UPDATE
I * I • T f C I L ' 11 • I • r . r u r i
L i m " i i k t i . l i i i i i f l i m . M i i , . . r . . . . l i n n Lit P « ! ' I t c . t i l i i P i t*
OOI R a f f I I I • > I I • I t > i 0 1 I l Ii '. r ' I M i m n L I C I L H S C t l f t l O B - I L L or I L O C I i o i . a o i t L i '• i * ocs o r r i n u • • M u - n m n i c i i a * • i * « or. n c ?o»j n i i r » • t s «.
/ I • I • M I I I I I r u i ^ , I Ut I I • I • I T • I -
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t * J | I 0 , , l " » • • • » ' • • S . ' I O 0600 • ' f o r S L O C I I I S T I I » o » i t i n . O C J o r r t c i i L M O T I I C T I O I i i a c i u . i » -
i i i » o » J - o c s e l a i r . I l l < ; i C t n e t l o a - o j - o i ' H o o i » • • • • ] > « . « 2 i . 4 2 i r i l a a t l a » » • » » r » » \ . ' » 0 oooo
L I C I L u s e i I r T I oa I L L o r I L I L I I J I . M S T I « i o n i • 1 1 . ocs o r r i c i i i . n o t n r n n i I U C I I I • • i *
i i i s o o i - o c f f l i j i . i l l i r t C a a a a a , l a t o i / i i ' i i e o i i m i t - i n , H I , i n r i i n t n • • • • i m v ' i o oooo
l l f l l D i s c u r r i o i I L L Of I L O C I t ' l . I I S T I I t o n I l l l . OCS O I M C I I L P I O T I i r r t o a I I K 4 I I . I I
21416 FT :HARY FUELS, INC EXHIBIT
PART I
Pag* no - I Data 07/7
MiMaiHsmma Vam . .Uim T r a c t •FMIwtt Hi atiti/CwntT
12*4001 001
OCS C 6578,BLK 221 Caawron Waat ( 2 2 6 . . )
LECAL DESCRIPTION A l l o f Bloclc 7 8, Wast Caawron A r a a , OCS Laaa lng Nap, Lou ia iana Nap No 1
Corpua C h r l a t l Exp lo ra t ->n Cr LA Waat Caawron Area
LU-BaOl i l S U fttltl
01/01/14. S.000 oooo
Ktcgrrtini Bil l
1264002 • OCS C 5293,BLK 226 001 Caawron Waat ( 2 2 6 . )
LECAL DESCRIPTION: A l l o f B t o c k 2 2 6 . Waat C a a w r o n A r o o . OCS L e a k i n g N a p , L o u l a l a n a N a p N o .
Corpua C h r l a t l E a p l o r a t i o n Co. LA Wool Caaaron Araa
07 /01 /11 5.0O0 0000
1723001 • OCS C 5315.BLK 368 0 0 1 KrypC***
LECAL DESCRIPTION A l l o f B lock 361 . Waat Caaaron A raa . OCS Laaa ina. Nap. Lou ia iana Nop No. 1 - A
S h a l l O f f a h o r a . I nc . LA Waat Caawron Aroo - W e a t A d d i t i o n
07 /01 /11 3.000.0000
2 K . 1 6 PR1HARY FUELS. INC E X H I B I T " A "
PART I
Lum
1 2 * 1 0 0 2 T r a c t 2XS.
ooi OCS C 5318 ,BLX 4 1 4
Caawron H a a t LECAL D E S C R I P T I O I I :
A l l e f B l o c k 4 1 4 . Waat C a a w r o n A r a a . OCS L a a a l n g N a p . L o u l a l a n a Hap No 1
C o r p u s C h r l a t l E x p l o r a t i o n Co LA Waat C a a e r o n U r s t A r a a
I 2 6 6 O 0 1 - OCS C 5 2 9 9 , BUC 143 0 0 1 C a a a r o n Waat 16 3 . 2 8 9
LECAL DESCRIPT ION A l l o f B l o c k 1 6 3 , Waat C a a a r o n A r a a . OCS L o o o l n g N a p . L o u l a l a n a Nap N o . I
C o r p u s C h r i s t ! O i l 6 C A S C I : LA Waa t C a a a r o n Waat A r a a
C r o s s A c r a a 0 / / 0 1 / 8 ! S.000.oooo
0//01/B1 5.000.OOOO
tMOOBUM I t t l
1 7 6 6 O 0 2 • OCS C 3300 .BUC « • 0 0 1 C a a a r o n U a a t 16 3 . 2 8 9
LECAL O C S C R I P T I O N : A l ' r f B l o c k 7 S 9 . Wast C a a a r o n A r a a . OCS r a s i n g N a p . L o u i s i a n a Nap No I
1 2 6 7 0 0 1 ~ OCS C 5 1 0 ) . B L K 1 1 1 C o r p . - 0 0 1 C a a a r o n Wast ( 3 1 1 . . . ) LA Was t Caau r ro
LECAL DESCRIPT ION A l l o f B l o c k 1 1 3 . Wast C a a a r o n A r a a . OCS L a a a l n g H a p . L o i l s i a n a Hap No I
C o r p u s C h r i s t l 0 1 1 6 Cas Co LA Wes t C a a e r o n - W e s t A r a a
Chr i s l 1 ( i l l 4 C A S CI
Wesl A i r *
0 7 / 0 I / B 1 5,000 0000
0 6 / 7 8 / 1 1 5 . OOO 0 0 0 0
1 2 6 7 0 0 2 • OCS C 7611 .BLK 112 0 0 1 C a a a r o n Wasr ( 3 1 3 . . . )
LECAL D E S C R I P T I O N : A l l o f B l o c k 1 1 2 . Wast C a a a m n A r a a . Waa t A d d i t i o n . OCS l e a s i n g H a p . L u u l s l a n
C o r p u s Chr i s . i O i l 4 Cas Ci I A Wast C a a e r o n - W r s t A r r a
Nap No IA
07/27/85 5 , 0 0 0 001)0
C o r p u s C h r i s t i C a p l o t O t l o n
LA Was ! C a a r r u n West A r a a 1 B 6 M M 1 • OCS C 1 * 0 7 . BLK 1 1 *
0 0 1 C a a a r o n Waat Waat ( 1 1 4 . ) LECAL D E S C R I P T I O N :
A l l o f B l o r k 1 1 5 . Wasr C a a a r o n At r . i . W a a t A d d i t i o n , o c s L a a a l n g N o p , L o u i s i a n a N A P NO IA
o;/oi/B6 5.noo.oooo
I 8 6 S O 0 2 - OCS C 1 4 0 6 , B L K 314
0 0 1 C a a a r o n Weat H o o t ( 3 1 4 . . . ) LECAL DESCRIPT ION
A l l o f B l o c k 1 1 4 . West Ca
C o r p u s c h r u i i E a p l o r a l I o n Co
LA W e s t C a s e * r o n Wasr A r e a
i r o n A r a n ,
07/01/16 5.OOO OOOO
21416 m I N A R Y M i H - S . INC E X H I B I T ' A *
PART I
L a a a o r / L o o j a , H a — L f H i t
IxBti rtaipttt "BBM 5^tt/Coumv
1 6 9 7 0 0 1 - C>:S C '> V>9. BLK 4 0 S h a l l O f f s h o r * . l n r A r a g o n l t a E a a t LA E a a t C a a w r o n A m
LECAL DESCRIPT l U i A l l o f B l o c k 6 0 . t t . t C a a a r o n A r a a . OCS L o o o l n g N a p . L o u l a l a n a Nap No 2
Paga n o . I
D a t a • 0 2 / 2 1 / * *
L»r D a n B a c o r d l n a D a t a C r o a i A c r a a
07/01/11
s .ooo oooo
? i « i 6 PHIHABY n i t t s . I N C Page no • I EXHIBIT *A- Data . 02 /71 /89
PART I
U n i t Tract f lB IB tC t Ml gUlf/Cowuv
L i t B t M C l f lM A t t t l
laUatfiiTaa B i t !
