
faith, but non-binding, estimate of the Delivery Amount for such Delivery
Month and the Delivery Month immediately thereafter, which notice shall
generally be in the form of Exhibit 2 attached hereto (the "Estimated
Amount").
(c) Set Aside Volume. Notwithstanding Section 2.1(a), Nuevo shall be
entitled, in accordance with the procedures set forth below, to retain a
portion of the Delivery Amount and exclude same from this Agreement (the
"Set Aside Volume") for the period of time such Set Aside Volume is in
effect as permitted by this Agreement. Upon agreement of the Parties
pursuant to
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Section 2.1(c)(ii), or upon delivery of the Set Aside Volume Election
pursuant to Section 2.1(c)(iii), such Set Aside Volume shall be excluded
from this Agreement and Tosco shall have no further rights under this
Agreement with respect thereto, but such exclusion shall be only for the
period of time such Set Aside Volume is in effect as permitted by this
Agreement. The procedures for, and restrictions on, retaining a Set Aside
Volume and excluding same from this Agreement are as follows:
(i) Nuevo shall have the right to notify Tosco in writing no
later than June 1 of any given calendar Year if it desires to have any
Set Aside Volume (a "Preliminary Set Aside Notice"). Each such
Preliminary Set Aside Notice shall set forth (A) the percentage (no
greater than 10%) of the Delivery Amount that Nuevo desires to retain
(the "Election Percentage"), (B) a calculation estimating the amount,
in Barrels per Day, that such percentage is anticipated to represent
(calculated in accordance with Section 2.1(c)(iv) and (v)), (C) the
Subject Fields from which such Set Aside Volume will be produced, and
(D) the Delivery Months that will be subject to such Set Aside Volume.
(ii) Upon Tosco's receipt of a Preliminary Set Aside Notice, the
Parties shall endeavor in good faith to negotiate the terms and
conditions upon which Tosco would purchase such Set Aside Volume.
(iii) With respect to any given calendar Year in which Nuevo
provides Tosco with a Preliminary Set Aside Notice, if the Parties
fail to agree upon the terms and conditions upon which Tosco will
purchase such Set Aside Volume pursuant to Section 2.1(c)(ii) on or
before June 30 of such Year, then Nuevo shall have the right, on or
before October 1 of such Year, to notify Tosco in writing of its
intent to sell such Set Aside Volume to a third party (a "Set Aside
Volume Election"). The Set Aside Volume Election may only be made as
to the same Election Percentage, Subject Fields, and Delivery Months
as set forth in the Preliminary Set Aside Notice, but shall contain
any updated estimated amount, in Barrels per Day, that such Election
Percentage is anticipated to represent (calculated in accordance with
Section 2.1(c)(iv) and (v)).
(iv) In estimating the Set Aside Volume, in Barrels per Day, for
purposes of the Preliminary Set Aside Notice and the Set Aside Volume
Election, Nuevo shall multiply the Election Percentage in connection
therewith times the average Daily Delivery Amount for the immediately
preceding three (3) Delivery Months for which such information is
available, rounding such product to the nearest 1,000 Barrels per Day.
The actual Set Aside Volume, in Barrels per Day, for a given delivery
Year shall equal the Election Percentage elected for such delivery
Year multiplied by the Average Delivery Amount for the Year
immediately preceding such delivery Year rounded to the nearest 1,000
Barrels per Day. For purposes of this Section, the term "Average
Delivery Amount" shall, for a given Year, mean an amount calculated as
follows:
(A) The Parties shall calculate an average of the Daily
Delivery Amounts for each of the Delivery Months of June through
November of such Year.
(B) The Parties shall determine the four Delivery Months of
such six Delivery Months that have the highest average Daily
Delivery Amount calculated pursuant to clause (A).
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(C) The Parties shall calculate the average Daily Delivery
Amount of all Days during the four Delivery Months determined
pursuant to clause (B).
(D) The average Daily Delivery Amount calculated pursuant to
clause (C) shall be the "Average Delivery Amount" for such Year.
In addition, in making a calculation for a Set Aside Volume, no
deduction from the gross amount of average Daily Delivery Amount shall
be made for any previous Set Aside Volume.
(v) In calculating the average Daily Delivery Amount for a given
Delivery Month for purposes of Section 2.1(c)(iv), the Parties (A)
shall not include Delivery Amounts attributable to Subject Fields or
interests in Sales Volumes, which Subject Fields or interests in Sales
Volumes were sold by Nuevo at any time during the period commencing as
of the first Day from which such average is being calculated and
ending on the last Day prior to the commencement of the relevant
delivery Year, and (B) shall include an amount, in Barrels per Day,
normalized throughout the period over which such average is being
calculated, equal to the average Daily Delivery Amounts attributable
to Subject Fields or interests in Sales Volumes, which Subject Fields
or interests in Sales Volumes were acquired by Nuevo at any time
during the period commencing as of the first Day from which such
average is being calculated and ending on the last Day prior to the
commencement of the relevant delivery Year.
(vi) Notwithstanding the foregoing, the Set Aside Volume may not
include amounts of Sales Volumes from Subject Fields belonging to the
Posting Group referred to as Kern River in Exhibit 4 in excess of 25%
of the average Daily Delivery Amount (calculated in accordance with
Section 2.1(c)(v) and with respect to the periods required pursuant to
Section 2.1(c)(iv)) attributable to all Subject Fields belonging to
such Posting Group.
(d) Additional Subject Fields. To the extent not otherwise restricted
or prohibited by agreements existing or effective at the time of such
acquisition or development, and in all cases subject to such agreements,
all fields and leases in the State of California, or located in California
state waters or Federal waters offshore of the State of California, that
Nuevo acquires or develops during the term of this Agreement shall
constitute Subject Fields effective as of the date of such acquisition or
development. The pricing and delivery location for Delivery Amounts
produced from such additional fields and leases shall be as mutually agreed
by the Parties or as otherwise determined pursuant hereto. For purposes of
the foregoing sentence, with respect to fields and leases located within
the geographic boundaries of existing Subject Fields or that are otherwise
considered by the applicable regulatory authority to be a part of a field
included within a current Subject Field, and provided that the Sales
Volumes produced from such fields and leases is of Substantially the Same
Quality as that produced from such Subject Field, then the Parties shall be
deemed to have agreed that the pricing and delivery location for Delivery
Amounts produced from such fields and leases shall be the same as that for
such Subject Field. For purposes of this Agreement, Sales Volumes shall
have "Substantially the Same Quality" as other Sales Volumes if its sulphur
content does not vary from the other by more than 1% by weight and if its
gravity does not vary from the other by more than 5 degrees API. If the
Parties fail to agree, and are not otherwise deemed to have agreed, on the
pricing and/or delivery location for Delivery Amounts produced from such
fields and leases on or before the 30th calendar day
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following the acquisition or development of such fields or leases by Nuevo,
then the Parties shall refer the determination of such pricing and delivery
location to arbitration pursuant to Section 10.1, and upon such
determination, such pricing and/or delivery location shall thenceforth
apply to such fields and leases. During the period, if any, commencing with
the date such fields and leases constitute Subject Fields (the "New
Fields") and ending upon the last Day of the last Delivery Month ending
prior to the agreement of the Parties (or the decision of the Arbitrator,
as applicable) as to pricing and/or delivery location, as applicable (the
"New Field Pre-Agreement Period"), the Parties shall use, for purposes of
temporary payment for and delivery of Delivery Amounts from such New
Fields, the pricing and/or delivery location, as applicable, set forth
below:
(i) If the delivery location has not been so agreed or
determined by arbitration, the delivery location during the New Field
Pre-Agreement Period shall be the location at which Delivery Amounts
produced from such New Field pass from equipment or locations owned or
controlled by Nuevo, or owned or controlled by a party designated to
make delivery on behalf of Nuevo.
