Exhibit 10(f)(i)
EIGHTH AMENDMENT
TO OCCLUDED GAS
LEASE
THIS AGREEMENT made and entered into
by and between RGGS Land & Minerals, LTD, L.P., a Delaware
corporation (“Lessor”) a successor in interest to
United States Steel Corporation and Energen Resources Corporation,
an Alabama corporation, formerly known as Taurus Exploration, Inc.
(“Lessee”), Lessor and Lessee are sometimes
collectively referred to as the “Parties”.
WITNESSETH:
WHEREAS, United States Steel
Corporation and Taurus Exploration, Inc. entered into an Occluded
Gas Lease dated January 1, 1986 covering certain lands in
Jefferson and Tuscaloosa Counties, Alabama (the
“Lease”); and
WHEREAS, the Parties have previously
amended the Lease by amendments dated April 30,
1987, January 1, 1989, June 1,
1990, December 11, 1990, January 1,
1993, December 16, 2002 and March 1, 2003
respectively; and
WHEREAS, Lessor and Lessee desire to
make this Eighth Amendment to the Occluded Gas Lease for the
purpose of amending the method for determining the Treatment
Factor, and further addressing measurement of gas;
NOW THEREFORE, Lessor and Lessee,
intending to be legally bound, do hereby agree as
follows:
Paragraph 1.20 of Article I of the
Occluded Gas Lease shall be amended to read as follows:
1.20 Treatment
Factor: as used herein, the amount determined by either
subparagraph A) or B) below to allow Lessee to recover all costs of
obtaining and/or constructing facilities that are not included in
the Payout account, i.e. for gathering, compression, treatment
dehydration, and transportation to the delivery point at which gas
enters either an interstate pipeline or the Alagasco
system:
A) At
all times, that the Average Monthly Sales Price (as hereinafter
defined) is greater than $5.00 per MMBtu, the Treatment Factor
shall be the amount of $0.78 per MMBtu or such other amount that is
in effect from time to time, adjusted; (a) as of
January 1 of each year beginning January 1, 1987 upward
by 20% of the difference between (1) 95% (to read 100% until
the expiration of the first 5 years of this Lease or until Article
1.22(a) (8) [2] comes into effect, whichever comes first) of
the OCD-2 Rate in effect as of said date and (2) the sum of
the Wellhead Price under Article 1.22(a) and the Treatment Factor,
both as in effect as of the day prior to the adjustment; provided
however, that the cumulative amount of all such increases shall not
exceed $.01 per MMBtu times the number of
1
years elapsed between the
commencement of this Lease and date of the adjustment; and
(b) as of the first day of each month shall be adjusted by
5.5% of any increase or decrease in the Average Wellhead Price in
effect for production from the immediately preceding month as
compared to the Average Wellhead Price in effect for production
from the second preceding month; in no case, however shall the
Treatment Factor be reduced other than as a result of this
1.20.
B) Effective
January 1, 2009, if the Average Monthly Sales Price for any
month falls below $5.00 per MMBtu, (the “Below Threshold
Month”) then the Treatment Factor for the Below Threshold
Month shall be suspended and the Lessor shall be charged during
said month an amount equal to the Actual Recovery Costs (as
hereinafter defined).
For purposes of this Paragraph 1.20
only, the term “Average Monthly Sales Price” shall be
defined as the average price received by Lessee for sales of that
month’s total production.
For purposes of this Paragraph 1.20
only, the term “Actual Recovery Costs” shall be defined
as all costs beyond the wellhead for operating the systems used for
gathering, compression, treatment, dehydration, and transportation
to the delivery point at which gas