1181001 - OCS C i i l l , I L K 2i7 OOI Caaaron Eaat
LECAL DESCRIPTIOH All of Block 1*7. taat Caaeron Araa, OCS Laaalng Nap, Louis'ana Nap No. 2
Corpus C h r l a t l Eap lo ra r l n i . Ct LA East Caaaron-South Area
Oi /10 /B* 5.OOO 0000
06/75/8* 5.OOO OOOO
PArfT I
172*001 OCS C VMM. BLK 95 Topat
LECAL rMttcairrioN: A l l o f B lock 9 i , V e r a l l l o n Araa OCS Laaa lng Nap, Loulalana Nap No
S h a l l O f f s h o r e . LA V e r a l l l o n Araa
07/01/BJ •OOO 0000
PART I
_Uuau S f t . /County
L t n i t
1196001 - OCS C 9)37.BLK BO Prlnary Fue l s , Inc 001 South Harsh l a i a n d 80 LA South Harsh Island-South Ar«
LECAL OES CR IPT IOW A l l a f Block 60, South Harsh I s l a n d Area . South Addi t ion . OCS Laaalng Hap. Louis iana Hap No IC
Pogo no • t Ooto • 02/23/B9
Lar jjttB Bacardlaa Oata Cross Acraa
06/01/SB 5,000 0000
7 1 * 1 6 PR I KARY FUELS. INC EXHIBIT "A"
PART 1
D a t a 0 2 / 2 J / 6 *
IfeQOOOl OO I
UlBPt/LBRlB W t l L r » « r c
f TB I W t t S t a t e / C o u n t y
OCS C 05 7A. BLX t l Ship Shoal 72
IFGAL DESCRIPTION P a r t o f B l o c k 6 1 . S h i p S h o a l A r a a . OCS L a a a l n g , H a p . L o u l a l a n a Hap No 5
A n n a H B e c h e r And LA S h i p S h o a l A r e a
R e c o r d i n g D a t a Laa D a t a
t i n ? At l t l
08/1 J / .6 BK *25 PC 27* l . l l l «*00
H a g n o l | a P r i Co
I A S h i p S h o a l A t r a 1 6 9 0 0 0 2 • OCS C 058A, BLX 6 *
OO I S h i p S h o a l 72 U *L DESCRIPTION
P a r t o f B l o c k 6 * . S h i p S h o a l A r a a . OCS L a a a l n g H a p . L o u l a l a n a Nap No 5
0 0 7 S h i p S h o a ! 72 LA S h i p S h o a l A n P a r t o f B l o c k 6 * . S h i p S h o a l A r r a . OCS L a a a l n g H a p . L o u l a l a n a N i p l i o 5
OCS C 059A.BLK 71 0 0 1 S h i p S h o a l 72
LECAL DESCRIPT ION B l o c k 7 1 , T r a c t 7 8 5 . S h i p S h o a l A r a a . OCS L a a a l n g N a p , L o u l a l a n a Hap No . 5
M if.no I la Pri Co
IA Ship Shn.il Mr a
09/17/4* B l l 5000
17 l"00
0 9 / 1 2 / 6 6 .' . 5 0 0 OOOO
OCS C 060A.BLK 72 0 0 1 S h i p Shoa l 72
LECAL DESCRIPT ION B l o r k 7 1 . T r a c t 7B6. S h i p S h o a l A r a a . OCS L a a a l n g N a p . l o u l a l a n a Hap No 5
N a g n n l l a Pa t Co
I A S h i p S h o a l A r a a
OCS C 0 * 7 A . B L K B7 S h i p Shoa l 72
LECAL DESCRIPT ION B l o r k 8 7 . T r a c t 8 0 1 . S h i p S h o a l A r r a OCS l a a a l n g N a p , L o u i s i a n a Hap Na . 5
M i F.T... 1 i .i P r i Co
I A S h i p S h o a l A r r a
0 1 / 1 7 / * * 1 . BOO 0 0 0 0
0 9 / I 7 / * 6 1.951 1100
2 1 4 1 6 PR I MAK Y FUEI.S. INC E X H I B I T " A "
PART I
P a g * no 2
Daca 0 2 / 2 ) / > a
\suaa T r a c t . " • t B t T / C o u n U
1 7 0 4 0 0 1 OCS C 5557 .BLK 2 0 1 B r o a a l t a d
LECAL D E S C R I P T I O N :
A l l o f B l o c k 2 0 1 . S h i p Shoa l A r a a . OCS L a a a l n g N a p . L o u l a l a n a Nap No *
S h a l l O f f s h o r e . I n c
LA S h i p S h o a l A r e s
— k r p « s A t » l
0 7 / 0 1 / 8 3 5 . 0 0 0 0 0 0 0
R e c o r d i n g D a t a
1 7 0 4 0 O 2 OCS C * * * S . B L K 2 0 2 B r o a e l l a d