(ii) If the pricing has not been so agreed or determined by
arbitration, the pricing during the New Field Pre-Agreement Period
shall be determined as if such New Field belonged to the Posting Group
whose "Specified Gravity" under Exhibit 3 is closest to the average
gravity of the Delivery Amounts then being produced from such Subject
Field (and if two such Posting Groups have Specified Gravities that
are equally close to such average gravity, then the Posting Group with
the higher Specified Gravity shall apply for purposes of this clause).
From and after the termination of such New Field Pre-Agreement Period, the
pricing and delivery location agreed by the Parties (or selected by the
Arbitrator, as applicable), shall thenceforth apply subject to the terms of
this Agreement. If the pricing provisions applied during the New Field
Pre-Agreement Period differ from those following the New Field Pre-
Agreement Period as a result of the mutual agreement of the Parties or the
decision of the Arbitrator, in each case pursuant to this Section, then the
Parties shall account for such difference in pricing in the next invoice
from Tosco pursuant to this Agreement, which accounting shall be in the
form of a credit or debit and which will include interest from the date
such New Field Pre-Agreement Period prices were paid until the date of such
invoice, calculated at the interest rate provided in Section 4.2. If any
fields or leases acquired or developed by Nuevo would constitute a Subject
Field pursuant to this Section 2.1(d) but for the existence of restrictions
or prohibitions contained in agreements existing or effective at the time
of such acquisition, then upon the termination of such restrictions,
prohibitions or agreements, such fields and leases shall then be subject to
this Section as if the date of such termination was the date of
acquisition.
(e) Additional Interests in Sales Volumes. To the extent not
otherwise committed, restricted or prohibited by agreements existing or
effective at the time of such acquisition, and in all cases subject to such
agreements, all interests in Sales Volumes production in the State of
California, or in California state waters or Federal waters offshore of the
State of California, that Nuevo acquires during the term of this Agreement
shall be included in the Delivery Amount effective as of the date of such
acquisition. The pricing and delivery location for such Delivery Amounts
shall be mutually agreed by the Parties or as otherwise determined pursuant
hereto. For purposes of the foregoing sentence, with respect to additional
interests in Sales Volumes
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produced from a Subject Field, which Sales Volumes are of Substantially the
Same Quality as that produced from such Subject Field, the Parties shall be
deemed to have agreed that the pricing and delivery location for such
Delivery Amounts shall be the same as that for such Subject Field. If the
Parties fail to agree, and are not otherwise deemed to have agreed, on the
pricing and delivery location for such additional Delivery Amounts on or
before the 30th calendar day following the acquisition of such interest in
Sales Volumes by Nuevo, then the Parties shall refer the determination of
such pricing and delivery location to arbitration pursuant to Section 10.1,
and upon such determination, such pricing and/or delivery location shall
thenceforth apply to such Delivery Amounts. During the period, if any,
commencing with the date such interest in Sales Volumes are included in the
Delivery Amount (the "New Volumes") and ending upon the last Day of the
last Delivery Month ending prior to the agreement of the Parties (or the
decision of the Arbitrator, as applicable) as to pricing and/or delivery
location, as applicable (the "New Volume Pre-Agreement Period"), the
Parties shall use, for purposes of temporary payment for and delivery of
such Delivery Amounts, the pricing and/or delivery location, as applicable,
set forth below:
(i) If the delivery location has not been so agreed or
determined by arbitration, the delivery location during the New Volume
Pre-Agreement Period shall be the location at which such Delivery
Amounts pass from equipment or locations owned or controlled by Nuevo,
or owned or controlled by a party designated to make delivery on
behalf of Nuevo.
(ii) If the pricing has not been so agreed or determined by
arbitration, the pricing during the New Volume Pre-Agreement Period
shall be determined as if such Delivery Amounts were produced from a
Subject Field belonging to the Posting Group whose "Specified Gravity"
under Exhibit 3 is closest to the average gravity of such Delivery
Amounts (and if two such Posting Groups have Specified Gravities that
are equally close to such average gravity, then the Posting Group with
the higher Specified Gravity shall apply for purposes of this clause).
From and after the termination of such New Volume Pre-Agreement Period, the
pricing and delivery location agreed by the Parties (or selected by the
Arbitrator, as applicable), shall thenceforth apply subject to the terms of
this Agreement. If the pricing provisions applied during the New Volume
Pre-Agreement Period differ from those following the New Volume Pre-
Agreement Period as a result of the mutual agreement of the Parties or the
decision of the Arbitrator, in each case pursuant to this Section, then the
Parties shall account for such difference in pricing in the next invoice
from Tosco pursuant to this Agreement, which accounting shall be in the
form of a credit or debit and which will include interest from the date
such New Volume Pre-Agreement Period prices were paid until the date of
such invoice, calculated at the interest rate provided in Section 4.2. If
any interest in Sales Volumes acquired by Nuevo would be included in the
Delivery Amount pursuant to this Section 2.2(e) but for the existence of
commitments, restrictions or prohibitions contained in agreements existing
or effective at the time of such acquisition, then upon the termination of
such commitments, restrictions, prohibitions or agreements, such interests
in Sales Volumes shall then be subject to this Section as if the date of
such termination was the date of acquisition.
(f) Quality. The Delivery Amount delivered hereunder shall be
merchantable, meeting the requirements of the approved tariff of the first
common carrier pipeline involved.
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2.2 Disclaimer of Implied Warranties. Nuevo and Tosco each acknowledges
that it has entered into this Agreement based solely on the express
representations, warranties, covenants and agreements set forth herein and,
subject to the express representations, warranties, covenants and agreements set
forth herein, Tosco accepts Sales Volumes delivered hereunder "as is." Except as
otherwise expressly provided in this Agreement, Tosco expressly negates, as to
the Delivery Amounts, any other representation, warranty, covenant or agreement,
written or oral, express or implied, including without limitation, any
representation or warranty with respect to (a) conformity to models or samples,
(b) merchantability, or (c) fitness for a particular purpose.
ARTICLE III
PRICING/TAXES
3.1 Delivery Amount Price. (a) Basic Calculation. The price to be paid by
Tosco for each Barrel of the Delivery Amount produced from a given Subject Field
during a given Delivery Month (each, a "Delivery Amount Price") shall, subject
to Section 3.2(a) and (b), equal (A) the NYMEX Price for such Delivery Month,
multiplied by (B) the percentage set forth opposite the Posting Group for such
Subject Field set forth in Exhibit 3.
(b) Uniform Deliveries. In computing the Delivery Amount Price for the
Delivery Amount hereunder for a given Delivery Month, it shall be assumed
that such Delivery Amount was delivered in equal daily quantities during
such Delivery Month.
(c) Truck Receipts. Subject to Section 3.2(a)(iv), the Delivery Amount
Price for Delivery Amount shall be unaffected by whether such Delivery
Amount is received by truck or by pipeline carrier. Tosco shall arrange for
the scheduling of trucks for receipt of Delivery Amounts that are not
delivered to a pipeline carrier.
3.2 Adjustments. (a) Delivery Amount Price. The following adjustments
shall apply to the Delivery Amount Prices:
(i) Subject Field Pricing Differential. The Delivery Amount Price
for a given Subject Field shall be adjusted by the "Subject Field
Pricing Differential" set forth in Exhibit 4 for such Subject Field.
(ii) Beta Field - Sulphur Content. The Delivery Amount Price for
the Subject Field designated as the "Beta (Edith)" in Exhibit 1 shall
be decreased by an amount equal to US$0.50 per Barrel for each full
percentage point of sulphur content in excess of 1.5% (and decreased
pro rata for partial percentage point increases). The Delivery Amount
Price for such Subject Field shall be increased by an amount equal to
US$0.50 per Barrel for each full percentage point of sulphur content
below 1.5% (and increased pro rata for partial percentage point
decreases). By way of example, the Delivery Amount Price for a
Delivery Amount from the Beta (Edith) field having a sulphur content
of (A) 3% shall be decreased by US$0.75 per Barrel, or (B) 1% shall be
increased by US$0.25 per Barrel.
