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UNITED STATES FORM 8-K Pursuant to Section 13 or 15(d) of Date of Report Commission IRS Employer File State of Identification Number Registrant Incorporation Number 1-7810 Energen Corporation Alabama 63-0757759 605 Richard Arrington Jr. Boulevard North Birmingham, Alabama 35203 (Address of principal executive offices) (Zip Code) (205) 326-2700 (Registrant's telephone number including area code) Item 2. Acquisition or Disposition of Assets On August 2, 2004, Energen Resources Corporation, the oil and gas acquisition and development subsidiary of Energen Corporation (Energen or the Company), completed its purchase of San Juan Basin coalbed methane properties from SG Interests I, LTD. for an adjusted purchase price of $263 million. The effective date of the acquisition was August 1, 2004. Located in the under-pressured Fruitland coal play, approximately 51 percent of the estimated 240 billion cubic feet equivalent (Bcfe) of proved natural gas and natural gas liquids (NGL) reserves are behind pipe and undeveloped; natural gas accounts for approximately 80 percent of the estimated proved reserves, with NGL comprising the balance. The Company used available cash and existing lines of credit to acquire the foregoing properties. Item 7. Financial Statements and Exhibits (c) Exhibits 10 - Agreement of Sale and Purchase Between SG Interests I, LTD. as Seller and Energen Resources Corporation as Buyer dated June 28, 2004 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ENERGEN CORPORATION August 4, 2004 By /s/ G. C. Ketcham G. C. Ketcham Executive Vice President, Chief Financial Officer and Treasurer of Energen PURCHASE AND SALE AGREEMENT BY AND BETWEEN SG INTERESTS I, LTD., ET AL., SELLER AND ENERGEN RESOURCES CORPORATION, BUYER San Juan County, New Mexico June 28, 2004 TABLE OF CONTENTS ARTICLE 1. DEFINITIONS; 1.1 Definitions ARTICLE 2. TRANSFER OF THE PARTNERSHIP 2.1 Sale and Purchase ARTICLE 3. PURCHASE PRICE 3.1 Purchase Price 3.2 Earnest Money 3.3 Allocation 3.4 Wellhead Gas Imbalances 3.5 Basis Adjustment ARTICLE 4. DUE DILIGENCE REVIEW 4.1 Review of Records 4.2 Alleged Title Defects. 4.3 Preferential Purchase Rights and Consents. 4.4 Environmental Inspection 4.5 Alleged Environmental Conditions. 4.6 Defect Curative Procedures ARTICLE 5. ACCOUNTING 5.1 Revenues, Expenses and Capital Expenditures 5.2 Tax Obligations 5.3 Obligations and Credits 5.4 Miscellaneous Accounting 5.5 Final Accounting Settlement 5.6 Post-Final Accounting Settlement 5.7 Accounting Standard 5.8 Audit Rights 5.9 Transition Services ARTICLE 6. CASUALTY AND CONDEMNATION 6.1 Casualty and Condemnation ARTICLE 7. INDEMNITIES 7.1 Opportunity for Review ARTICLE 8. SPECIAL WARRANTY OF TITLE AND DISCLAIMERS 8.1 Special Warranty of Title 8.2 Disclaimer - Representations and Warranties 8.3 Disclaimer - Statements and Information ARTICLE 9. SELLER'S REPRESENTATIONS AND WARRANTIES 9.1 Organization and Good Standing; Capitalization. 9.2 Authority; Authorization of Agreement 9.3 No Violations 9.4 Absence of Certain Changes 9.5 Operating Costs 9.6 Pending Proceedings 9.7 Bankruptcy 9.8 Liability for Brokers' Fees 9.9 Capital Projects 9.10 No Liens 9.11 Judgments 9.12 Records 9.13 No Violation; Compliance with Law 9.14 Forward Contracts 9.15 Material Contracts 9.16 Permits 9.17 Taxes 9.18 Personal Property 9.19 Burdens 9.20 Preferential Purchase Rights and Consents 9.21 Environmental Representations and Warranties 9.22 Imbalances 9.23 Governmental Approvals 9.24 Materiality 9.25 Benefit Plans 9.26 Employees 9.27 The Partnership. 