Quarterly Report — Form 10-Q
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report 24± 121K
2: EX-10.37 Material Contract 5± 21K
3: EX-10.62 Material Contract 1 7K
4: EX-10.63 Material Contract 1 7K
5: EX-12.1 Statement re: Computation of Ratios 2± 16K
6: EX-12.2 Statement re: Computation of Ratios 3± 17K
7: EX-27.1 Financial Data Schedule (Pre-XBRL) 1 9K
8: EX-99.1 Miscellaneous Exhibit 10± 35K
EX-99.1 — Miscellaneous Exhibit
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EXHIBIT 99.1
HEADS OF AGREEMENT
BETWEEN
MALAYSIA-THAILAND JOINT AUTHORITY
AND
PETRONAS CARIGALI (JDA) SDN BHD
AND
TRITON OIL COMPANY OF THAILAND
AND
TRITON OIL COMPANY OF THAILAND (JDA) LIMITED
AS SELLERS
AND
PETROLIAM NASIONAL BERHAD
AND
PETROLEUM AUTHORITY OF THAILAND
AS BUYERS
FOR THE SUPPLY OF GAS
FROM THE BLOCK A-18 OF THE
MALAYSIA-THAILAND JOINT DEVELOPMENT AREA
April 1, 1998
PREAMBLE
--------
This Heads of Agreement (hereinafter referred to as "this GSA-HOA") is made
this 22nd day of April 1998 BETWEEN
the following parties collectively referred to as "the SELLERS".
1. MALAYSIA-THAILAND JOINT AUTHORITY with its principal office at 27th
Floor, City Square Centre, 182 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia,
(hereinafter referred to as "MTJA"),
2. PETRONAS CARIGALI (JDA) SDN BHD with its registered office at Tower 1,
PETRONAS Twin Towers, Persiaran KLCC, 50450 Kuala Lumpur, Malaysia
(hereinafter referred to as "CARIGALI"),
3. TRITON OIL COMPANY OF THAILAND with its principal place of business at
7th. Fl. Kian Gwan Bldg. 1, 140 Wireless Road, Bangkok 10330, Thailand, and
4. TRITON OIL COMPANY OF THAILAND (JDA) LIMITED with its registered
address at Suite 13.01, Menara Tan & Tan, 207, Jalan Tun Razak, 50400 Kuala
Lumpur, Malaysia, (Triton Oil Company of Thailand and Triton Oil Company of
Thailand (JDA) Limited are hereinafter referred to collectively and treated as
one entity "TRITON")
AND WITH
The following parties of the other part who are collectively referred to as
"the BUYERS" and individually as "a BUYER"
1. PETROLIAM NASIONAL BERHAD with its principal office at Tower 1,
PETRONAS Twin Towers, Persiaran KLCC, 50450 Kuala Lumpur, Malaysia
(hereinafter referred to as "PETRONAS") and
2. PETROLEUM AUTHORITY OF THAILAND with its principal office at Head
Office Building, 555 Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900,
Thailand or its successors or legal assigns (hereinafter referred to as
"PTT"),
MTJA, PETRONAS, PTT, CARIGALI and TRITON are hereinafter collectively referred
to as "Parties" and individually as "Party" as the context may require.
WHEREAS
1. MTJA on the 21st day of April 1994 entered into a Production Sharing
Contract (hereinafter referred to as "PSC") with CARIGALI and TRITON in
respect of Block A-18 (hereinafter referred to as the "Contract Area") of the
Malaysia-Thailand Joint Development Area (hereinafter referred to as "the
JDA") for the exploration and exploitation of petroleum resources in the
Contract Area.
2. CARIGALI and TRITON as joint operators have delegated their role as
operator to CARIGALI-TRITON OPERATING COMPANY SDN BHD (hereinafter referred to
as "CTOC") which has its principal place of business at Suite 5.01-5.03, 5th
Floor, Wisma Inai, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia.
3. Natural Gas reserves discovered in the Contract Area (hereinafter
referred to as "Gas") are anticipated to be developed under the PSC by 1st
quarter 2001 . According to the PSC, CARIGALI and TRITON as contractors
(hereinafter referred to as "PS Contractors") thereunder are required to
negotiate for the sale of the Gas on a joint-dedicated basis with MTJA.
