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the minimum volume Buyer [i.e., Arkla] was obligated to
receive during the year."
The Settlement Agreement provides that Arkla's payment
of $1,850,000 "shall constitute a prepayment in advance for
natural gas to be delivered by Seller to Buyer on and after
May 1, 1988 from all wells subject to the Contract". In
order to effectuate Arkla's receipt of a volume of natural
gas in an amount equal to the prepayment, the Settlement
Agreement further provides that 50 percent of the volume of
natural gas delivered to Arkla under the Contract during
the period May 1, 1988, through the remaining term of the
Contract or until the prepayment is fully recouped, shall
be considered recoupment gas and shall be received without
further payment. The value of the gas delivered to Arkla
under the Contract is to be based upon "the price per MMBtu
in effect under the terms of the Contract, as amended this
date, at the time such natural gas is requested for
delivery under the Contract."
While the Settlement Agreement does not disturb
Arkla's obligation of purchasing gas from Malibu, or
Malibu's obligation of selling gas to Arkla, the binding
nature of those obligations is alleviated somewhat under
the Settlement Agreement. As to Arkla's take or pay
obligation, the Settlement Agreement provides that Malibu:
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