Attorneys at Law. January 3,2019

Transcription

1 MAILING ADDRESS: P.O. BOX 3967 CHARLESTON, W Attorneys at Law 1206 VIRGINIA STREET EAST, SUITE 201 CHARLESTON, WV January 3,2019 TELEPHONE (304) FAX (304) ww. hannalawpllc.com VIA HAND DELIVERY Ingrid Ferrell Executive Secretary Public Service Commission 201 Brooks Street Charleston, WV Re: Case No G-PC Canaan Valley Gas Company Petition for the Commission s consent and approval of Gas Purchase Contract between Canaan Valley Gas Company and RAN Resources, lnc., an affiliated company. Dear Ms. Ferrell: On behalf of Canaan Valley Gas Company ( CVG ), 1 hand you for filing the original and twelve (12) copies of a revised gas purchase Agreement between Canaan Valley Gas Company and RAN Resources, Inc. Following the issuance of the Final Joint Staff Memorandum on October 31, 2018, CVG and Staff met in an effort to resolve the issues in the case. The parties followed up their meeting with telephone calls and communications and agreed to make certain revisions to paragraph 10.2 of the Agreement regarding price redetermination. Those revisions are set forth in the enclosed revised Agreement and represent the parties resolution of the issues in the case. If you need anything further, please contact me. Since rely, David B. Hanna WV State Bar # 8813 dhanna@hannalawpllc.com DBHldh Enclosure cc: R. Compton, Esq. A. Swecker

2 AGREEMENT THIS AGREEMENT, made and entered into this day of, 2019, by and between RAN Resources, Inc., a West Virginia corporation, hereinafter referred to as "Seller", and CANAAN VALLEY GAS COMPANY, a West Virginia corporation, hereinafter referred to as "Buyer". Seller and Buyer are collectively referred to as the "Parties". WITNESSETH ARTICLE 1. SUBJECT PREMISES AND RESERVATIONS BY SELLER 1.1 Subject to the conditions hereinafter set forth, Seller hereby agrees to sell and deliver to Buyer, and Buyer agrees to purchase and take, natural gas produced or that may be produced and saved by Seller from any or all wells now or hereafter operated by the Seller. 1.2 Such rights of entry, use and occupation of the surface of said land as are vested in Seller are hereby permitted to Buyer under this Agreement. 1.3 Neither this Agreement, nor anything contained herein, nor any deliveries of gas pursuant hereto, shall be construed as a dedication of the gas reserves, gas wells or related acreage to Buyer by Seller. ARTICLE 2. TERM 2.1 This Agreement shall go into effect upon the day of execution by the parties hereto; and delivery of gas shall begin as soon as gas has been produced, rights-of-way secured, gathering lines laid, measuring and regulating stations and purification facilities constructed and completed, and the well or wells connected. All rights hereunder shall continue for a term of one (1) year after the day of its execution and acceptance and month to month thereafter unless cancelled by either party by giving at least 30 days' notice to the other. ARTICLE 3. DELIVERY 3.1 Seller shall be deemed to be in control and possession of the gas hereunder until it shall have been delivered to Buyer at the delivery point herein designated, after which Buyer shall be deemed to be in control and possession thereof. Buyer shall have no responsibility with respect to any gas hereunder until it is delivered to Buyer at the specified delivery point or because of anything which may be done, happen, or arise with respect to said gas

3 before such delivery; and Seller shall have no responsibility with respect to said gas after delivery of said gas to Buyer, except as hereinafter provided for in Article 5, in accordance with the terms and conditions of this Agreement. Seller assumes the full cost and expense, as well as full and complete liability and responsibility, for collecting, gathering and transporting the gas to the delivery point hereunder at the quality hereafter specified. ARTICLE 4. WARRANTY; ADVERSE CLAIMS 4.1 Seller WARRANTS that it will at the time of delivery have good title to all gas delivered by it to Buyer, free and clear of all liens, encumbrances, and claims whatsoever. ARTICLE 5. QUALITY 5.1 All gas delivered by Seller to Buyer shall be commercially free from air, dust, gum, gum-forming constituents, harmful or noxious vapors, or other solid or liquid matter which might interfere with its merchantability or cause injury to or interference with proper operation of the lines, regulators, meters and other equipment of Buyer. ARTICLE 6. QUANTITIES 6.1 It is recognized that Buyer may not be able to take, and need not take, gas from Seller hereunder during any definite period. It is further expressly understood and agreed that Seller shall, at any time, be free to sell to any third party or to "split stream" production. ARTICLE 7. MEASUREMENT 7.1 For the purpose of this Agreement, the unit of volumetric measurement shall be a standard cubic foot of gas at a pressure base of fourteen and seventy-three hundredths (14.73) pounds per square inch absolute, a temperature base of sixty degrees Fahrenheit (60-F), (five hundred twenty degrees [520-1 absolute) and without adjustments for water vapor. 7.2 In connection with the use of any type of measuring device, an atmospheric pressure of fourteen and four tenths (14.4) pounds per square inch shall be assumed, with no allowance for variation in atmospheric pressure. The flowing gas temperature may be recorded at the Buyer's discretion. In the absence of a flowing gas temperature recorder, temperature may be estimated or sixty degrees Fahrenheit (60-F) may be assumed. 7.3 The cost of maintaining and operating said measuring station shall be borne by the Buyer. 2

