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Miscellaneous Correspondence, A-L, 1960
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446394767
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Miscellaneous Correspondence, A-L, 1960
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George H. W. Bush Papers
Zapata Oil Files
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Originally Processed With FOIA(s):
FOIA Number:
S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection: Donated Historical Materials
Collection/Office of Origin: Bush, George H.W., Collection
Series:
Personal Papers
Subseries:
Zapata Oil File, Business Correspondence File
OA/ID Number:
25852
Folder ID Number:
25852-002
Folder Title:
Miscellaneous Correspondence, A-L, 1960
Stack:
Row:
Section:
Shelf:
Position:
G
5
1
3
7
B
BROWN & ROOT MARINE OPERATORS, INC.
P. O. BOX 3
.
HOUSTON 1, TEXAS
BROWN-BILT
December 11, 1959
Mr. George H. W. Bush, President
Zapata Off-Shore Company
1701 Houston Club Building
Houston 2, Texas
Dear Mr. Bush:
We have received the invoices attached to your
letter of December 7th in connection with your Well #1,
Block 86, Vermilion Area and have transmitted these invoices
along with a copy of your letter to our insurance carrier for
their attention.
Sincerely,
Ben H. Powell, Jr.
ben H. Pawell Jelle
BHPJr:dr
or
show to to Dear
R. C. MOSBY
notes
Jana-60 29 60
Ben Pawell
save
1. limit liability
2. Facts to support inclusion
of Linlsay and Pan american
20-
3. do they want lawsuit B
Burll
or if not Ineed
logs etc
dipartment
2-1-60th
1. had hoped could he dispond of
since have lot unpaid
z. B.R mged un * rittle with us.
3 " don't think right we hold up
4. Gichh take up NY Courses- NY. larger
Z not ant many
say can limit - aan get out Knew
came to storm
5. NY Lauyu can due
by servare - worthan
et al - say that's all
thy we do.
6. NY frim written book
opinion an the matter
BAKER, BOTTS, ANDREWS & SHEPHERD
ESPERSON BUILDING
HOUSTON 2
Flu
0-15,868
May 3, 1960.
Re: Adm. No. 1782 -
Bilks6
Limitation Proceeding of Brown
8)
and Root Marine Operators, Inc.,
Federal District Court, Houston
Division
Mr. George H. W. Bush, President,
Zapata Off-Shore Company,
1701 Houston Club Building,
Houston 2, Texas.
O
Dear George:
This will serve as a status report on the
above case. On March 14 I filed with the Court our ex-
ceptions and motion to require Brown & Root to give ad-
ditional security (1.e., the value of the Barge H. A.
LINDSAY and the Tug PAN AMERICA). This matter has been
before Judge Hannay since that date, and until today
the opposing attorney had not filed any reply or oppo-
D
sition to our exceptions and motion. I received in
today's mail a reply brief to our pleadings which will
require an answer. I am leaving for New York in the
morning and will not return for a week; therefore, my
reply will not be filed until after my return. Judge
Hannay's clerk has agreed to give us until May 23 to
file our reply.
We regret that Judge Hannay had not taken
Y
the time to consider our exceptions and motion while
they were on his desk for six weeks and unopposed.
X personally requested the clerk on several occasions
to ask Judge Hannay to consider the matter. Confiden-
tially, Judge Hannay is a procrastinator and sometimes
takes many months to decide the simplest of issues. I
feel that our legal position is sound and should be sus-
tained by Judge Hannay. We are hopeful that he sees it
that way.
Yours very truly,
1919
James K, Nance
MEMO TO THE FILE ON MEETING AT
BROWN & ROOT, AUGUST 24th
See attached schedule for those in attendance:
The agenda WAS essentially as follows:
1. Bedges asked for a survey of the barge, which survey was
presented to him by Burttschell.
2. Hedges asked how much the Merritt Chapman invoices would be,
Burttschell replied that it would be appro. $250,000 but they
had received no billing as yet.
3. Iledgen claimed they were asserting a claim against B&R or their
underwriters for four months rental while the barge was on the
beach, they claimed that diligence was not exercised in getting
the barge off the beach.
4. Burttschell reviewed the salvage stating that the MEL I and
TILMAN J offered no cure no pay deal - 16 days later they
turned it down therefore Merritt Chapman was employed:
5. Hedged made comment that they do not like the contract and that
they would not have signed it had not Zapata gone ahead and
signed it. Brown informed Hedges that this was a customary
rental contract.
6. The dates of the catastrophe were reviewed. October 15th the
barge went on the beach; January 28th it arrived at Costracoalcos;
March 10th it returned to the U.S.
7. Hedges stated that there was a delay in sailing from Mexico due
to Zapata they stated something about Captain of the boat did
not want to sail due to weather.
8. A long discussion ensued about why the crane was left on the barge.
Burttschell stated that the crane was left on the barge since the
motor was damaged and the crane could not therefore be pulled off.
9: Several invoices were discussed. There was one invoice in the
amount of $2,026.79 which Depata sent out as watchman's services.
Bush agreed to got more information on the invoice, The boat
dispute was to be put on the insurance claim which was ready to
be paid including payments for boats in the amount of $7800 and
2400. B&R did not want to release this money to Zapata for
Falgout but it was agreed that Pauly did not make a payment on
account of $10,000 when this has been done B&R will release the
$10,200 for the boats.
10. Another discussion with Falgout involving $13,200 was still
unsolved and open.
MARINE PETROLEUM TRUST
1,733,333 UNITS OUTSTANDING
RESERVE FOR
MONTHLY
INCOME AND EXPENSE
DISTRIBUTABLE
DOLLARS PER UNIT
NUMBER OF
DISTRIBUTABLE
PERIOD
DOLLARS PER UNIT
PER
INCREASE
BALANCE END
UNITS HELD
TO UNIT
ENDING
INCOME
EXPENSE
UNIT
DECREASE (X)
OF PERIOD
ON RECORD DATE
HOLDER
6/28/60
00025048
00025048
00011538
500
.13
7/27/60
00012005
00012005
00011538
500
.06
8/29/60
00319206
00087320
00197270
00034616
00046154
500
.99
QUARTERLY DISTRIBUTION
$
1.18
UNIT HOLDER
FEDERAL INCOME TAX INFORMATION
GEO H W BUSH
THE AMOUNTS SHOWN IN THE INCOME
2218 FIRST CITY NATL
1.
COLUMN ARE TAXABLE OIL AND GAS ROYALTIES
BANK BLDG
SUBJECT TO THE DEPLETION ALLOWANCE.
HOUSTON TEXAS
THE AMOUNTS SHOWN IN THE EXPENSE
2.
COLUMN ARE DEDUCTIBLE
REPUBLIC FM 83-57 R1
DOMESTIC SERVICE
INTERNATIONAL SERVICE
$
Check the class of service desired;
otherwise this message will be
sent as a fast telegram
W
ESTERN UN.ON
Check the class of service desired;
otherwise the message will be
S
sent at the full rate
TELEGRAM
1206 (4-55)
FULL RATE
DAY LETTER
E
TELEGRAM
LETTER TELEGRAM
NIGHT LETTER
SHORE:SHIP
W.P. MARSHALL. PRESIDENT
NO. WDS. CL. OF SVC.
PD. OR COLL.
CASH NO.
CHARGE TO THE ACCOUNT OF
TIME FILED
ZAPATA OFF-SHORE COMPANY
Send the following message, subject to the terms on back hereof, which are hereby agreed to
5-9-60
M.E. GORMLEY
JOHNSON & HIGGINS
63 WALL STREET
NEW YORK, N.Y.
PLEASE WIRE SOUTHERN MARINE THAT MAGNOLIA PETROLEUM
NO LONGER HAS ANY INTEREST IN NOLA II THIS WILL SAVE
OUR GETTING NAGNOLIA ENDORSEMENT ON CHECK.
GEORGE BUSH
ALL MESSAGES TAKEN B' HIS COMPANY ARE SUBJECT T HE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order It repeated. that Is, telegraphed back to the originating office for comparison. For this, one-half the
unrepeated message rate is charged In addition. Unless otherwise indicated on its face, this Ls an unrepeated message and paid for as such, in consideration whereof It is agreed between
the sender of the message and the Telegraph Company as follows:
1. The Telegraph Company shall not be liable for mistakes or delays In the transmission or delivery. or for non-delivery, of any message received for transmission at the unrepeated-
message rate beyond the sum of five hundred dollars: nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the repeated-
messagerate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of Its lines.
2. In any event the Telegraph Company shall not be liable for damages for mistakes or delays In the transmission or delivery, or for the non-dellvery, of any message, whether
caused by the negligence of Its servants or otherwise, beyond the actual loss, not exceeding in any event the sum of five thousand dollars, at which amount the sender of each message
represents that the message is valued, unless a greater value is stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message
rate is paid or agreed to be paid and an additional charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
3. The Telegraph Company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach Its
destination.
4. The applicable tariff charges on a message destined to any point in the continental United States listed in the Telegraph Company's Directory of Stations cover Its delivery within
the established city or community limits of the destination point. Beyond such limits and to points not listed in the Telegraph Company's Directory of Stations, the Telegraph Company does
not undertake to make delivery but will endeavor to arrange for delivery by any available means as the agent of the sender, with the understanding that the sender authorizes the collection
of any additional charge from the addressee and agrees to pay such additional charge If It is not collected from the addressee.
5. No responsibility attaches to the Telegraph Company concerning messages until the same are accepted at one of Its transmitting offices: and If a message is sent to such office by
one of the Teleg aph Company's messengers, he acts for that purpose as the agent of the sender: except that when the Telegraph Company sends a messenger to pick up a message, the mes-
senger in that instance acts as the agent of the Telegraph Company in accepting the message, the Telegraph Company assuming responsibility from the time of such acceptance.
6. The Telegraph Company will not be liable for damages or statutory penalties when the claim is not presented in writing to the Telegraph Company, (a) within ninety days
after the message is filed with the Telegraph Company for transmission in the case of a message between points within the United States (except in the case of an intrastate message in
Texas) or between a point in the United States on the one hand and a point in Alaska, Canada. Mexico. or St. Pierre-Miqueion Islands on the other hand, or between a point in the United
States and & ship at sea or In the air. (b) within 95 days after the cause of action, If any. shall have accrued in the case of an Intrastate message in Texas, and (c) within 180 days after
the message is filed with the Telegraph Company for transmission In the case of a message between B point in the United States and a foreign or overseas point other than the points
specified above in this paragraph: provided, however, that this condition shall not apply to claims for damages or overcharges within the purview of Section 415 of the Communications
Act of 1934, as amended.
7. It is agreed that in any action by the Telegraph Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be
presumed, subject to rebuttal by competent evidence.
8. Special terms governing the transmission of messages according to their classes, as enumerated below, shall apply to messages in each of such respective classes in addition to
all the foregoing terms.
9. No employee of the Telegraph Company is authorised to vary the foregoing.
0-00
CLASSES OF SERVICE
DOMESTIC SERVICES
INTERNATIONAL SERVICES
TELEGRAM
FULL RATE (FR)
The lastest domestic service.
The fastest overseas service. May be written in code, cipher, or in any language ex-
pressed in Roman letters.
DAY LETTER (DL)
LETTER TELEGRAM (LT)
A deferred same-day service, at low rates.
