Phillips Petroleum Company

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IN THE MATTER OF PHILLIPS PETROLEUM COMPANY CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SEC. 7 OF THE CLAYTON ACT AND SEC, 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3728. Complaint, March 28, 1997--Decision, March 28, 1997 This consent order requires, among other things, the Oklahoma-based corporation to divest approximately 160 miles of pipeline belonging to ANR Pipeline Company and Phillips in the Anadarko Basin area, and to maintain the assets in their current condition and to provide customers under the contract with ANR with gathering services at existing terms and conditions pending divestiture. The consent order also requires Phillips, for ten years, to notify the Commission before acquiring during any 18-month period more than five miles of gas gathering pipelines in the specified areas of the Oklahoma counties.

Appearances For the Commission: George Cary, Frank Lipson, Phillip Broyles and William Baer.

For the respondent: William Kolasky, Wilmer, Cutler & Pickering, Washington, D.C.

COMPLAINT The Federal Trade Commission ("Commission"), having reason to believe that respondent Phillips Petroleum Company ("Phillips"), through its subsidiary GPM Gas Corporation ("GPM"), is subject to the jurisdiction of the Commission and that Phillips’ acquisition of certain gas-gathering assets of ANR Pipeline Company ("ANR"), a subsidiary of the Coastal Corporation, is in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act ("FTC Act"), as amended, 15 U.S.C. 45, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its complaint pursuant to Section 11 of the Clayton Act, as amended, 15 U.S.C. 21, and Section 5(b) of the FTC Act, as amended, 15 U.S.C. 45(b), stating its charges as follows:

PHILLIPS PETROLEUM COMPANY 953 952 Complaint I. PHILLIPS PARAGRAPH 1. Respondent Phillips is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business at Phillips Building, Bartlesville, Oklahoma. PAR. 2. Respondent Phillips is, and at all times relevant herein has been, engaged in commerce, as commerce is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C. 12, and is a corporation whose business is in or affects commerce, as commerce is defined in Section 4 of the FTC Act, as amended, 15 U.S.C. 44. II. THE PROPOSED ACQUISITION PAR. 3. Respondent Phillips, through its subsidiary GPM, entered into a Purchase and Sale Agreement dated January 12, 1996, with ANR to acquire the gas gathering assets currently owned by ANR. Ill. THE RELEVANT MARKETS PAR. 4. The relevant line of commerce in which to analyze the effects of the merger is natural gas gathering services i.e., the transportation, for the respondent's own account or for other persons, of natural gas from the wellhead or producing area to a natural gas transmission pipeline or a natural gas processing plant. PAR. 5. The relevant sections of the country in which to analyze the effects of the acquisition are the areas in and around the following townships:

a. T28N/R24W in Harper County, Oklahoma; b. TSN/R28E in Beaver County, Oklahoma;

c. TZ29N/R21W in Woods County, Oklahoma; d. T24N/R25W in Ellis County, Oklahoma, e. T23N/R26W in Ellis Country, Oklahoma; f. TLN/R26E in Beaver, Oklahoma; and g. T23N/R18W in Woodward, Oklahoma.

PAR. 6. The relevant line of commerce is highly concentrated in the relevant geographic markets. The acquisition will significantly increase concentration in the relevant geographic markets set forth in paragraph five a-g.

Decision and Order 123 F.T.C.

PAR. 7. Respondent Phillips is an actual and potential competitor of ANR in the relevant line of commerce in the relevant geographic markets.

PAR. 8. Effective entry in the relevant line of commerce in the relevant geographic markets is unlikely. IV. EFFECTS OF THE MERGER PAR. 9. The effects of the acquisition may be substantially to lessen competition or to tend to create a monopoly in the relevant markets in the following ways, among others: a. Actual and potential competition between Phillips and ANR to provide natural gas gathering services to existing natural gas wells will be eliminated;

b. Actual and potential competition between Phillips and ANR to provide natural gas gathering services for new natural gas wells will be eliminated; and c. The respondent is likely to exact anticompetitive price increases from producers in the relevant geographic market for performance of natural gas gathering services in the relevant geographic markets; and d. Producers may be less likely to do exploratory and developmental drilling for new natural gas in the relevant geographic markets than prior to the merger.

V. VIOLATIONS CHARGED PAR. 10. The acquisition agreement described in paragraph five constitutes a violation of Section 5 of the FTC Act, as amended, 15 U.S.C. 45.

PAR. 11. The acquisition described in paragraph five, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45.

