Sample Business Contracts

Wilmington Crude Oil Supply Agreement - Huntway Refining Co. and Magness Petroleum Co.

Sponsored Links

                            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.


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

[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.


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

By:      /s/ Gary Magness
Title:   President