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the particular unrecouped annual
shortage occurred, the right to recoup
the remainder of that particular annual
shortage will terminate.
(5) Tax reimbursements, if any,
due by Buyer to Seller hereunder will
be payable as and when gas is actually
received, without regard to whether the
gas being received is recouped gas or
gas currently being purchased and paid
for.
(6) If the price
payable under this contract
when particular recoupment
gas is received is higher
than the price Buyer paid
hereunder for the particular
annual shortage against which
that recoupment gas is
credited, then Buyer will pay
the difference at the time
the recoupment gas is
received.
Shortly after Malibu acquired its interest in the
subject wells, Mr. Herbel wrote to Arkla and demanded
payment in the amount of $4,749,123 due to Arkla's failure
to take and pay for, or to pay for if not taken, a minimum
quantity of gas during the period April 1983 through April
1987, as required by section 9 of the Contract quoted
above. In a letter dated March 9, 1988, Mr. Herbel reduced
Malibu's claim to $3,539,040 to account for the fact that
the original claim had overstated Malibu's working interest
in one of the wells. He further reduced the claim to
$2,418,170, "After making certain adjustments because of
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Last modified: May 25, 2011