LECAL D E S C R I P T I O N : A l l o f B l o c k 2 0 2 . S h i p S h o a l A r e a . OCS L a a a l n g H a p . L o u i s i a n a Hap N > . 5
S n e l l Of I s h o r o , I A S h i p S h o a l A r e a
0 7 / 0 1 / 8 1 ' . . 0 0 0 0 0 0 0
2 0 0 2 0 0 1 OCS C i * 6 8 S h i p Shoa l B l k 2 8 *
LECAL D E S C R I P T I O N : A l l o f B l o c k 2 8 2 . S h i p S h o a l A i e a . OCS L e a s i n g N a p . L o u i s i a n a Hap No *
Sun E x p l o r a t i o n an i l P i o r i u c t i< LA S h i p S h o a i A r e a
0 / / 0 I / 8 1 s.OOO 0 0 0 0
7 0 0 2 0 0 2 - OCS C * * 6 9 O O I S h i p Shoa l B l k 7 8 *
LECAL D E S C R I P T I O N : A l l o f B l o c k 7 8 * . S h i p S h o a l A r e a . OCS L a a a l n g H a p . L o u l a l a n a Hap No
A j a e r a r l * Hess C n i p n i a t t n
I A S h i p S h o a l A r e a 0 7 / 0 1 / 8 1 S . 0 0 0 OOOO
2 0 0 8 0 0 1 - OCS C 6741
O O I S h i p S h o a l B l k I 7 i / ' ' * LECAL D E S C R I P T I O N :
A t l o f B l o c k 1 7 ) . S h i p S h o a l A i e a . OCS l e a s i n g N a p . L o u i s i a n a Hap No
U n i o n T e x a s P e t r o l e u a C o a p a n y LA S h i p S h o a l A r e a
O h / 0 1 / 8 4 * .0OO 0 0 0 0
OCS C 9618 0 0 1 S h i p S h o a l B l k 1 7 1 / 1 7 4
LECA . D E S C R I P T I O N : A l l o f B l o c k 1 7 4 . S h i p S h o a l A r e a . OCS L e a s i n g N o p . L o u i s i a n a Nap No *
U n i o n T e x a s P e t r o l e u a Coapany
I A S h i p S h o a l A r e a
0 7 / 0 1 / 8 8 * . 0 0 0 . 0 0 0 0
21416 PR I HA* Y FUELS . INC EXHIBIT -A-
PART I
laimi iliBiB ITBBM Ltxtu. I U £ £ r IlllUCr llBBII S'«tt/(7ount,T
I99B0O1 • OCS C 9664. BUI 237 Primary F u r l s . Inr 001 Souch T l a * a l l a r Block 237 LA "outh T i a b a l i e r Arra
LECAL DESCRIPTION A l l of Block 217. Souch Ttabo l lor Aroo. South Addition. OCS Laaalng Nap. Louislono Nop No. 6A
Page no. - I Data - 02/73/89
U t B t a J B a c o r d i n a P a f
QUMM juau
PART I
P a g * n o . - t D a t e • 0 2 / 2 1 / B 9
L s . a n r / L e a a e M a — . L f f J i t r U l P i t ! n t C q n U n g U t t
I t i t l P r o s p e c t M i a c S t B l t V f i g ' W t Y C r o s s a & I l l —
I 9 5 S 0 0 I OCS C 7 7 9 1 . B l * 9 § C o r p u s C h r i s t i E a p l o r a t i o n Co 0 9 / O I / B S
0 0 1 C a l l s U a a t 9S I A Was t D e l i a A r e a 5 , 0 0 0 0 0 0 0 LEGAL DESCRIPT ION:
A l l o f B l o c k 9 S . West D e l t a A r e a . OCS L a a a l n g N a p . L o u l a l a n a Map No B
71AI6 PR IHAKY FUELS, INC. E X H I B I T " A "
PART I
U n w i / U m \SMSS 1 1 a c t . S i» " r /goyn t .Y
172SO01 ocs c SOi? Ha rui
BLK 8 1 LA Sr
S h a l l O l f s h o r e , l i i t h Pass S o u t h A r e a
LECAL DESCRIPTION
A l l o f B l o c k 8 1 . S o u t h Pass A r e a . S o u t h 6. E a s t A u d i t t o n . OCS L a a a l n g H a p . L o u i s i a n a Nap No . 9A
Page n o . - 1 D a t a 0 2 / 2 1 / 8 9
!•»« " a t a n f t B t t f l M P B t t
£1211 bOMM—
0 4 / 0 1 / 8 2 i .OOO 0000
71416 PRIMARY FI IF I .5 . INC E X H I B I T - A -
P A R T I
P»H ' n o . 1 O a t * 0 2 / 2 1 / 8 9
Uait mmbMi T r a c t
176)007
L a a a o r / L i s i a Baaa
f r n i B i t i H—t - L c u t t UtJ lB lB
S t t l e / t p o u r i t Y .