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(iii) Monthly Crack Slider Adjustment. The Delivery Amount Price
for all Subject Fields during a given Delivery Month shall be adjusted
by the Monthly Crack Slider Adjustment for such Delivery Month. An
illustration of calculations for this adjustment using hypothetical
data is set forth in Exhibit 5.
(iv) Trucking Costs. For Delivery Amounts received by truck,
Tosco may deduct the actual cost of trucking from the Delivery Amount
Price payable pursuant to this Agreement with respect thereto;
provided, however, that if any such Delivery Amount could have been
delivered to a pipeline carrier and is delivered by truck at Tosco's
election, such cost of trucking shall not be deducted.
(v) Gravity Adjustment. The Delivery Amount Price for a given
Subject Field and Delivery Month shall be adjusted, upward or downward
as applicable, by the product obtained by multiplying:
(A) the average of the gravity price adjustments (in
$/barrel/degree API) published by each of the four Major Posters
for such Delivery Month for crude oil of the gravity produced
from such Subject Field, by
(B) the difference obtained by subtracting:
(x) the Specified API Gravity set forth in Exhibit 3
for the Posting Group to which such Subject Field belongs,
from
(Y) the average gravity (in degrees API) for Sales
Volumes delivered from such Subject Field for each Day
during such Delivery Month.
For purposes of Section 3.2(a)(v)(A), if greater than one but fewer
than four Major Posters have published gravity price adjustments for
such Delivery Month for crude oil produced in California, then the
Parties shall use the average of such Major Posters. If only one or
less Major Posters have so published gravity price adjustments, then
the Parties shall mutually agree upon the appropriate gravity
adjustment for purposes of Section 3.2(a)(v)(A) and failing such
agreement, the gravity adjustment shall be determined pursuant to
Section 3.2(b)(iii).
(vi) Point Pedernales. The Delivery Amount Price for Sales
Volumes produced from the Subject Field designated as Point Pedernales
in Exhibit 1 shall be adjusted for sulphur content and for location
differential in accordance with Exhibit 6.
(vii) Point Arguello Posting Group Adjustments. Nuevo shall
have the right to propose a change in the pricing under this Agreement
with respect to Sales Volumes produced from any or all Subject Fields
belonging to the Point Arguello Posting Group, to take effect
commencing upon the third (3rd) anniversary of this Agreement, by
giving written notice to Tosco of the proposed change no later than
ninety (90) calendar days prior to such third anniversary. If Nuevo
does not give such notice within such time period then it shall be
deemed to have waived its rights under this Section 3.2(a)(vii). If
Nuevo gives such notice in accordance herewith, and the Parties agree
on any such change, such change shall take effect as of such third
anniversary. If the Parties fail to
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agree upon such new pricing by thirty (30) calendar days prior to such
third anniversary, either Party may submit the issue for resolution in
accordance with Section 10.1; provided that such Party submit such
issue for resolution prior to such third anniversary.
(viii) Additional Pricing Adjustment. The Delivery Amount Price
for all Sales Volumes delivered to or for the benefit of Tosco prior
to the fourth (4th) anniversary of this Agreement (and only with
respect to such period) shall be increased by $.05 per Barrel.
(b) Periodic Pricing Adjustment. The Parties acknowledge and agree
that the pricing formulas set forth in this Agreement utilize appropriate
pricing mechanisms and publications and fairly reflect the markets that are
available for the Sales Volumes subject hereto. As the Parties recognize
that such pricing mechanisms, publications or markets may change materially
during the term of this Agreement, the Parties hereby agree to the
following procedures for periodically evaluating (and potentially
adjusting) such pricing formulas to reflect the fair market value of the
Sales Volumes.
(i) In the event that, during the term of this Agreement,
either Party determines, in good faith, that the pricing formulas set
forth in this Agreement for one or more Subject Fields materially vary
from the fair market pricing for the relevant Sales Volumes for such
Subject Fields, then such Party, may propose a change in the pricing
under this Agreement for such Subject Fields to take effect commencing
upon the 4th, 6th, 8th 10th, 12th or 14th anniversary of this
Agreement, by giving the other Party written notice of the proposed
change no later than ninety (90) calendar days prior to such
anniversary date. If a Party gives such notice in accordance
herewith, and the Parties agree on any such change in the pricing for
such Subject Fields, such change shall take effect as of such
anniversary date. If the Parties fail to agree upon such new pricing
for any such Subject Field by thirty (30) calendar days prior to such
anniversary date, either Party may submit the issue for resolution in
accordance with Section 10.1; provided that such Party submits such
issue for resolution prior to such anniversary date. Although the
Parties are encouraged to engage in dialogue, written or otherwise,
regarding pricing and pricing changes under this Agreement, including
under this Section, a Party may only formally invoke the provisions of
this Section 3.2(b)(i) once per anniversary date listed above. Until
a Party asserts in writing that it has formally invoked its rights
under this Section, it shall in no way be limited in its rights to
propose or discuss pricing changes hereunder. Either Party shall have
the right to request that the other Party confirm in writing whether
it has, through its written correspondence, formally invoked this
Section with respect to a given anniversary date, and until receipt of
an affirmative response to such request for confirmation, the
requesting Party shall be under no obligation to respond to such
correspondence.
(ii) In the event that, during the term of this Agreement,
either Party determines, in good faith, that there has occurred a
material change to the quality specifications attributable to, or any
other material component used for determining, the NYMEX Price for one
or more Subject Fields, then such Party, may propose a change in the
pricing for such Subject Fields under this Agreement to take effect
commencing upon the 4th, 6th, 8th, 10th, 12th or 14th anniversary of
this Agreement by giving the other Party written notice of the
proposed change no later than ninety (90) calendar days prior to such
anniversary date. If a Party gives such notice in accordance herewith,
and
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the Parties agree on any such change in the pricing for such Subject
Fields, such change shall take effect as of such anniversary date. If
the Parties fail to agree upon such new pricing for any such Subject
Field by thirty (30) calendar days prior to such anniversary date,
either Party may submit the issue for resolution in accordance with
Section 10.1; provided that such Party submits such issue for
resolution prior to such anniversary date. Although the Parties are
encouraged to engage in dialogue, written or otherwise, regarding
pricing and pricing changes under this Agreement, including under this
Section, a Party may only formally invoke the provisions of this
Section 3.2(b)(ii) once per anniversary date listed above. Until a
Party asserts in writing that it has formally invoked its rights under
this Section, it shall in no way be limited in its rights to propose
or discuss pricing changes hereunder. Either Party shall have the
right to request that the other Party confirm in writing whether it
has, through its written correspondence, formally invoked this Section
with respect to a given anniversary date, and until receipt of an
affirmative response to such request for confirmation, the requesting
Party shall be under no obligation to respond to such correspondence.
(iii) In the event that, during the term of this Agreement, only
one or fewer Major Posters are publishing gravity price adjustments
for crude oil produced in California, and the Parties are unable to
agree upon the gravity adjustment for purposes of Section
3.2(a)(v)(A), then either Party may submit the issue for resolution in
accordance with Section 10.1.
(iv) In the event of any dispute resolution pursuant to Section
10.1, the pricing formulas hereunder shall, subject hereto, remain in
effect pending the written decision of the Arbitrator. If the
decision of the Arbitrator results in a change in pricing, (A) the
change will be retroactive to the anniversary date on which the
pricing change was to be effective pursuant to this Section 3.2(b),
and (B) the Parties shall make a cash settlement to reflect such
retroactivity of the pricing change (together with interest at the
rate calculated in accordance with Section 4.2) within twenty (20)
calendar days after the Arbitrator's written decision is delivered.
(v) Any pricing change in accordance with this Section shall
constitute an amendment to this Agreement without further action, but
the Parties shall take such steps as reasonably requested by either
Party to further evidence such amendment.