For overnight plain language messages, at half-rate. Minimum charge for 22 words applies.
NIGHT LETTER (NL)
SHIP RADIOGRAM
Economical overnight service. Accepted up to 2 A. M. for delivery the following morning:
at rates lower than the Telegram or Day Letter rates.
For messages to and from ships at sea.
20
Bostock
ZAPATA INTERNATIONAL CORP.
TRINIDAD, W.I.
HOME OFFICE:
PLEASE REPLY TO:
1701 HOUSTON CLUB BUILDING
CO. BARCLAYS BANK-D.C.O.,
HOUSTON 2, TEXAS
POINT FORTIN,
TRINIDAD, W.I.
23rd September, 1960.
Zapata Off-Shore Company,
1701 Houston Club Building,
Houston, 2,
Texas,
U. S. A.
Gentlemen:
Please refer to our Bareboat Charter of Craft relating to
the Nola III. You are requested to reduce the charter hire to the
rate of $200 (U.S.) per day beginning on September 18th 1960, the
date of completion of well No. G9 and the termination of Zapata
International Corp.'s drilling contract with Kern Trinidad Oilfields
Limited. This rate is to continue so long as Zapata International
Corp., is entitled to termination payment of $724 (U.S.) per day as
provided in such drilling contract, unless our Bareboat Charter of
the Nola III is sooner terminated by mutual agreement or otherwise.
It is understood that if additional drilling work is
commenced in the Gulf of Paria the Charter Hire will revert to that
provided in the original agreement.
Very truly yours,
ZAPATA INTERNATIONAL CORP
FMA:mjc
By:
Accepted:
ZAPATA OFF-SHORE COMPANY
(s) GHWB
President
OCTOBER- 5 , 1960
Date
INDEMNITY AGREEMENT
FOREST OIL CORPORATION, a New York corporation, having a
place of business in San Antonio, Bexor County, Texas, has entered into a
lease of personal property, as Lessor, with PERFORACIONES MARINAS DEL
GOLFO, S.A., a Mexican corporation, as Lessee, a copy of which lease
agreement is attached hereto as Exhibit "A."
On September 1, 1960, ZAPATA OFF-SHORE COMPANY, a corpo-
ration having a place of business in Houston, Harris County, Texas, issued
its letter of guaranty to Forest Oil Corporation, a copy of which is attached
hereto as Exhibit "B."
WE, WAYNE H. DEAN, of Houston, Harris County, Texas, as
principal, and
as surety, are hereby held and firmly bound unto Zapata Off-Shore Company,
in the sum of Eighty Thousand Dollars ($80,000.00), conditioned that Zapata
Off-Shore Company will not be required to pay any money unto Forest 011
Corporation under the terms and provisions of its said letter of guaranty dated
September 1, 1960, copy of which is attached hereto as Exhibit "B."
EXECUTED this the
day of September, 1960.
like
ask
PRINCIPAL
Wayne H. Dean
the
11
the
:
SURETY
if
boned be dough
1 channil mg at not know 64 weich
with we caralled Dear collatued
2. will word ususe tomorrinon-
or
3. Falgout give personal individualy
/ No problem at all.
2)
2 Up to this mount not given any facts2 on figures
/ Isc
2 option to puch
3. Guennenty
4. Fulg. letter
3. Falgort will deliver statements Tomorrow It
has been as requiremented
Ian Figart
October 10, 1960
George H. W. Buch
Drew Cornell
Paul Montgomery was in the effice today. They have
signed the contract with Tennessee Gas at $100 per day.
He thought they Drew had mailed us our contract but
he is checking with him immediately and it should be
in the mail in a day or two. This contract is for
$150. I want to have it looked at very closely by
the lawyers particularly with reference to the insurance
provisions of any suppliers etc.
Drew will probably want to get his own boats. He seems
unhappy with the beet arrangement, saying that the
equipment that me have had has been entirely unsatio-
factory.
Should I be out of town please send the contract, after
studying it, over to Baine Kerr for approval. Everything
is under control and we should have a lower operating
cost out there 29 a result of this.
GHWB/vf
cc: F. M. Allen
7
February 2, 1960
Mr. Prescett S. Bush, Jr.
Jehnson & Higgins
63 Wall Street
New York, N.Y.
Dear Pres:
I would appreciate your letting us knew as soon as you can
what is going to happen on the Nola 2 regarding its 1960
premium. We have paid for the insurance through a note with
the Whitney National Bank and if the Mola 2 can be taken out
of our schedule we would like to get a refund for its premium.
Wayne Dean and Harry Blakely are down there now trying to get
a final and complete authoratative list which will be binding
for beth the Carpinter & Baker claim and the hull claim. As
seen as they get back we will be in teuch with Reinsdorf and
Mr. Sell.
Very truly yeurs,
George H. W. Bush
GHWB/vf
CC: W. Reinsderf
Sell
PS. Would you please give a copy of this letter to Sell and
Reindderf. for their information.
August 25, 1960
Mr. Prescott S. Bush, Jr.
Johnson & Higgins
67 Wall Street
New York, N.Y.
Dear Pres:
I realize that you are gone but 1 wanted to answer your
letter of August 17th regarding this sue and labor matter.
The point that we want to bear in mind is that Giffin
has agreed to pay to almost all of these items in question.
If Carpinter & Baker demands adjustments that should come
out of Giffin and not out of us since Giffin has agreed
that all this should be paid. Perhaps Ciffin will not
get as much from Carpinter & Baker as he would like but
certainly Zapata should not be made to take less money
since Southern Marine has agreed to pay essentially all
of the items. They were prepared to pay off entirely
and then they decided that would like to get: a contri-
bution from Carpinter & Baker. We were glad to have
them do this but we do not want Zapate out any money
because of the relationship between those two companies.
Of course, you can understand we are most anxious to
get this matter finally closed since 10 has been open
and dragging on for a long time. I understand how
difficult it is to get some many people together on a
deal but I an hoping that we can get it closed as soon
as Walter gets back.
Best regards,
George H. W. Bush
GHWB/vf
June 1, 1960
Mr. Walter B. Reinsdorf
Johnson & Higgins
63 Wall Street
How York, N.Y.
Dear Walter:
I am just curious as to the status of the Sue and Labor
claim on the Nola 2 and of the fire insurance claim on
the Nola 1. When you get a chance would you please
drop me a note about the status of these two claims.
Once these are out of the way I believe we will be
pretty well squared away with the insurance company.
I am attaching a copy of # letter I wrote recently to
Mr. Giffin regarding the Vinegarroen. I am hepeful
there will be no claim on this but I think a lot
depends on how we come out with Paulay on payment.
Very truly yours,
George H. W. Bush
GHWB/vf
Enc.
0 Frank M. Allen
September 29, 1960
George H. W. Bush
Paria Settlement
The attorney from Continental and Ohio Oil Companies will
be in our office to settle this matter next week.
Friend
GHWB/vf
September 29, 1960
Mr. Walter Reinsdorf
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Walter:
Regarding the tripod structure, I have your letter and
Giffin's. I cannot find fault with his logic. You
will recall that we agreed to go along on any settlement
you worked out and this still holds true, so if you
feel that Giffin is correct we are willing to abide
by your decision.
This is not a liability which Pauley's people are
claiming against us but if it becomes one we can file
a claim on our P. & I. policy.
We are anxious to get this matter closed as soon as
possible. I cannot see why we have to wait for
Carpinter & Baker and Southern Marine to settle
their differences, since Giffin has agreed to abide
by your decision regarding the full amount.
Thank you for your continuing help.
Very truly yours,
George H. W. Bush
GHWB/vf
New York
JOHNSON & HIGGINS
Montreal
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Winnipog
Pittsburgh
Wilmington
Atlanta
Established 1845
Vancouver
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Maracaibe
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INSURANCE BROKERS-AVERAGE ADJUSTERS
Puerto La Cruz
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EMPLOYEE BENEFIT PLAN CONSULTANTS
Buenos Aires
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Sentile
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
TELEPHONE WHITEHALL 4-3160
AIR MAIL
September 22, 1960
Mr. George H. W. Bush
Zapata Off-Shore Co
Houston Club Bldg.
Houston 2, Texas
Dear George:
Tripod Structure ex Barge Nola No. 2
Our File Number: 39488
In addition to your claim for sue and labor charges
against the Hull and Cargo Underwriters, there is the claim for
expenses of $5,400 incurred in the recovery of the tripod struc-
ture which sank during heavy weather when the Nola No. 2 had to
cast off leave. Giff has pointed out to us that it was never
their intention to consider in their coverage a tripod structure
as being part of well completion equipment, nor does he think
the facts concerning the operation and use of the structure
could ever be construed as well completion equipment. That
being the case, the expenses of attempting to recover the
structure are not recoverable under the hull policy. A
copy of Giff's letter of August 16th is enclosed.
The question arises whether the expenses could
be claimed under the P. & I. policy (less the deductible).
As you are aware, the P. & I. policy is strictly a liability
policy and could only be asked to respond if it could be shown
that Zapata was at fault for the loss of the structure and
incurred a legal liability (not contractual) to the owner of
same. I shall appreciate your advices on this particular feature.
I am continuing the discussions with Carpinter &
Baker regarding the sue and labor expenses and hope to report
to you favorably very soon.
Yours faithfully,
JOHNSON & HIGGINS
W. Weinsdoy Reinsdorf
mjs - Encl.
Nather
SOUTHERN MARINE
L.K. GIFFIN
President
and Aviation Underwriters, Inc.
LEE M. STENTZ
UNDERWRITERS OF SPECIALIZED INSURANCE
Vice President
W. L. TREADWAY
610 POYDRAS street. TUlane 5266. NEW ORLEANS 12, LA.
Vice President
J. E. RIVETTE, JR.
Treasurer
August 16, 1960
Mr. Walter Reinsdorf, Vice-President
Johnson & Higgins
63 Wall Street
New York 5, N. Y.
Re: Certificate 11500
Zapata Offshore Company
Dear Walter:
of We have your letter of August 9, 1960 enclosing copy of Mr. Rudolph's letter
July 29th and office memorandum of Pres Bush dated August 5, 1960.
ture Both falls Mr. Rudolph and Mr. Bush are contending that the involved tripod struc-
As under the coverage of Paragraph I C "well completion equipment".
we have attempted to point out to you in the past by no stretch of
ment". imagination In can we properly consider this structure as "well completion the equip-
clause addition I personally know it was not the intent in drawing this
follows: to include such a structure. In fact, we think the clause reads
and as "property consisting of casing, tubular goods, wellhead equipment clearly
miscellaneous other well completion equipment
lation on vessels and on platforms .... and while being installed .... while and located ....
principal's drilled property while in the assured's custody after the well up had been
is completed. The purpose of this coverage was to pick until the instal- assured's
which usually the located on a drilling barge, drilling tender or on the platform property
and was being completed as a producer. This principal's is
any structures such as platforms, well jackets, pilings etc. that would
fixed drilling was done. It was never intended that this clause from cover
clause hadn't even started drilling the well 80 how can case at
the commonly assured a part of the well location offshore. In the particular are point
keep the structure is set before drilling starts and its principle Actually
tripod to include the tripod structure as completion equipment. you stretch this this
been during drilling and remains at the location after the well has
starts, is conductor there pipe in line. This structure is set at location purpose before is drilling to
drilled and the contractor moves off the location.