OCS C ' 1 0 5 , BLX 1 0 9 M a i n Paaa S o u t h a a a t
LECAL DES C X I P T I ON: A l l o f B l o c k 1 0 9 . N a i n Paaa A r a a . O "S L a a a l n g N a p . l o u i s i a n a Mn,. No 10
I A M a i n Pass S o u t h S f a a t A r 0 9 / 0 1 / 1 5 4 , •»•»<, s,*00
n t C g H r l n i P B l B
1 6 9 5 0 0 ) S h a l l O l f s h o r e . I n c
LA N a i n Paas S o u t h 6 E a s l A r a a OCS C V l * . . B I X 7 0 2
Anna p u m a LECAL DESCRIPTION
A l l o f B l o c k 7 0 7 . N a i n Pass A r a a . S o u t h 6 F a s t A d d l t l OCS L a a a l n g N a p . L o u i s i a n a Nap No IOA
0 7 / 0 1 / 8 ) 4 . 9 9 4 5500
OCS C 5 7 1 5 . B I X 2 0 ) Annapurna
LECAL DESCRIPT ION A l l o t B l o c k 7 0 ) . N a i n Paaa A r a a . OCS l e a s i n g N a p . l o u i a l a r . a Hap Ho 10
S h - l l O f f a h o r a . I n r A H a i n Pass S o u t h '. K.ist A i r ^
0 r / 0 I / B ) 4. 99/. 5500
1 6 9 5 0 0 * • OCS C 5 7 1 6 . B I X 708 S h a l l O f f s h o r e . I n . 0 7 / 0 1 / 8 1 0 0 1 Annapurna I A H a i n Paaa S o u t h 4 F a s t A r e a 4 . 9 9 4 5500
LECAL DESCRIPTION
A l l o r B l o c k 7 0 8 . H a l n Paas A r a a . OCS L a a a l n g N a p , L o u i s i a n a Nap Nn 10
1 7 1 0 0 0 1 • OCS C 4 8 2 2 . BIX ?<5 S h e l l O f f s h o i e . I n r 0 6 / 0 1 / 8 4 0 0 1 S h e s t s I A H a l n Pass S o u t h f. F a s t A r e a 6 , 9 9 4 5500
LECAL DESCRIPTION
A l l o f ( l o c k 7 1 5 . H a l n Pass A r e a . S o u t h 6 Eas t A d d i t i o n OCS L e a s i n g H a p . L o u i s i a n a Hap Nn I D A
21416 PRIMARY FUELS. INC E X H I B I T - A "
PART I
I.rnn Itvaktr
U i i o r / U m H i
ftBIMtt BVBBB 5 l P t f / P ? W Y I f T l l l t
S h e l l O f f s h o r e . I n c
I A H a l n P a s s - S o u t h & Eas t A r e a OCS C 1 1 2 1 . BIX 216
S h a s t a LECAL D E S C R I P T I O H :
A l l o f B l o c k 2 1 6 . H a l n Paas A r a a . S o u t h 6 E a s t A d d i t i o n . OCS L a a a l n g H a p . L o u i s i a n a Hap No IOA
S h e l l O f l s h o r e . I n . LA N a i n P a a a - S o u t h 4 E a s t Area
1 7 1 0 0 0 ) - OCS C 6126.BLK 226 O O I S h a a t a
LECAL DESCRIPTION A l l o f B l o c k 2 2 6 . H a l n Pass A r e a . S o u t h 6 E a s t A d d l t l OCS L a a a l n g H a p . L o u l a l a n a Nap No IOA
Paga n o 2 D a t a 0 2 / 2 1 / 1 9
Lit tola EBSPttiint Pata S m i A t t n
0 6 / 0 i / a *
4 . 9 9 4 s.5.00
0 6 / 0 1 / 1 4 4 . 994 SSOO
2 1 4 1 b PHtHARY FUELS. INC E X H I B I T • » *
PART 1
P a g * n o t D a t a 0 2 / 2 5 / 8 9
T r a c t 9 L / U * ! - •".
. . f l B H r t t t Ma-rVf—.
Ltjui i K t l g r d i B l a m a l
1 2 6 2 0 0 1 OOI
OCS C 5691., BLX 98 Natn Paaa 98 LA N a l r
L A L D E S C R I P T I O N t i l o f B l o c k 9 1 . Na<n Paaa A r a a . OCS L a a a I n g Nop, L o u l a l a n a Nap No
C o r p u a C h r i s t i E x p l o r a t i o n Co
Stall A t tn
0 7 / 0 1 / B 1 4 . 9 9 4 5 5 0 0
10
1864001 - OCS C 7 1 0 0 . g U t A ) P C o r p u a C h r l a t l E x p l o r a t i o n Co 0 / / 0 1 / I 5 0 0 1 N a t n Paaa O P 1 C LA H a l n Paaa A r a a 1 6 ' 0500
L E C A L D K S C R I P T I O N : A l l o f B l o c k o l f , N a i n Paaa A r a a . OCS L a a a Ina , N a p , L o u i a i a n a Nap No 10 B e i n g t h a t p o r t i o n of B l o c k 6 1 . H a l n P a a a A r e a . OCS L e a s i n g Hap. L o u i a i a n a Hop No | 0 , s e a w a r d o f t h e l i n e e s t a b l i s h e d p u r s u a n t tn S o c t l o n B ( g ) o f the OCS L a n d s A r t a s a a e n d e d . s p e c 11 I c a l l y d e a c r i b e d o a f o l l o w s
I N T E R S E C T I O N S ARC CENTERS X T X Y
1 7 7 7 ) 4 0 2 f t ' 2 6 ) no 0 0 ' 1 7 7 6B'» 105 ' ?'•(> 195 '
2 7 7 7 0 195 0 6 - 769 / 8 0 l r 7 1 J 68B 7 1 V 7'.7 7 1 V
1 7 719 6 4 9 0 8 ' ? / 0 705 oo­ • ) 4 2 6 B I 9 1 V 757 / i i -
4 . 7 ' U Bll 2 5 ' 7 / 0 / 0 5 oo* 5 7 714 6)1 75 7 6 / 0 1 7 5 0 "
6 7 709 100 O O ­ 767 0 1 7 . 5 0 ' • T a n g e n t Segaen t
7 7 709 100 OO" 7 6 1 110 OO­
I 2 7 ? ) 407 * T 7 6 ) 1 ) 0 OO'
71*16 PRIMARY FUEl-S. JHC
EXHIBIT *A" PART I
P a g * n o . 2 D a t a - 0 2 / 2 1 / 8 9
L e s a e a
5.at t / ' r9"nu C r o a a A c r a a
1 8 6 4 0 0 ? OCS C 7601.BIX 41 C Corpua C h r l a t l E x p l o r a t i o n Co
H a l n Paaa O F I . LA H a l n Paaa A r a a
LEGAL D I S C R I P T I O H A l l o f B l o c k 4 I C . H a l n Paaa A r a a . OCS L a a a l n g H a p . L o u l a l a n a Nap N o . 10 B e i n g t h a t p o r t i o n o f B l o c k 6 1 . N a t n Paaa A r a a . OCS L a a a l n g N a p . l o u i a', anu N a p No 1 0 . l a n d i a r d o f t h a U n a e a t a b l l s h e d p u r s u a n t I S a c t i o n I ( g ) o f t h a OCS L a n d s A c t a s a a e n d e d . e p a c l f I c a l l y d e a c r i b e d e a f o l l o w s '
07/01/65
I . 661 9800
INTERSECTIONS ARC CENTERS
X X Y
1 7 7 7 1 602.tr 7 r , l no 0 0 ' 1 7 7 689 105- 750 195 -
7 7 720 1 9 5 . 0 6 ' 269 780 1 7 ' 7 1 7 668 215* 257 715 -
1 2 719 6 6 9 0 6 ' 7 70 70-i 0 0 ' • 1 4 7 681 9 1 5 - 7 5 / / 5 5 -
4 7 r i * 6 1 1 7 5 ' 2 / 0 ro5 oo- 5 2 714 6 i i : v l t l 0 1 / 5 0 -
6 2 / 0 9 100 OO­ 261 0 1 7 5 0 ' • T a •gen t S e g a e n l
7 2 ro9 IOO 0 0 ?h ! 1X1 0 0 '
• 2 7 7 1 4 0 7 f f 2b 1 I JO 0 0 *
n<.\b PRIHAfiY F U E L S . IHC E X H I B I T - A *
PART I
P a g * n o . I D a t a - 0 2 / 2 3 /89
T r a c t L e a a o r / L a s a a H a a a laSJEBfJ
P t o a a a c t H J atatt/CownlY
1 6 9 2 0 0 I OCS C 5 7 ) 9 . B I X 72 A c h i l l a .