3.3 Taxes. Tosco shall reimburse Nuevo for all taxes imposed by federal,
state or local governments, other than taxes on income, assessed on Nuevo,
directly or indirectly in connection with and occasioned by the transfer of
title of Sales Volumes delivered under this Agreement. Each Party shall be
solely responsible for any taxes assessed on it pursuant to Sections 8670.40 or
8670.48, or applicable successor Sections, of the California Government Code. If
Tosco is entitled to purchase any such Delivery Amount free of any tax (state or
federal), Tosco shall furnish Nuevo the proper exemption certificate.
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ARTICLE IV
PAYMENT
4.1 General. (a) Tosco's Obligation. Tosco shall, except as expressly
provided otherwise in this Agreement, pay Nuevo, by wire transfer in immediately
available funds no later than twenty (20) calendar days after the end of each
Delivery Month, the aggregate for all Subject Fields of (i) the Delivery Amount
Price for each Subject Field and such Delivery Month multiplied by (ii) the
Delivery Amount attributable to such Subject Field and such Delivery Month as
reflected in the relevant delivery tickets. Tosco shall wire amounts due Nuevo
hereunder as follows:
Chase Bank of Texas, National Association
ABA#: 113000609
Credit: Nuevo Energy Company
Account #: 00103291226
Reference: Crude Oil Purchases
(b) Weekends/Holidays. Notwithstanding Section 4.1(a):
(i) if the deadline for payment under such provisions falls on
a Saturday, such deadline shall be deemed to have instead
fallen on the immediately preceding Business Day;
(ii) if the deadline for payment under such provisions falls on
a Sunday, such deadline shall be deemed to have instead
fallen on the immediately succeeding Business Day;
(iii) if the deadline for payment under such provisions falls on
a Monday that is not a Business Day, such deadline shall be
deemed to have instead fallen on the immediately succeeding
Business Day; and
(iv) if the deadline for payment under such provisions falls on
a Day that is neither a Business Day nor a Saturday, Sunday
or Monday, such deadline shall be deemed to have instead
fallen on the immediately preceding Business Day.
4.2 Interest. Any payments that are past due under this Agreement shall
bear interest at the lesser of (i) a rate per annum equal to the rate published
as the "Prime Rate" in the "Money Rates" section of The Wall Street Journal for
the calendar day payment was due (or if not published on such calendar day, such
rate as last published), plus two percent (2%), or (ii) the maximum rate of
interest permitted by applicable law.
4.3 Accounting Address. All accounting documentation delivered pursuant
to or in connection with this Agreement shall be delivered to the following
addresses:
To Nuevo:
Nuevo Energy Company
c/o Torch Energy Marketing Inc.
1221 Lamar, Suite 1600
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Houston, Texas 77010
Attn: Crude Oil Marketing
Fax: 713-759-0805
To Tosco:
Tosco Refining Company
P.O. Box 52085 DC71
Tempe, Arizona 85072
Attn: Crude Oil Analyst
Fax: 602-728-7994
ARTICLE V
TITLE WARRANTIES AND TRANSFER
5.1 General. Nuevo warrants good title to the Delivery Amount delivered by
it hereunder and agrees to indemnify and hold harmless Tosco from and against
any and all loss, claim or demand by reason of any failure of such title to such
Delivery Amount or failure or breach of this warranty. Title to, possession and
risk of loss of the Delivery Amount shall, except as set forth in Section 5.2,
pass to Tosco as such Delivery Amount passes from equipment or locations owned
or controlled by Nuevo, or owned or controlled by a party designated to make
delivery on behalf of Nuevo.
5.2 Specific Fields. Notwithstanding anything to the contrary in Section
5.1 above, for any Sales Volumes to be delivered to Tosco hereunder that is:
(a) produced from the Subject Field designated as Beta (Edith) in
Exhibit 1 hereto, title to, possession and risk of loss of such Sales
Volumes shall pass to Tosco as such Sales Volumes pass from equipment or
locations owned or controlled by Nuevo, or owned or controlled by a party
designated to make delivery on behalf of Nuevo into Aera Energy LLC's
pipeline at Aera Energy LLC's Beta platform;
(b) produced from the Subject Field designated as Buena Vista in
Exhibit 1 hereto, title to, possession and risk of loss of such Sales
Volumes shall pass to Tosco as such Sales Volumes pass from equipment or
locations owned or controlled by Nuevo, or owned or controlled by a party
designated to make delivery on behalf of Nuevo into Chevron Pipeline
Company's KLM pipeline;
(c) produced from the Subject Field designated as Point Pedernales in
Exhibit 1 hereto, title to, possession and risk of loss of such Sales
Volumes shall pass to Tosco as such Sales Volumes pass from Nuevo's Lompoc
oil and gas plant into Tosco's Unocap pipeline;
(d) produced from the Subject Field designated as Brea O'Linda in
Exhibit 1 hereto, title to, possession and risk of loss of such Sales
Volumes shall pass to Tosco as such Sales Volumes pass from Nuevo's
Stearn's E. Naranjal lact meter into Tosco's Unocap pipeline.
ARTICLE VI
MEASUREMENT
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6.1 Measurement. (a) Method. Deliveries of the Delivery Amount shall be
measured by means of automatic custody transfer unit as and when the Delivery
Amount is produced, or by tank gauge as and when the Delivery Amount is produced
and accumulated in approximate shipping tank lots. All tankage and trucking
equipment shall have certified gauge tables available to the receiving Party.
(b) LACT Pinning. Tosco shall provide Nuevo with written notice at
least forty-eight (48) hours in advance of the "pinning" or other closure
of any lact meter other than in the case of an emergency, in which case
Tosco shall provide as much notice of such "pinning" or other closure as is
practicable. Nuevo leases are recommended to have on-site crude oil
storage capacity for at least forty-eight (48) hours of production although
it is recognized that some leases may have less capacity.
6.2 Meters and Tests. (a) Measurements in connection with this Agreement
will be obtained using existing meters or such other meters as the Parties may
mutually agree. All measurements hereunder shall be made from static tank gauges
on 100% tank table basis or by positive displacement meters. All measurements
and tests shall be made in accordance with the latest ASTM or ASME-API
(petroleum PD Meter Code) published methods then in effect, whichever apply.
Volume and gravity shall be adjusted to 60 degrees Fahrenheit by the use of the
Petroleum Measurement Tables API 5A and 6A in its latest revision. Full
deduction for all free water and BS&W content shall be made according to the
API/ASTM Standard Method then in effect. The delivering Party shall be
responsible for all pipeline carrier charges due to failure to meet the
specifications required of such Party under this Agreement.
(b) Either Party shall have the right to have a representative witness
all meter provings, gaugings, samplings, tests and measurements. Each
Party will provide not less than 48 hours notification (unless otherwise
mutually agreed) to the other Party prior to conducting such activities.
In the absence of the other Party's representative, such meter provings,
gaugings, samplings, tests and measurements shall be deemed to be correct
by the attendant representative.
ARTICLE VII
TERM AND TERMINATION
7.1 Term. This Agreement shall commence as of 7:00 a.m. Pacific Time
January 1, 2000, and shall continue until 6:59 a.m. Pacific Time January 1,
2015, unless terminated earlier in accordance with this Agreement. Termination
of this Agreement shall not relieve any Party from any liability arising
hereunder prior to such termination.