DECISION AND ORDER The Federal Trade Commission ("Commission") having initiated an investigation of the proposed acquisition by Phillips Petroleum Company ("Phillips"), through its subsidiary GPM Gas Corporation ("GPM"), of certain gas-gathering assets of ANR Pipeline Company, PHILLIPS PETROLEUM COMPANY 955 952 Decision and Order a subsidiary of the Coastal Corporation ("Coastal"), and it now appearing that Phillips, hereinafter sometimes referred to as respondent, having been furnished with a copy of a draft complaint that the Bureau of Competition proposed to present to the Commission for its consideration, and which, if issued by the Commission, would charge respondents with violations of the Clayton Act and Federal Trade Commission Act; and Respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that respondent has violated the said Acts, and that the complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Secton 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order: 1. Phillips Petroleum Company is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at Phillips Building, Bartlesville, Oklahoma. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER I.

It is ordered, That, as used in this order, the following definitions shall apply:

Decision and Order 123 F.T.C.

A. Phillips or respondent means Phillips Petroleum Company, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns, its subsidiaries, divisions, groups and affiliates controlled by Phillips, and the respective directors, officers, employees, agents and representatives, successors, and assigns of each.

B. Coastal means The Coastal Corporation, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns, its subsidiaries, divisions, groups and affiliates controlled by Coastal, and the respective directors, officers, employees, agents and representatives, successors, and assigns of each.

C. The “Acquisition” means the proposed acquisition by GPM Gas Corporation, a subsidiary of Phillips, of certain gas-gathering assets of ANR Pipeline Co., a subsidiary of Coastal, pursuant to the purchase agreement executed on January 12, 1996, by and between Phillips and Coastal as subsequently modified and amended. D. Gas5 1 3 4 1 3 772 1567 268 59 93.918091 Gathering means pipeline transportation, for oneself or other persons, of natural gas over any part or all of the distance between a well and a gas transmission pipeline or gas processing plant. 3 1 3 5 0 0 471 1839 1646 201 -1 4 1 3 5 1 0 562 1839 1553 61 -1 5 1 3 5 1 1 562 1848 47 41 92.837700 E.5 1 3 5 1 2 634 1846 217 43 95.455948 Person" means any natural person, partnership, corporation, company, association, trust, joint venture or other business or legal entity, including any governmental agency. F. Related5 1 3 6 1 3 841 2054 197 43 95.174377 Person means a person controlled by, controlling, or under the common control with, another person. G. “Relevant geographic area" means all portions of Harper County, Oklahoma, within fifteen miles of the Kansas border; all portions of Beaver County, Oklahoma, within twenty miles of the Harper County border; all portions of Ellis County, Oklahoma, within eighteen miles of the northwest corner of Ellis County; and Townships T23N/R14W, T23N/RI5W, T23N/ R16W, T23N/R17W, T23N/RI8W, T22N/RI6W, T22N/RI7W, = T22N/R18W, T21N/R17W, and T21N/R18W of Woodward, Major and Woods Counties, Oklahoma.

H. “Schedule A assets" means the whole and any part of the assets listed in Schedule A of this order.

I. Commission means the Federal Trade Commission. PHILLIPS PETROLEUM COMPANY 957 952 Decision and Order IL.

It is further ordered, That:

A. Following completion of the Acquisition, Phillips shall divest the Schedule A assets, absolutely and in good faith, at no minimum price, consistent with the provisions of this order. B. The divestiture shall be made only to an acquirer or acquirers that receives the prior approval of the Commission and only in a manner that receives the prior approval of the Commission. C. Pending divestiture of the Schedule A assets, Philips shall take such actions as are necessary to maintain the viability and marketability of the Schedule A assets and to prevent the destruction, removal, wasting, deterioration, or impairment of any of the Schedule A assets except for ordinary wear and tear. D. Phillips shall comply with the Asset Maintenance Agreement, attached hereto and made a part hereof as Appendix I. E. The purpose of the divestiture is to ensure the continued use of the Schedule A assets in the same type of business in which the Schedule A assets are used at the time of the Acquisition, and to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission's complaint. Ii.

It is further ordered, That:

A. If Phillips has not divested the Schedule A assets consistent with paragraph II of this order by the later of April 30, 1997, or thirty days after Phillips consummates the Acquisition, the Commission may appoint a trustee to divest the Schedule A assets. B. In the event that the Commission or the Attorney General brings an action pursuant to Section 5(1) of the Federal Trade Commission Act, 15 U.S.C. 45(1), or any other statute enforced by the Commission, Phillips shall consent to the appointment of a trustee in such action. Neither the appointment of a trustee nor a decision not to appoint a trustee under this paragraph III shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed trustee, pursuant to Section 5(1) of the Federal Trade Commission Act, or any Decision and Order 123 F.T.C.

other statute enforced by the Commission, for any failure by Phillips to comply with this order.