9.28 Power of Attorney; Payment to Beneficial Owners ARTICLE 10. BUYER'S REPRESENTATIONS AND WARRANTIES 10.1 Organization and Good Standing 10.2 Corporate Authority; Authorization of Agreement 10.3 No Violations 10.4 SEC Disclosure 10.5 Independent Evaluation 10.6 Governmental Approvals ARTICLE 11. ADDITIONAL AGREEMENTS 11.1 Covenants of Seller and the Partnership 11.2 Notice of Loss 11.3 Subsequent Operations 11.4 Buyer's Assumption of Obligations 11.5 Records 11.6 Permitting 11.7 Interim Operations ARTICLE 12. CONDITIONS PRECEDENT TO CLOSING 12.1 Conditions Precedent to Seller's Obligation to Close 12.2 Conditions Precedent to Buyer's Obligation to Close 12.3 Conditions Precedent to Obligation of Each Party ARTICLE 13. TERMINATION 13.1 Grounds for Termination 13.2 Effect of Termination 13.3 Dispute over Right to Terminate 13.4 Return of Documents 13.5 Confidentiality ARTICLE 14. THE CLOSING 14.1 Closing 14.2 Obligations of Seller at Closing 14.3 Obligations of Buyer at Closing ARTICLE 15. MISCELLANEOUS 15.1 Notices 15.2 Conveyance Costs 15.3 Brokers' Fees 15.4 Further Assurances 15.5 Amendments and Severability 15.6 Successors and Assigns 15.7 Headings 15.8 Governing Law 15.9 No Partnership Created 15.10 Public Announcements 15.11 No Third Party Beneficiaries 15.12 Deceptive Trade Practices 15.13 Not to be Construed Against Drafter 15.14 Entire Agreement 15.15 Conspicuousness of Provisions 15.16 Arbitration. 15.17 Execution in Counterparts
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
the Securities Exchange Act of 1934
August 4, 2004
EXHIBITS AND SCHEDULES
Exhibit A - Schedule of Spacing Units and Leases
Exhibit A-1 - Schedule of Wells, Ownership Interests and Allocations of the Purchase Price
Exhibit A-2 - Excluded Properties
Exhibit B - Equipment List of Production Handling Facilities
Exhibit C - Pending Proceedings
Exhibit D - Form of Assignment of Partnership Interests
Exhibit E Form of Assignment of Record Title
Exhibit F - Form of Seller's Officer's Certificate
Exhibit G - Form of Letters in Lieu
Exhibit H - Form of Buyer's Officer's Certificate
Schedule 3.1 Wire Transfer Instructions
Schedule 4.6 Defect Curative Procedures
Schedule 7.1 Indemnities
Schedule 9.9 Wells/Capital Projects in Progress
Schedule 9.10 Liens and Encumbrances
Schedule 9.15 Material Contracts
Schedule 9.20 Preferential Rights and Consents
Schedule 9.21 Environmental Exceptions
Schedule 9.22 Imbalances
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is dated June 28, 2004, by and between SG INTERESTS I, LTD., a Texas limited partnership, with offices at 909 Fannin, Suite 2600, Houston, Texas 77010, in its individual capacity and as agent and attorney-in-fact pursuant to, and on behalf of the other parties identified in, that certain Power of Attorney dated June 28, 2004 (hereinafter referred to individually and collectively, as the case may be, as "Seller"), and ENERGEN RESOURCES CORPORATION, an Alabama corporation, with offices at 605 Richard Arrington, Jr. Blvd. North, Birmingham, Alabama 35203-2707 (hereinafter referred to as "Buyer"), and is based on the following premises:
WHEREAS, Seller desires to sell, assign and convey to Buyer and Buyer desires to purchase and accept ownership of one hundred percent (100%) of the Partnership Interests in and to the Partnership, which owns certain oil and gas properties and related interests; and
WHEREAS, the parties have reached agreement regarding such sale and purchase.
NOW, THEREFORE, for valuable consideration and the mutual covenants and agreements herein contained, Seller and Buyer agree as follows:
"AAA" has the meaning set forth in Article 15.16.
"Accounting Referee" has the meaning set forth in Article 5.5.
"Affiliate" means and includes any entity that, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the entity specified. Control means ownership of greater than fifty percent (50%) of the voting stock, units, or partnership interests of such entity.
"Alleged Environmental Condition" means an Environmental Condition asserted by Buyer in accordance with Article 4.5.
"Alleged Title Defect" means a Title Defect (as hereinafter defined) which is asserted by Buyer in accordance with Article 4.2.