7.2 Suspension Rights. (a) If an Event of Default occurs and is
continuing, the non-defaulting Party may, by giving five (5) calendar days'
written notice, suspend its obligation to deliver Sales Volumes hereunder or its
obligation to purchase Sales Volumes hereunder, as applicable. While deliveries
of Sales Volumes hereunder are suspended pursuant to this Section 7.2, Nuevo
shall have the right but not the obligation to sell any undelivered volumes to
other purchasers and shall, if Nuevo is the non-defaulting party, be entitled to
damages from Tosco equal to the amount it would have received under the terms of
this Agreement for such undelivered volumes less the amount received from other
purchasers of the undelivered volumes, plus actual costs and expenses incurred
by Nuevo in arranging sales to other purchasers. While any purchases of Sales
Volumes hereunder are suspended pursuant to this Section 7.2, Tosco may purchase
Sales Volumes from other sellers and shall, if Tosco is the non-defaulting
party, be entitled to damages from Nuevo equal to the amount paid to purchase
the Sales Volumes from other sellers less the amount it would have paid for the
Sales Volumes under the terms of this Agreement, plus actual costs and expenses
incurred by Tosco in arranging purchases from other sellers.
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(b) The right of the non-defaulting party to suspend performance under
this Section 7.2 shall continue until the earlier of (i) the Event of
Default is cured or (ii) this Agreement is terminated pursuant to Section
7.3.
(c) An election by a Party to suspend performance under this Section
7.2 shall not preclude that Party from later electing to terminate this
Agreement under Section 7.3.
7.3 Termination Rights. (a) If an Event of Default occurs and is
continuing, the non-defaulting Party may give the defaulting Party written
notice of such Event of Default. If the Event of Default is not cured within 10
calendar days after receipt of such notice, the non-defaulting Party, in
addition to all other rights and remedies available to the non-defaulting Party
and notwithstanding Section 7.1, shall be entitled to terminate this Agreement.
(b) If this Agreement is terminated pursuant to this Section 7.3 the
non-defaulting Party may provide the defaulting Party with a statement
setting out in reasonable detail the computation of the (A) all amounts due
and payable under this Agreement, including interest on any later payments,
and (B) the amount of actual damages, losses or other directly related
costs and expenses (including, but not limited to, reasonable attorney's
fees and court costs) incurred by the non-defaulting Party arising out of
or related to the Event of Default or the termination of this Agreement,
excluding any punitive, consequential or indirect damages. In calculating
such amounts, the non-defaulting Party may offset any sums due to the
defaulting Party, whether hereunder or by reason of any other agreements or
arrangements, against any amounts owed by the defaulting Party hereunder.
(c) No later than five Business Days after receiving the statement
from the non-defaulting Party pursuant to Section 7.3(b), the defaulting
Party shall pay the non-defaulting Party the sum of the amount set forth in
such statement.
(d) Neither Party shall be liable under this Agreement to the other
Party for any punitive, consequential, special or indirect damages, in tort
or contract or otherwise, as a result of or related to, any breach of or
default under this Agreement.
(e) The rights and obligations created by this Section 7.3 shall
survive the termination of this Agreement.
ARTICLE VIII
REPRESENTATIONS, WARRANTIES AND OTHER COVENANTS
8.1 Nuevo Representations and Warranties. Nuevo represents and warrants to
Tosco that as of the date of execution of this Agreement:
(a) Nuevo is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) Nuevo has all requisite power and authority to enter into and
perform this Agreement;
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(c) the execution, delivery and performance of this Agreement and the
transactions contemplated hereby have been duly authorized by Nuevo;
(d) this Agreement has been duly executed and delivered by Nuevo and
constitutes the legal, valid and binding obligation of Nuevo, enforceable
against Nuevo in accordance with its terms, subject, however, to applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and except as the enforceability
thereof may be limited by general principles of equity (regardless of
whether considered in a proceeding in equity or at law);
(e) the execution, delivery, and performance by Nuevo of this
Agreement and the transactions contemplated hereby will not (A) violate or
conflict with any provision of Nuevo's organizational documents (including
articles of incorporation and bylaws), (B) violate or constitute a default
under any agreement or instrument to which Nuevo is a party or by which
Nuevo is bound, which violation will have a material and adverse effect on
Nuevo's ability to perform its obligations hereunder, (C) violate any
statute or law or any judgment, decree, order, regulation or rule of any
court or governmental authority applicable to Nuevo, which violation will
have a material and adverse effect on Nuevo's ability to perform its
obligations hereunder, or (D) require any consent, approval or
authorization of, or designation, declaration or filing with, any
governmental authority on the part of Nuevo (except such governmental
authorizations and filings as Nuevo's performance of this Agreement from
and after the date hereof may then require in the ordinary course of
business), under any law or any agreements to which Nuevo is a party or by
which it is bound; and
(f) there are no suits, judicial or administrative actions,
proceedings or investigations (including, without limitation, bankruptcy,
reorganization or insolvency actions, proceedings or investigations)
pending against Nuevo or its affiliates or, to Nuevo's knowledge,
threatened that (A) challenge the validity of this Agreement or the
transactions contemplated hereby, (B) seek to restrain or prevent any
action taken or to be taken by Nuevo in connection with this Agreement, or
(C) if adversely determined, would have a material and adverse effect upon
Nuevo's ability to perform its obligations hereunder.
8.2 Tosco Representations and Warranties. Tosco represents and warrants to
Nuevo that as of the date of execution of this Agreement:
(a) Tosco is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada;
(b) Tosco has all requisite power and authority to enter into and
perform this Agreement;
(c) the execution, delivery and performance of this Agreement and the
transactions contemplated hereby have been duly authorized by Tosco;
(d) this Agreement has been duly executed and delivered by Tosco and
constitutes the legal, valid and binding obligation of Tosco, enforceable
against Tosco in accordance with its terms, subject, however, to applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and except as the enforceability
thereof may
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be limited by general principles of equity (regardless of whether
considered in a proceeding in equity or at law);
(e) the execution, delivery, and performance by Tosco of this
Agreement and the transactions contemplated hereby will not (A) violate or
conflict with any provision of Tosco's organizational documents (including
articles of incorporation and bylaws), (B) violate or constitute a default
under any agreement or instrument to which Tosco is a party or by which
Tosco is bound, which violation will have a material and adverse effect on
Tosco's ability to perform its obligations hereunder, (C) violate any
statute or law or any judgment, decree, order, regulation or rule of any
court or governmental authority applicable to Tosco, which violation will
have a material and adverse effect on Tosco's ability to perform its
obligations hereunder, or (D) require any consent, approval or
authorization of, or designation, declaration or filing with, any
governmental authority on the part of Tosco (except such governmental
authorizations and filings as Tosco's performance of this Agreement from
and after the date hereof may then require in the ordinary course of
business), under any law or any agreements to which Tosco is a party or by
which it is bound; and
(f) there are no suits, judicial or administrative actions,
proceedings or investigations (including, without limitation, bankruptcy,
reorganization or insolvency actions, proceedings or investigations)
pending against Tosco or its affiliates or, to Tosco's knowledge,
threatened that (A) challenge the validity of this Agreement or the
transactions contemplated hereby, (B) seek to restrain or prevent any
action taken or to be taken by Tosco in connection with this Agreement, or
(C) if adversely determined, would have a material and adverse effect upon
Tosco's ability to perform its obligations hereunder.
8.3 Covenants. Each Party shall through the term of this Agreement:
(a) preserve its corporate existence and good standing as necessary to
perform its obligations hereunder;
(b) comply in all material respects with all statutes and laws
applicable to performance of this Agreement and with all judgments,
decrees, orders, regulations and rules of any court or governmental
authority applicable to performance of this Agreement;
(c) give the other Party prompt written notice of the existence of any
agreement or instrument to which the Party is a party or by which the Party
is bound that may have a material and adverse effect in the Party's ability
to perform its obligations hereunder; and
(d) give the other Party prompt written notice of any pending or
threatened suits, judicial or administrative actions, proceedings or
investigations that may have a material and adverse effect on the Party's
ability to perform its obligations hereunder.