C. If a trustee is appointed by the Commission or a court pursuant to paragraph III.A, Phillips shall consent to the following terms and conditions regarding the trustee's powers, duties, authority, and responsibilities:

1. The Commission shall select the trustee, subject to the consent of Phillips, which consent shall not be unreasonably withheld. The trustee shall preferably be a person with experience and expertise in acquisitions and divestitures of gas gathering assets. If Phillips has not opposed, in writing, including the reasons for opposing, the selection of any proposed trustee within ten (10) days after notice by the staff of the Commission to Phillips of the identity of any proposed trustee, Phillips shall be deemed to have consented to the selection of the proposed trustee.

2. Subject to the prior approval of the Commission, the trustee shall have the exclusive power and authority to divest the Schedule A assets. The trustee may, in his or her discretion, or at the direction of the Commission, effect such arrangements and divest (a) any additional gas gathering assets (including, but not limited to, gas gathering lines, compressors, surface equipment, and gas purchase and gathering contracts) of the respondent located in the relevant geographic area and (b) any additional assets necessary to connect the divested assets to the buyer's existing systems or to a third-party transmission line. The trustee may select such assets pursuant to clauses (a) and (b) of this paragraph to assure the marketability, viability, and competitiveness of the Schedule A assets so as to accomplish expeditiously the remedial purposes of this order. 3. Within ten (10) days after appointment of the trustee, Phillips shall execute a trust agreement that, subject to the prior approval of the Commission and, in the case of a court-appointed trustee, of the court, transfers to the trustee all rights and powers necessary to permit the trustee to effect the divestiture required by this order. 4. The trustee shall have twelve (12) months from the date the Commission approves the trust agreement described in paragraph III.C.3 to accomplish the divestiture(s), which shall be subject to the prior approval of the Commission. If, however, at the end of the twelve month period, the trustee has submitted a plan of divestiture or believes that divestiture can be achieved within a reasonable time, PHILLIPS PETROLEUM COMPANY 959 952 Decision and Order the divestiture period may be extended by the Commission, or, in the case of a court-appointed trustee, by the court; provided, however, the Commission may extend this period only two (2) times. 5. Phillips shall provide the trustee full and complete access to the personnel, books, records and facilities related to the Schedule A assets, or to any other relevant information, as the trustee may request. Phillips shall develop such financial or other information as the trustee may request and shall cooperate with the trustee. Phillips shall take no action to interfere with or impede the trustee's accomplishment of the divestiture(s). Any delays in divestiture caused by Phillips shall extend the time for divestiture under this paragraph in an amount equal to the delay, as determined by the Commission or, for a court-appointed trustee, by the court. 6. The trustee shall make reasonable efforts to negotiate the most favorable price and terms available in each contract that is submitted to the Commission, subject to Phillips' absolute and unconditional obligation to divest at no minimum price. The divestiture(s) shall be made to an acquirer or acquirers that receive the prior approval of the Commission, provided, however, if the trustee receives bona fide offers for any of the assets to be divested from more than one acquiring entity, and if the Commission determines to approve more than one such acquiring entity, the trustee shall divest that particular assets to the acquiring entity or entities selected by Phillips from among those approved by the Commission.

7. The trustee shall serve at the cost and expense of Phillips, without bond or other security unless paid for by Phillips, on such reasonable and customary terms and conditions as the Commission or a court may set. The trustee shall have the authority to employ, at the cost and expense of Phillips, such consultants, accountants, attorneys, business brokers, appraisers, and other representatives and assistants as are necessary to carry out the trustee's duties and responsibilities. The trustee shall account for all monies derived from the divestiture and all expenses incurred. After approval by the Commission and, in the case of a court-appointed trustee, by the court, of the account of the trustee, including fees for his or her services, all remaining monies shall be paid at the direction of Phillips, and the trustee's power shall be terminated. The trustee's compensation shall be based at least in significant part on a commission arrangement contingent on the trustee's divesting the Schedule A assets.

Decision and Order 123 F.T.C.

8. Phillips shall indemnify the trustee and hold the trustee harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the trustee's duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of any claim, whether or not resulting in any liability, except to the extent that such liabilities, losses, damages, claims, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the trustee.