4 7.4 Buyer shall read the meter, furnish, place and remove any and all recording gauge charts, calculate the deliveries, and perform any other service necessary in connection with the measurement of said gas, without cost to Seller. 7.5 In the event any measuring equipment is out of service for test or repair, or is inoperable for any reason, deliveries through such equipment shall be estimated in a practical manner, utilizing all available information to determine the volume of gas for the delivery period affected. 7.6 Buyer shall keep meter charts on file for four (4) years after the date of delivery, during which time they will be open for inspection by Seller or his authorized representative at any and all reasonable times. ARTICLE 8. DELIVERY POINT 8.1 One (1) measuring station shall be constructed by Buyer under this Agreement at the point of delivery, which point of delivery shall be at the inlet side of Buyer s Measuring Station, hereinafter called the delivery point1$. Said Measuring Station to be designated as RAN Measuring Station No. 1, shall be located at (To be determined) on a site to be furnished by Seller. Title to said gas shall be considered as passing to Buyer at such delivery point. Additional measuring stations may be established by agreement of the parties. ARTICLE 9. PAYMENTS 9.1 Payments for all gas delivered shall be made monthly to RAN Resources, Inc. not later than the end of the month following the month in which the gas is taken. ARTICLE 10. PRICE 10.1 PURCHASE PRICE. The price to be paid for gas delivered hereunder, beginning with the date of initial delivery and continuing for a period of one year shall be $3.25/Mcf, with the price to be redetermined on an annual basis pursuant to paragraph 10.2 of this Agreement PRICE REDETERMINATION. The price to be paid for gas delivered shall be redetermined annually and finally determined in the Buyer s annual 30C filing with the Public Service Commission of West Virginia. The redetermined Mcf price shall be no more than the PGA rate component, less $0.80, of Mountaineer Gas Company s Wholesale rate as determined in Mountaineer s annual 30C filing with the Public Service Commission of West Virginia. In no event shall the price be less than $3.25 per Mcf. 3

5 ARTICLE 11. LINES AND FITTINGS 11.1 All lines and fittings furnished under this Agreement upstream of the Delivery Point shall remain the property of the party furnishing the same, and may be removed by such party at the termination of this Agreement All lines and fittings furnished under this Agreement downstream of the Delivery Point shall, upon their installation and acceptance by Buyer, become the sole property of Buyer, regardless of the party furnishing same. ART1 CLE 12. COMPRESSION 12.1 Seller may, upon written approval of Buyer, install and operate a compressor within Buyer's specifications and conditions for the purpose of facilitating the delivery of gas from the well or wells covered by this Agreement. ARTICLE 13. TAXES 13.1 Seller and Buyer shall each pay all taxes of every kind as respectively assessed to or levied on each, without right of contribution by the other. ARTICLE 14. FORCE MAJEURE 14.1 In case either party to this Agreement fails to perform any obligation hereunder assumed by it and such failure is due to acts of God or a public enemy, strikes, riots, injunctions, or other interference through legal proceedings, breakage or accident to machinery or lines of pipe, washouts, earthquakes, storms, freezing of lines or wells, blowouts, the failure of the well or wells in whole or in part, or the compliance with any statute, either State or Federal, or with any order of the Federal Government or any branch thereof, or of the Government of the State wherein the subject well or wells is situate, or to any causes not due to the fault of such party, or is caused by the necessity for making repairs or alterations in machinery or lines of pipe, such failure shall not be deemed to be a violation by such party of its obligations hereunder, but such party shall use due diligence to again put itself in position to carry out all of the obligations which by the terms hereof it has assumed The settlement of strikes, or lock-outs, or industrial disputes shall be entirely within the discretion of the party so affected. Nothing contained herein shall require the settlement of strikes, lock-outs, or industrial disputes by acceding to the demands of any opposing party therein, when that course is deemed inadvisable in the sole discretion of the party so affected. 4

6 IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto and their seals affixed, all as of the day and year just above written. Robert R Hutson, President RAN Resources, Inc. Arden Swecker, President Canaan Valley Gas Company This document was prepared in duplicate originals 5

7 CERTIFICATE OF SERVICE I, David B. Hanna, counsel for Canaan Valley Gas Company, hereby certify that copies of the foregoing has been served upon the following, by hand delivery, this 3'' day of January 2019: VIA HAND DELIVERY Robert Compton, Esq. Legal Division Public Service Commission 201 Brooks Street Charleston, WV DAVID B. HANNA