LEGAL DESCRIPTION A l l e f B l o c k 2 2 . C h a n d e l e u r A r a a . OCS L e a s i n g H a p . L o u l a l a n a Hap Ho
S h a l 1 O f f s h o LA C h a n d e l e u r A r e a
CIVH At tia
0 7 / 0 1 / 1 1 5 . 0 0 0 . 0 0 0 0
11
Uc.gn.Ung Data
16970O2 OCS C 5 7 * 2 . B L X 3* A c h i l l e a
LECAL DESCRIPT ION A l l o f B l o c k 1 * . C h a n d e l e u r A r e e . OCS L e a s i n g H a p . L o u i s i a n a Hop H o . 11
S h e l l O f f s h o r e .
LA C h a n d e l e u r A r e a 07/01/81 5.000.0000
PRIMARY FUELS. INC E X H I B I T - A "
PART I
Page n o . - 1 D a t e 0 2 / 7 3 / 8 9
L*8if t*m»nt
T r a c t
11(1 i o n i -
L e s s o r / L e a s e W a — P r o a o a c t M a a * 5 ' a t e / C o u n t y
C o r p u s C h r i s t 1 n i I TX H a t a g o r d a I s S 8 A t e .
OCS C 6 0 * * 1 . BUC 4 5 1 H a t a g o r d a [ a l a n d 4 5 1
LECAL DESCRIPTION A l l o f B l o c k 6 5 1 , H a t a g o r d a I s l a n d A r a a . OCS L a a a l n g H a p . Taaaa Hap Nn *
Laa P a t f
£ 1 2 1 1 A c r e s
1 0 / 0 1 / 8 1
• ' 6 0 OOOO
R e c o r d i n g D a t a
C o r p u s Chr t s i I O i I TX H a t a g o r d a | « S B. A r a n
1 ) 0 7 0 0 1 - OCS C 6 0 5 2 . B L K 6 B 7 Ha tago rda . I s l a n d 6 8 7
LECAL DESCRIPT ION A l l o t B l o c k 6 6 7 . H a t a g o r d a I s l a n d A r a a . OCS L e a s i n g H a p . T a s a a Hap No *
1 0 / 0 1 / 6 1 5 . ' 6 0 0 0 0 0
1 7 0 8 0 0 1 OCS C * 9 9 7 . B L K 5B8 C o r t e x
LECAL DESCRIPT ION A l l n f B l o c k 5 8 8 . H a t a g o r d a I OCS l e a s i n g N a p . T e x a s Hap No
S h e l l O f t s h o t TX H a t a g o r d a I s S B
0 4 / 0 1 / 8 2 •>. / 4 0 n o o o
t t m t n r e u s , i 1 1 1 I I I T '
M l t !
t i n , . . . , , , { i r , a t t t , I t , . U l l . t m i l i , M » » o - i • g ( l | I I I O . I l I X l T » r l . . . r * . . ! • l a c
O O I • a r i a 4 1 ' I I I n c u i i s c n m o i I L L OP IL O C I 411. I l l t O - I I I
OCS I 4141 . I L I • 11 l a r l a
t l l l L H S C I l f l l O i /» OP IL O C I i l l . I I I J O S I I I
• a S . I I r a a
ocs L i t s i o c oar . T i n ? aar HO
8 ,Mi7i.m- S ' 6 0 0 0 0 0
i.;.;
. . . I t c o c i i i a . l a t i
0 1 / 0 7 / 1 9
o i ' o w i i r91 I I * n i n 7 . 4 O O 0 0 O O
OCS L I I S I I I OIP. T I I I S l l f an
OCI C I I M . I L I 111 Oarla *•* T l l r
L I I I L H I C I l P T l o a •LL OP BLOCI 4 ) 1 . I I I Z O S I I I
0 1/01/11
s. no oooo ocs L I I S I I : n r . T H I S air an
11 • I m u . , m i c
P I M ' I * o i / s ' / i f
k m * . I I I I I I I t i i * c < loot t . loot . . t i n u l i t l i t t I i i i c t t i i . l i t l .
• « - r i i i f ; t t r f l i l a M * B 5 f f l « i f S S ! M : n ; : * 8 " I I / i f f 11-- o a l Cf»rl*ra*i T I t i i . n U i 5 . 1 . I r * i •. iso OOOO
L t l l l I I I C I l i t I O I : I L L Of I L O C I I I I . C I I T I S T O I I l l l . OCS L I I S I M G O i l . T H I S O i r • 0 I
PRIMARY FUELS, INC EXHIBIT -A-
PART I
P . K * n o 1 D a r * 0 ? / 2 J / " °
I t l l f NVJatTTI T r a c t
I IOOOOI -
L a a a o i / L a a a a W a — S ' f l t r / C o u n t y
OCS C 6 1 * 7 , B L K <6 H i g h l a l * n d 6 6 . 117
LECAL DESCRIPTION A l l o f B l o c k B 6 . H i g h I s l a n d A r r a . OCS L e a s i n g H a p , T r x a i Hap N o . '
C o r p u s C h r i s t i E x p l o r a ! l >
TX H i g h I s . S B A r r a
1 0 / 0 1 / 6 )
' . . ' 6 0 0 0 0 0
1)00007 OCS C 7777 .BLK 117 H i g h I s l a n d 8 6 . 117
LECAL D E S C R I P T I O N : A l l o l B l o c k 1 1 7 . H i g h I s l a n d A r a a . OCS L a a a l n g H a p , T a x a a Nap No 7
C o r p u s C h i 1s t i E x p l o r a t i i
TX H i g h l o . S B A r r a
1 7 0 7 0 0 2 • OCS C 61 7 2 . 8 ' K . '17 Bo
LECAL D E S C R I P T I O N : A l l o f B r o c k 2 ) 7 . H i g h I s l a n d A r r a . OCS L r a s l n g N a p . T a x a s Nap No /
S h a l l 0 1 1 s h o r e TX H i g h l a , S B A r r a
0 9 / 0 1 / 8 4 /dO OOOO
I . - V 0 I / 8 1 •», 700 0 0 0 0
I7150O1 HCS C 6 1 7 1 , BLK A - l
I H o n a a F s s t LECAL D E S C R I P T I O N :
A l l o f B l o c k A
S h a l l O f f s h n r
TX H i g h I s S B . A i a a
1 . H i g h I s l a m ! A r a a .