-2-
While I can't find it brought out in the file apparently this tripod structure
belonged to the assured's principal and if so it would seem that any damage
or expense to it might be a third party property damage liability claim that
the principal would have against Zapata. In the capsizing of the Trans-Gulf
barge the well jacket belonging to the principal was knocked over involving
some $200,000.00 in repair costs. It is our understanding that the principals
were reimbursed under the third party insurance protection of Trans-Gulf.
We have always attempted to interpret broadly the meaning of the various
coverage clauses in our policies but we know it was never the intent to include
anything such as this tripod structure as well completion equipment or do we
think the facts concerning the operation and use of this structure could ever
be construed as well completion equipment.
Yours very truly,
Lift
LKG/ms
629B-26M2-60
Copy From
J INSON & HIGGINS
63 WALL STREET, NEW YORK 5, N.Y.
MARINE DEPARTMENT
March 28, 1960
Mr. J. A. Rudolph
Zapata Off-Shore Company
1701 Houston Club Building
Houston, Texas
Dear Jerry -
LLOYD'S CERTIFICATE NO. 11500
Enclosed is endorsement increasing the
value of the "NOLA NO. 3" by $62,000., the value of the
Halliburton Unit now on board. This endorsement also
amends the Assured and Payee Clauses as you requested.
Also enclosed is our invoice in original and one copy,
covering the additional premium required.
Very truly yours,
JOHNSON & HIGGINS
meh
M. E. Gormly, Jr.
Marine Department
ni
encl
cc: Mr. George Bush, Pres.
No.
New York,..
ruary 23,
19 60
Endorsement to be attached to and made part of Policy No.
11500
of the
UNDERWRITERS AT LLOYD'S LONDON AND/OR INSURANCE COMPANIES
issued to
ZAPATA OFF-SHORE COMPANY
on the
SCHEDULE HEADED "VINEGARROON"
Notwithstanding anything herein contained to the
contrary effective from January 25, 1960, 10:00 A.M., Central
Standard Time, the amount insured on the "NOLA NO. 3" is increased
to $839,000. so valued, the additional @62,000. being the value of
the Halliburton Unit on board the "NOLA NO. 3".
Effective from January 25, 1960, the Assured with
respect to the "NOLA NO. 3" 1s:-
Zapata Off-Shore Company and Kern Trinidad Oilfields,
Ltd. and Trinidad Oilfields Services.
and the Payee with respect to all losses paid on and after that
date is:-
Loss, if any, (excepting claims required to be paid
to others under the Collision Clause), payable to
Zapata Off-Shore Company and Mobil 011 Company and
011 Well Supply Division, United States Steel Cor-
poration and Kern Trinidad Oilfields, Ltd. and Trinidad
Oilfields Services as their interest may appear, or
order.
Hereto: $62,000. P.R. 3-1/4% = $1,822.31
(2.93921%)
All other terms and conditions of policy remaining unchanged.
SOUTHERN MARINE & AVIATION UNDERWRITERS INC.
Per mL
JOHNSON & HIGGINS
MARINE DEPARTMENT
63 Wall St., N. Y. 5
259-25M-3-58
New York
JOHNSON & HIGGINS
San Francisco
Buffalo
Los Angeles
Philadelphia
Seattle
Montreal
Pittsburgh
Established 1845
Toronto
Wilmington
Winnipeg
Atlanta
Vancouver
Cleveland
INSURANCE BROKERS-AVERAGE ADJUSTERS
Havana
Detroit
Rio de Janeiro
São Paulo
Chicago
EMPLOYEE BENEFIT PLAN CONSULTANTS
Caracas
Minneapolis
London
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
TELEPHONE WHITEHALL 3160
March 28, 1960
Mr. George Bush, Pres.
Zapata Off-Shore Company
1701 Houston Club Building
Houston, Texas
Dear George -
Enclosed is a copy of a letter we are
sending Mr. Pennington at Socony. Socony Mobil Oil Company,
Inc. is not included as an Assured with respect to the
"NOLA NO. 3", but they are included in the Loss Payable
Clause. If your agreement with them requires that they
be named as an Assured, please let us know and we shall
do SO. However, if their only interest is a pecuniary
one, it might be better that they remain only in the
Loss Payable Clause.
Very truly yours,
JOHNSON & HIGGINS
M. E. Gormly, Jr.
Marine Department
ni
encl
029B-26M-2-60
Copy From
JUNSON & HIGGINS
63 WALL STREET, NEW YORK 5, N. Y.
MARINE DEPARTMENT
March 28, 1960
Socony Mobil Oil Company, Inc.
P.O. Box 900
Dallas 21, Texas
Attention: Mr. F. H. Pennington
Gentlemen:
"NOLA NO. 2"
LLOYD'S CERTIFICATE NO. 9999 (12/21/58-12/21/59)
LLOYD'S CERTIFICATE NO.11500 (12/21/59-12/21/60)
MARINE INSURANCES
Thank you for your letter of March 18th
authorizing us to delete Magnolia Petroleum Company and
Mobil Oil Company as Assureds with respect to the "NOLA
NO. 2". We would appreciate your letting us have the date
on which your interest ceased with respect to this vessel
in order that we may make the change effective from that
date. We also require your confirmation that it will be
in order to delete Magnolia Petroleum Company and Mobil
Oil Company from the "NOLA NO. 2" loss payable clauses
for all losses paid on and after the date your interest
ceased in the vessel.
Very truly yours,
JOHNSON & HIGGINS
M. E. Gormly, Jr.
Marine Department
ni
cc: Zapata Off-Shore Company
Att: Mr. George Bush, Pres.
CLASS OF SERVICE
WESTERN UNION
SYMBOLS
This is a fast message
DL=Day Letter
unless its deferred char-
NL=Night Letter
acter is indicated by the
TELEGRAM
1201 LT= International
proper symbol.
Letter Telegram
W. P. MARSHALL. PRESIDENT
The filing time shown in the date line on domestic telegrams is STANDARD TIME at point of origin. Time of receipt is STANDARD TIME at point of destination
DB302
D CDU307 PD AR=CD NEW YORK NY 18 1235PME= DEC 18 PM 12 36
ZAPATA OFF-SHORE CO=
MR RUSS MOSBY 1701 HOUSTON CLUB BLDG HOU=
:HAVE BOUND $25,000. PROVISIONALLY ON NOLA III CARGO.
PLEASE WIRE TODAY IF YOU REQUIRE HIGHER LIMITS=
JOHNSON & HIGGINS SV TIMBERLAKE , JR=:
=$25,000. 111.
THE COMPANY WILL APPRECIATE SUGGESTIONS FROM ITS PATRONS CONCERNING ITS SERVICE
JD HOUSTON TEXAS
1959 DEC 18 PM I2 46
ZAPATA OFF-SHORE COMPANY
1701 HOUSTON CLUB BUILDING
HOUSTON 2, TEXAS
December 17, 1959
Johnson & Higgins
63 Wall Street
New York 5, New York
Attention: Mr. Prescott S. Bush, Jr.
Gentlemen:
The excess Zapata owned cargo being shipped to
Trinidad over the hull insurance coverage is as follows:
Aboard the NOLA No. 3
1 Radio, Motorola, FM, Model L53AKB
$ 825.70
I Antenna, Isoplane, Model 44TAD
37.50
1 Radio, Motorola, FM, Model L53AKB
825.70
1 Antenna, Isoplane, Model 44TAD
37.50
1. Antenna, CE-286
130.00
1 Spartan Trailer #445 AG1781
4,600.00
$6,456.40
Aboard the TILMAN J No. 2
1 M/V MEL 3 #273716 42' X 12.8' X 4'
1 M/V MISS SUSAN #276078 38.8' X 13.2' X 4'
(Value of the above boats is as normally carried.)
Very truly yours,
ZAPATA OFF-SHORE COMPANY
Wayne H. Dean,
Executive Vice-President
WHD/dw
DOMESTIC SERVICE
INTERNATIONAL SERVICE
$
Check the class of service desired;
sent as a fast telegram
S
W_STERN UNION
Check the class of service desired;
otherwise this message will be
otherwise the message will be
sent at the full rate
TELEGRAM
1206 (4-35)
FULL RATE
DAY LETTER
E
TELEGRAM
LETTER TELEGRAM
NIGHT LETTER
W.P. MARSHALL. PRESIDENT
SHORE-SHIP
NO. WDS.-CL. OF SVC.
PD. OR COLL.
CASH NO.
CHARGE TO THE ACCOUNT OF
TIME FILED
ZAPATA OFF-SHORE COMPANY
11:00
Send the following message, subject to the terms on back hereof, which are hereby agreed to
11-13-59
JOHNSON & HIGGINS
ADJUSTING DEPARTMENT
63 WALL STREET
NEW YORK 5, N.Y.
ESTIMATE COST OF RECOVERING AND REPAIRING RARGE NOLA 2 ASHORE
EN THE GULF OF CAMPEECHE WILL EXCEED HER INSURED VALUE AND
THEREFORE INSTRUCT YOU TO TENDER ABANDONMENT OF VESSEL TO
UNDERWRITERS or OUR BERAIF.
ZAPATA OFF-SHORE COMPANY
ALL MESSAGES TAKEN
THIS COMPANY ARE SUBJECT
THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order It repeated, that Is. telegraphed back to the originating office for comparison. For this, one-half the
unrepeated message rate is charged in addition. Unless otherwise Indicated on its face, this to an unrepeated message and paid for as such, in consideration whereof it is agreed between
the sender of the message and the Telegraph Company as follows:
1. The Telegraph Company shall not be liable for mistakes or delays In the transmission or delivery, or for non-delivery. of any message received for transmission at the unrepeated-
message rate beyond the sum of five hundred dollars: nor for mistakes or delays in the transmission or delivery. or for non-delivery, of any message received for transmission at the repeated-
messagefrate beyond the sum of five thousand dollars, unless specially valued: nor In any case for delays arising from unavoidable interruption in the working of Its Unes,
2. In any event the Telegraph Company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the actual loss, not exceeding in any event the sum of Dve thousand dollars, at which amount the sender of each message
represents that the message is valued, unless a greater value is stated in writing by the sender thereof at the time the message to tendered for transmission, and unless the repeated-message
rate 18 paid or agreed to be paid and an additional charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
3. The Telegraph Company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach Its
destination.
4. The applicable tariff charges on a message destined to any point In the continental United States listed In the Telegraph Company's Directory of Stations cover Its delivery within
the established city or community limits of the destination point. Beyond such limits and to points not listed in the Telegraph Company's Directory of Stations, the Telegraph Company does
not undertake to make delivery but will endeavor to arrange for delivery by any available means as the agent of the sender. with the understanding that the sender authorizes the collection
of any additional charge from the addressee and agrees to pay such additional charge If it is not collected from the addressee.
5. No responsibility attaches to the Telegraph Company concerning messages until the same are accepted at one of its transmitting offices: and If a message is sent to such office by
one of the Teleg aph Company's messengers, he acts for that purpose ns the agent of the sender: except that when the Telegraph Company sends a messenger to plck up a message, the mes-
senger In that instance acts as the agent of the Telegraph Company in accepting the message, the Telegraph Company assuming responsibility from the time of such acceptance.
