AMENDED
AND RESTATED
PROJECT
SERVICES AGREEMENT
by
and between
SEECO,
INC.
And
Schlumberger
Technology Corporation
Dated
February
16, 2009
For
Project DeSoto (Fayetteville Shale Play)
In
the State of Arkansas
Page
1.
INTRODUCTION
[ 1
]
2.
DEFINITIONS
[ 1
]
3.
AGREEMENT/TERM
[ 2
]
4.
PROJECT
ORGANIZATION
[ 4
]
5.
GENERAL
TERMS AND CONDITIONS
[ 5
]
6.
CONFIDENTIAL
INFORMATION
[ 6
]
7.
MISCELLANEOUS
PROVISIONS
[ 8
]
8.
REASONABLENESS
[ 9
]
9.
CORPORATE POWER AND
AUTHORITY
[ 9
]
EXHIBIT
A:
MASTER
SERVICE AGREEMENT
[ 10
]
EXHIBIT
B :
RAW
MATERIALS
[ 17
]
EXHIBIT
C:
SLB
SUBSIDIARIES
[ 18
]
1.
INTRODUCTION
This
AMENDED AND
RESTATED PROJECT SERVICES AGREEMENT (the “ Agreement ”) is entered into as of the 16
th day of February, 2009, between
Schlumberger Technology Corporation (“ SLB
”) and SEECO, INC. (“
SEECO ”). SLB and SEECO
may hereinafter be referred to collectively
as the “ Parties ” or individually as a “
Party ” and as of the Effective Date (as defined
below) shall supersede in its entirety that certain Project
Services Agreement by and between SLB and SEECO dated as of August
17, 2006 (the “Initial Project Services
Agreement”).
WHEREAS,
SEECO
and SLB desire to continue to work with each other with respect to
the Fayetteville Shale project (the “ Project ”)
in the Project Area (as defined below), in
order to further their respective commercial
objectives and most
efficient ly use
equipment, personnel, know-how and other technology; and
WHEREAS
,
SEECO and SLB wish to
amend certain of the terms and conditions set forth in the Initial
Project Services Agreement to reflect current economic
circumstances and each party’s current needs.
NOW,
THEREFORE ,
in consideration of the mutual promises, conditions and agreements
herein contained, the sufficiency of which is hereby acknowledged,
the Parties agree as follows.
2.
DEFINITIONS
The
following definitions are provided to clarify any potentially
ambiguous terms used commonly in the oilfield industry in order to
ensure clear understanding of this Agreement.
2.1
“
Agreement” means this Project
Services Agreement between SEECO and SLB including the
Exhibits attached hereto or referred to herein.
2.2
“Oilfield
Services” means
services provided by SLB to SEECO including but not limited to Open Hole Logging
Services, Cased Hole Wireline Services, Data Services, Cementing
Services, Stimulation Services, Coiled Tubing Services, Data and
Consulting Services, Directional Drilling Services, Testing
Services, Artificial Lift and Information Technology Services;
provided, however, that SEECO shall have the
right to independently secure Raw Materials
, as more particularly described on
“Exhibit B” , from other
suppliers required for or relating to such services.
2.3
“Key
Services” means
the services provided by SLB that utilize technologies,
techniques, and products that are
proprietary to SLB.
2.4
“Data
and Consulting Services” means
the data consulting services, including but not limited to,
Computed Log Products, Petrophysical
Analysis, Geologic Interpretation, PowerSTIM (Completion
Optimization), ShaleGAS Reservoir Simulation, Reserve Analysis, and
Field Modeling .
2.5
“
Joint Leadership Team ” or “ JLT ”
means the Joint Leadership Team as described more fully in Section
4.1 herein.
2.6
“Raw
Materials” means
materials and products set forth on “ Exhibit B ” to this Agreement.
1
2.7
“Committed
SLB Resources ”
means the personnel and/or equipment, including technical support,
to be committed by SLB to the Project, which at a minimum shall be
those resources which are reasonable and necessary to meet SEECO’s requirements.
2.8
“MSA”
means
the Services Agreement between Southwestern
Energy Production Company, SEECO, Inc. and Schlumberger Technology
Corporation dated January 3rd, 2002 , a copy of which is attached hereto as “Exhibit A” ,
as the same may be amended or supplemented from time to time.
Except as otherwise provided herein, the MSA is incorporated herein by reference for all
purposes and is made a part of this Agreement.
2.
9
“
Project Area ” shall mean and include Johnson, Hope,
Conway, Faulkner, Van Buren, Cleburne and White Counties in the
State of Arkansas.
2.
10
“Effective
Date” means
January 1, 2009.
2.
11
“SWN-SLB
Enterprise Agreement” means
that certain enterprise pricing agreement between Southwestern
Energy Company and SLB dated February 16, 2009.
2.12
“SLB
Subsidiaries” shall
mean and include all of the entities in which SLB or its U.S.
affiliates directly or indirectly holds an interest and which also
provide Oilfield Services to SEECO. Exhibit C
sets forth such entities and the percentage of ownership and/or
economic interests (whichever is higher, the Ownership
Percentage”) of SLB or its U.S. affiliates as of the date
hereof and such Exhibit shall be amended by SLB to reflect any
changes, including, without limitation, increases or decreases in
ownership or economic interest percentages, investments in or
acquisitions of additional entities.
3.
COMMITMENTS
AND TERMS
Subject
Matter and Purpose .
Except as otherwise provided herein, SLB will provide
Oilfield Services and Key Services for the Project and SEECO agrees to purchase
Oilfield Services from SLB in the amounts
described in Section 3.2 below. It is contemplated that
situations will arise during the Term of this Agreement that are
not specifically covered herein. In the event these
situations do arise, the Parties agree, in the spirit of
cooperation, to use all commercially reasonable efforts to resolve
such situations.