"Arbitrable Dispute" has the meaning set forth in Article 15.16.
"Assignment" means a document in the form of Exhibit D.
"Burdens" means all royalties, overriding royalties, rentals, shut-in payments and other payments due under or with respect to the Properties or the production of Hydrocarbons therefrom or allocable thereto.
"Business Day" means a Day (as hereinafter defined) excluding Saturdays, Sundays and U.S. legal holidays.
"Casualty Loss" means any loss, damage or reduction in value to the Properties resulting from mechanical failure or defects, catastrophic occurrences, acts of God and any other property losses which are not the result of normal wear and tear or of natural reservoir changes.
"Certificate" means the documents required by Article 14 in the form of Exhibit F and Exhibit H.
"Claim" or "Claims" means any and all claims, demands, suits, causes of action, investigations, administrative proceedings, other legal proceedings, losses, damages, liabilities, judgments, assessments, settlements, fines, notices of violation, penalties, interest, obligations, responsibilities, Taxes and costs (including attorneys' fees and costs of litigation) of any kind or character (whether or not asserted prior to the date hereof, and whether known or unknown, fixed or unfixed, conditional or unconditional, based on negligence, strict liability or otherwise, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise) which are brought by or owed to a Third Party.
"Claim Notice" has the meaning set forth in Article 7.6.
"Claimant" has the meaning set forth in Article 15.16.
"Close" or "Closing" means the consummation of the transfer of the Partnership Interests (as hereinafter defined) and record title to the Properties to Buyer, including execution and delivery of all documents provided herein.
"Closing Date" means the later of (i) August 2, 2004, or (ii) such other date as may result from the procedures set forth in this Agreement, or such other date as may be mutually agreed upon by the parties.
"Closing Statement" means the statement to be prepared and delivered under Article 14.1.
"Code" means the Internal Revenue Code of 1986, as amended, along with the related treasury regulations.
"Computed Interest" means simple interest of three and one-half percent (3.5%) per annum using a three hundred sixty-five (365) Day year.
"Contractual Expenses" means all expenses payable under the terms of the Material Contracts, including, but not limited to, joint interest billings and other charges for any labor or materials relating to or otherwise affecting the Properties.
"Day" means a calendar day consisting of twenty-four (24) hours from midnight to midnight.
"Defensible Title" means, as to the Properties, such title held by the Partnership that, subject to and except for the Permitted Encumbrances (as hereinafter defined):
"Earnest Money" has the meaning set forth in Article 3.2.
"Effective Time" means 7:00 a.m. local time where the Properties are located on August 1, 2004.
"Environmental Claims" means all Claims for pollution or environmental damages of any kind, including without limitation, those relating to: (a) remediation and/or clean-up required by Environmental Laws; (b) injury or death of any person or damage or loss of any property, resource or reserve; (c) the assessment, remediation, removal, transportation or disposal of asbestos, NORM or other potentially hazardous substances associated with or attributable to the Properties; and/or (d) Claims relating to breach and/or violation of Environmental Laws, common law causes of action asserting damage to the environmental quality of a property such as negligence, gross negligence, strict liability, nuisance or trespass, or fault imposed by statute, rule or regulation.
"Environmental Condition" means any condition that is not in compliance with the then existing Environmental Laws (as hereafter defined).
"Environmental Defect Threshold Amount" shall have the meaning set forth in Article 4.6(b).
"Environmental Laws" means all laws, statutes, ordinances, permits, orders, judgments, rules or regulations which are promulgated, issued or enacted by a governmental entity having appropriate jurisdiction that, (a) relate to the prevention of pollution or environmental damage, (b) the remediation of pollution or environmental damage, or (c) the protection of the environment generally; including without limitation, the Clean Air Act, as amended, the Clean Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substance and Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous and the Solid Waste Amendments Act of 1984, as amended, and the Oil Pollution Act of 1990, as amended.
"ERISA" means Employee Retirement Income Security Act of 1974, as amended.
"Excluded Properties" means any and all wells, oil and gas interests, lands or leases now owned or hereafter acquired by Seller or Seller's Affiliates that are located outside the spacing units described on Exhibit A or Exhibit A-1, any interests in the Properties listed on Exhibit A-2, and all inventory items or pipe owned by Seller and not in service on the Properties.
"Final Accounting Settlement" has the meaning set forth in Article 5.5.