6. The Telegraph Company will not be liable for damages or statutory penalties when the claim is not presented In writing to the Telegraph Company, (a) within ninety days
after the message is filed with the Telegraph Company for transmission in the case of a message between points within the United States (except in the case of an Intrastate message in
Texas) or between a point in the United States on the one hand and a point in Alaska, Canada, Mexico, or St. Pierre-Miquelon Islands on the other hand. or between a point in the United
States and a ship at sea or in the air, (b) within 95 days after the cause of action, If any, shall have accrued in the case of an intrastate message in Texas, and (e) within 180 days after
the message is filed with the Telegraph Company for transmission In the case of a message between a point in the United States and a foreign or overseas point other than the points
specified above In this paragraph; provided, however, that this condition shall not apply to claims for damages or overcharges within the purview of Section 415 of the Communications
Act of 1934, 88 amended.
7. It is agreed that in any action by the Telegraph Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be
presumed, subject to rebuttal by competent evidence.
8. Special terms governing the transmission of messages according to their classes, ns enumerated below, shall apply to messages in each of such respective classes in addition to
all the foregoing terms.
9. No employee of the Telegraph Company in authorized to vary the foregoing.
0.00
CLASSES OF SERVICE
DOMESTIC SERVICES
INTERNATIONAL SERVICES
TELEGRAM
FULL RATE (FR)
The fastest domestic service.
The tastest overseas service. May be written in code, cipher, or In any language ex-
-pressed In Roman letters.
DAY LETTER (DL)
LETTER TELEGRAM (LT)
A deferred same-day service, at low rates.
For overnight plain language messages, at half-rate. Minimum charge for 22 words applies.
NIGHT LETTER (NL)
SHIP RADIOGRAM
Economical overnight service. Accepted up to 2 A. M. for delivery the following morning:
at rates lower than the Telegram or Day Letter rates.
For messages to and from ships at sea.
X-551-7-56
(7-56)
MOBIL OIL COMPANY
M
Message Center
Dallas, Texas
November 13, 1959
Johnson & Higgins
Adjusting Dept.
63 Wall Street
New York 5, New York
WE APPROVE YOUR TENDERING ABANDONMENT OF NOLA #2 TO UNDERWRITERS
AS A CONSTRUCTIVE TOTAL LOSS
MAGNOLIA PETROLEUM COMPANY
A. E. CHESTER
Straight Telegram
WHT:mkJ
2:30 p.m.
CC: Mr. George H. W. Bush
Zapata Off-Shore Company, 1701 Houston Club Building, Houston 2, Tex.
CHARGE TO: Legal Dept., Dallas
(Please Show to What Department, Item of Expense or Individual This Message is Chargeable)
November 16, 1959
Mr. S. V. Timberlake
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Shel:
The attached letter and report may need some polishing up
but I believe that it sets out what you need. I as also
sending a copy of this stuff to Pres and Walter.
Tomorrow I will send you a list with some values on it.
After you have received this list would you please let us
know what additional information you will need to be sure
that vs get the best possible settlement out of the under-
writers. I feel much better about things after going with
you to the meeting on Friday.
Walter probably cold you that va declared the barge 4
CTL and offered her to the underwriters as such. In his
opinion they will decline abandement.
My trip up there makes me realize fully that we need to
get tegether in the near future here in Rouston with all
our people. On any future movements of carge prior to a
meeting with you I will see that you receive the full word
on the shipments.
Thanks for your help and please let me know as soon as
you receive my list 50 that we can be sure that everything
is in your hands in order to get a prompt settlement.
Very truly yours,
live
George H. W. Tush
Enc.
November 17, 1959
Mr. Walter B. Reinsdorf
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Walter:
The attached letter was written by Harry
Blakely to Hr. Eichorn, Manager of the
Cargo Loss Department of Carpinter & Baker.
I am sending a copy to you, Pres and Shel
Timberlake for your information.
Very truly yours,
George H. W. Bush
GHWB/Vf
Enc.
November 17, 1959
Johnson & Miggine
63 Wall Street
New York, N.Y.
Attention Mr. S. V. Timberlake
Centlemen:
We are attaching a report on the asvements of the Mela 2. This
report was prepared by our superintendent in the field and sats
forth in chronological order the activities of the vessel.
You will note that on Sunday, October 11th, the Mola departed
for location. Unloading of the work beat M.E.L. I began en
October 13th and en October 14th HOME of the equipment from the
Nole 2 was unloaded, this being the first available moment for
such unloading. It was not our intention to unload any C.I.M.A.
cargo before arrival in the Santa Aus area. The plan was to take
the C.I.N.A. equipment to Santa Ana and our eivil cargo to
Costracoalcos after the Mola 2 reached location. There was no
devistion whatsoever from this plan.
In offshere drilling sperations the standard procedure is to
proceed to the location, commence rigging up and drilling and
unload the cargo at the earliest possible amount that will net
interfere with the operations. This precedure was followed in
the past and would have been followed entirely in the Mexican
operation had not the barge gone up onto the beach.
It is extramely important to realise that the precedure which
me followed for this operation is the customery procedure in
our business and has been used by us in our past operations of
this kind.
We hope that the attached report will be of use to you.
Vary truly yours,
George H. W. Bush
GRWB/vf
Enc.
VIA AIR MAIL
New York
Buffalo
JOHNSON & HIGGINS
San Francisco
Los Angeles
Philadelphia
Seattle
Pittsburgh
Established 1845 1845
Montreal
Toronto
Wilmington
Winnipeg
Atlanta
Vancouver
Cleveland
INSURANCE BROKERS-AVERAGE ADJUSTERS
Havana
Detroit
Rio de Janeiro
São Paulo
Chicago
EMPLOYEE BENEFIT PLAN CONSULTANTS
Caracas
Minneapolis
London
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
RECEIVED
TELEPHONE WHITEHALL 4-3160
November 17,1959
NOV 18 1959
ZAPATA OFF-SHORE COMPANY
Zapata Off Shore Company
1701 Houston Club Building
Houston 2, Texas
Dear Sirs:
BARGE " NOLA No.2 If - Ashore in
Gulf of Campeche - OCTOBER, 1959
File No: 39488
We refer to our several conversations with Mr. George Bush
on his visit here last week, and confirm the receipt of your telegram
of the 13th instant instructing us to tender abandonment of this
vessel to underwriters. The Magnolia Petroleum Company approved the
abandonment. Enclosed is a copy of our telegram of the same date
to your underwriters as instructed.
The underwriters have replied declining to accept the
abandonment which is customary procedure in casesof total loss when
abandonment is tendered them. You should, of course, cooperate with
the underwriters in taking whatever steps are mutually agreed upon
to salve the property.
We await the receipt of the proposed contacts for salving
the vessel and cargo.
Very truly yours,
JOHNSON & HIGGINS
W. Reinsdorf
Vice President
b
enc
COMPARE IS
JOHN )N & HIGGINS
Insurance Brokers & Average Adjusters
Confirmation of Telegram
63 Wall Street
New York 5, N. Y.
WITH MESSAGE RECEIVED, IF ANY ERROR OCCURRED
ADJUSTING
IN TRANSMISSION, NOTIFY US IMMEDIATELY.
Dept.
WESTERN UNION
NOVEMBER 13 1959
SOUTHERN MARINE & AVIATION UNDERWRITERS
610 POYDRAS STREET
NEW ORLEANS LA
BARGE NOLA NUMBER 2 ASHORE GULF OF CAMPECHE OWNERS CONSIDER COST
RECOVERING AND REPAIRING VESSEL WILL EXCEED INSURED VALUE $600000
AND HAVE INSTRUCTED US TENDER ABANDONMENT OF VESSEL TO YOU WHICH WE
HEREBY DO
JOHNSON & HIGGINS
WR/b
RECEIVED
CHARGE ADJUSTING EXPENSE
10 1959
PATA OFF-SHORE COMPANY
D
December 3, 1959
Mr. S. V. TimberTake
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Shel:
I have just gotten out of the hospital but
wanted to tell you that for the last two days
we have been having meetings with the salvage
people and Southern Marine Aviation Underwriters.
Apparently the Contract to Salvage is under
control and Reinsdorf has been keeping in very
clost touch with the developments. He was here
for the two days meetings. He has all the
latest dope on the cargo insurance, hence I
have not replied in detail to your letter of
November 20th. Should you need additional
information after Walter returns, please let
me know.
Best regards,
George H. W. Bush
GHWB/vf
December 11, 1959
Mr. Walter Reinsdorf
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Walter:
I am attaching a draft which we presume will be the final
salvage contract. There has been a last minute delay
relating to permits, so the deal may not 80, through, but
in any event this is the final draft.
We understand that the cargo underwriters have agreed to
go along based on 50% of the salved value Bill Harvin
thinks it would be good if we could get a letter from the
cargo underwriters setting out that they are willing to
promptly reimburse us for the cargo salved using a figure
of 50% of the salved value. I think since this contract
essentially is being underwritten by Giffin it would be
very good for us to have this letter so we could furnish
him a copy.
I would appreciate your trying to get such a letter for us
from Carpinter and Baker and if this is not possible would
you give me a call so that we can discuss an alternative.
Carpinter and Baker did not want to be a party to the
contract and from the way the contract is drawn you can
see that it would not make much sense for them to be
involved with Ryan, et al if a lump sum deal for the
Nola 2 and cargo.
Thanks for all your help on this.
Very truly yours,
George H. W. Bush
GHWB/vf
Enc.
New York
San Francisco
Buffalo
JOHNSON & HIGGINS
Los Angeles
Seattle
Philadelphia
Montreal
Pittsburgh
Established 1845
Toronto
Wilmington
Winnipeg
Atlanta
Vancouver
Havana
Cleveland
INSURANCE BROKERS-AVERAGE ADJUSTERS
Rio de Janeiro
Detroit
São Paulo
Chicago
EMPLOYEE BENEFIT PLAN CONSULTANTS
Caracas
Minneapolis
London
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
TELEPHONE WHITEHALL 4-3160
AIR MAIL
December 22, 1959
Zapata Off-Shore Company
1701 Houston Club Building
Houston 2, Texas
Attention: Mr. George H. W. Bush
President
Gentlemen:
Drill Barge NOLA NO. 2
Stranding - October 16, 1959
Our File Number: 39488
It seems probable from conversation with Mr. L. K. Giffin today
that your underwriters will consider this vessel a constructive total loss
but that final decision to declare her such has not yet been made. In
order to be prepared to present claim to underwriters for a total loss, if
that proves to be the case, please furnish us with the following:
1. The enclosed affidavit of insurance duly completed by an officer of
your company.
2. Losses under the insurance certificate are payable to Zapata Off-
Shore Company and Magnolia Petroleum Company as their respective interests
may appear or order. Underwriters will draw their check in settlement in
accordance with this provision unless it is desired that loss be paid either
to yourselves or to Magnolia Petroleum Company alone. In that case the name
of the desired payee should be inserted to replace the name of Johnson and
Higgins on the enclosed payment order which should then be dated and signed
by the other payee and returned to us.
Yours faithfully,
JOHNSON & HIGGINS
W. Reinsdorf
gm
Vice President
Underwriters at Lloyds, London
To and/or Insurance Companies of London, Eng.
(Southern Marine and Aviation Underwriters, Inc.)
