Message-ID: <2417478.1075842594887.JavaMail.evans@thyme> Date: Tue, 6 Jun 2000 04:13:00 -0700 (PDT) From: gerald.nemec@enron.com To: gharless@mariner-energy.com Subject: Re: Platform Lease -Reply -Reply Cc: steve.hooser@enron.com, ted.bland@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: steve.hooser@enron.com, ted.bland@enron.com X-From: Gerald Nemec X-To: gharless@mariner-energy.com X-cc: Steve Van Hooser, Ted C Bland X-bcc: X-Folder: \Gerald_Nemec_Dec2000_June2001_1\Notes Folders\All documents X-Origin: NEMEC-G X-FileName: gnemec.nsf Greg, Attached is correspondence between Marathon and Enron (MEGS) concerning the revised draft of the lease that I had forwarded for Marathon's review and also to you for Mariner's review. I wanted to give you the benefit of these discussion we have had with Marathon concerning how the MEGS and Mariner's responsibilities should be split. Our intent with these revisions, and the our goals as we continue to work with Marathon on these issues is to simply allocate the risks between Mariner and MEGS with respect to Marathon, as Mariner and MEGS intended them to be allocated under the O&M Agreement between the two. We are not asking Marathon to rely on the O&M Agreement to which they are not a party. Risk associated with ownership of the flowline should run to MEGS and risk associated with the operation and maintenance of the flowline and ownership of the hydrocarbons should run to Mariner as they currently do under the Production Handling Agreement. We intend to work with Marathon toward this end. If you have any comments concerning these discussions or would like to discuss this further with me, please contact me at (713) 853-3512. I would also be interested in any comments you may have with respect to the draft lease agreement I forwarded to you earlier. Thanks. Gerald Nemec ENA-Legal ----- Forwarded by Gerald Nemec/HOU/ECT on 06/06/2000 10:25 AM ----- "Bradley G Penn" 06/01/2000 09:17 AM To: Gerald.Nemec@enron.com cc: ERGetz@GROUPWISE.MarathonOil.com, RAHernandez@GROUPWISE.MarathonOil.com Subject: Re: Platform Lease -Reply -Reply Gerald, It seems that the drafts that have been sent back to Marathon have confused the relationships of Marathon, Mariner and MEGS. As an example you have requested that the LOPSA rely on the O&M Agreement between Mariner and MEGS, which Marathon is not a party. We would rather that agreement remain between MEGS and Mariner and be the basis for your resolution of disputes. The legal capacities presented in your response to the LOPSA draft are confusing. All rights seem to flow to MEGS, yet the obligations seem to be on Mariner, we do not believe the division of rights and obligations in this manner are a good situation. By example the Indemnity provisions have been altered to have Mariner indemnify the Owners and Operator (no mention of MEGS)and then further change the indemnity to a negligence based indemnity (of Platform Operator). The PHA is a unilateral indemnity to Platform Operator and Platform Owners and we must insist on this same level of protection with MEGS. If you would like to make another attempt at either a ratification or LOPSA that addresses MEGS as Lessee and Mariner as its operator and provide for any resolution between those two in the O&M Agreement we would be happy to discuss this further. If you would like to go through the LOPSA line by line please call and we can set up a teleconference with our legal department to do so. BGP >>> 05/31/00 01:04pm >>> I have reviewed your response and disagree with the characterization of our modification the documents. I would like to clarify our reasons for the modifications to avoid any further miscommunications. MEGS' alteration of the documents do not impair the protections afforded to Marathon under the Production Handling Agreement. Our modifications were simply intended to allocate certain risks between MEGS and Mariner with respect to Marathon (as operator of the South Pass 89 B Platform) as such risks were intended to be allocated by MEGS and Mariner. Mariner's transfer of interest in the flowline to MEGS introduces a new party which Marathon can look to for certain obligations with respect to the platform. The alterations do not remove Mariner from its current role as operator and maintainer of the flowline and owner of the hydrocarbons. For these reasons, I would disagree with your response that the draft alterations do not provide the intended protections that Marathon would expect absent such a transfer to MEGS. Mariner still shoulders these risks and expenses under the Production Handling Agreement. Having MEGS fully ratify the Production Handling Agreement and becoming jointly and severally liable to Marathon is not appropriate. MEGS does not hold title to any hydrocarbon production or operate the facilities and should not be liable for all risks and expenses associated therewith. Mariner should continue to shoulder those risks and as before. I would be happy to discuss your issues with our Platform Lease revisions at your convenience or to discuss the above further. "Bradley G Penn" To: Gerald.Nemec@enron.com JCAlbert@GROUPWISE.MarathonOil.com Subject: Platform Lease -Reply 05/26/2000 10:00 AM Attached are our response and ratification agreement. BGP >>> "Gerald Nemec" 05/25/00 04:49pm >>> Brad, Can you give me a status on where you are at with the review of the Lease Docs for the MEGS Facilities? I forward those documents about a month back. Gerald Nemec Enron North America Corp. - Legal (See attached file: MEGS.DOC) (See attached file: MEGSRAT.DOC)