9. If the trustee ceases to act or fails to act diligently, a substitute trustee shall be appointed in the same manner as provided in paragraph III.A of this order.

10. The Commission or, in the case of a court-appointed trustee, the court, may on its own initiative or at the request of the trustee issue such additional orders or directions as may be necessary or appropriate to accomplish the divestiture required by this order. 11. The trustee shall have no obligation to operate or maintain the Schedule A assets.

12. The trustee shall report in writing to Phillips and the Commission every sixty (60) days concerning the trustee's efforts to accomplish divestiture.

IV.

It is further ordered, That, for a period of ten (10) years from the date this order becomes final, Phillips shall not, without prior notification to the Commission, directly or indirectly: A. Acquire the Schedule A assets after their divestiture, or any assets the trustee may divest pursuant to paragraph JII.C.2 of this order.

B. Acquire any stock, share capital, equity, or other interest in any person engaged in gas gathering within the relevant geographic area at any time within the two years preceding such acquisition, provided, however, that an acquisition of securities will be exempt from the requirements of this paragraph (IV.B) if after the acquisition Phillips will hold cumulatively no more than two (2) percent of the outstanding shares of any class of security of such person; and provided further, that this paragraph ([V.B) shall not apply to the acquisition of any interest in a person that is not at the time of the acquisition engaged in gas gathering within the relevant geographic PHILLIPS PETROLEUM COMPANY 961 952 Decision and Order area due to the sale within the preceding two years of all assets used for gas gathering within the relevant geographic area to another party who intended to operate said assets for gas gathering within the relevant geographic area; or - C. Enter into any agreements or other arrangements with any person or with two or more related persons to obtain, within any 18 month period, direct or indirect ownership, management, or control of more than five (5) miles of pipeline previously used for gas gathering and suitable for use for gas gathering within the relevant geographic area. .

V.

It is further ordered, That the prior notifications required by paragraph IV of this order shall be given on the Notification and Report Form set forth in the Appendix to Part 803 of Title 16 of the Code of Federal Regulations as amended (hereinafter referred to as thes 1 5 1 5 2 701 1498 350 57 96.499771 Notification), and shall be prepared and transmitted in accordance with the requirements of Part 803, except that no filing fee will be required for any such notification, notification shall be filed with the Secretary of the Commission, notification need not be made to the United States Department of Justice, and notification is required only of Phillips. In lieu of furnishing (1) documents filed with the Securities and Exchange Commission, (2) annual reports, (3) annual audit reports, (4) regularly prepared balance sheets, or (5) Standard Industrial Code ("SIC") information in response to certain items in the Appendix to Part 803 of Title 16 of the Code of Federal Regulations, Phillips shall provide a map showing the location of the pipeline whose acquisition is proposed and other pipelines used for gas gathering in the relevant geographic area and a statement showing, for the most recent 12 month period for which volume information is available, the quantity of gas that flowed through pipeline whose acquisition is proposed. Respondent shall provide the Notification to the Commission at least thirty days prior to consummating any such transaction (hereinafter referred to as the firsts 1 5 1 23 2 739 2752 181 56 95.251793 waiting5 1 5 1 23 3 969 2752 211 57 95.545135 period). If, within the first waiting period, representatives of the Commission make a written request for additional information, respondent shall not consummate the transaction until twenty days after substantially complying with such request for additional information. Early termination of the waiting 962 FEDERAL. TRADE COMMISSION DECISIONS Decision and Order 123 F.T.C.

periods in this paragraph may be requested and, where appropriate, granted by letter from the Bureau of Competition. Provided, however, that prior notification shall not be required by paragraph IV of this order for a transaction for which notification is required to be made, and has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. 18a.

VI.

It is further ordered, That:

A. Within sixty (60) days after the date this order becomes final and every sixty (60) days thereafter until Phillips has fully complied with the provisions of paragraphs II or III of this order, Phillips shall submit to the Commission a verified written report setting forth in detail the manner and form in which it intends to comply, is complying, and has complied with paragraphs II and II] of this order. Phillips shall include in its compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with paragraphs II and III of the order, including a description of all substantive contacts or negotiations for the divestiture and the identity of all parties contacted. Phillips shall include in its compliance reports copies of all written communications to and from such parties, all internal memoranda, and all reports and recommendations concerning divestiture. B. One (1) year from the date this order becomes final, annually for the next nine (9) years on the anniversary of the date this order is entered, and at such other times as the Commission may require, Phillips shall file a verified written report with the Commission setting forth in detail the manner and form in which it has complied and is complying with this order.