Please pay to Messrs JOHNSON & HIGGINS, the amount shown to be due under
Cert.
your poticy.No. 9999
on steamer Drill Barge "Nola No. 2"
for $ 600,000
% accident Total Loss - October 16, 1959
854A-/
December 24, 1959
Johnson & Higgins
63 Wall St.
New York, N.Y.
Attention Mr. P. S. Bush, Jr.
Gentlemen:
We should like to clarify the status of the Schlumberger and
Holliburton units while we are operating on our foreign
contracts. Responsibility for Halliburton and Schlumberger
which is normally covered under our regular hull policy now
rests with the operators under all three foreign contracts,
nemely the Scorpion and the Vinegarroon in Mexico, the Nola 1
in Venezuela and the Nole 3 in Trinidad. We should like to
leave the insurance values on the vessels just exactly as
they are but we want it clearly understood by the underwriters
that they are not responsible for the Schlumberger and
Halliburton units.
Regarding the Scorpion, it is still in the States and is still
working for California Company as of this date but as soon as
it finished this contract and goes to Mexico we will not be
responsible for Halliburton or Schlumberger.
Would you please let us know if we should do anything further
in this regard.
Very truly yours,
George H. W. Bush
GHWB/vf
cc: M. E. Goraly
USE
December 24, 1959
Mr. Walter Reinsdorf
Johnson & Higgins
63 Wall St.
New York, N.Y.
Dear Walter:
We are returning herewith executed affidavit
of insurance,
It will be agreeable with us for the Underwriters
to make the check payable to Magnolia Petroleum
Company and ourselves. We will then get a release
from Magnolia.
Best wishes for the holiday season.
Very truly yours,
George H. W. Bush
GHWB/vf
Enc.
New York
JOHNSON & HIGGINS
San Francisco
Buffalo
Los Angeles
Philadelphia
Seattle
Pittsburgh
Established 1845
Montreal
Toronto
Wilmington
Winnipeg
Atlanta
Vancouver
Cleveland
INSURANCE BROKERS-AVERAGE ADJUSTERS
Havana
Detroit
Rio de Janeiro
Chicago
EMPLOYEE BENEFIT PLAN CONSULTANTS
São Paulo
Caracas
Minneapolis
London
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
TELEPHONE WHITEHALL 4-3160
December 28,1959
Mr. George H.W. Bush, President
Zapata Off-Shore Company
1701 Houston Club Building
Houston 2, Texas
Dear George:
BARGE If NOLA No.2 "- = - OCTOBER, 1959
File No. 39488
We have for acknowledgment your letter of the
24th instant with enclosed affidavit of insurance which we are
sending to Mr. Giffin and informing him regarding the manner in
which he should draw check in settlement of the claim.
Regarding cargo claim, we have referred same to
Mr. Joseph Sell of our Cargo Claims Department who will write
you direct in connection with the preparation of your claim.
Best regards,
Sincerely,
JOHNSON & HIGGINS
Willindon
Vice President
b
New York
JOHNSON & HIGGINS
San Francisco
Buffalo
Los Angeles
Philadelphia
Seattle
Pittsburgh
Established 184 1845
Montreal
Toronto
Wilmington
Winnipeg
Atlanta
Vancouver
Cleveland
INSURANCE BROKERS-AVERAGE ADJUSTERS
Havana
Detroit
Rio de Janeiro
São Paulo
Chicago
EMPLOYEE BENEFIT PLAN CONSULTANTS
Caracas
Minneapolis
London
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
TELEPHONE WHITEHALL 4-3160
March 21, 1960
Mr. Wayne Dean
Zapata Off-Shore Company
1701 Houston Club Building
Houston 1, Texas
Dear Wayne:
NOLA II
Last month George advised me that you
went down to Mexico and spent several days with the
representative of the insurance company finalizing
the details on the list with regard to cargo, etc.,
and I would appreciate it if you would send me a
final list sometime in the near future.
Underwriters are most anxious to close out
the provisional binder we have on this particular
shipment, and I would appreciate it if you could
send me a split up of the On Deck and Under Deck
values of the cargo.
Best regards,
S. V. Timberlake, Jr.
SVT:ak
about duh
the
If
629B-26M-2-60
Copy From
J
NSON & HIGGINS
63 WALL STREET, NEW YORK 5, N.Y.
MARINE DEPARTMENT
April 8, 1960
Socony Mobil Oil Company, Inc.
P.O. Box 900
Dallas 21, Texas
Attention: Mr. F. H. Pennington
Gentlemen:
MAGNOLIA DRILLING BARGE NO. 6
(251201) RENAMED BY ZAPATA
OFFSHORE COMPANY "NOLA NO. 2"
Thank you for your letter of April lst.
We shall issue the appropriate endorsements to Certificates
9999 and 11500, copies of which will be forwarded to you.
Very truly yours,
JOHNSON & HIGGINS
of my
M. E. Gormly, Jr.
Marine Department
ni
cc: Zapata Off-Shore Company
Att: Mr. George Bush, Pres.
April 28, 1960
Mr. Walter Reinsdorf
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Walter:
Attached is a memo on the lousy Nola 2 deal. It stinks
and I am confident that it is crooked on the Mexican end.
Zapata's feeling, however, is that we have abandoned
this vessel to the underwriters and that we are acting
merely as their agents. I have made this one hundred
per cent clear to Giffin but I did feel that I should
point out to him what these crooks were trying to do.
As you know the vessel was sold yesterday for $10 under
an agreement very favorable to Zapata and the underwriters
as far as liability for duties go. The only weak spot on
this is that the Brazos Engineering Company and McDaniel
who are parties to the contract do not check out well
financially in spite of the fact that McDaniel says that
he individually has a large net worth.
This letter requires no acknowledgment but I wanted to
have it in your files in the event something comes up
in the future.
Very truly yours,
d
George H. W. Bush
H B/vf
May 10, 1960
Mr. Walter Reinsdorf
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Walter:
Today you raised certain questions on the telephone regarding the
settlement of the Nola II sue and labor claim. My answer to
these points is as follows:
1. By copy of this letter I SEE requesting that
Stents forward to you the bills that you requested
from him. Most of our bills on this claim were in
Spanish. We had one translation made which was
forwarded to the underwriters, therefore, it is more
appropriate that they furnish you the necessary bills.
2. By copy of the attached letter I have asked
Stentz to call you on point 5 and 10 of his letter
dated May 6 addressed to you.
3. The welding equipment repairs that you asked
about were in conjunction with cutting loose certain
of the cargo, cutting a hole in the side of the barge
to remove certain equipment. This welding equipment
belonged to the salvor and the deal was that repairs
would be handled by us on this equipment.
4. Hugo Zanelli who appears in the claim was a
freight forwarder whose charges are mainly in connection
with the clearing of the Falgout boat which was supposed
to go to Mexico on the Captain Ryan expedition.
5. Point 9 in Stentz's letter raises the question
of commissary supplies. I have been advised that the
$2500 charge is not applicable because commissary was
part of the hull insurance. In addition Jerry Rudolph
advises me that we recovered $12,011.27 of commissary
supplies. If we have to give a credit to the under-
writers this is the amount that should be used.
May 16, 1960
Mr. S. V. Timberlake, Jr.
Johnson & Wiggins
03 Wall Street
New York, N.Y.
Dear Shel:
With reference to your letter of May 11th which enclosed
2 letter from Carpinter & Baker dated May 6th and a
statement from United States Salvage Association, Inc.
we have checked our records and we have never received
any such bill. I do not know what this $269.90 is for.
You will recall that sometime ago we had the same type
of trouble.
I an returning all of this correspondence with the
request that you ask Carpinter & Baker or the United
States Salvage Association to send us an invoice for
$269.90 setting out what it is for. These are small
items but I do hate to have them feel that we have
been billed and are not willing to pay them. When
you do get the invoice please have it sent to my
attention and we will approve it and send a check
immediately.
Best regards,
George H. W. Bush
GHWB/vf
Enc.
Zapata's copy
DRILLING CONTRACT
THIS CONTRACT, entered into on the 3rd day of
February
, 1959, between ZAPATA OFF-SHORE COMPANY,
a Delaware corporation, CONTINENTAL OIL COMPANY, a Delaware
corporation, THE ATLANTIC REFINING COMPANY, a Pennsylvania
corporation, TIDEWATER OIL COMPANY, a Delaware corporation,
and CITIES SERVICE PRODUCTION COMPANY, a Delaware corporation,
HIISSENLIM
(This contract is being executed in connection
with and to supplement that certain Agreement dated as of
January 26,
,
1959, between the five parties
hereto providing, among other things, for the drilling by
Zapata Off-Shore Company, hereinafter sometimes called
"Contractor", of the well hereinafter identified by its
designation and location. Under the provisions of that
Agreement, Contractor, for a maximum turnkey price of Forty
Five Thousand Dollars ($45,000), agreed to drill said well
to a maximum depth of 9,000 feet, to run a final electric
log and (unless the five parties thereto or any one or more
of them should elect, as therein provided, to run casing
and test said well, or drill it to a greater depth, or to
deviate the hole) to plug and abandon same. Accordingly,
and notwithstanding anything contained herein to the
contrary, this contract shall not cover or apply to the
work to be performed under said Agreement by Zapata Off-
Shore Company for said turnkey price; and no obligations
shall accrue or commence to accrue hereunder unless and
until a final determination has been made under the
elective provisions of said Agreement to run casing and
test said well, to drill the same deeper or to deviate the
hole. Moreover, this contract shall cover and apply only
to the work which is so determined to be done on or in
connection with said well, notwithstanding any contrary
provisions hereof.
This drilling contract, which is being executed
both by Continental Oil Company, The Atlantic Refining
Company, Tidewater Oil Company and Cities Service Production
Company (hereinafter collectively called the "CATC companies")
and by Zapata Off-Shore Company and not merely by the Operator
under said Agreement with the approval of the representative
of the CATC companies, shall be deemed to be one authorized
by and made in compliance with Paragraph 4 of Section II of
Exhibit "A" to said Agreement, notwithstanding that Zapata
Off-Shore Company is at one and the same time the Operator
under said Agreement and the "Contractor" hereunder; and,
although this contract shall be binding upon each of the
five parties hereto, only those of the five parties (in-
cluding Zapata Off-Shore Company, which will retain an
undivided one-half interest in the lease on the well site
even after it has conveyed an undivided one-half interest
in such lease to the CATC companies in compliance with
said Agreement) who, under the elective provisions of said
Agreement, are liable for the cost of the work determined
to be done thereunder, shall be hereinafter referred to
collectively and for convenience as the "Company" and only
they shall be liable for the obligations hereunder of the
"Company". In this connection, it is agreed that each of
the parties hereto included with the term "Company" shall
be liable only for its proportionate part of the obligations
hereunder of the "Company", its proportionate part being a
fraction the numerator of which is such party's interest in
the lease on the well site and the denominator of which is
the total of such interests of all of the parties included
within the term "Company".)
I.
WORK TO BE PERFORMED
Contractor, for the consideration hereinafter stated,
hereby contracts and agrees to drill and complete for Company
a well designated as: Zapata Off-Shore Company-CATC Marine
Group No. 1, State Lease 2548, West Delta Area, Block 51,
Plaquemines Parish, Louisiana. The location of the well is:
approximately 660 feet from the South line and 660 feet from
the West line of said Block 51.
