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HomeMy WebLinkAbout04 - Oil Well Repair ServicesCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 4 November 27, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Utilities Department Steve Myrter, Utilities Director 718 -3411 or smyrter (a)city.newport- beach.ca.us SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH OIL WELL SERVICE COMPANY FOR OIL WELL REPAIR SERVICES RECOMMENDATION: Approve Professional Services Agreement with Oil Well Service Company for on -call repair services for oil well pumping units and authorize the Mayor and City Clerk to execute the Agreement. DISCUSSION: Background: On -call agreements allow staff to retain specialized services that are regularly required for various repairs of the City's oil wells. Oil Well Service Company is one of several southern California companies that provide oil rigging units for repair of oil and gas casing, tubing, sucker rods and down hole oil production pumps. Oil Well Service Company has provided oil rigs and repair services for the City's oil wells for the last 23 years. Oil Well Service's background includes 67 years experience in oil production service. Environmental Review: This action requires no environmental review, as it is not a project pursuant to CEQA. Funding Availability: Funding is available in Maintenance and Repair 5400 -8160. Oil Well Repair Services — Approval Professional Services Agreements November 27, 2007 Page 2 Expenditures more than $30,000 for an individual repair project will require a separate City Council action in accordance with Policy F -14. Prepared by: CIA* Cindy As le , Administrative Manager Submitted by: Steve Myrter, Utilitie& Director Attachments: Agreement with Oil Well Service Company PROFESSIONAL SERVICES AGREEMENT WITH OIL WELL SERVICE COMPANY FOR ON -CALL OIL WELL REPAIR SERVICES THIS AGREEMENT is made and entered into as of this 27th day of November, 2007, by and between the CITY OF NEWPORT BEACH, a Municipal Corporation ( "City "), and OIL WELL SERVICE COMPANY, a California Corporation whose address is 1241 E. Burnett St., Signal Hill, California 90755 ( "Contractor"), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City has a need for on -call assistance for oil well repair services. C. City desires to engage Contractor to perform on -call repair of oil and gas casing, tubing, sucker rods and down hole oil production pumps at the City's Oil Fields on an as need basis ("Project"). D. Contractor possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement. E. The principal member of Contractor for purposes of Project, shall be Jack Frost. F. City has solicited and received a proposal from Contractor, has reviewed the previous experience and evaluated the expertise of Contractor, and desires to retain Contractor to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: 1. TERM The term of this Agreement shall commence on the above written date, and shall terminate on the 9th day of April, 2007, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Contractor shall provide "On -Call" oil well repair services as described in the Statement of Qualifications attached as Exhibit "A." Upon verbal or written request from the Project Administrator, Contractor shall provide a letter proposal for services requested by the City (hereinafter referred to as the "Letter Proposal'). The Letter Proposal shall include the following: (a) A detailed description of the services to be provided; (b) The position of each person to be assigned to perform the services, and the name of the individuals to be assigned, if available; (c) The estimated number of hours and cost to complete the services; (d) The time needed to finish the specific project. No services shall be provided until the Project Administrator has provided written acceptance of the Letter Proposal. Once authorized to proceed, Contractor shall diligently perform the duties in the approved Letter Proposal. 3. TIME OF PERFORMANCE Time is of the essence in the performance of services under this Agreement and the services shall be performed to completion in a diligent and timely manner. The failure by Contractor to perform the services in a diligent and timely manner may result in termination of this Agreement by City. Notwithstanding the foregoing, Contractor shall not be responsible for delays due to causes beyond Contractor's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. 3.1 Contractor shall submit all requests for extensions of time for performance in writing to the Project Administrator not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Contractors control. 