VIL.

It is further ordered, That Phillips shall notify the Commission at least thirty (30) days prior to any proposed change in Phillips, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change that may affect compliance obligations arising out of the order.

PHILLIPS PETROLEUM COMPANY 963 952 Decision and Order VIIl.

It is further ordered, That, for the purpose of determining or securing compliance with this order, and subject to any legally recognized privilege, upon written request and on reasonable notice to respondent, respondent shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to - inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of respondent relating to any matters contained in this order; and B. Without restraint or interference from it, to interview officers, directors, or employees of respondent, who may have counsel present, relating to any matters contained in this order. IX.

It is further ordered, That this order shall terminate on March 28, 2007.

Decision and Order 123 F.T.C.

SCHEDULE A SCHEDULE A System 1 is Iccated in T29N-AZ2W, TZ9N-A21W, T28N-R21W, and TZ2EN-R20W in norsheastern Harper County, Oklahoma, and consists of approximately 15 miies of 47 piping as descibed in the table and map below.

| System | Item Current ANR Line Legal Location Pipe Length | Oiameter Numoer Numcer | Owner Number Townshio Range Feet Inches 1 1 ANR 460-413 22N 22W 17,400 4 2SN 21W 2 ANR 460-0434 Z2N 21W 400 4 3 ANR 460-0417 2SN 21W 3,800 4 4 ANA 460-0415 22N 21W 3,700 4 g ANA 460-0414 29N 21W 11,000 a 6 ANA 460-0412 Z9N 21W 40,500 4 28N 21W 28N 20W 460-0416 28N 21W £,000 4 s ANR toral 81,800 PHILLIPS PETROLEUM COMPANY Decision and Order SCHEDULE A 3p2 1 10 0 0 0 1545 987 48 39 -1 3 1 10 1 0 0 1545 987 48 39 -1 4 1 10 1 1 0 1545 987 48 39 -1 5 1 10 1 1 1 1545 987 23 30 56.216736 IF,5 1 10 1 1 2 1566 991 27 35 31.416901 aS2 1 11 0 0 0 1478 1082 615 8 -1 3 1 11 1 0 0 1478 1082 615 8 -1 4 1 11 1 1 0 1478 1082 615 8 -1 5 1 11 1 1 1 1478 1082 615 8 95.000000 2 1 12 0 0 0 1484 570 16 430 -1 3 1 12 1 0 0 1484 570 16 430 -1 4 1 12 1 1 0 1484 570 16 430 -1 5 1 12 1 1 1 1484 570 16 430 95.000000 2 1 13 0 0 0 1489 711 3 171 -1 3 1 13 1 0 0 1489 711 3 171 -1 4 1 13 1 1 0 1489 711 3 171 -1 5 1 13 1 1 1 1489 711 3 171 95.000000 2 1 14 0 0 0 1471 1298 621 13 -1 3 1 14 1 0 0 1471 1298 621 13 -1 4 1 14 1 1 0 1471 1298 621 13 -1 5 1 14 1 1 1 1471 1298 621 13 95.000000 2 1 15 0 0 0 1886 1605 14 454 -1 3 1 15 1 0 0 1886 1605 14 454 -1 4 1 15 1 1 0 1886 1605 14 454 -1 5 1 15 1 1 1 1886 1605 14 454 95.000000 2 1 16 0 0 0 1464 1514 613 9 -1 3 1 16 1 0 0 1464 1514 613 9 -1 4 1 16 1 1 0 1464 1514 613 9 -1 5 1 16 1 1 1 1464 1514 613 9 95.000000 2 1 17 0 0 0 1453 1726 632 13 -1 3 1 17 1 0 0 1453 1726 632 13 -1 4 1 17 1 1 0 1453 1726 