SEECO
Commitments .
(a)
Except
as set forth below, during the Term of this
Agreement, SEECO agrees to utilize SLB to provide for
no less than 50%, and at SEECO’s sole discretion, up to 60%,
of SEECO’s requirements with respect to the following
services in the Project Area (as modified
from time to time as contemplated in this Section 3.2, the “
Utilization Percentages ”):
(i) Cased Hole Logging services; (ii)
Open Hole Logging services; (iii) Cementing
services; (iv) Stimulation services; (v)
Coiled Tubing services ; (vi) Data and Consulting services and (vii)
Tubing Conveyed Perforating (TCP).
(b)
For
purposes of calculating the foregoing percentages, it is understood
and agreed that SEECO shall be credited with:
(i)
100%
of all applicable expenditures made in favor of SLB or any of the
SLB Subsidiaries that is wholly owned with respect to each well
operated by SEECO in the Project Area;
(ii)
100%
of the amounts paid by SEECO for any
services provided by a third party in accordance with paragraph (c) of this Section 3.2.; and
2
(iii)
a
percentage of all applicable expenditures made in favor of any of
the SLB Subsidiaries that is not wholly owned equal to the
Ownership Percentage with respect to each well operated by SEECO in
the Project Area.
(c)
Upon
the occurrence of any of the following events, even if the
Utilization Percentages have not been met, SEECO shall have the
right to obtain the above-described Services from one or more third
parties;
(i)
SLB
is not able to provide a level of Oilfield Services sufficient to
meet SEECO’s needs for the Project;
(ii)
A
third-party vendor is able to provide new technologies and
techniques that SEECO desires to employ in the Project Area and SLB
is unable to provide such technologies and
techniques at a comparable price;
or
(iii)
SLB
is in breach of its obligations under this Agreement or any other
agreement between SLB and SEECO and such breach has not been cured
within the 30-day period following the date upon which SEECO
notifies SLB of any such breach.
Prior
to the utilization of a third party to provide Oilfield Services to
SEECO in accordance with clauses (i) or (ii) of this Section
3.2(c), SEECO will provide thirty (30) days advance notice to SLB,
provided , however , that
only reasonable advance notice is required in the event the
circumstances giving rise to SEECO’s utilization of a third
party are both urgent and immediate. If the urgency and
immediacy of the need does not allow for any advance notice to SLB,
SEECO will notify SLB no more than three (3) business days after
the engagement of such third party.
Each
notice provided under this Section 3.2(c) with respect to clauses
(i) or (ii) will be in writing and state (1) the basis for the
utilization of the third party and (2) to the extent known, the
expected term of any agreements entered into for the provision of
the Services which would have otherwise been provided by SLB under
this Agreement. Each notice provided under this Section
3.2(c) with respect to clause (iii) will be in writing and describe
the nature of the breach. It is understood and agreed that
any notice provided by SEECO pursuant to this Section 3.2(c) with
respect to a breach under this Agreement or any other agreement
with SLB shall not constitute a waiver by SEECO of such breach and
SEECO shall be entitled to avail itself of all actions, claims and
other remedies for such breach whether in contract, equity or at
law .
SEECO
will use commercially reasonable efforts to limit the duration of
utilization of a third party in accordance with this Section 3.2(c)
to the time period during which the
situation is expected to continue to exist.
Notwithstanding the foregoing, the term for third party services to
be utilized in lieu of SLB services pursuant to this Section 3.2
shall not exceed one year unless the parties are unable to agree to
a reasonable remedy to correct the situation. If a reasonable
remedy cannot be agreed upon, it is understood and agreed that
SEECO shall have the right to proportionately reduce the
Utilization Percentages to address the service deficiency, and
enter into a third party contract with a term greater than one year
if necessary to obtain commercially reasonable pricing, terms and
conditions.
It
is understood and agreed that the foregoing notice requirements and
limitations do not apply to SEECO’s requirements above the
Utilization Percentages.
3
The
parties agree that neither this Agreement nor any other agreement
precludes SEECO from obtaining Oilfield Services with respect to
SEECO’s remaining requirements for the Project, within the
Project Area or otherwise from any third party, nor does this
Agreement preclude SEECO from obtaining Oilfield Services from
third-party companies or individuals outside of the Project
Area.
(d)
To
the extent that the provisions of this Section 3.2 conflict with
the provisions of the MSA, the provisions of this Section 3.2 shall
control.
3.3
SLB
Commitments .
(a)
In
return for the foregoing contractual
commitments from
SEECO , SLB agrees :
(i)
to
provide the Committed SLB Resources to SEECO as required to perform
the services hereunder on a priority basis. The priority of
services to SEECO hereunder shall be determined based on the level
of SEECO’s commitment and expenditures as compared with the
level of commitments and expenditures of other customers in the
Midcontinent Basin, and SEECO shall receive priority treatment over
all customers whose year-to-date commitment and expenditures are
lower than those of SEECO;
and
(ii)
that
all Oilfield Services provided to SEECO hereunder shall receive
competitive pricing based on the rates charged for such services to
Midcontinent Basin customers or such other pricing as shall be
required under the SWN-SLB Enterprise Agreement..
(b)
To
the extent that the provisions of this Section 3.3 conflict with
the provisions of the MSA, the provisions of this Section 3.3 shall
control.
3.4
Term.
This
Agreement shall remain in force and effect for two (2) years from
the Effective Date of this Agreement (the “ Term
”). To the extent that this
provision conflicts with the provisions of the MSA, this provision
sh