Contractor further agrees to drill and complete
with due diligence and in a good and workmanlike manner such
additional wells as Company may elect to have it drill in the
proximity of the well above described. Each additional well
shall be drilled under the terms and conditions of this
contract, and shall be appropriately identified by number
and lease and block to which it is projected.
Company shall have the exclusive option to determine
the number of wells to be drilled under this contract, except
that Contractor may give Company notice of any wage increase
that has been in effect for a period of more than 30 days and
request that Company renegotiate the payment rate herein pro-
vided to compensate for such increase. In the event Company
and Contractor do not agree on a new rate of payment, Contractor
shall have the right to terminate this contract by written
notice to Company 15 days prior to completion of the well then
drilling, the termination to be effective when the well is
drilled to completion or abandonment as specified by Company.
2.
II.
SPECIFICATIONS AND PROCEDURE
The casing pattern for each well drilled, unless
changed by Company, shall be as follows:
Maximum Diameter
Approximate
of Casing
Amount
20"
215'
10-3/4"
1500'
7"
As Required
Each well, when completed, shall be free of ob-
struction. A well drilled as a straight hole shall not deviate
o
from vertical more than 5 degrees without approval of Company.
A planned directional well shall be deviated from vertical as
directed by Company. Measurement of angles shall be made by
methods and instruments approved by Company and at intervals
not greater than 500 feet.
III.
CONTRACTOR'S OBLIGATIONS
A. Contractor agrees that the drilling of the first
well hereunder shall be commenced on or before the 15th day of
February, 1959, and drilling shall be continued with due dili-
gence and in a workmanlike manner until the well is drilled to
completion or abandonment as specified by Company. Each ad-
ditional well which may be drilled hereunder at Company's
option shall be commenced without delay after completion of
the well Contractor is then drilling and the drilling of the
additional well shall be continued with due diligence and in
a good and workmanlike manner until the well is drilled to
completion or abandonment as specified by Company.
B. Contractor shall furnish, at Contractor's
expense, the equipment, services and personnel described in
Exhibit "A", annexed hereto as a part of this contract for
all purposes, including incidental equipment and services
customarily furnished by a drilling contractor even though
not particularly described.
3.
C. Contractor further agrees:
(1) Except for items to be furnished by
Company or at Company's expense as
provided in this contract, to furnish
at its own risk and expense, subject
to inspection and approval of Company,
all labor, equipment, material, supplies,
and services necessary and proper for
the drilling, casing, completing or
abandoning of each well drilled pursuant
to this contract, and for the instal-
lation, handling, caring for and
accurately accounting for all equip-
ment and materials furnished by Company.
(2) To examine, before using, all material,
equipment and supplies furnished by
Company for the drilling operations
herein undertaken and report to Company
any defects discovered therein in time
to allow Company to replace same without
delaying drilling operations, and to
assume all risk and responsibility for
any mishap, damage, or loss caused by
such discovered defects not called to
the attention of Company, except in
instances where Contractor is relieved
from responsibility under the terms of
this contract. Contractor agrees to
maintain the material, equipment and
supplies furnished by Company in the
condition received, usual wear and tear
resulting from normal use excepted.
4.
(3) To keep accurate measurements and records
of all formations encountered, prepare
reports and records as requested, notify
Company immediately when any oil or gas
bearing formation is encountered and as
requested save and prepare clean samples
of formations drilled. Not to give, nor
make available, to any person, firm,
corporation, or entity, other than
Company, or those persons, firms,
corporations, or entities authorized
by Company in writing, any information
as to the drilling of such well or as
to the formations encountered in the
drilling of such well.
(4) To follow a mud program as specified by
Company and account for all mud materials
as requested by Company.
(5) To run, cement, and test all strings of
casing by such methods as Company may
require and to complete or abandon the
well as specified by Company.
(6) To exercise due care and caution in the
prevention of fires, explosions, blowouts,
and to perform any operations necessary
to protect life and property. Contractor,
in performing operations to protect life
and property and preventing a blowout,
shall be paid and reimbursed on the basis
as hereinafter provided for drilling
operations, and it is expressly agreed
that Contractor shall perform the work
hereunder, or at Company's direction, in
5.
cooperation with other contractors who
may be engaged by Company to assist.
(7) To assume all responsibilities and
liabilities as an employer or otherwise
as to social security, unemployment,
withholding and other taxes assessed
by law or regulatory bodies upon the
property or operations of Contractor.
(8) Not to discriminate against any employee
or applicant for employment because of
race, creed, color, or national origin.
(9) To procure and maintain at Contractor's
expense insurance policies in minimum
amounts as outlined in Exhibit "B",
annexed hereto as a part of this contract
for all purposes, covering all operations
to be performed under this contract.
Contractor shall furnish for approval,
prior to the commencement of the work,
certificates of insurance, listing the
required insurance policies and contain-
ing a statement that said insurance shall
not be changed or cancelled without at
least 10 days prior written notice to
Company. Such certificates must be
signed by authorized representatives
of the insurance companies and all
coverages must be written on policy
forms and by insurance companies ap-
proved by Company. If requested by
Company, Contractor shall furnish
Company originals or certified copies
of all such policies.
6.
(10) To see that each and every sub-
contractor employed by it shall
carry and pay for insurance in
minimum amounts deemed necessary
by Contractor to cover the work
of the particular subcontractor.
When requested by Company, Contractor
shall furnish, or cause to be
furnished to Company certificates
of insurance coverage for each
subcontractor. Should insurance
requirements for a subcontractor be
less than the minimum requirements
for Contractor, as set out above,
Company may, at its option, require
Contractor to secure such minimum
coverage.
(11) Failure to comply, or the full
compliance, with any of the
insurance provisions of this
contract, and the failure to
secure endorsements on the
policies as may be necessary to
carry out the terms and pro-
visions of this agreement shall
in no way act to relieve Con-
tractor from the obligations of
this contract, anything in this
contract to the contrary not-
withstanding.
(12) To operate and maintain all safety
devices, aids to navigation and
related equipment situated on the
7.
drilling equipment used in connection
with the drilling operations herein
undertaken. Safety equipment and
devices shall be maintained and
operated to meet or exceed Company
safety practices and policies. Aids
to navigation and related equipment
shall be maintained and operated in
strict compliance with Coast Guard
Regulations.
D. At the option of Company, Contractor shall provide,
or shall exercise reasonable diligence in the selection of others
to provide or furnish, for the account of Company, any of the
materials, supplies or services that Company is obligated to
furnish hereunder.
Contractor agrees that it will obtain the approval
of Company before contracting for any work or services under
this article at rates in excess of those charged for comparable
work and services on similar operations, and that wages,
salaries, expense allowances and compensation paid to persons
employed by Contractor or subcontractors, where the compensation
is not on a fixed fee basis, which are in excess of the pre-
vailing rates for similar services on like operations, shall
be approved by Company in advance of Contractor's furnishing
or procuring the services at the excess rate.
All contracts and agreements for services,
supplies and equipment procured or furnished by Contractor,
for the account of Company, shall reserve to Contractor the
right to terminate the agreement or contract for such services,
supplies or equipment, after a reasonable notice and without
penalty. Contractor agrees that it will immediately exercise
its right to terminate any of said agreements or contracts if
Company advises Contractor that the services, equipment or
8.
supplies furnished are not satisfactory to Company.
IV.
REPRESENTATIONS AND COMPANY OBLIGATIONS
A. The parties hereto recognize that Zapata Off-
Shore Company is the Operator of that certain lease in the
Gulf of Mexico on which the initial well will be drilled here-
under, and they represent that they have authority to make this
contract.
Contractor as operator word
B. Company agrees that it has procured, or will
procure, all necessary permits, certificates and other au-
thorizations required from the United States, the State of
Louisiana, the State of Texas, or any governmental subdivisions
or departments of either the United States, the State of
Louisiana, or the State of Texas, for drilling each well here-
under, and that it will, through the life of this contract,
maintain in full force and effect all necessary permits,
certificates and other authorizations.
C. Except in cases where a mobile drilling unit
made subject to this agreement is designed to set the protective
structure, Company agrees that it has procured the fabrication,
construction and erection of the necessary drilling platform
or protective structure for the drilling operations hereunder.
Contractor shall not be required to commence the installation
of any equipment on a platform, or begin any of its operations
at the well site, except those which may be completed without
risk prior to the erection of the protective structure, until
Company shall have accepted the completion of the drilling
platform, or protective structure, and shall have advised
Contractor that such facilities are complete and ready for
its drilling operations hereunder. The mobile unit designed
to erect the protective structure, or to operate without the
protective structure, shall not be affected by the limitations
of this paragraph.
9.
D. Company will provide for the drilling operations
herein undertaken, free of all cost to Contractor, materials,
equipment, tools, machinery, appliances, services, and supplies
as described in Exhibit "C", annexed hereto and made a part
hereof for all purposes.
Company may, at its option, have Contractor
furnish or procure any one or more of the items provided in
the above paragraph for the account of Company. Company will
give Contractor notice that it elects to have Contractor
furnish the item or items specified in the notice. There-
after, until further notice, as provided in Section III of
this contract relating to Contractor's obligations, the items
covered by the notice shall be furnished or procured by Con-
tractor.
V.
RESPONSIBILITY FOR EQUIPMENT
A. Contractor shall not have any responsibility to
Company, or any of its underwriters or insurers, including
the co-lessees of Company, if any, and their underwriters or
insurers, for damage occasioned to or loss of a tender, drilling
platform, drilling structure, drilling vessel, or derrick
furnished by Company for use in the drilling operations herein
undertaken, regardless of the cause of or reason for said loss.
B. Any damage to or loss of the rig and equipment
of Contractor, except uninsured subsurface equipment lost in
the hole for which Company is obligated to pay under Exhibit
"C", regardless of the cause of or reason for said loss, shall
be the loss of Contractor, its underwriters or insurers, and
Contractor expressly relieves Company, its agents, employees,
invitees, servants, co-lessees, if any, and their underwriters
or insurers from any claim or responsibility for loss of the
drilling rig and equipment furnished by Contractor for use in
the drilling operations herein undertaken. Insurance coverage
10.
on the rig and equipment will contain express waiver of any
claim by the underwriters or insurers against the Company,
its agents, servants, invitees, employees, co-lessees, if any,
and their underwriters and insurers.
VI.
PAYMENT
Company shall pay contractor upon the completion
of the drilling of each well hereunder, or at Contractor's
option, at periodic intervals of not less than 30 days, upon
proper invoice from Contractor to Company, supported by proof
satisfactory to Company that all charges for materials, services
and wages accruing from work covered by the invoice that could
be made the basis for a claim against Company or result in a
lien or encumbrance against the property of Company have been
satisfied, as the full consideration for the work herein under-
taken:
A. $ 5,100.00 per day, for each day, commencing
at such time as the Contractor's drilling equipment is ready
for tow, for each day spent in transit to the designated
way
location of the first well, placing the Contractor's drilling
equipment in position to drill, and, when the drilling of the
- spent in
last well hereunder has been completed, removing the Contractor's
drilling equipment from the drill site to the nearest shore base
of Company or to the next location, whichever distance is the
lesser. Company shall not be obligated to make any payments
for a day, or a part thereof, under this section if Company is
obligated to pay Contractor pursuant to another contract.