OCS L r a s l n g N a p . T a x a s Nap Nn 7
1 0 / 0 1 / I I t
S. / M l OtKMI
. . • I I I * ! • » • r . f . o i ' O f < • •
i n n K i i i i i L > . o : .' I • g • t . t t t t - , . - r . . - L « . « f « . . L i t . F t t t
1 , . . . o l
, , , t ' oes n « h H ' » t i , , M " e .?S ! f ' ^? : ! f l l i i i . n c ; . E, ' 'Ml4. fSI I • a . r l a l c l s . a M I t l I I I « | . I 4 I I i S . I I . . . 5 . 7 1 0 0 0 0 0
L I C I L I I S C I I f T I O N : 111 of I I or I M t . • a t . t . r * . 1 . 1 . • I lr«*. or. S L • a a < a | t e p , r . i . . • . c a o «
This Schedule sets f o r t h P r o d u c t i o n Costs set f o r t h t n Sec t i o n 1.21(a) ( i i )
SCHEDULE C
Attached t o and made a p a r t of O v e r r i d i n g Royalty I n t e r e a t Conveyance ( t h e "Conveyance") from Subject I n t e r e s t Owner to Royalty Owners.
PRODUCTION COSTS
I . D e f i n i t i o n s
1- Defined terms used i n the Conveyance t o which t h i s Schedule C i s attached have the same meaning when used here i n .
2. " C o n t r o l l a b l e M a t e r i a l " s h a l l mean M a t e r i a l which a t tho time i s so c l a s s i f i e d i n the M a t e r i a l C l a s s i f i c a t i o n Manual as most r e c e n t l y recommended by the Cou.icil of Petroleum Accountants S o c i e t i e s of North America.
3. " F i r s t Level Supervisors" s h a l l nean those employees whose primary f u n c t i o n i s the d i r e c t s u p e r v i s i o n of othe r employees and/or c o n t r a c t l a b o r d i r e c t l y employed on the Subject I n t e r e s t s i n a f i e l d o p e r a t i n g c a p a c i t y .
4. " M a t e r i a l " s h a l l mean personal p r o p e r t y , equipment or sup­ p l i e s a c q u i r e d or held f o r u i e on the Subject I n t e r e s t s .
5. "Operations" s h a l l mean a l l c p e r a t i o n s necessary or prcper f o r the developme.it, o p e r a t i o n , p r o t e c t i o n a n i maintenance of the P r o p e r t y .
6. "Operator" s h a l l mean the Subject I n t e r e s t Owner.
7. "Personal Expense'" s h a l l mean t r a v e l and o t h e r reasonable reimbursable expe. ses of Subject I n t e r e s t Owner's employees.
3. "Property" s h a l l mean the p r o p e r t y t -ha Subject I n t e r e s t d e s c r i b e d i n Schedule B t o ,nveyance r e l a t e s .
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9. "Technical Employees" sh a l l mean those employees having special and s p e c i f i c engineering, geological or ether professional s k i l l s , and whose primary function i s *:he handling of s p e c i f i c operating conditions and problems for the benefit of the Subject I n t e r e s t s .
I I . Direct costs
1• Rentals and Royalties.
Direct costs s h a l l include ( i ) lease rentals (including delay r e n t a l s and shut-in gas payments) and ( i i ) r o y a l t i e s burdening the Property which were i n existence at the Closing Date.
2. Labor.
A. (1) Salaries and wages of Operator's f i e l d employees d i r e c t l y employed on the Property i n the conduct of Operations.
(2) Salaries of F i r s t Level Supervisors in the f i e l d are not covered by the Overhead rate
(3) Salaries and wages of Technical ..nployees d i r e c t l y employed on the Property i f such charges are excluded from the Overhead rates.
B. Operator's cost of holiday, vacation, sickness and d i s a b i l i t y benefits and other customary allowances paid t o employees whose salaries and wages are chargeable under Pardgraph 2A of t h i s Section I I . Such costs under t h i s Paragraph 2B may be charged on a "when and as paid basis" or by "percentage assessment" on the amount of salaries and wages chargeable under Parag-aph 2A of t h i s Section I I . I f percentage a sessment i s used, the rate s h a l l se based on the Operator's cost experience.
C. Expenditures or contributions made pursuant to assess­ ments imposed by governmental authority which are applicable to Operator's costs chargeable under Para­ graphs 2A and 2B of t h i s Saction I I .
D. Personal Expenses of those employees whose salaries and wages are chargeable under Paragraph 2A of t h i s Section I I .
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3. Employee Benefits.
Operator's current costs of established lans f o r employees' group l i f e insurance, h o s p i t a l i z a t i o n , pension, retirement, stock purchase, t h r i f t , bonus, and other benefit plans of a l i k e nature, applicable to Operator's labor cost chargeable under Paragraphs 2A and 2B of t h i s Section I I s h a l l be Operator's actual .•ost not to exceed twenty percent (20%) or the percent most recently recommended by the Council of Petroleun Accountants Societies of North Ame*- ca.
4. Material.
Material purchased or furnished by Operator for use on the Property as provided under Section IV. Only such Material shall be purchased for or transferred to the Property as may be required for immediate use and i s reasonably practical and consistent with e f f i c i e n t and economical operations. The accumulation of surplus stocks s h a l l be avoided.
5 • Transportation.
Transportation of employees and Material necessary fo r Operations but subject tc the following l i m i t a t i o n s :
A. I f Material is moved to the Property from the Operator's warehouse or other properties, no charge shall be made for a distance greater than the distance from the nearest r e l i a b l e supply store, recognized barge terminal, or railway receiving point where l i k e material i s normally available.
B. I f surplus Material is moved to Operator's warehouse or other storage point, no charge shall be made for a distance greater than the distance to the nearest r e l i a b l e supply store, recognized barge terminal, or railway receiving point. Nc charge shall be made for moving Material to other properties belonging to Operator.