"Final Settlement Date" has the meaning set forth in Article 5.5.
"Hydrocarbons" has the meaning set forth in the definition of "Properties."
"Laws" means laws, statutes, ordinances, permits, decrees, orders, judgments, rules or regulations (including without limitation Environmental Laws) which are promulgated, issued or enacted by a governmental entity having appropriate jurisdiction.
"Letters-in-Lieu" means a document in the form of Exhibit G.
"Material," for purposes of Article 9, shall have the meaning set forth in Article 9.24.
"Material Contracts" means any contracts or agreements which would have a material economic impact on the Partnership's right or ability to own, operate or utilize the Properties or on the value of the Properties, excluding any oil and gas lease or title transfer document that is filed of record in the applicable public records, including, without limitation, the following contracts and agreements to which the Partnership is a party or by which any of its assets are bound: (a) any agreement with any Affiliate of any of the Sellers; (b) any agreement or contract for the sale, exchange, disposition, purchase, processing, gathering, or transportation of, or call on, oil or gas produced from the Properties; (c) any agreement to sell, acquire, lease, farmout, farmin, grant, convey or otherwise dispose of any of its interests in any of the Properties other than conventional rights of reassignment; (d) any operating agreement, exploration agreement, development agreement, participation agreem ent, joint venture agreement, partnership agreement, farmout agreement, farmin agreement, unitization agreement, pooling agreement, plant agreement, injection, repressuring or recycling agreement or other similar agreement; (e) any contract or series of related contracts that commits the Partnership to expend more than Fifty Thousand and 00/100 Dollars ($50,000.00) in any year; (f) any contract or agreement that creates any area of mutual interest with respect to the acquisition by the Partnership of any interest in any oil, gas, minerals, lands or assets; (g) any contract or agreement to acquire or shoot seismic, (h) any contract or agreement that evidences a lease or rental of any land, building or other improvements or portion thereof, excluding any oil and gas lease; and (i) any contract or agreement that materially affects the Properties, the Partnership or surface use of the lands covered by the Properties and is not described in items (a) through (h) above.
"Net Revenue Interest" means an interest (expressed as a percentage, decimal or fraction) in and to all Hydrocarbons produced and saved from or attributable to a particular subdivision of the Properties, after deducting all lessors' royalties, overriding royalties, production payments, net profits interests, and other interests or burdens thereon owned by Third Parties.
"Non-Environmental Claims" means all Claims, except Environmental Claims.
"NORM" means naturally occurring radioactive materials.
"Open Defect" means all Open Environmental Defects and all Open Title Defects.
"Open Environmental Defect" means all uncured Environmental Conditions or Alleged Environmental Conditions that were submitted to Seller on a timely basis pursuant to Article 4.5 and that remain in dispute under Article 4.5.
"Open Title Defect" means all uncured Title Defects or Alleged Title Defects that were submitted to Seller on a timely basis pursuant to Article 4.2 and that remain in dispute under Article 4.2.
"Opinion of Counsel" means a document in the form contemplated by Article 14.2(e) or 14.3(e). With respect to Buyer, such document shall include, inter alia, confirmation that each corporate, limited liability company and partnership party satisfies the qualifications of Articles 10.1, 10.2 and 10.3, and if any such party is not qualified to do business in the State of New Mexico, confirmation by acceptable legal counsel that such qualification is not required to consummate this transaction. With respect to each Seller, such document shall include, inter alia, confirmation that each corporate, limited liability company and partnership party satisfies the qualifications of Articles 11.1, 11.2 and 11.3, and if any such party is not qualified to do business in the State of New Mexico, confirmation by acceptable legal counsel that such qualification is not required to consummate this transaction.
"Partnership" means SG Interests 30, Ltd., a Texas limited partnership.
"Partnership Agreement" means the Agreement of Limited Partnership of SG Interests 30, Ltd.
"Partnership Interests" means all of the interests of any kind whatsoever in and to the Partnership, including, without limitation, one hundred percent (100%) of the general partner interest and one hundred percent (100%) of the limited partner interests in the Partnership.
"Permitted Encumbrances" means:
"Properties" means the following properties (real, personal or mixed) and rights (contractual or otherwise):
The parties acknowledge that the Partnership does not own and that SELLER EXCEPTS, RESERVES AND RETAINS, unto itself, its successors and assigns:
(i) any seismic information licensed from third parties and subject to confidentiality or assignment restrictions;
(ii) a copy of all engineering and geologic information relating to the Properties; and
(iii) the Excluded Properties.