ARTICLE IX
FINANCIAL MATTERS
9.1 Credit Requirements. (a) Credit Rating. Subject to Section 9.1(b), if
Tosco shall fail to maintain a long term issuer rating of BB or higher with
Standard & Poor's Ratings Group, then, within thirty (30) calendar days of
receiving a written request from Nuevo for additional financial assurances,
Tosco shall provide Nuevo with (i) a guaranty of payment and performance from
its ultimate direct or
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indirect parent corporation in a form acceptable to Nuevo, or (ii) if such
parent corporation is unable or otherwise fails to issue such a guaranty or
fails to maintain its credit rating at the level specified above, a standby
letter of credit in a format and issued by a bank acceptable to Nuevo for an
amount equal to the sum of the amounts due hereunder for the two prior Delivery
Months.
(b) Lack of Rating Publication. If Standard & Poor's Rating Group
shall cease to publish a long term issuer rating for Tosco, the Parties
shall mutually agree to the use of a substitute rating service and shall
require the maintenance of a rating by such substitute service that
provides the closest approximation of the credit quality characterized by
rating set forth in Section 9.1(a).
(c) Letters of Credit. Any letter of credit provided pursuant to this
Section 9.1 shall, subject to this Section, be for a one-Year period and
automatically renewable for successive one-Year periods unless the issuing
bank provides notice of non-renewal at least sixty (60) calendar days prior
to maturity, in which case a substitute bank acceptable to Nuevo shall
issue such letter of credit. Notwithstanding the foregoing, if the then
remaining obligations to deliver Sales Volumes under this Agreement of
Nuevo are for a period of less than one Year, then such letter of credit
may be for a period ending forty-five (45) calendar days after the last
such scheduled delivery of Sales Volumes. Provided that Tosco or its
ultimate direct or indirect parent maintains its credit rating at the level
specified above, then a parent guaranty meeting the above requirements may
be substituted for any letter of credit delivered hereunder. In the event
that Tosco is required to provide a parent guaranty or letter of credit
hereunder and then subsequently re-establishes a credit rating at or above
the level set forth above for a period of 12 consecutive months, the
obligation to provide a parent guaranty or a letter of credit pursuant to
this Section 9.1 shall be suspended so long as Tosco maintains its credit
rating at the level specified for Tosco above.
9.2 Financial Responsibility. If during the term of this Agreement, the
financial responsibility of a Party becomes such that such Party's ability to
perform its obligations hereunder is impaired or unsatisfactory to the other
Party, in its good faith, (the "demanding party") then in any such case advance
cash payment, properly endorsed negotiable bills of lading, or satisfactory
security shall be given upon written demand, and performance hereunder may be
withheld by the demanding party until such payment, bills of lading, or security
is received. If such payment, bills of lading, or security is not received
within fifteen (15) calendar days from demand therefor, the demanding party may
terminate this Agreement. In the event either Party makes an assignment for the
benefit of creditors or any general arrangement with creditors, or if there are
instituted by or against either Party proceedings in bankruptcy or under any
insolvency law or law for reorganization, receivership or dissolution, the other
Party may withhold shipments or terminate this Agreement without notice. The
exercise by either Party of any right under this paragraph shall be without
prejudice to any claim for damages or any other right under this Agreement or
applicable law.
ARTICLE X
DISPUTES
10.1 Pricing Disputes. Any and all disputes related to pricing pursuant to
Section 3.2(b), or pricing or delivery location of newly acquired leases, fields
or interests in Sales Volumes pursuant to Section 2.1(d) or 2.1(e), of this
Agreement shall be finally settled by arbitration pursuant to this Section 10.1:
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(a) The Parties hereby agree and consent to submit to the American
Arbitration Association any and all such disputes for settlement by final
and binding arbitration by one (1) arbitrator (the "Arbitrator") pursuant
to the Commercial Arbitration Rules of the American Arbitration Association
in effect as of the date of this Agreement (the "Rules"). The resulting
decision of the Arbitrator shall be the sole and exclusive remedy between
the Parties regarding any and all such disputes.
(b) Arbitration proceedings pursuant to this Section shall be held in
Los Angeles, California, or such other location as the Parties may agree.
To the extent that it is necessary to apply substantive law, the
substantive law of the State of California shall be applied, without
reference to conflicts of law rules that would direct the matter to the law
of another jurisdiction.
(c) The Parties shall initiate arbitration proceedings hereunder in
accordance with Section 6 of the Rules. The Parties shall use commercially
reasonable efforts to agree upon and appoint the Arbitrator, who shall have
not less than fifteen (15) Years of experience (commercial or legal)
related to the marketing of domestic crude oil (not less than five (5)
Years of which shall relate to such marketing in California). In the event
that the Parties fail to appoint the Arbitrator within fifteen (15)
calendar days after the American Arbitration Association receives the
notice of arbitration, each Party shall submit to the American Arbitration
Association a list containing the names of three (3) persons who meet the
qualifications set out above that it nominates to serve as the Arbitrator.
The Parties shall instruct the American Arbitration Association to appoint
the Arbitrator (from the names submitted by each Party in accordance
herewith) within forty-five (45) calendar days after it receives the notice
of arbitration. Should a Party fail to submit a list of names, the
American Arbitration Association shall appoint the Arbitrator from the
names submitted. Should both Parties fail to submit a list of names, the
American Arbitration Association shall appoint the Arbitrator it deems
appropriate within forty-five (45) calendar days after it receives the
notice of arbitration.
(d) Within sixty (60) calendar days after the American Arbitration
Association receives the notice of arbitration, each Party shall submit to
the Arbitrator in writing its proposed resolution to such dispute and any
information it considers relevant to the Arbitrator's decision. The
failure of a Party to make such a submission or the absence or default of a
Party to the arbitration shall not prevent or hinder the arbitration
procedure in any stage. The arbitration shall continue in accordance with
Section 30 of the Rules.
(e) The Parties shall instruct the Arbitrator to select, as its
decision, the resolution proposed by one of the Parties. If only one Party
submits a proposed resolution in accordance with this Agreement, the
Arbitrator shall select that resolution as its decision. The Parties shall
instruct the Arbitrator to render its decision in writing to the Parties
within ninety (90) calendar days after the American Arbitration Association
receives the notice of arbitration. The decision of the Arbitrator shall
be final and binding on all Parties. Notwithstanding any provision in this
Agreement to the contrary, the Parties shall instruct the Arbitrator that
the standard by which it shall resolve such disputes under this Section
10.1 shall be which Party's resolution of such pricing dispute best
reflects the then current fair market pricing for the relevant production
from the relevant Subject Fields.
(f) The Parties agree to exclude any right of application or appeal to
the courts of any jurisdiction in connection with the arbitration
proceedings, the subject matter of the arbitration proceedings or the
decision
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of the Arbitrator, except for the purpose of enforcement of a decision of
the Arbitrator to the extent providing for a change to the method for
calculating the Delivery Amount Price hereunder, as provided in Section
10.1(g) below.
(g) Any written decision of the Arbitrator providing for a change to
the method for calculating the Delivery Amount Price hereunder shall be
deemed to constitute an amendment to this Agreement without the necessity
of formally amending this Agreement. Any such decision of the Arbitrator
effecting a pricing change shall be valid and enforceable in any court of
competent jurisdiction.
(h) Nothing in this Section 10.1 shall limit the Parties' remedies or
rights to seek judicial resolution with respect to disputes under this
Agreement to the extent not involving pricing or otherwise directed by this
Agreement to be resolved by arbitration pursuant to this Agreement.
10.2 Other Disputes. (a) Except for arbitration proceedings commenced in
accordance with Section 10.1, any legal action taken in connection with this
Agreement will be brought in a California state court or U.S. Federal District
Court having jurisdiction and in which venue is proper. Nuevo and Tosco each
irrevocably submit to the jurisdiction of such courts.
(b) Each Party irrevocably waives, to the fullest extent permitted by
law, any claim or objection that it may have, now or hereafter, that venue
or jurisdiction is not proper with respect to any such legal action or
legal proceeding brought in a court set out above, including without
limitation any claim that such legal action or legal proceeding has been
brought in an inconvenient forum, any claim that a Party is not subject to
personal jurisdiction or service of process, and any claim that such court
does not have proper jurisdiction over the subject matter of the legal
action or legal proceeding.