4. As agreed between the BUYERS and the SELLERS through the Memorandum of
Understanding dated Thursday 30th May 1996, the BUYERS are desirous to
purchase the Gas from the SELLERS and the SELLERS are desirous of selling the
Gas to the BUYERS on terms and conditions to be agreed between the Parties on
the mutual understanding as set forth herein.
5. As agreed between the BUYERS through the Head of Agreement dated 19th
September 1997, the BUYERS intend to bring their respective 50% share of the
Gas purchased from the SELLERS back to their respective countries on terms and
conditions to be agreed between the BUYERS under a separate agreement.
NOW THE PARTIES HEREBY AGREE as follows:-
ARTICLE 1
---------
STATEMENT OF INTENT
-------------------
1.1 This GSA-HOA summarizes the understanding and intent of the SELLERS to
sell to the BUYERS and the intent of the BUYERS to purchase and receive from
the SELLERS, the Gas on terms and conditions to be agreed in accordance with
the main principles as set forth herein.
1.2 The Parties agree in good faith to take the actions outlined in this
GSA-HOA and subject to the mutual agreement of the Parties to enter into a gas
sales agreement or agreements ("the GSA") and any other documents necessary
for the sale and purchase of the Gas from the Contract Area.
END OF ARTICLE 1
----------------
ARTICLE 2
---------
TERM OF THIS GSA-HOA
--------------------
2.1 This GSA-HOA shall become effective on the date of execution of this
GSA-HOA ("Effective Date") and shall, subject to the provisions of Article 2.2
continue in effect thereafter until June 1, 1998, unless extended by the
mutual agreement of the Parties.
.2.2 Any Party may withdraw from this GSA-HOA by giving the other Party
not less than thirty (30) days written notice without liability to the other
Parties.
END OF ARTICLE 2
----------------
ARTICLE 3
---------
MAIN PRINCIPLES
---------------
It is agreed that the GSA will include the following main principles:
3.1.1 GAS SUPPLY
-----------
(a) Reserve Dedication
-------------------
The SELLERS agree to dedicate the entire gas reserves in the
Contract Area to be sold to the BUYERS for the duration of the GSA.
(b) Daily Contract Quantity (DCQ)
-------------------------------
and Contractual Delivery Capacity (CDC)
------------------------------------------
The SELLERS shall develop sufficient gas reserves in the Contract
Area to deliver Gas at a Daily Contract Quantity ("DCQ") and to maintain a
Contractual Delivery Capacity ("CDC") of 110 per cent of the DCQ for the
duration of the GSA. As between the BUYERS, it is intended that each BUYER
shall have an individual DCQ (DCQ*) and an individual CDC (CDC*) equal to
fifty (50) percent of the DCQ and CDC respectively.
(c) Start-Up Date
--------------
It is anticipated that deliveries of the Gas by the SELLERS to the
BUYERS will commence between March 1, 2001 and June 30, 2001 ("Start-Up
Date"). The Parties will establish a procedure in the GSA to determine the
timing of the Start-Up Date. The Parties shall use all commercially reasonable
efforts to cause the commencement of deliveries on the Start-Up Date.
(d) Supply Profile
---------------
(i) The Contract Area will be developed in a number of phases. The
initial DCQ will be fixed as set out in this paragraph (i). The DCQ at the
Contractual Delivery Date (CDD) will be 195 Million standard cubic feet per
day (Mmscf/d) and will increase in six or fewer months to 390 Mmscf/d and will
be maintained at that rate until the end of the 20th Contract Year.
(ii) The DCQ will be revised as set out in this paragraph (ii).
Pursuant to procedures to be detailed in the GSA, SELLERS will notify BUYERS
of a possible increase in DCQ and, subject to terms and timing to be defined
in the GSA, the Parties will mutually agree on the effective date for the
increased DCQ. The DCQ shall be determined by dividing the Field Reserves
(defined in Article 3.1.6) as last calculated by six thousand (6,000).
(iii) In the event the BUYERS do not wish to accept a possible
increase in the DCQ notified by the SELLERS to the BUYERS, the SELLERS shall
be free to sell Gas to third parties from that quantity of the Field Reserves
in excess of the quantity of Field Reserves needed to support the DCQ agreed
and accepted for the purpose of sale and purchase of Gas between the BUYERS
and SELLERS. Such release shall be subject to the SELLERS ensuring that the
DCQ agreed and accepted between the BUYERS and the SELLERS can be maintained
for the duration of the GSA.