"Purchase Price" has the meaning set forth in Article 3.1.
"Records" means all of the Seller's and the Partnership's books, records and files related to the Properties, including, without limitation, (i) all lease and land files, well files and logs, maintenance files, division order files, accounting files, production records, abstracts, title opinions, contract files, title reports, environmental site assessments, environmental compliance reports, surveys, analyses, compilations, correspondence, filings with and reports to regulatory agencies and other documents and instruments that in any manner relate to the Properties, (ii) computer databases that are owned by Seller or the Partnership that relate to the Properties, (iii) geophysical, geological, engineering, exploration, production and other technical data, magnetic field recordings, digital processing tapes, field prints, summaries, reports and maps, whether written or in electronically reproducible form, that are in the possession of the Partnership or Seller and relate to th e Properties and (iv) all other books, records, files and magnetic tapes containing title or other information that are in the possession of the Partnership or Seller and relate to the Properties, provided that Seller shall have the right to retain a copy of any and all such Records, but excluding (a) previous offers and economic analyses associated with the purchase, sale or exchange of the Properties, (b) proprietary information, interpretive information, internal communications, personnel information, tax information (except that Seller shall provide Buyer with copies of any property, severance, usage or similar tax records, other than state and federal income tax records or returns, that are reasonably necessary for Buyer's ownership, administration or operation of the Properties), (c) information covered by a non-disclosure obligation to a Third Party and (d) information covered by a legal privilege.
"Required Consents" shall have the meaning set forth in Article 4.3.
"Respondent" has the meaning set forth in Article 15.16.
"Seller's Knowledge" shall mean the actual knowledge of each individual Seller, and any officer, director, manager level employee or the general partner of each corporate, limited liability company and partnership Seller.
"Tax" means any tax (including without limitation any federal, state or local income tax, franchise tax, capital gains tax, gross receipts tax, license tax, value-added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, environmental tax, inventory tax, occupancy tax, severance tax, withholding tax, payroll tax, employment tax, gift tax, estate tax or inheritance tax), levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), imposed, assessed or collected by or under the authority of any governmental authority or payable pursuant to any tax-sharing agreement or pursuant to any other contract relating to the sharing or payment of any such tax, levy, assessment, tariff, impost, imposition, toll, duty, deficiency or fee.
"Tax Return" means any return (including any information return), report, claim for refund, statement, declaration, schedule, notice, notification, form, partnership agreement or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental authority in connection with the determination, assessment, collection, reporting or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any legal requirement relating to any Tax, and including any amendment thereof.
"Third Party" means any person or entity, governmental or otherwise, other than the Partnership, Seller and Buyer, and their respective Affiliates.
"Title Defect" means any lien, encumbrance, encroachment or defect associated with the Partnership's title to the Properties (excluding Permitted Encumbrances) that would cause the Partnership not to have Defensible Title.
"Title Defect Threshold Amount" shall have the meaning set forth in Article 4.6(a).
"Transfer Taxes" means all Taxes (other than Taxes measured by net income or Texas franchise Taxes (or any Tax imposed by a successor statute)) incurred or imposed by reason of transactions contemplated by this Agreement, regardless of upon whom such Taxes are levied or imposed by Law, including sales and use Taxes, real property transfer Taxes, excise Taxes, and stamp, documentary, filing, recording, permit, license, or authorization duties or fees.
"Working Interest" shall mean the share (expressed as a percentage, decimal or fraction) of costs and expenses attributable to the maintenance, development and operation of a particular subdivision of the Properties.
Notwithstanding Seller's obligations under Article 4.2(b), Seller shall have the right to request and receive a reassignment of one or more spacing units identified as being subject to the Open Title Defect and the Purchase Price shall be reduced by the value allocated to such spacing units, until such time as the aggregate reduction in the Purchase Price on account of exclusion of spacing units at Seller's direction has reached one percent (1%) of the Purchase Price. If Seller requests a reassignment of a spacing unit, Buyer shall have the right to waive the Open Title Defect in which case the spacing unit will not be excluded, the Purchase Price will not be reduced and the parties shall proceed to Closing.