3.2 For all time periods not specifically set forth herein, Contractor shall respond in the most expedient and appropriate manner under the circumstances, by telephone, fax, hand - delivery or mail. 4. COMPENSATION TO CONTRACTOR City shall pay Contractor for the services on basis, in accordance with the provisions of Billing Rates attached hereto as Exhibit . reference. a time and expense not -to -exceed this Section and the Schedule of "B" and incorporated herein by No rate changes shall be made during the term of this Agreement without the prior written approval of the City. Contractors compensation for services performed in accordance with this Agreement, including all reimbursable items and 2 subconsultant fees, shall not exceed the fees identified in the Letter Proposal, as approved by the Project Administrator. Any Letter Proposal .that sets forth fees in excess of Thirty Thousand Dollars and No Cents ($30,000.00) shall require a separate Professional Service Agreement approved by per Council Policy F -14. 4.1 Contractor shall submit monthly invoices to City describing the work performed the preceding month. Contractor's bills shall include the name of the person and /or classification of employee who performed the work, a brief description of the services performed and /or the specific task in the letter proposal to which it relates, the date the services were performed, the number of hours spent on all work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Contractor no later than thirty (30) days after approval of the monthly invoice by City staff. 4.2 City shall reimburse Contractor only for those costs or expenses specifically approved in the Letter Proposal. Unless otherwise approved, such costs shall be limited and include nothing more than the following costs incurred by Contractor. A. The actual costs of subconsultants for performance of any of the services that Contractor agrees to render pursuant to this Agreement and the Letter Proposal, which have been approved in advance by City and awarded in accordance with this Agreement. B. Approved reproduction charges. C. Actual costs and /or other costs and /or payments specifically authorized in advance in writing and incurred by Contractor in the performance of this Agreement. 4.3 Contractor shall not receive any compensation for Extra Work without the prior written, authorization of City. As used herein, "Extra Work' means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Letter Proposal and which the parties did not reasonably anticipate would be necessary. Compensation for any authorized Extra Work shall be paid in accordance with the Schedule of Billing Rates set forth in Exhibit B. 5. PROJECT MANAGER Contractor shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Contractor has designated Jack Frost to be its Project Manager. Contractor shall not remove or reassign the Project Manager or any personnel listed in Exhibit A or assign any new or replacement personnel 7 to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of non -key personnel. Contractor, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Contractor warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 6. ADMINISTRATION This Agreement will be administered by the Public Works Department. Steve Myrter, Department Director shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his/her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 7. CITY'S RESPONSIBILITIES In order to assist Contractor in the execution of its responsibilities under this Agreement, City agrees to, where applicable: A. Provide access to, and upon request of Contractor, one copy, of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Contractor's work schedule. B. Provide usable life of facilities criteria and information with regards to new facilities or facilities to be rehabilitated. 8. STANDARD OF CARE 8.1 All of the services shall be performed by Contractor or under Contractor's supervision. Contractor represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. All services shall be performed by qualified and experienced personnel who are not employed by City, nor have any contractual relationship with City. By delivery of completed work, Contractor certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and local laws and the professional standard of care. 8.2 Contractor represents and warrants to City that it has or shall obtain all licenses, permits, qualifications, insurance and approvals of whatsoever nature that are legally required of Contractor to practice its profession. 12 Contractor further represents and warrants to City that Contractor shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any and all licenses, permits, insurance and other approvals that are legally required of Contractor to practice its profession. Contractor shall maintain a City of Newport Beach business license during the term of this Agreement. 8.3 Contractor shall not be responsible for delay, nor shall Contractor be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to fumish timely information or to approve or disapprove Contractor's work promptly, or delay or faulty performance by City, contractors, or governmental agencies. 