(iv) SELLERS certify that as of December 31, 1997 the Field
Reserves are two decimal nine five (2.95) trillion standard cubic feet (Tscf)
inclusive of up to 23% Carbon Dioxide which is calculated based on the
certified reserves by third party of two decimal three six (2.36) Tscf
(Proved)
(e) Shortfall and Take-or-Pay Obligations
----------------------------------------
The SELLERS and BUYERS will within the GSA agree to a run-in period,
starting on the Start-Up Date, to test facilities before the CDD. The
"shortfall" obligations of the SELLERS and the "take or pay" obligations of
the BUYERS (hereinafter described) will commence in all events on the CDD.
The sum of a BUYER'S DCQ* in effect for each day in a year,
multiplied by zero decimal nine zero (0.90), reduced by agreed annual
maintenance, failure by SELLERS to deliver, and Force Majeure shall be called
the Net Annual Contract Quantity ("Net ACQ*") and the BUYER will be obligated
to take or pay for the Net ACQ* each year. The BUYER will have the right to
take free of charge quantities of the Gas paid for but not taken in subsequent
contract years after the BUYER has taken the Net ACQ* for that contract year
and will be subject to carry forward provisions.
In any Contract Year the BUYERS will set up a balancing mechanism in
respect of their obligations to take Gas from the SELLERS provided that; if
one BUYER cannot take Gas in the amount of the Net ACQ*, another will endeavor
to take the remaining Gas of the said BUYER'S Net ACQ* in order to fulfill
BUYERS' obligation.
The SELLERS will be obligated to be able to deliver Gas each day to
each BUYER up to the CDC* notwithstanding that the aggregate of such
requirements may exceed the Net ACQ*.
Failure to deliver the quantity of Gas properly notified by the
BUYERS, up to the CDC, on any day will result in a shortfall to supply the
Gas ("Shortfall") and default provisions will apply where BUYERS can recoup
such Shortfall from the next available deliveries at a discounted price
(Shortfall Price).
3.1.2 FACILITIES
----------
The SELLERS shall be committed to drill the necessary wells and design,
construct and operate those producing, handling and transporting facilities
necessary to deliver the Gas from the Contract Area to the outlet flange of a
metering station on the Central Processing Platform (CPP) in the Contract Area
(the "Delivery Point"). The SELLERS shall complete these activities in
sufficient time to commence deliveries of Gas at the Delivery Point conforming
to the quality specifications appended hereto as Appendix "A" by the Start-Up
Date.
The BUYERS shall complete the laying of the pipeline in sufficient time
to accept deliveries of Gas at the CDC rates and at a maximum delivery
pressure of 2000 psig by the Start-Up Date and shall install individual meters
to measure the receipt of Gas for each BUYER at the Delivery Point.
3.1.3 POINT OF SALE
---------------
(a) The Gas will be delivered and sold by the SELLERS at the Delivery
Point and custody, risk and title shall pass to the BUYERS at that point for
the Gas attributable to each BUYER.
(b) SELLERS shall indemnify BUYERS for all costs, taxes, royalties,
levies, imposts, charges or any other such costs or expenses imposed on or
attributable to the Gas before the BUYERS take custody and title of the Gas.
Each BUYER shall indemnify SELLERS for costs, taxes, royalties, levies,
imposts, charges or any other costs or expenses imposed on or attributable to
his share of the Gas after the BUYER takes custody and title to his share of
the Gas.
(c) The Gas delivered by the SELLERS to the BUYERS shall meet quality
and delivery pressure specifications. The BUYERS shall have the right to
reject Gas failing to meet Gas specifications and to recoup limited costs for
damages in the event off specification Gas is accepted or the SELLERS fail to
remedy the situation.