B. $ 5,250.00 per day for each day commencing
when the drilling equipment of Contractor is at the drilling
location or the mobile or floating unit is in position to drill,
for each day spent logging, testing and completing, including
days spent standing by with drilling crews, but excluding
11.
days spent standing by without full drilling crews or days for
which payment is made as provided in sections A, C, D, E and
F of this article.
C. $ 5,250.00
per day for each day spent
drilling, casing, logging, coring and fishing below 9,000',
but excluding days for which a payment is made under Sections
D, E or F below.
D. $ XXXXXXX
per foot for all hole drilled
from the bottom of the drive pipe to contract footage depth
which shall be the measured depth of the hole at the time the
XXX casing is set or a measured depth of XXX
, which-
ever is the lesser. The footage rate shall include the running
and cementing of the casing program as outlined in Article II
to contract footage depth and the nippling up of the surface
and intermediate strings. The footage rate will not be paid
for hole lost because of hole difficulties or stuck tools, but
will be paid for hole redrilled at Company's request to change
the bottom hole locations.
E. $ XXXXX
per day for each day spent drill-
ing, running and cementing casing, nippling up, logging, coring,
fishing from the bottom of the drive pipe until a depth of
XXX
feet is reached or the setting and nippling up of the
XXX
casing is completed as the case may be. This day rate
payment provided in this section shall be payable in addition
to the footage payment due in Section D above, notwithstanding
anything in this contract to the contrary.
F.
$
XXXXX
per day for each day spent
standing by without full drilling crews, plus amount equal to
the actual cost of watchmen and maintenance labor. When opera-
tions are suspended because of storms, hurricanes, or other
action of the elements and drilling crews are not released so
as to qualify for a payment under the first sentence of this
subsection, $ 4,650.00
per day for each day spent standing
12.
by with crews, at location or evacuated to shore, plus an
amount equal to the actual cost of the crews and tool pushers
during such period.
G.
XXXXX & per foot per day for drill pipe
used in ordinary drilling operations and XXXXX
& per
foot per day for drill pipe used in planned directional
drilling operations for drill pipe used while payment is
being made on a day work basis as provided in Section C of
this article. The payment is to be based on the maximum
footage of Contractor's drill pipe in use during any one day.
Company shall be obligated to pay Contractor on the
applicable per day rate as provided in the appropriate sections
above for any time Contractor is performing services for
Company except for footage operations under Section D above
or except when operations herein undertaken by Contractor
are suspended for a cumulative total of more than 12 hours
during any calendar month by reason of, (1) a breakdown in
Contractor's equipment, (2) force majeure as herein defined,
except where the force majeure is a windstorm, hurricane or
other action of the elements, (3) failure of Contractor to
have operating crews at a location to work, of (4) Contractor's
rig or equipment being away from location for inspection, or
other cause, or (5) when operations are suspended by reason
of Contractor's failure to have proper permits for its
equipment.
The obligation to make the payment on the per day
rate for the 12 hour period, or any part thereof, shall be
on the applicable day rate basis in effect when the operations
were suspended. Company shall not be obligated to make any
payment while operations are suspended for reasons set out
above after the 12 hour cumulative total of down time during
any calendar month has been exceeded.
13.
When a payment is due hereunder for any part of a
day, the payment herein provided shall be based on the pro-
portionate amount of time spent during the day in performing
the work for which the payment is due. When payment is due
hereunder for a full day, part of the day spent on one basis
and the remainder on the other, the obligation of Company to
pay shall be a cumulative total determined on the part pay
formula set out in the foregoing sentence.
In the event of loss of circulation, partial loss
of circulation, water flow, domal formation, abnormal pressures,
heaving shale or similar formation, salt or other similar
condition, is encountered which makes drilling abnormally
difficult or hazardous, causes sticking of drill pipe or
casing, or other similar difficulty which precludes drilling
ahead under reasonably normal procedures, Contractor shall,
in all such cases, without undue delay, exert every reason-
able effort to overcome such difficulty. When such condi-
tions are encountered, Company shall assume risk of loss or
damage to the hole and to Contractor's equipment in the hole.
Should such condition or conditions persist in spite of
Contractor's efforts to overcome them, then after a period
of twenty-four consecutive hours time consumed in such effort,
further operations shall be conducted on a day work basis at
the applicable day work rate until such conditions have been
overcome and normal drilling operations can be resumed. The
footage drilled while on day work basis shall be deducted
from the footage charge. "Abnormal pressures" shall be
considered to exist in the event a mud weight in excess of
12.5 pounds per gallon is required.
While Contractor is drilling on a footage rate,
except as the day rate is applicable either during the
period of time special services are being performed for
Company or the foregoing provisions of the Contract provide
14.
for both a footage and a day-work payment, the payment on the
footage rate will discharge the obligation of Company to make
a payment under this article.
VII.
DEFAULT
Time shall be the essence of this contract, and,
should Contractor neglect, delay or discontinue the work
provided in this contract without the written consent of
Company, violate any provisions of this contract, or furnish
false records, any such acts or delay shall constitute de-
fault of Contractor under this agreement and Company shall
have the right at any time, after Company gives Contractor
24 hours notice of such default in writing and Contractor
fails to correct such default, to take possession of a well
and complete same with Contractor's equipment without any
liability for any part of the contract price herein provided
which has not been previously paid, and without any other
liability except a rental on Contractor's equipment during
the time required to complete the work herein undertaken,
at $ 2,500.00
per day, and after completion of the well,
or wells if more are drilled hereunder, will return the
equipment to Contractor in condition received, usual wear
and tear excepted.
Nothing shall be held or construed to relieve
Contractor from the obligation to complete any well in
accordance with the terms of this contract, except Company's
written release.
VIII.
MODIFICATIONS
All changes, alterations or variations of this
contract shall be made in writing and signed by both
parties.
15.
IX.
COMPLIANCE WITH LAWS
The Fair Labor Standards Act of 1938 and all other
applicable laws, rules and regulations of governmental bodies
shall be complied with by Contractor and all subcontractors.
Upon request of Company, Contractor will give Company proof
of compliance with the laws, rules and regulations.
X.
INDEPENDENT CONTRACTOR
It is expressly understood that Contractor is an
independent contractor and that neither it nor its employees
or subcontractors or their employees are servants, agents, or
employees of Company. The actual performance and superinten-
dence of all work hereunder shall be by Contractor, under the
control and direction of Contractor as to the details of the
work; provided, however, Company being interested in the results
to be obtained, is authorized to designate a representative,
or representatives, who shall at all times have access to the
drilling site and related equipment for the purposes of ob-
serving tests or inspecting the work performed hereunder by
Contractor.
XI.
FORCE MAJEURE
Contractor and Company agree that in the event a
blowout, hurricane, accident, injunction, government order,
or other occurrence (whether similar to or dissimilar from
the other events identified), beyond the control of either
party (each such event or occurrence being hereinafter called
a "force majeure") prevents the performance of the obligations
of either party or the equipment of Contractor or the equip-
ment of Company is damaged to such an extent that repairs
within a reasonable time will be impracticable, or destroyed,
as the case may be, this agreement may be terminated at the
16.
option of either party; provided, however, if the termination
is occasioned by the destruction of Company's equipment, and
Contractor's equipment is in condition to operate, the payment
to Contractor will continue as herein provided until the equip-
ment is returned to the shore base. Contractor agrees that
the cost of moving its equipment that is damaged or destroyed
by a force majeure shall be paid by Contractor.
Each party agrees to exercise reasonable diligence
to correct any force majeure which is delaying the work herein
undertaken with the understanding that this shall not obligate
either to settle any labor dispute or comply with governmental
orders or decrees, where the settlement or compliance is deemed
to be disadvantageous to the affected party. Company and Con-
tractor shall not be responsible or liable to each other for
delays occasioned by a force majeure as herein defined, except
where the force majeure is a windstorm, hurricane or other
action of the elements Company shall make payment to Contractor
for the duration of the force majeure. Contractor agrees that
delays in operating a mobile unit occasioned by conditions of
the ocean bottom shall never be construed as caused by force
majeure, but shall be construed as a breakdown in Contractor's
equipment. Time spent reclaiming Contractor's equipment, or
restoring it to the position it was left for hurricane or
other weather conditions, after the inclement weather clears,
shall likewise be construed as a breakdown of Contractor's
equipment, except that in the case of floating drilling
equipment, such time spent reclaiming or so restoring it
shall be deemed to extend the duration of such hurricane
or other inclement weather condition.
XII.
RESERVOIR DAMAGE AND POLLUTION AND OTHER CLAIMS
Company agrees that regardless of the cause of or
reason for any blowout, cratering or uncontrolled well that
17.
results in damage to any underground reservoir, or pollution
of any underground freshwater reservoir and the Gulf of Mexico,
it will assume and does hereby assume full liability and re-
sponsibility for any claims brought against Contractor for
such damages and any liabilities resulting therefrom, pro-
vided Company shall be given notice of such claims and an
opportunity to defend before it becomes liable. Contractor
shall have full responsibility and liability for any pollution
of the Gulf of Mexico, underground freshwater reservoirs or
other losses or claims resulting solely from negligent acts
or omissions of Contractor (or of those operating by, through
or under it) in operations hereunder, except where there is
a blowout, cratering, or uncontrolled well and except as
otherwise provided in Sections V and XIV hereof. Company
with
shall have the full responsibility and liability for all other
claims arising out of operations hereunder, except those losses
or claims the responsibility for which is placed by Sections
V and XIV hereof. Contractor and Company agree that the one of
them who under this Section XII is to have responsibility for
a particular injury, loss, damage, or claim, shall indemnify
and hold the other harmless from and with respect to such
injury, loss, damage or claim.
XIII.
WAIVER OF SUBROGATION
To eliminate controversies, the expense and in-
convenience thereof, as between Company and Contractor, it
is agreed that Company, Contractor and the underwriters,
insurers and insurance carriers of each with respect to
this contract shall not have any right of recovery over
(equitable or by assignment, express or implied, loan
receipt or otherwise) against any of the parties hereto,
their agents, employees, invitees and servants, and co-
lessees, and their respective property, vessels and craft
18.
or underwriters, insurers and insurance carriers of either;
and the rights of recovery with respect to this operation
are mutually waived. All policies of insurance herein
provided and obtained or required by either party shall be
suitably endorsed to effectuate this waiver of recovery.
XIV.
EMPLOYEE CLAIMS
Company shall be fully responsible for and hereby
agrees to indemnify and hold harmless Contractor against any
and all claims, demands or suits which may be brought against
them or either of them for bodily injury to or death or loss
of services of an employee of Company which may arise out of
the work to be performed under this contract, whether such
suits are based on the relationship of master and servant,
third party or otherwise and even though occasioned, brought
about, or caused in whole or in part by the negligence of
Contractor, its agents, employees or subcontractors or the
unseaworthiness of vessels or craft. Company further agrees
to defend any such claim, demand, or suit even if it is
groundless, false or fraudulent; but Company may make such
investigation, negotiation and settlement of any such claim,
demand, or suit as it deems expedient.