C. In the ap p l i c a t i o n of Subparagraphs A and B above, there s h a l l be no equalization oi actual gross trucking costs of $200 or less exc uding accessorial charges.
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Services.
The cest of contract services, equipment and u t i l i t i e s provided by outside sources, except services excluded by Paragraph 9 of Sectirn l i and Paragraph l . i i of Section I I I . The cost of professional consultation services and contract services of technical personnel d i r e c t l y engaged in connection w i t h t t e Property. The cost of professional consultant services or contract services of technical personnel not d i r e c t l y engaged on the Property s h a l l not be charged.
Equipment and F a c i l i t i e s Furnished by Oper ator.
A. O p e r a s h a l l . .arge for use of Oper?tor owned equipment P 1 f a c i l i t i e s at rates commensurate with costs of c ers hip and operation Such rates shall include cc^cs of maintenance, repair , other operating expense, insurance, taxes, depreciation, and interest on investment not to exceed the Prime Rate plus two per cent per annum. Such rates snail not exceed average commercial rates c u r r e r c l y prevailing in the immediate area of the Property
B. In l i e u of charges in Paragraph 7A above. Operator nay elect to use average commercial rates prevailing in t h i immediate area of the Property less 20%. For automotive equipment, Operator may elect to use rates published by the Petroleum Motor Transport Association.
Da-sages and Losses to Property.
A l l costs or expenses necessary fo r the repair or replacement of Property made necessary because of damages or losses incurred by f i r e , flood, storm, t h e f t , accident, or other cause, except those r e s u l t i n g from Operator's gross negligence or w i l l f u l misconduct.
Legal Expense.
Expense of handling, investigating and s e t t l i n g l i t i g a t i o n or claims, discharging of l i e n s , payment of judgments and amount's paid f o r settlement of claims incurred in or resulting from operations ur.der the agreement or necessary to protect or recover the Property, except that no charge for services ot Operator's legal s t a f f or fees or expense of outside attorneys shall be made; provided, however, thaf a charge may be made for the expense of outside
attorneys i n connection with any actions brought by Operator against t h i r d parties which actions a prudent operator would determine to bring or to defend actions brought by t h i r d parties against Operator in conrection with the operatiors hereunder. A l l other legal expense is considered t o be covered by the overhead provisions of Section I I I .
10. Taxes.
A l l taxes of every kind and nature assessed or levied upon or in connection with the Property, the operation thereof, or the production therefrom and which taxes have been paid by the Operator.
11. Insurance.
Net premiums paid f o r insurance required to be carried for Operations. I n the event Operations are conducted in a state i n which Operator may act as s e l f - i n s u r e r for Workmen's compensation and/or Employers L i a b i l i t y under the respective state's laws, Operator may, at his election, include the r i s k under i t s self-insurance program and i n t h a t event, Operator s h a l l include a charge at Operator's cost not to exceed manual rates.
1 2. Other Expenditures.
Any other expenditure not covered or dealt within the foregoing provisions of t h i s Section I I , or i n Section I I I , and v h i c \ i s incurred by the Operator in the necessary ana proper conduct of the Operations.
I I I . Overhead
1. Overhead -- D r i l l i n g and Producing Operations.
( i ) As compensation for administrative, supervision, o f f i c e services and warehousing costs. Operator shall charge d r i l l i n g and producing operations on the Fixed Rate Basis provided below. Such charge shall be in l i e u of costs and expenses of a l l o f f i c e s and salaries or wages plus applicable burdens and expenses of a l l personnel, except those d i r e c t l y chargeable under Paragraph 2A, Section I I . The cost and expense of services from outside sources in connection w i t h matters of taxation, t r a f f i c , accounting or, except as otherwise provided in t h i s Cchedule C, matters before or involving governmental
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agencies shall be considered as included in the Overhead rates provided for.
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( i i ) The s a l a r i e s , wages and Personal Expenses of Technical Employees not d i r e c t l y employed on the Property s h a l l be coveted by the Overhead rates, and the costs of professional consultants' services and contract services of technical personnel d i r e c t l y employed on the Property s h a l l not be covered by the Overhead rates.
A. Operator s h a l l charge **' e following rates per well per month:
D r i l l i n g Well Rate: Rates competitive with the fees of u n a f f i l i a t e d persons i n the area engaged i n the business of rendering comparable services.
Producing Well Rate: Rates competitive with the fees of u n a f f i l i a t e d persons i n the area engaged in the business of rendering comparable services.
b. Application of Overhead — Fixed Rate Basis s h a l l be as f o l l o w s :
(1) D r i l l i n g Well Rate
(a) Charges for onshore d r i l l i n g wells s h a i l begin on the date the well is spu l f i l --nd terminate on the date the d r i l l i n g cr completion r i g i s released, whichever ;s l a t e r , except that no charge shall be made during suspension of d r i l 1 ing opeLat..ons f o r ten (10) or more consecutive days.
(b) Charges for offshore d r i l l i n g wells s h a l l begin on the date when d r i l l i n g or completion equipmer.t arrives on location and terminate on the -late the d r i l l i n g cr completion equipment .roves o f f location r i g i s released, which*. %?r occurs fit-.-. •:, except that no charge s h a l l oe made d . r i . j suspension of d r i l l i n g operations for con (10) or more consecutive days.
(c) Charges for wells undergoing any »v , e of workover or recompletion for a p-. Jod of f i v e (5) consecutive days or more sh a i l be made at the d r i l l i n g w ell rate. Such charges shall be applied for the period from the date workover operation?, v i t h
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r i g , commence through the date of r i - ^ release, except t h a t no charge s h a l l be made during suspension of operat' "or ten (10) or more consecutive day:
(?) Producing Well Rates
(a) An active well e i t h e r produced or injected i n t o for any po r t i o n of the month s h a l l be considered as a one-well charge f o r the e n t i r e month.
(b) An inactive gas we l l shut i n because of overproduction or f a i l u r e of purchaser to take the production s h a l l be considered as a one-well charge providing the gas well i s d i r e c t l y connected to a permanent sales o u t l e t .
(c) A one-well charge may be made for the month i n which plugging and abar.donment operations are completed on any w e l l .
(d) A l l other inactive wells (including but not l i m i t e d t o ina c t i v e wells covered by un i t allowable, lease allowable, transferred allowable, etc.) s h a l l not q u a l i f y f o r an overhead charge.