3.1.4 PRICE
-----
The Initial Base Price ("IBP") to be paid to the SELLERS for the Gas
received by the BUYERS at the points of sale will be 2.30 US dollars for each
one million Btu's of gross heating value of such Gas. Effective October 1st
immediately preceding the Start-Up Date and each October 1st throughout the
duration of the GSA, the IBP shall be adjusted by the following formula to
calculate the Current Price:
Normal Price (By) = IBP [0.25(CPIy/CPI)+0.25(OMy/OM)+0.35(Fy/F)+0.15]
Ceiling Price (Ay) = 1.1(IBP)(Fy/F)
Floor Price (Cy)=(IBP-$0.125)[0.25(CPIy/CPI)+0.25(OMy/OM)+0.2(Fy/F)+ 0.3]
Special Floor Price (Dy) = (Ay + Cy)/2
The Current Price shall be:
(i) By if Ay is greater than By and By is greater than Cy
(ii) Ay if By is greater than Ay and Ay is greater than Cy
(iii) Cy if Ay is greater than Cy and Cy is greater than By
(iv) Dy if Cy is greater than Ay
The price paid to the SELLERS by the BUYERS shall be the Current Price
until a cumulative zero decimal five (0.5) Tscf of Gas has been delivered from
the Contract Area by the SELLERS and paid for by the BUYERS. For deliveries
in excess of zero decimal five (0.5) Tscf of Gas until a cumulative one
decimal three (1.3) Tscf of Gas is delivered from the Contract Area and paid
for by the BUYERS, the Current Price will be multiplied by zero decimal nine
five (0.95) to obtain the price to be paid to the SELLERS by the BUYERS. For
deliveries from the Contract Area in excess of a cumulative one decimal three
(1.3) Tscf of Gas the Current Price shall be multiplied by zero decimal nine
zero (0.90) to obtain the price to be paid to the SELLERS by the BUYERS.
Fy = the arithmetic average of the figures last published for each month
of the calendar year immediately preceding the year in which prices have to
be adjusted in United States Dollars per barrel of medium fuel oil ex
Singapore from Shell Eastern Petroleum PTE Ltd., Esso Singapore PTE Ltd.,
Mobil Sales and Supply Corporation, Caltex Petroleum Corporation, BP Oil
International and Singapore Petroleum Corporation PTE Ltd. as published in
"Platts Oilgram Price Service".
F is agreed to be US$14.500000 per barrel
CPI = the arithmetic average of the figures published for each month of
the twelve (12) month period, inclusive, for the Consumer Price Index number
in the United States of America, all items, all urban consumers (CPI-U) on 100
basis for the calendar year 1982-1984 as published by the United States
Department of Labor, Bureau of Labor Statistics. "CPI" is agreed to be one
hundred forty seven decimal three six six six six seven (147.366667) for the
time period October 1, 1993 to September 30, 1994.
CPIy = the arithmetic average of the figures published as for CPI above
in respect of the twelve (12) Month period ending twelve (12) months prior to
the date on which the prices will be adjusted.
OM = the arithmetic average of the figures published for each month of
the twelve (12) Month period, inclusive, for the Producer Price Index for Oil
Field and Gas Field Machinery and Tools, Commodity Code No. 1191, based on
100 for the calendar year 1982 as published by the United States Department of
Labor, Bureau of Labor Statistics. OM is agreed to be one hundred ten decimal
zero eight three three three three (110.083333) for the base period October 1,
1993 through September 30, 1994.
OMy = the arithmetic average of the figures published as for OM above for
each Month of the twelve (12) Month period ending twelve (12) Months prior to
the date on which the prices will be adjusted.
3.1.5 DURATION
--------
The duration of the GSA shall be co-terminous with the duration remaining
in the PSC as at the Effective Date or any extension to the PSC unless
otherwise mutually agreed by the Parties.
3.1.6 REDETERMINATION OF RESERVES
-----------------------------
There will be a procedure in the GSA for determining initial and future
reserves ("Field Reserves") certified by independent expert for purposes of
establishing whether there are adequate reserves to meet the obligations of
the SELLERS and to establish second and subsequent phase DCQ and CDC in the
event the Parties do not mutually agree. In any redetermination, the
calculation of Field Reserves shall contain all proved reserves and no more
than 20% of the total Field Reserves shall be probable reserves.
3.1.7 FORCE MAJEURE
--------------
A Force Majeure clause will be included incorporating the concept of a
BUYER'S right to Force Majeure relief if Force Majeure events affect BUYER'S
customers and if the BUYER pro-rates the amount of relief required among all
of his relevant suppliers.