632 13 -1 5 1 17 1 1 1 1453 1726 632 13 95.000000 2 1 18 0 0 0 1467 570 34 982 -1 3 1 18 1 0 0 1467 570 34 982 -1 4 1 18 1 1 0 1467 570 34 982 -1 5 1 18 1 1 1 1467 570 34 982 95.000000 2 1 19 0 0 0 651 740 843 22 -1 3 1 19 1 0 0 651 740 843 22 -1 4 1 19 1 1 0 651 740 843 22 -1 5 1 19 1 1 1 651 740 843 22 95.000000 2 1 20 0 0 0 646 969 302 4 -1 3 1 20 1 0 0 646 969 302 4 -1 4 1 20 1 1 0 646 969 302 4 -1 5 1 20 1 1 1 646 969 302 4 95.000000 2 1 21 0 0 0 1466 1001 18 551 -1 3 1 21 1 0 0 1466 1001 18 551 -1 4 1 21 1 1 0 1466 1001 18 551 -1 5 1 21 1 1 1 1466 1001 18 551 95.000000 2 1 22 0 0 0 1465 1001 18 551 -1 3 1 22 1 0 0 1465 1001 18 551 -1 4 1 22 1 1 0 1465 1001 18 551 -1 5 1 22 1 1 1 1465 1001 18 551 95.000000 2 1 23 0 0 0 0 2118 0 548 -1 3 1 23 1 0 0 0 2118 0 548 -1 4 1 23 1 1 0 0 2118 0 548 -1 5 1 23 1 1 1 0 2118 0 548 95.000000 2 1 24 0 0 0 638 1180 840 29 -1 3 1 24 1 0 0 638 1180 840 29 -1 4 1 24 1 1 0 638 1180 840 29 -1 5 1 24 1 1 1 638 1180 840 29 95.000000 2 1 25 0 0 0 628 1407 672 23 -1 3 1 25 1 0 0 628 1407 672 23 -1 4 1 25 1 1 0 628 1407 672 23 -1 5 1 25 1 1 1 628 1407 672 23 95.000000 2 1 26 0 0 0 619 1606 822 36 -1 3 1 26 1 0 0 619 1606 822 36 -1 4 1 26 1 1 0 619 1606 822 36 -1 5 1 26 1 1 1 619 1606 822 36 95.000000 2 1 27 0 0 0 625 583 41 1058 -1 3 1 27 1 0 0 625 583 41 1058 -1 4 1 27 1 1 0 625 583 41 1058 -1 5 1 27 1 1 1 625 583 41 1058 95.000000 2 1 28 0 0 0 624 583 41 1058 -1 3 1 28 1 0 0 624 583 41 1058 -1 4 1 28 1 1 0 624 583 41 1058 -1 5 1 28 1 1 1 624 583 41 1058 95.000000 2 1 29 0 0 0 624 583 41 1058 -1 3 1 29 1 0 0 624 583 41 1058 -1 4 1 29 1 1 0 624 583 41 1058 -1 5 1 29 1 1 1 624 583 41 1058 95.000000 2 1 30 0 0 0 1443 1947 501 10 -1 3 1 30 1 0 0 1443 1947 501 10 -1 4 1 30 1 1 0 1443 1947 501 10 -1 5 1 30 1 1 1 1443 1947 501 10 95.000000 2 1 31 0 0 0 1050 2040 350 17 -1 3 1 31 1 0 0 1050 2040 350 17 -1 4 1 31 1 1 0 1050 2040 350 17 -1 5 1 31 1 1 1 1050 2040 350 17 95.000000 2 1 32 0 0 0 0 1785 0 831 -1 3 1 32 1 0 0 0 1785 0 831 -1 4 1 32 1 1 0 0 1785 0 831 -1 5 1 32 1 1 1 0 1785 0 831 95.000000 2 1 33 0 0 0 606 1830 826 27 -1 3 1 33 1 0 0 606 1830 826 27 -1 4 1 33 1 1 0 606 1830 826 27 -1 5 1 33 1 1 1 606 1830 826 27 95.000000 2 1 34 0 0 0 1432 2157 504 9 -1 3 1 34 1 0 0 1432 2157 504 9 -1 4 1 34 1 1 0 1432 2157 504 9 -1 5 1 34 1 1 1 1432 2157 504 9 95.000000 2 1 35 0 0 0 594 2060 497 10 -1 3 1 35 1 0 0 594 2060 497 10 -1 4 1 35 1 1 0 594 2060 497 10 -1 5 1 35 1 1 1 594 2060 497 10 95.000000 2 1 36 0 0 0 594 1836 64 254 -1 3 1 36 1 0 0 594 1836 64 254 -1 4 1 36 1 1 0 630 1836 28 146 -1 5 1 36 1 1 1 634 1836 24 34 0.000000 “),5 1 36 1 1 2 630 1879 21 103 0.000000 0+8-a0p4 1 36 1 2 0 596 1858 37 232 -1 5 1 36 1 2 1 596 1858 37 41 37.450722 ha5 1 36 1 2 2 605 2077 10 13 56.768974 ed jy .

—_———._.