9. HOLD HARMLESS To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents and employees (collectively, the "Indemnified Parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Contractor's presence or activities conducted on the Project (including the negligent and /or willful acts, errors and /or omissions of Contractor, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Contractor to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Contractor. 10. INDEPENDENT CONTRACTOR It is understood that City retains Contractor on an independent contractor basis and Contractor is not an agent or employee of City. The manner and means of conducting the work are under the control of Contractor, except to the extent 5 11. 12. 13. 14. they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Contractor or any of Contractors employees or agents, to be the agents or employees of City. Contractor shall have the responsibility for and control over the means of performing the work, provided that Contractor is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Contractor as to the details of the performance or to exercise a measure of control over Contractor shall mean only that Contractor shall follow the desires of City with respect to the results of the services. COOPERATION Contractor agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Contractor on the Project. CITY POLICY Contractor shall discuss and review all matters relating to policy and project direction with Citys Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. PROGRESS Contractor is responsible for keeping the Project Administrator and /or his /her duly authorized designee informed on a regular basis regarding the status and progress of the work, activities performed and planned, and any meetings that have been scheduled or are desired. INSURANCE Without limiting Contractor's indemnification of City, and prior to commencement of work. Contractor shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Certificates of Insurance. Contractor shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of performance or issuance of any permit. Current certification of insurance shall be kept on file with City's at all times during the term of this Agreement. G B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. C. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. D. Coverage Requirements. 1. Workers' Compensation Coverage. Contractor shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his or her employees in accordance with the laws of the State of California. In addition, Contractor shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (10 calendar days written notice of non- payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Contractor for City. 2. General Liability Coverage. Contractor shall maintain commercial general liability insurance in an amount not less than two million dollars ($2,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. 3. Automobile Liability Coverage. Contractor shall maintain automobile insurance covering bodily injury and property damage for all activities of the Contractor arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence. 7 4. Professional Errors and Omissions Insurance. Contractor shall maintain professional errors and omissions insurance, which covers the services to be performed in connection with this Agreement in the minimum amount of one million dollars ($1,000,000). E. Endorsements. Each general liability and automobile liability insurance policy shall be endorsed with the following specific language: 1. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Contractor. 2. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Contractors operations or services provided to City. Any insurance maintained by City, including any self - insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. 3. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. 4. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. 5. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. 6. The insurance provided by this policy shall not be suspended, voided, canceled,.or reduced in coverage or in limits, by either party except after thirty (30) calendar days (10 calendar days written notice of non - payment of premium) written notice has been received by City. F. Timely Notice of Claims. Contractor shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Contractors performance under this Agreement. G. Additional Insurance. Contractor shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own F judgment may be necessary for its proper protection and prosecution of the worts. 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Contractor is a partnership or joint - venture or syndicate or cotenancy, which shall result in changing. the control of Contractor. Control means. fifty percent (50 %) or more of the voting power, or twenty-five percent (25%) or more of the assets of the corporation, partnership orjoint - venture. 