3.1.8 DISPUTES
--------
The GSA shall include provisions for resolving disputes by the use of
Experts or by Arbitration according to UNCITRAL rules.
3.2 GAS SALES AGREEMENT
---------------------
As soon as possible after the Effective Date the Parties shall in good
faith exercise their best endeavours to conclude the GSA setting forth all the
terms and conditions governing the sale and purchase of the Gas recognising
the rights and obligations of each BUYER with respect to fifty (50) percent of
the Gas. The Parties agree that the GSA shall include the terms of this
GSA-HOA, and such other terms and conditions customary for similar gas
purchase and sale transactions, including the following:
(i) Billing and Payment
(ii) Default
(iii) Force Majeure
(iv) Assignment
(v) Measurement
(vi) Commercial Dispute Arbitration
(vii) Technical Dispute Resolution
(viii) Applicable Law
(ix) Representatives
(x) Exchange of Information
(xi) Liabilities
END OF ARTICLE 3
----------------
ARTICLE 4
---------
CONDITION PRECEDENT
-------------------
It is fully understood that this GSA-HOA is subject to:-
(a) A full and binding agreement being reached by the Parties on the full
GSA by June 1, 1998 unless mutually extended by the Parties.
(b) Confirmation and acceptance of this GSA-HOA by the Board, and where
required by Government, of each of the Parties by confirmed signature below.
END OF ARTICLE 4
----------------
IN WITNESS WHEREOF, the Parties hereto have executed this HOA on 22nd day of
April 1998.
For: MALAYSIA-THAILAND JOINT AUTHORITY Date:
{Authorized Signature} {Witness}
For: PETRONAS CARIGALI (JDA) SDN BHD Date:
{Authorized Signature} {Witness}
For: TRITON OIL COMPANY OF THAILAND Date:
{Authorized Signature} {Witness}
For: TRITON OIL COMPANY OF THAILAND (JDA) LIMITED Date:
{Authorized Signature} {Witness}
For: PETROLEUM AUTHORITY OF THAILAND Date:
{Authorized Signature} {Witness}
For: PETROLIAM NASIONAL BERHAD Date:
{Authorized Signature} {Witness}
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Appendix A
Quality Specifications
1. Gas delivered under this Agreement shall at the Delivery Points:
(1) GENERAL - be commercially free from materials and dust or other
solid matter, liquid matter, waxes, gums and gumforming constituents which
might cause injury to or interference with proper operations of the lines,
meters, regulators or other appliances through which natural gas flows.
Sellers shall furnish, install, maintain and operate such drips, separators,
heaters and other devices as Sellers deem necessary or desirable to effect
compliance with this specification.
(2) WATER CONTENT - contain not more than seven pounds of water vapor
per one million (1,000,000) cubic feet (7 lbs/MMCF) of Gas.
(3) SULFUR - contain not more than five decimal one seven (5.17)
grains total sulfur per one hundred (100) cubic feet of Gas.
(4) HYDROGEN SULFIDE - contain not more than three decimal four five
(3.45) grains of hydrogen sulfide per one hundred (100) cubic feet of Gas, as
determined by the weighted average at all applicable delivery points.
(5) CARBON DIOXIDE - contain not more than twenty-three (23) mole
percent of carbon dioxide, as determined by the weighted average at all
applicable delivery points.
(6) OXYGEN - contain not more than zero decimal one (0.1) mole
percent of oxygen.
(7) HEATING VALUE - have a Gross Calorific Value not less than eight
hundred fifty (850) BTU per cubic foot and not more than eleven hundred fifty
(1,150) BTU per cubic foot.
(8) TEMPERATURE - shall have a temperature which is not less than
sixty degrees (60 degrees) Fahrenheit and not more than one hundred forty
degrees (140 degrees) Fahrenheit.
(9) MERCURY - contain not more than 50 micrograms per cubic meter, as
determined by the weighted average at all applicable delivery points.
2. Suitable standard test method and measuring instruments of
standard manufacture acceptable to both parties together with procedures for
checking and/or verification of the instruments shall be agreed between the
parties or be determined by an expert.
Dates Referenced Herein and Documents Incorporated by Reference
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