Decision and Order 123: FTC SCHEDULE A Systam 2 is located in T28N-RZEW, T27N-AZEW, TZ29N-A2Z4W, T28N-AZ4W, T2Z7N-A24'W, TZEN-AZIW, T28N-AZSW, and T2SN-R22W in northern Harper County, Oklahamtia, and consists of apcroximately 26 miies of 4" piping, agproximately 14 miies of 6° piping, and approximately 3 miles of 10° piping as deserted in the table and map below.

System | Item Current Line Legal Locatien Pipe Length | Diameter Number Number | Owner | Numer Township Range Feet Inches 2 1 GPM ND-+2 27N, 28N z=w 27,000 4 2 GPM NO 27N 24w, 25W 13,200 10 3 GPM Os-1-5° 27N 24W 1,200 4 4 GPM Os-2 27N 24w 3,400 6 5 GPM Ds-1 27N, 28N 24'N 14,600 6 28N 24W 8,500 4 6 GPM Ds-1-4° 28N 24w 1,000 4 7 GPM Os-1-1 28N 24W, 25W £,300 4 8 GPM DS-1-2 28N 24w, 25W 12,800 4 9 GPM DS-1-2-1* 28N 24W, 25W 93,500 4 10 G?M DS-1-3 28N 24W 6,000 4 1 CPM ND-5 27N, 28N 24Ww 30,500 6 12 GPM NO-5-2 28N z4w 2,100 4 14 GPM NO-5-3 268N Z6w $,300 a tt CFM ND-5-1 28N 23w. 24W 23.5C0 4 15 ANR 453-0608 28N 22W, 23W 24,200 6 16 ANR 453-0473 28N 22 200 4 17 ANR 453-0477 ZEN ZzWw 4,100 4 18 ANA 4535-04139 28N zw =,600 4 i9 ANR 455-0488 235N Z2W 1,400 a z0 ANR 4853-04117 28N ziw 2,300 od 27 ANR 453-0474 28N 22W 1,700 4 22 ANR 483-0475 28N 2=2W 1,800 4 as ANA 483-0476 Z3N 22W 1,800 = 24 GPM ND-6 23N 2a. 31,600 4 28N z22wW 29N 22W 25 GFM ND-s-1 23N 23W 4,900 = 26 GPM ND-7 22N 22~ 6.600 4 27 GPM ND-8 22N 23W. 24'W 21,600 4 278.00 PHILLIPS PETROLEUM COMPANY Decision and Order SCHEDULE A Decision and Order 123 F.T.C.

SCHEDULE A System @ is located in T6N-R27E. TEN-AZ7E. TSN-AZBE, and, T4N-AZEE in norcneasiern Beaver Caunty, Oklahoma, and consist of approximately 18 miles of 4” piping and aperaximately 13 miles of &* piping as descrided in the table and mao heiow. . System | item Current Line Legal Location Pipe Length | Diameter Number Number | Owner | Numaer Township Range | Feet | Inches | 3 1 GPM 0G15901 £N, GN 27E 5,400 a 2 GFM OGi530T-J =N 27E §,300 4 3 GEM OGis£01-G SN 27E 6,200 4 4 GPM ocis3 5N 27E, 28E 29,200 6 5 GFM OG15S01-K« =N 27E 1,800 4 6 GPM 0G16501 EN, 6N 27E 11,200 6 7 GFM 0G16501-8 6N 27E 500 4 i} GFM 0G16=0 §N 27E€ 600 4 9 GFM O0G16=501-C 6N 27E 7oo 4 10 GPM OG16SE 6N 27E 6,800 4 Ww GFM OGiS3F SN Z7eE 5,100 4 12 GFM OGiSs01-FI £N 27E 3,7c0 4 3 GFM OG1£301-F EN z7 3,700 4 14 GPM OG1£3-8 SN, 6N 27E 4,500 4 15 GFM CGiz301-82 6N 27E 1,700 a 16 GPM LG-3 =N 28& 3,100 4 17 GFM LG-2 5N 23E 22,800 4 if GFM LG-2-1 SN 28E 5,200 4 1g GPM LG-1 4N, EN 2SE 27,300 6 20 GFM LG-i-i AN 2SE §,100 a 21 GEM LG-1-Z* an 28E 6.900 4 163,000 PHILLIPS PETROLEUM COMPANY 969 952 Decision and Order SCHEDULE A ;

Decision and Order 123 F.T.C.