C. The w e l l rates shall be adjusted as of the f i r s t day of A p r i l each year commencing i n 1989. The adjustment shall be computed by m u l t i p l y i n g the rate c u r r e n t l y in use by the percentage increase or decrease i n the average weekly earnings of Crude Petroleum and Gas Production Workers for the l a s t calendar year ronpared to the calendar year preceding as shown by the index of average weekly earnings of Crude Petroleum and :>as Fields Production Workers as published by the United States Department of Labor, Bureau of Labor S t a t i s t i c s . The adjusted rates s h a l l be the rates currently i n use, plus or minus the computed adjustment.
IV. Pricing of Material Purchases, Transfers and Dispositions
Cperator i s responsible for Material and s h a l l make proper and timely charges and credits f o r a l l material movements a f f e c t i n g the Property. Operator s h a l l provide a l l material
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f o r use on the P r o p e r t y . Operator s h a i ' ke t i m e l y d i s p o s i t i o n o f i d l e and/or s u r p l u s M a t e r i a l , such d i s p o s a l b e i n g made e i t h e r t h r o u g h sa le t o Opera to r o r s a l e t o o u t s i d e r s . The d i s p o s a l o f s u r p l u s C o n t r o l l a b l e M a t e r i a l no t purchased by t h e O p e r a t o r s h a l l be de te rmined by Ope ra to r .
1 . Purchases.
Material purchased shall be charged at the p r i c e , including c a r r y i n g costs incurred during the 24-month period preceding the sale, paid by Operator a f t e r deduction of a l l discounts received. In case of Material found to be defective or returned to vendor for any other reason, c r e d i t s h a l l be allowed when adjustment has been received by the Operator.
2. Transfers and Dispositions.
Material furnished -o the Property and Mat . transferred from tne Property or disposed Operator s h a i l be priced on the following t ; s i v of cash discounts:
A. New Ma t e r i a l (Condition A)
(1) Tubular goods, except l i n e pipe, s h a l l be priced at the current new price in e f f e c t on date of movement on a maximum carload or barge load weight basis, regardless of quantity transferred, equalized t c the lowest published p r i c e f.o.b. railway receiving point or recognized barge terminal nearest the Property where such Material i s normally available.
(2) Line Pipe
(a) Movement of less than 30,000 pounds shall be priced at the cuirent new pr i c e , i n ef f e c t at date of movement, as l i s t e d by a re l i a b l e supply s'.- re nearest the Property where such Material i s normally available.
(b) Movement of 30,000 pounds or more s h a l l be priced under provisions of '.ubular goods pr i c i n g of Paragraph 2A(1) of t h i s Section IV.
(3) Other Material s h a l l be priced at the current new p r i c e , in e f f e c t at date of movement, as
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l i s t e d by a r e l i a b l e supply store or f.o.b. railway receiving point nearest the Property where such Material i s nonnally available.
B. Good Used Material (Condition B)
Material i n sound and serviceable condition and suit a b l e f o r reuse without reconditioning:
(1) M a t e r i a l moved to the Property
(a) At seventy-five percent (75%) of current now price, as determined by Paragraph 2A of t h i s section IV.
(2) H a t e r i u 1 moved from the Property
(a) At seventy-five percent (75%) of current new price, as determined by Paragraph 2A of t h i s Section IV, i f Material was o r i g i n a l l y charged as new Material, or
(b) At s i x t y - f i v e percent (65%) of current new price, as determined by Paragraph 2A of t h i s Section IV, i f Material was o r i g i n a l l y charged as good used Material at seventy- f i v e percent (75%) of current new price.
The cost of reconditioning, i f any, " h a l l be arsorbed by the t r a n s f e r r i n g property.
C. Other Used Material (Condition C and D)
(1) Condition C
Material which is not in sound and isrviceable c o n d i t i o n and not suitable for i t s o r i g i n a l f u n c t i o n u n t i l a f t e r reconditioning s h a l l be priced at f i f t y percent (50%) of current new p r i c e as determined by Paragraph 2A of t h i s Section IV. The cost of reconditioning s h a l l be charged t c the receiving property, provided Condition C value plus cost of reconditioning does not oxceed Condition B value.
(2) Condition D
A l l o* her t - . i t e r i a l , including junk, s h a l l be priced d-t a value commensurate with i t s use or
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at prevailing prices. Material no longer s u i t a b l e for i t s o r i g i n a l purpose Lut usable for soae other purpose, s h a l l be priced on a basis comparable with t h a t of items normally used for such other purpose.
D. Obsolete Material
M a t e r i a l which i s serviceable and usable for i t s o r i g i n a l function but condition and/or value of such M a t e r i a l i s not equivalent to that which would j u s t i f y a price as provided above may be specially priced by the Operator. Such price should r e s u l t i n the Operations being charged with the value of the service^rendered by such Material.
E. P r i c i n g Conditions
(1) Loading and unloading costs may be charged at the r i t e of twenty-five cents (25) per hundred weight on a l l tubular goods movements, i n l i e u of loading and unloading costs sustained, when actual hauling cost of such tubular goods are equalized under provisions of Paragraph 5 of Section I I .
(2) Material involving erection costs s h a l l be charged at applicable percentage of the current knocked-down price of new Material.
3. Premium Prices.
Whenever Mat e r i a l is not r e a d i l y obtainable at published or l i s t e d p r i c e s because of national emergencies, strikes or other unusual causes over which the Operator has not control, the Operator may cuargc tor the required Material at the Operator's actual cout incurred in providing such Material, i n making i t suitable for use, and in moving i t to the Property.
V. Inventories
The Operator s h a l l maintain detailed records of Controllable Material.
1. Periodic Inventories, Notice and Representation.
At reasonable in t e r v a l s , Inventories s h a l l be taken by Operator of the Controllable Material.
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2 . P -iconcil i a t i o n and f djustment of Inventories.
Reconciliation of a physical inventory with charges against Operations s h a l l be made, and inventory adjustments s h a l l be made by Operator for coverages and shortages, but Operator s h a l l be held accountable only f o r shortages due to lack of reasonable diligence.
3. Special Inventories.
Special Inventories may be taken whenever there is any sale or change cf. i n t e r e s t i n t r e Property. I t shall be the duty of the p -ty s e l l i n g t o n o t i f y a l l other working i n t e r e s t holders ± quickly as possible a f t e r the transfer of i n t e r e s t takes place. I n such cases, both the s e l l e r and the purchaser shall be governed by such inventory.
4. Expense of Conductinq Periodic Inventories.
The expense of conducting periodic Inventories shai.. not be charged.
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