If the dispute is referred to binding resolution, the title attorney shall resolve the Open Title Defects submitted by the parties in accordance with the procedure set forth in Article 15.16(c). If the parties are not able to agree on a title attorney, the Designating Entity (as defined in Article 15.16(a)) shall appoint the title attorney. The decision of the title attorney regarding any Open Title Defect shall be final as between the parties.
Buyer shall succeed to all deposits paid to the Minerals Management Service or to the State of New Mexico associated with the Properties as of the Effective Time. The deposits shall be reflected as a Purchase Price increase in the Closing Statement. At Closing, Buyer shall succeed to such deposits referenced above.
Notwithstanding the above provision, Buyer acknowledges that the Partnership is currently engaged in a development drilling program on the Properties and that the operations listed on Schedule 9.9 shall continue in the ordinary course of business. With respect to the ongoing operations listed on Schedule 9.9, Seller, as owner of the Partnership, shall bear the actual cost of such operations and installation of the equipment specified until Closing. If such operations have not been completed as of Closing, the Purchase Price shall be reduced by the estimated cost to perform and complete such operations and to install the specified equipment based on the cost to Seller of comparable operations or equipment, subject to reconciliation to the extent known in the Final Accounting Settlement. With respect to any capital expenditures or new operations conducted prior to Closing that are not listed on Schedule 9.9, subject to Seller obtaining Buyer's consent with respect thereto as required pursuant to this Agreement, Buyer shall reimburse Seller at Closing, in addition to payment of the Purchase Price, for all actual costs incurred and paid or payable by Seller, as owner of the Partnership, through the Closing in connection with such operations (including reimbursement for operator's overhead as provided in the applicable operating agreements and payments or prepayments made for equipment ordered for those operations). At Closing, Buyer shall be deemed to have assumed all liabilities and obligations relating to the ongoing operations on the Properties as of the Effective Time.
Seller represents and warrants to Buyer that on the date hereof and as of the Closing Date the statements contained in this Article 9 are true and correct.
Each such Seller has ratified and confirmed in the Power of Attorney all acts and actions of Agent in connection with this Agreement, and whatsoever Agent shall and may do by virtue of the powers therein granted to the Agent. Upon Agent's receipt of any payment (including, without limitation, the Purchase Price under this Agreement), such Seller has released and discharged Buyer from any further liability with respect to such payment, and agrees to look solely to Agent for the correct, timely, and proper distribution of any amount owed to such Seller as a result of such payment.
Buyer represents and warrants to Seller that to the best of Buyer's knowledge on the date hereof and as of the Closing Date the statements in this Article 10 are true and correct.
If to Seller: c/o SG Interests I, Ltd., as Operator
909 Fannin, Suite 2600
Houston, Texas 77010
Attn: Russell D. Gordy
Telephone: 713-951-0100
Facsimile: 713-951-0191
If to Buyer: Energen Resources Corporation
605 Richard Arrington Jr. Blvd. North
Birmingham, Alabama 35203-2707
Attn: J. T. McManus II
Telephone: 205-326-2525
Facsimile: 205-326-1858
If, as a result of the initial decision making process, the arbitration panel determines that a valid Claim was presented as an Arbitrable Dispute or that in fact and in law an Open Defect submitted to the single arbitrator does constitute a Title Defect or Environmental Condition, the arbitration hearing shall be scheduled and conducted as promptly as possible in Houston, Texas. The amount of the award relating to the Claim shall be determined by the majority vote of the three (3) arbitrators or by the single arbitrator, if applicable. The arbitration panel and the arbitrator shall have the authority to award attorney's fees and costs of arbitration to the prevailing party if the panel or the arbitrator determines that the non-prevailing party's position was not based on a commercially reasonable interpretation of the applicable standards, law or facts.
[SIGNATURE PAGES FOLLOW]
The parties have executed this Agreement on the Day and year first set forth above.
SELLER: SG INTERESTS I, LTD., as a Seller and
as Agent and Attorney-in-Fact for each
Seller
By: Gordy Oil Company,
its Managing General Partner
By:
Russell D. Gordy, President
BUYER: ENERGEN RESOURCES CORPORATION
By:
James T. McManus II, President
PARTNERSHIP: SG INTERESTS 30, LTD.
By: SG Interests I, Ltd.,
its General Partner
By: Gordy Oil Company,
its Managing General Partner
By:
Russell D. Gordy, President
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