Wilmington Crude Oil Supply Agreement - Huntway Refining Co. and Magness Petroleum Co.
HUNTWAY REFINING COMPANY
1664 Alameda Street, Wilmington, California 90744
Mailing address: P.O. Box [illegible],
Wilmington, California [illegible]
(310)548-4000 FAX (310) 518-1197
November 7, 1996
Sent via Fax (714) 769-1181
Mr. Gary Magness
Magness Petroleum Company
9 St. Tropaz
Newport Beach, CA [illegible]
Dear Mr. Magness:
After execution of this agreement by both parties and upon transfer of
title to the Wilmington "Townlot" producing property from Exxon Corp. to Magness
Petroleum, Huntway Refining Company ("Huntway") will purchase and receive and
Magness Petroleum Company ("Mangess") will sell and deliver Wilmington crude oil
under the terms and conditions specified herein. This will be Huntway contract
number [illegible]-2326.
CRUDE OIL: Wilmington crude oil
VOLUME: Approximately 400 to 600 barrels per day
QUALITY: Typical Wilmington "Townlot" production crude oil quality at the time
of delivery, approximately 15.0 - 16.0 deg. API. Oil delivered under this
agreement shall be merchantable, virgin produced crude oil free of objectionable
contaminates such as, but not limited to, organic chlorides, oxygenated
hydrocarbons, phenols, and shall not exceed 1.5 percent by weight [illegible].
LOCATION: F.O.B. Wilmington "Townlot" lease. Title and risk of loss transfers as
the crude oil passes from Magness's delivery hose into Huntway nominated
delivery truck at the lease.
MEASUREMENT: Volume, corrected for temperature and [illegible], shall be
measured by Automatic Custody Transfer Meter at the lease. Huntway shall check
volume by weigh [illegible] and analysis under [illegible] standards of samples
taken at delivery location. Any significant discrepancy shall be resolved by
mutual agreement between Huntway and Magness.
PRICE: Average of Union, Mobil and [illegible] posted prices for Wilmington
crude oil, averaged over the month of delivery and adjusted for gravity actually
delivered plus [illegible] price per [illegible] barrel. Deliveries are deemed
to be in equal daily quantities over the month.
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PAYMENT: Mangess shall invoice Huntway by the tenth business day following the
month of delivery and payment shall be due the twentieth of the month following
the month of delivery. If payment due date falls on a Saturday or bank holiday
other than a Monday, payment shall be made the business day immediately
preceding the due date. If payment due date falls on a Sunday or on a Monday
bank holiday, payment shall be made the first business day following the due
date.
[Illegible]: This agreement shall commence on the effective date of transfer of
title to the "Townlot" lease from Exxon to Magness and shall continue until
either party advises the other of termination which shall be effective at the
end of a calendar month, such notice being in writing and delivered at least
thirty days in advance of the effective termination date stated in such notice.
GOVERNING LAW: This agreement shall be enforceable under the laws of the State
of California and each party hereto hereby submits to the jurisdiction of the
courts of the State of California.
OTHER:
1) Magness warrants and guarantees that is has clear title to, and right to
sell, all oil delivered to Huntway under this agreement.
2) Magness warrants and guarantees that all oil delivered hereunder is straight
production containing no hazardous or toxic waste additive.
3) All other terms and conditions shall be in accordance with usual industry
practice for similar type transactions.
If this conforms with your understanding of our agreement, please sign
and return one copy of this letter.
Yours truly,
HUNTWAY REFINING COMPANY
T.L. Stringer
Executive Vice President
AGREED to this 13 day of November 1996
MAGNESS PETROLEUM COMPANY
By: /s/ Gary Magness
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Title: President
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