(c) Nuevo and Tosco each appoints the Secretary of State of the State
of California as its agent for service of process in California, to the
extent that it does not have a registered agent for service of process in
California.
ARTICLE XI
MISCELLANEOUS
11.1 Notices. Notices, other than accounting documentation provided
pursuant to this Agreement, shall be in writing and may be given by delivering
same by hand at, or by sending the same by facsimile, express delivery service
or first-class mail to, the relevant address set forth below or such other
address as each Party may notify the other Party in writing from time to time.
Such notice or communication shall be deemed to have been given when delivered,
if by hand; when actually received, if by first class mail or express delivery
service; and upon receipt by the sender of electronic confirmation of
transmission, if by facsimile.
To Nuevo:
Nuevo Energy Company
c/o Torch Energy Marketing Inc.
1221 Lamar, Suite 1600
Houston, Texas 77010
Attn: Crude Oil Marketing
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Fax: 713-759-0805
To Tosco:
Tosco Refining Company
P. O. Box 52085 DC68
Phoenix, Arizona 85072
Attn: Manager, Crude Oil Supply
Fax: 602-728-7984
11.2 Confidentiality. Each Party agrees that it will maintain this
Agreement, all parts and contents hereof, and any information or data received
hereunder, in strict confidence, and that it will not cause or permit disclosure
of same to any third party without the express written consent of the other
Party. Notwithstanding the foregoing, disclosure by a Party is permitted in the
event and to the extent that (a) such Party is required by a court or agency
exercising jurisdiction over the subject matter hereof, by order or by
regulation, to make such a disclosure (provided, however, that in the event
either Party becomes aware of a judicial or administrative proceeding that has
resulted or may result in such an order requiring disclosure, it shall (i) so
notify the other Party immediately, (ii) utilize all reasonably available means
to limit the scope of the order or regulation requiring disclosure, and (iii)
take all actions reasonably necessary to prevent disclosure to the public as a
result of disclosure to the court or administrative body), (b) disclosure is
required by law or regulation or order of governmental authority or by the rules
of any stock exchange applicable to such Party or its affiliates, or as part of
such Party's good faith attempt to comply with disclosure obligations under any
of the same, (c) disclosure is to such Party's affiliates, attorneys, financial
or lending institutions, outside auditors and insurers, provided that the person
or entity to which such information is disclosed executes an agreement to hold
it confidential, and (d) disclosure (other than with respect to Section 3.2
(a)(viii) or 11.9) is to entities involved in the negotiation or bidding for the
acquisition of a Party, its stock or assets, provided that the person or entity
to which such information is disclosed executes an agreement to hold it
confidential. Notwithstanding the foregoing, Nuevo and Tosco shall have the
right to issue press releases, or otherwise make public comments, that
substantially conform to Exhibit 7. This Section 11.2 shall survive the
termination of this Agreement.
11.3 Assignment. (a) General. Except with respect to assignments in
conjunction with an assignment of the Subject Fields as provided in Section
11.3(b), neither Party shall assign this Agreement without the prior written
consent of the other. Any such purported assignment made without such consent
shall be null and void. With respect to any assignment permitted hereunder, the
assigning Party shall remain liable to the other Party for fulfillment of any
existing obligation under this Agreement. Subject to the limitations on transfer
contained herein, this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Parties.
(b) Producing Property Sales. Nothing in this Agreement shall limit
Nuevo's right to sell, exchange or otherwise dispose of any interest in a
Subject Field or any interest in production therefrom. Nuevo will notify
Tosco promptly following any sale of interests in any of the Subject Fields
subject to this Agreement. Promptly after notification of such a sale by
Nuevo, Tosco shall use its best efforts to enter into an agreement with the
assignee of the sold interests on the same terms and conditions set forth
herein, to the extent such terms and conditions apply to such interests.
Notwithstanding Section 11.3(a), with respect to any such interests that
are sold, this Agreement (other than with respect to Section 3.2(a)(viii)
and other
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than with respect to Section 11.9) shall be binding on Tosco and the
successors in interest to Nuevo of such interests without the prior written
consent of Tosco.
11.4 Force Majeure. If either Party is rendered unable, wholly or in part,
by Force Majeure to perform its obligations hereunder, other than to make
payments due hereunder, the affected Party shall give written notice to the
other Party of such Force Majeure within forty-eight (48) hours after such
failure to perform, and the obligations of the affected Party shall be suspended
during the continuance and to the extent of the inability so caused, but for no
longer period. In the event that any such period of suspension shall continue in
excess of ninety (90) calendar days, this Agreement may be terminated as to the
Subject Fields subject to such suspension at the option of either Party, without
liability of either Party. Any such failure to perform shall be remedied with
all reasonable dispatch, but Nuevo shall not be required to supply substitute
quantities of Sales Volumes from other sources of supply. Failure to perform
this Agreement due to events of Force Majeure shall not extend the term of this
Agreement.
11.5 Waiver. No waiver by any Party of any one or more defaults by another
Party in the performance of this Agreement shall operate or be construed as a
waiver of any future default or defaults by the same Party, whether of a like or
of a different character. Except as expressly provided in this Agreement, no
Party shall be deemed to have waived, released or modified any of its rights
under this Agreement unless such Party has expressly stated, in writing, that it
does waive, release or modify such right.
11.6 Entire Agreement. This Agreement contains the entire agreement of the
parties for the sale of the Delivery Amount from the Subject Fields (other than
the Committed Volumes), and supersedes and replaces in its entirety all prior
agreements regarding crude oil sales, including the following:
(a) that certain Crude Oil Purchase Agreement dated July 1, 1998,
between Nuevo and Tosco, as amended, except to the extent such agreement,
as amended, pertains to Sales Volumes produced from the Subject Field
designated as "Las Cienegas" in Exhibit 1 (the "Committed Volumes");
(b) that certain Crude Oil Purchase Agreement dated January 1, 1999,
between Nuevo and Tosco, as amended;
(c) that certain crude oil purchase agreement between Nuevo and Tosco,
dated September 28, 1999, as confirmed on October 13, 1999, regarding 5,000
barrels of crude oil per calendar day from the Cymric Field, as amended;
(d) that certain Agreement dated July 21, 1994 between Union Oil
Company of California, dba Unocal and Torch Energy Marketing, Inc., and its
affiliates, as amended; and
(e) that certain agreement with a one-Year term commencing September
1, 1999, between Nuevo and Tosco regarding production from the Buena Vista
field.
No statement or agreement, oral or written, made before or at the signing
hereof, shall be offered or used to vary or modify the written terms of this
Agreement.
11.7 Control. Nothing in this Agreement shall be construed or deemed to
require Nuevo to take any action, or to prohibit Nuevo from taking any action,
regarding operations of or with respect to the Subject Fields. Specifically, but
not by way of limitation, Tosco acknowledges and agrees that Nuevo
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shall have no obligation to drill, produce, or abandon any well, or to achieve
any specific production volumes. Tosco acknowledges and agrees that all
decisions with respect to such actions and operations are expressly and
exclusively within Nuevo's control.
11.8 Severability. If and for so long as any provision of this Agreement
shall be deemed or judged to be invalid for any reason whatsoever, such
invalidity shall not affect the validity or operation of any other provisions of
this Agreement except only so far as shall be necessary to give effect to the
construction of such invalidity, and any such invalid provision shall be deemed
severed from this Agreement without affecting the validity of the balance of
this Agreement.