Contractor shall be fully responsible for and agrees
to indemnify and hold harmless Company against any and all
claims, demands, or suits which may be brought against them
or either of them for bodily injury to or death or loss of
services of an employee of Contractor arising out of the work
to be performed under this contract whether such suits are
based on the relationship of master and servant, third party
or otherwise and even though occasioned, brought about, or
caused in whole or in part by the negligence of Company, its
agents, employees or subcontractors or the unseaworthiness
19.
Any employee who receives payment from Contractor shall be the
employee of Contractor; even though Company reimburses Contractor
for the amount paid such employee.
of vessels or craft. Contractor further agrees to defend any
such claim, demand, or suit even if it is groundless, false
or fraudulent; but Contractor may make such investigation,
negotiation and settlement of any such claim, demand, or suit
as it deems expedient.
XV.
EMPLOYER REGISTRATION
Contractor's employer registration numbers are:
Federal:
75-088-7234
State: Louisiana
61586
Texas
XVI.
ASSIGNMENT
This contract shall be binding upon the parties
hereto, their successors and assigns; provided, however, no
assignment or transfer hereof shall relieve the parties so
transferring or assigning this contract of the obligation
imposed hereunder unless and until the other parties hereto
shall have approved the assignment or transfer in writing.
IN WITNESS WHEREOF, the parties hereto have executed
this contract as of the day and date first hereinabove written.
WITNESSES:
ZAPATA OFF-SHORE COMPANY
Donald E mitchell
Billie 2. Jackson
By Nayne Hean Wayne Hllean
Bichard H Hittle
Joanna L. Morse
By CONTINENTAL ( twett OIL COMPANY
THE ATLANTIC REFINING COMPANY Batd.
By
TIDEWATER OIL COMPANY
By
Cities Service Production Company
CITIES SERVICE OIL COMPANY
HeBland
CRspears
20. By Johnly Vice-President
EXHIBIT "A"
CONTRACTOR TO FURNISH:
FLOATING DRILL BARGE "NOLA I":
Length
260 ft.
Width
56 ft.
Depth
15 ft.
Storage capacities:
Pipe Rack
250 tons
Drill Water
2000 barrels
Potable Water
500 barrels
Diesel Fuel
1000 barrels
Wet Mud - Active
1200 barrels
Dry Mud
3000 sacks
1 - Link Belt Capstan, 20 H.P. electric motor driven
Complete with 1200 ft. of 1-1/2" Baldt forged steel
chain and 3,000 lb. Danforth anchor for bow anchor.
4 - BOICO Wildcat double drum anchor windlasses, equipped
with 2-1/16" Di-Lok chain, driven by 50 H.P. electric
motors, complete with 1,000 ft. of 2-1/2" Baldt forged
steel anchor chain for each windlass.
8 - Anchors, 12,000 lb.
1 - Stiffleg crane, 5 ton with 50 ft. boom, complete with
double drum hoist and swinger, electric motor driven.
1 - Shear Leg, 50 ton.
Quarters for 42 men, complete with galley, air-
conditioning, etc.
Vessel meets all applicable USCG and ABS rules.
OTHER DRILLING EQUIPMENT:
Drawworks National Type "130"
1500 H.P.
Mud Pump 1, National C-350
600 H.P.
Mud Pump 2, National C-350
600 H.P.
Compound, Turney
1500 H.P.
Engines, 3 GMC 6-110 Twins
w/Torque Converters
1500 H.P.
Rotary, Ideco
23 in. opening
Auxiliary Brake, Parkersburg
46 in. Hydro-
matic
Derrick, L. C. Moore 140'x30'x9'6"
100 mph
952,000# API
Crown Block, National 7-48" Sheaves
360 tons
Traveling Block, National 6-48"
Sheaves
300 tons
Drill Line, 1-3/8" X 5000'
Swivel, National R-3
300 tons
Hook, BJ 4300
300 tons
Shaker, "Large" Rumba
Electric Log, Schlumberger OSU-C
Howco Measuring Line, Heavy duty reel
with air motor drive
Air Compressor, Ingersoll-Rand Type 30,
compound driven for control air
Air Receiver, 75 cu. ft.
Hex Kelly, 40' with TIW Kelly valve
Blow-Out Preventers & Control:
Payne closing unit with air-hydraulic pump,
complete with 6 control manifold and 80
gallon accumulator
1 - Westinghouse 5 YC 60 cfm electric driven air
compressor with 120 gallon air receiver
1 - 12" Series 900 GK Hydril
1 - 12" Series 900 QRC Cameron
1 - 10" Series 1500 GK Hydril
1 - 10" Series 1500 QRC Cameron
Necessary spools and choke manifold
1
- Cementing Unit, Haliburton Dual T-10 with A-C Unit
Drill Pipe, 4-1/2" OD - - 16.60 Grade E 10,000 ft.
Drill Collars, 8-6 1/2" OD X 30'
8-7 3/4" OD X 30'
Or as required by drilling program
3 - 100 KW 3 phase 440 volt cycle generators with GMC
6-110 A Diesel engines
2.
1
-
Martin-Decker Type E. Weight Indicator
3
-
Drill Water - Bilge Pumps
2
-
Fuel Transfer Pumps
2
-
Potable Water Pressure sets
2
-
Sanitary Water Pressure sets
1
-
300 amp arc welder
1
-
Oxy-acetylene welding outfit
1
-
Westinghouse 5 YC 60 cfm electric driven air
compressor for general service air
1
-
75 cu. ft. air receiver for general service air.
All air systems are cross-manifolded for emergency use.
1
-
Fork Lift Truck
Vapor-Proof Derrick Lights
Rubber and Steel Rotary Hoses
Dual Mud Lines and Standpipes
Radio - RCMA Marine Telephone Motorola VHF - FM
2
- Mission 4x5 centrifugal mud transfer pumps with
GMC 6-71 Diesel engines
PERSONNEL:
2
Toolpushers, one at location, one ashore.
2
Six man drilling crews.
1
Barge Engineer.
3
Roustabouts .
1
Welder ( as required)
1
Five man galley crew.
TRANSPORTATION
1
Supply Vessel
1
Crew boat
1
Tug boat ( as required by Contractor)
3.
EXHIBIT "B"
INSURANCE
Workmen's Compensation and Employers' Liability insurance
applicable under the laws of the States of Louisiana and
Texas with limits of liability as to Employers' Liability
of $750,000, one or more employees and like coverage with
respect to Longshoreman's and Harbor Worker's compensation
benefit.
Comprehensive General Liability insurance covering operations
in the Gulf of Mexico as follows:
Public Liability
Bodily Injury - Coverage "A"
Limits of Liability: $100,000 per person
$500,000 each occurrence
Property Damage - Coverage "B"
Limits of Liability: $500,000 one accident
$500,000 aggregate Operations
$500,000 aggregate Protective
$500,000 aggregate Contractual
Such insurance shall cover the operation of watercraft
and will apply to the carrying of passengers and guests
from whom no consideration for such carriage is received.
Cargo insurance with limits of $400,000 in respect of ship-
ments of complete drilling rigs and $75,000 of all other
shipments.
Combined marine perils for full value of all the Contractor's
equipment, including rotary drilling rig and appurtenant
equipment. The policy shall also provide coverage for blow-
out and cratering, including fire resulting therefrom.
Adequate Hull and P. & I. insurance covering fleet of vessels.
.
EXHIBIT "C"
COMPANY TO FURNISH:
Company will provide, free of all cost to Contractor, the following:
A. A suitable location, markers, and weather service for
Contractor's barge.
B. All equipment and material necessary for equipping the
well for producing including casing, tubing and well
head connections other than that provided for in letter
agreement of January 26, 1959.
C. Materials and other items including diesel drive
hammer, necessary for installation of well protector
if required. Contractor will install well protector
and drive pipe at drilling day rates, if so requested
by Company.
D. All cement for casing, cementing service for casing,
electric logging, perforating, drill stem testing,
and other special tools and services: including casing
crews other than that provided for in letter agreement
of January 26, 1959.
E. Depreciated value of uninsured subsurface equipment
lost in the hole or damaged during day work operations.
F. Drilling mud materials and lost circulation materials
and services other than that provided for in letter
agreement of January 26, 1959.
G. Fuel and water, F.M. radio.
H. Bits, reasers, mills, and fishing tools used in
daywork operations.
I. Drill pipe of sizes smaller than that to be furnished
by Contractor.
J.
Shore base.
K. Upon completion of contract Company will bear the expense
of towing Contractor's nobile drilling barge to Contractor's
base at Galveston, Texas, or to the next immediate drilling
location whichever is the closer.
L. Well control insurance. wall
New York
JOHNSON & HIGGINS
San Francisco
Buffalo
Los Angeles
Philadelphia
Seattle
Montreal
Pittsburgh
Established 1845
Toronto
Wilmington
Winnipeg
Atlanta
Vancouver
Cleveland
INSURANCE BROKERS- AVERAGE ADJUSTERS
Havana
Detroit
Rio de Janeiro
São Paulo
Chicago
EMPLOYEE BENEFIT PLAN CONSULTANTS
Caracas
Minneapolis
London
63 WALL ST., NEW YORK 5
CABLE ADDRESS "KERODEN"
TELEPHONE WHITEHALL 4-3160
April 29,1960
Mr. George H.W. Bush, President
Zapata Off Shore Company
1701 Houston Club Building
Houston 2, Texas
Dear George:
II NOLA II II -
File No: 39488
With regard to the paragraph addressed to me on
the carbon of your letter to Giff of April 27th, I do not think
it necessary for me to see the sales contract because I presume
you submitted it to your counsel before completing it.
I do not see how any future levies against the wreck
should concern you inasmuch as you are no longer the owner of
same. However, if you think that any future levies might be
retroactive to the time of your ownership then as a matter of
protection to yourself, you should put Giff on notice in writing
that you will expect him to respond for same.
Best regards,
Nalles W.Reinsdorf
b
July 28, 1960
Mr. Walter B. Reinsdorf
Johnson & Higgins
63 Wall Street
New York, N.Y.
Dear Walter:
Regarding the remaining Nola II claim, I am setting out below the
answers to your questions:
1. The value of the cargo removed before
stranded is approximately $85,200. This consists
principally of bits, casing tools.
2. In my letter to you of May 10th please
refer to #5 regarding commissary supplies. The
correct figure should be $1211.27 not the $12,011.27
as shown in the letter.
3. The production structure is valued at
approximately $35,000.
4. I understand that Rudolph corrected
your question about the Baker, Botts invoices.
Apparently those items as stated are correct.
5. Regarding the $4,000 for drill pipe, I
talked to Giffin and he confirmed that the $4,000
is to be left in the claim. Our deal with Giffin is
that $17,500 is the net purchase price for the pipe.
We settled with Giffin an amount equal to $9466. We
cancelled this $9466 and agreed that we would deduct
the $17,500 purchase price of the pipe from the agreed
open sue and labor claim. Giffin today reconfirmed
that the $4,000 is justifiably in the claim and was
not to be cancelled out.
AND
Page Two
Mr. Walter Reinsdorf
July 28, 1960
FORM
Regarding the $643.36 claim for cargo being four joints of 32'
pipe, Jerry has prepared a separate invoice on this today and
has forwarded it to Southern Marine, so it should come out of
the other claim. I am attaching a copy of this other invoice.
Very truly yours,
George H. W. Bush
GHWB/vf
Enc.