16. SUBCONTRACTING The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Contractor. Assignments of any or all rights, duties or obligations of the Contractor under this Agreement will be permitted only with the express written consent of City. Contractor shall not subcontract any portion of the work to be performed under this Agreement without the written authorization of City. 17. OWNERSHIP OF DOCUMENTS Each and every report, draft, map, record, plan, document and other writing produced (hereinafter "Documents "), prepared or caused to be prepared by Contractor, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Contractor or any other party. Contractor shall, at Contractor's expense, provide such Documents to City upon written request. Documents, including drawings and specifications, prepared by Contractor pursuant to this Agreement are not intended or represented to be suitable for reuse by City or others on any other project. Any use of completed documents for other projects and any use of incomplete documents without speck written authorization from Contractor will be at City's sole risk and without liability to Contractor. Further, any and all liability arising out of changes made to Contractor's deliverables under this Agreement by City or persons other than Contractor is waived against Contractor and City assumes full responsibility for such changes unless City has given Contractor prior notice and has received from Contractor written consent for such changes. E 18. CONFIDENTIALITY All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential unless City authorizes the release of information. 20. RECORDS Contractor shall keep records and invoices in connection with the work to be performed under this Agreement. Contractor shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Contractor to this Agreement. All such records shall be clearly identifiable. Contractor shall allow a representative of City to examine, audit and make transcripts or copies of such records during regular business hours. Contractor shall allow inspection of all work, data, documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 21. WITHHOLDINGS City may withhold payment of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Contractor shall not discontinue work as a result of such withholding. Contractor shall have an immediate right to appeal to the City Manager or his designee with respect to such disputed sums. Contractor shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 22. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of Contractor which result in expense to City .greater than what would have resulted if there were not errors or omissions in the work accomplished by Contractor, the additional design, construction and /or restoration expense shall be bome by Contractor. Nothing in this paragraph is intended to limit City s rights under any other sections of this Agreement. 23. CITY'S RIGHT TO EMPLOY OTHER CONTRACTORS City reserves the right to employ other Contractors in connection with the Project. 10 24. CONFLICTS OF INTEREST The Contractor or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act'), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Contractor shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of this Agreement by City. Contractor shall indemnify and hold harmless City for any and all claims for damages resulting from Contractors violation of this Section. 25. NOTICES All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Contractor to City shall be addressed to City at: Steve Myrter Utilities Department City of Newport Beach 3300 Newport Boulevard Newport Beach, CA, 92658 -8915 Phone: 949 -644 -3012 Fax: 949 -646 -5204 All notices, demands, requests or approvals from City to Contractor shall be addressed to Contractor at: Jack Frost Oil Well Service Company 1241 E. Burnett St. Signal Hill, CA 90755 Phone: (562) 595 -4501 Fax: (562) 424 -8026 26. TERMINATION In the event that either party fails or refuses to perform any of the provisions of this Agreement at. the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to 11 give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, the non - defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. Notwithstanding the above provision, City shall have the right, at its sole discretion and without cause, of terminating this Agreement at any time by giving seven (7) calendar days' prior written notice to Contractor. In the event of termination under this Section, City shall pay Contractor for services satisfactorily performed and costs incurred up to the effective date of termination for which Contractor has not been previously paid. On the effective date of termination, Contractor shall deliver to City all reports and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 27. COMPLIANCE WITH ALL LAWS Contractor shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Contractor shall conform to applicable City, county, state and federal laws, regulations and permit requirements and be subject to approval of the Project Administrator and City. 28. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 29. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 30. CONFLICTS OR INCONSISTENCIES In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 31. AMENDMENTS This Agreement may be modified or amended only by a written document executed by both Contractor and City and approved as to form by the City Attorney. 12 32. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 33. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction, which might otherwise apply. 34. CONTROLLING LAW AND VENUE The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 35. EQUAL OPPORTUNITY EMPLOYMENT Contractor represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. 13 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: Aaron C. Harp, Assistant City Attorney for the City of Newport Beach ATTEST: LaVonne Harkless, City Clerk CITY OF NEWPORT BEACH A Municipal Corporation By: Steve Rosansky Mayor for the City of Newport Beach CONSULTANT: By: (Corporate Officer) Title: Print Name: By: (Financial Officer) Title: Print Name: Attachments: Exhibit A — Statement of Qualifications Exhibit B — Schedule of Billing Rates 14 OIL WELL SER,VI 546 LONG REACH (562) $954501 BAKERSFIELD (661) 746 -4809 COALINGA (559) 935 -5060 SANTA PAULA (805) 525 -2103 WOODLAND (530) 662 -9384 October 9, 2007 Cindy Asher Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 Dear Cindy Asher, EXHIBIT "A" Co. 1241 E. BURNETT STREET • SIGNAL HILL, CALIFORNIA 90755 -3594 This is to inform you that Oil Well Service Co. has been in business since 1940 and is 100% owned by our Employee Stock Ownership Plan. Our current office and yard address is, 1241 E. Burnett St. Signal Hill, CA 90755. We plan to hold our current prices for the next six months. Feel free to give us a call if you have any additional questions. Sincerel J Frost il Well Service General Manager CV la �$C°t51ed \ _ �i ll bgr EXHIM in 0u -U7ELL SE R�VICx- CO. RELATED E DIRMENl' TRIPLEX PUMP WITH SHAKER, TANK. AND 2 HOSES DUPLEX PUMP WITH SHAKER, TANK AND 2 HOSES 1200.00 PER DAY STANDBY RATE WHEN PUMPS ARE NOT USED 1050.00 PER DAY GENERATOR 300:00 PER DAY HYDRAULIC POWER SWIVEL 100.00 PER DAY __.. _. -- - -- STANDBY RATE WHEN NOT USED 900.00 PER DAY OPERATOR REQUIRED FOR ALL ABOVE EQUIPMENT WHEN NOT USED IN 300.00 PER DAY CONJUNCTION WITH O.W.S. RIGS 90.00 PERHR H.T. PRODUCTION SWIVEL 2"X 50'2000 PSI KELLY HOSE (EJCTRA HOSES) I00.00 PER DAY PORTABLE HYDRAULIC UNIT 100.00 PER HOSE OIL WELL SERVICE CO. TRANSPORTATION 250.00 PER DAY ELECTRONIC H2S MONITOR 100.00 PER HR. SCOTT AIR PACK 100.00 PER DAY ACID PACKAGE, INC. (GOGGLES, RUBBER RAIN SUIT, RUBBER GLOVES) 150.00 PER DAY CELLAR PUMP 95.00 PER MAN HYDRAULIC MANIFOLD 80.00 PER DAY EXTRA CHARGE FOR CELLAR RINGS AND RIG MATS 80.00 PER DAY WATER TRAILER 60.00 PER DAY SUPPLIES AND RENTAL EQUIPMENT FROM OTHER SOURCES WILL HAVE 150/6 ADDED FOR PROCESSING. SHAKERBOX WELDER 50.00 DAY PLASTIC 100.00 HR 100.00 ROLL ADDITIONAL CHARGES FOR DISPOSAL OF SOLIDS AND FLUIDS FROM MUD PUMPS TERMS: NET 60 DAYS IF A WAIVER OF SUBROGATION IS REgUIRED AN ADDITIONAL CHARGE OF 52.60 PER CREW HOUR WILL BE ADDED * FUEL SURCIARGE FUEL WILL BE BASED ON AVERAGE BEFORE TAX COST OF 1.05 PER GALLON EACH RIG USES 6 GALLONS PER HOUR, EACH I CENT INCREASE IN FUEL PRICE OVER LAST YEARS RATE WILL RESULT IN A 6 CENT PER HOUR SURCHARGE OIL WELL SERVICE WILL CALCULATE FUEL COSTS AT THE END OF EACH MONTH IN ORDER TO DETERMINE THE NEXT MONTHS CHARGES. TWS MAY 1ST, 2007 LIST SUPERSEDES ALL PRJS VIOUS PRICES QUOTED U]r.L WELL SERN -1 FRODiJG"�ON EOUZFMENT DR1 VB -IN RIGS - 90' -95', 180,00011- 212,000# CAPACITY 155.00 PER HR SKID RIGS RIG STANDBY RATE (WHEN SHUT -DOWNS ARE BEYOND OUR CONTROL) I75.00 PER HR TOOL TRUCK - WITHOUT RIG 1050.00 PER DAY FISHING TOOLS 100.00 PER HR DAMAGED FISHING TOOLS - CHARGED TO CUSTOMER 125.00 PER RUN SANDLINE CHARGE: MIIJIIKiIM 0' - 5'000' 120.00 PER DAY OVER 5,000' 50.00 PER HR ADDITIONAL CHARGE FOR BAILING OR SWABBING IN CORROSIVE 75.00 PER HR ENVIRONMENT (112S ACID ETC.) CONTRACT LABOR AND TRAVEL TIME TO AND FROM THE JOB SITE FOUR MEN CREW 390.00 PER HR THREE MEN CREW 320.00 PER HR HEAD WELL PULLER 130.00 PER HR HELPER DOUBLE TIME SURCHARGE 3 MEN CREW 105.00 PER HR DOUBLE TIME SURCHARGE .4 MEN CREW 135.00 PER HR 161.00 PER HR EXTRA SUPERVISION SUBSISTENCE AWAY PROM HOME PER MAN 1250.00 PER DAY 150.00 PER DAY DOUBLE TIME WILL BE CHARGED FOR CREWS WORKING ON THE FOLLOWING LEGAL HOLIDAYS: MEMORIAL, DAY, JULY 4TH, LABOR DAY, THANKSGIVING, CHRISTMAS AND NEW YEARS DAY MINIMUM DAY, FOUR HOURS RIG AND CREW