11.9 Audit. Each Party and its duly authorized representatives shall have
access to the accounting records and other documents maintained by the other
Party that relate to Sales Volumes sold under this Agreement, and shall have the
right to audit such records at any reasonable time prior to the third
anniversary of the termination of this Agreement subject to the following
conditions or restrictions:
(a) the auditing Party shall furnish the other Party written notice at
least thirty (30) Business Days prior to the date of the audit;
(b) the notice shall specify what accounting period, records and
other documents the auditing Party desires to review and/or photocopy;
(c) the audit shall be conducted at the offices of the Party being
audited during the hours of 8:00 am and 5:00 pm on a Business Day;
(d) a Party may not initiate an audit hereunder more often than once
every two Years unless such additional audits are justified on the grounds
of fraud or the occurrence of a catastrophic event;
(e) the duration of an audit shall not exceed seven (7) Business Days
unless matters revealed during such audit reasonably justify an extension
of such time period;
(f) the documents, reports and records prepared in the audited Party's
ordinary course of business shall be furnished in sufficient form to
substantiate the volumes, deliveries and pricing of the transactions
contemplated hereunder;
(g) to the extent, if any, that the Party being audited must use
internal or external accounting or electronic information systems person(s)
to retrieve, produce or explain the documents and records requested, the
auditing Party shall reimburse the other Party the full cost thereof;
(h) photocopying shall be done at the expense of the auditing Party
(but photocopying in violation of copyrights shall not be required);
(i) the auditing Party shall be responsible for its own costs and
expenses incurred in connection with the audit;
(j) the audit shall be limited to no more than the three (3) Years
immediately preceding the date of the request to audit; and
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(k) the auditing Party shall designate a single contact person from
among the auditing personnel to be the person with whom the audited Party
may limit its contacts.
11.10 Safety. Each Party agrees that its agents and employees will comply
with all safety regulations of the other when such agents or employees are upon
the premises of the other in connection with the performance of this Agreement.
11.11 Business Practices. (a) Each Party shall in the performance of this
Agreement comply with all applicable governmental laws and regulations.
(b) Each Party hereto agrees that all financial settlements,
billings, and reports rendered to the other Party as provided for in this
Agreement and/or any amendments to it will, to the best of its knowledge
and belief, reflect properly the facts about all activities and
transactions related to this Agreement, which data may be relied upon as
being complete and accurate in any further recording and reporting made by
such other Party for whatever purpose.
(c) Each Party hereto agrees to notify the other Party promptly upon
discovery of any instance where the notifying Party fails to comply with
Section 11.11(a) above, or where the notifying Party has reason to believe
data covered by Section 11.11(b) above is no longer accurate and complete.
11.12 Governing Law. This Agreement and any disputes arising hereunder
shall be construed, enforced, and governed by the laws of the State of
California, without reference to conflicts of law rules which would direct the
matter to the law of another jurisdiction.
11.13 Entirety of Agreement and Amendments. This Agreement contains the
entire Agreement of the Parties with respect to the subject matter hereof and
there are no other promises, representations or warranties with respect thereto.
Except as expressly provided otherwise in this Agreement, this Agreement may
only be amended by a written instrument executed by authorized officers of the
Parties specifically referencing this Agreement.
11.14 Headings. The Section headings used in this Agreement are for
convenience only and shall not be construed as having any substantive
significance or as indicating that all of the provisions of this Agreement
relating to any topic are to be found in any particular Section.
11.15 General Provisions. To the extent not in conflict with the terms of
this Agreement, Conoco's General Provisions, Domestic Crude Oil Agreements,
effective January 1, 1993 are incorporated herein and made a part hereof for all
purposes.
11.16 Further Assurances. Each Party shall execute, acknowledge and deliver
such other instruments or documents and shall take such other actions as may be
necessary to carry out their respective obligations under this Agreement or to
consummate or substantiate transactions contemplated by this Agreement.
11.17 Time and Performance of the Essence. Time and full performance
hereunder by the Parties are of the essence of this Agreement.
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11.18 No Third Party Beneficiaries. Other than with respect to permitted
successors and assigns, nothing in this Agreement is intended to inure to the
benefit of any third party and this Agreement shall not create any third party
beneficiaries.
11.19 Hazards and Risks. Each Party acknowledges the hazards and risks in
handling and using crude oil. Each Party shall advise its affiliates and its and
their employees and third parties, who may purchase or come into contact with
crude oil delivered under this Agreement, about the reasonable hazards and risks
of crude oil, as well as precautionary procedures for handling such crude oil.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of
the date and year first above written.
TOSCO CORP. NUEVO ENERGY COMPANY
By: /s/ Peter A. Sutton By: /s/ Douglas B. Chapman
--------------------------- ------------------------
Name: Peter A. Sutton Name: Douglas B. Chapman
------------------------- ----------------------
Title: Senior Vice President Title: Attorney-in-fact
------------------------ -------------------
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INDEX TO EXHIBITS
Exhibits
- --------
Exhibit 1 - Subject Fields
Exhibit 2 - Form of Nuevo Estimated Amount Notification
Exhibit 3 - NYMEX Price/specified Gravity
Exhibit 4 - Posting Group/Subject Field Pricing Differentials
Exhibit 5 - Monthly Crack Slider Adjustments
Exhibit 6 - Point Pedernales Adjustments Example Calculation
Exhibit 7 - Approved Disclosures
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EXHIBIT 99.1
[LOGO] NUEVO ENERGY COMPANY
NEWS RELEASE
-----------------------
FOR IMMEDIATE RELEASE CONTACT:
February 7, 2000 Barbara B. Forbes
Director of Investor
Relations
713-374-4870
- --------------------------------------------------------------------------------
NUEVO ENERGY COMPANY CONTRACTS TO SELL
ITS CALIFORNIA CRUDE OIL TO TOSCO CORPORATION
FOR 15 YEARS AT PRICES TIED TO NYMEX CRUDE OIL
HOUSTON - Securing a long-term pricing structure and sales outlet for its
California crude oil production, Nuevo Energy Company (NYSE: NEV) has signed a
15-year contract to sell all of its current and future California crude oil
production to Tosco Corporation, Nuevo announced today. The contract provides
pricing related to a percentage of the NYMEX crude oil price for each type of
crude oil Nuevo produces in California, effective January 1, 2000.
"By linking our contract price to the NYMEX, Nuevo has effectively eliminated
our exposure to the basis differential risk for the vast majority of the
Company's crude oil production," said Doug Foshee, Chairman and CEO of Nuevo.
"This long-term supply agreement, combined with our ongoing risk management
program, greatly reduces our vulnerability to oil price volatility. By taking
tangible steps to mitigate our exposure to basis differentials as well as WTI
price volatility, I think we're bringing significant long-term value to Nuevo's
shareholders."
Under the terms of the contract, Tosco will purchase all of Nuevo's current and
future crude oil production, both onshore and offshore California. Mr. Foshee
said that individual oil prices under the contract vary based on several factors
such as quality and location, but he anticipates that in the aggregate Nuevo
will receive approximately 72% of the NYMEX price over the first four years.
Nuevo Energy Company is a Houston, Texas-based Company primarily engaged in the
exploration for, and the acquisition, exploitation, development and production
of crude oil and natural gas. Nuevo's principal domestic properties are located
onshore and offshore California. Nuevo is the largest independent producer of
oil and gas in California. The Company's international properties are located
offshore the Republics of Congo and Ghana in West Africa and onshore the
Republic of Tunisia in North Africa. To learn more about Nuevo, please refer to
the Company's internet site at http://www.nuevoenergy.com.
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This press release includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934. All statements other than statements of
historical facts included in this press release, including without limitation,
business strategies, estimated reserves and production volumes, plans and
objectives of management of the Company for future operations, and capital
expenditures are forward-looking statements. Although the Company believes that
the assumptions upon which such forward-looking statements are based are
reasonable, it can give no assurances that such assumptions will prove to have
been correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") and
projections include volatility in oil and gas prices, operating risks, the risks
associated with reserve replacement, competition from other companies and other
factors set forth in the Company's Annual Report on Form 10-K filed with the SEC
and incorporated herein. All subsequent written and oral forward-looking
statements and projections attributable to the Company or to persons acting on
its behalf are expressly qualified by the Cautionary Statements.
####