SCHEDULE A System 4 is !ocated in TZN-RZ6E, TIN-AZEE. TZN-A2Z7E, and TIN-AZ7E in scutneastem Beaver County, Oklahoma, and consists of approximately 21 miles of 4” piping as described in the table and map below. System Item Current ANA Line Legal Lecation Pipe Length eee], | Number Number | Cwner | Number Tawnsnip Rance Feet | Inches 4 1 ANA 452-0470 2N 27E 15,500 a 2 ANA 452-04150 2N 27E 45,000 4 2N 2 1N 26 3 ANA 452-04155 1N. 2N 26& 20,600 ad 4 ANR 452-04194 1N 26= 3,900 4 5 ANA 45204269 1N 26€ 3,200 4 6 ANR 452-04158 1N 26€ 1,700 4 7 ANR 452-04232 1N 26€ 2.200 4 = a ANR 452-04165 1N 26& 27E 8,200 4 9 ANR 452-Cc00-+ 1N 27E 1,400 a total 112,400 O74 PHILLIPS PETROLEUM COMPANY Decision and Order SCHEDULE A ,— —-——-— —— _———--— p——-— = fm ty aud yey Decision and Order 123 F.T.C.

SCHEDULE. A System 5 is located in T22N-R26W, T22N-AZ5W. and T22N-AZ6W in northwestern Elis County, Oklahoma. and consists of approximately 13 miles of 4” piping as described in the table and map below. 3 System Item Current ANA Line Legal Location Pipe Length | Diameter | Number Nurmder | Owner | Number Township Range Feet Inches s 1 ANR 452-4169 23N 26wW 12.200 4 2 ANR 452-4176 22N 26W 13,700 4 3 ANR 452-4177 23N Z5W, 26W 5,900 4 a ANA 452-4193 23N 26W 6,200 a 5 ANA 452-4215 22N, 235N 26W 13,200 4 6 ANR 452-4218 22N 26W 2,600 4 7 ANA 452-4217 22N 26w 6,200 4 66,000 PHILLIPS PETROLEUM COMPANY 973 952 Decision and Order SCHEDULE A ' feb 2 aN Zew =e a) = 4$2-34(76 4352-34177 : “ meee! ! i z | 3) 6 ! i | i Ay <42-ga2:3 \ | ere Fh = i en a ee Decision and Order 123 F.T.C.

SCHEDULE A Sysiem 6 is located in T24N-R25W and T24N-R24W in northern Elis Caunty, Cklahoma, ana consists of approximately 13 miles of 4° piping as descibed in the table and map below. System Item Current ANA Line Legal Location | Pipe Length | Diameter Number Number | Owner | Number Township Range Feat inches é 7 ANA 45404134 Z4N 25W 2.700 4 2 ANR 45404133 24N 25W 11,200 4 3 ANR 45404129 24N 24w 32,100 4 4 ANR 45404143 24N 25w 7,600 4 5 ANR 45404148 24N 25w 1,600 4 6 ANR 4541-04128 24N 24W 7,500 4 7 ANR 45404132 26N 25w 5,800 4 g ANA 4542-04139 24N 24W 3.500 4 total 66,000 PHILLIPS PETROLEUM COMPANY 975 952 Decision and Order SCHEDULE A | au is) TOU Decision and Order 123 F.T.C.

SCHEDULE A System 7 is located in T23N-A1aW, T22N-A18W. T22N-R17W, and T21N-A17W in Woodward County, Oklahoma. and censists of approximately 12 miles of 4° piping and approximately 8 miles af 6” piping as described in the table and map below.

System Item Current ANR Line Legal Lacarion Pipa Length | Oiameter Numcer Number [ Owner Number Tawnshio Range Feet Inches 7 1 GPM 0G36701-8 23N 18w 7,900 4 2 G?M 0G26701-A 22N, 23N 18w 4,200 4 3 G?M 0G326701 23N 18wW 18,000 6 4 GPM 0G36701-C 22N, 23N 18w 4,300 4 5 GPM 0G36701-D 22N, 23N 18Ww 7,000 4 6 GPM QG32401-Alia 23N 18W 3,300 4 7 GPM 0G32401-A1B 235N 18W 1,000 4 8 GPM O0G32401-A1A Sta. 45 23N 1aw 1,500 4 9 GFM 0G32401-A 22N. 23N 18W 22.300 6 10 GPM 0G22401-A8 22N 18W 1,500 4 11 GPM 0G32401-A5 22N 17W, 18W 11,500 4 12 GFM O0G32401-A5A 22N 17W 3,400 4a 13 GPM OG3Z401-A6 22N Taw 2,000 4 i4 GFM 0G32401-C 22N 1gW 18,1c0 4 22N 17W 21N 17W 15 GFM OG32401-C2 22N 17wW soo 4 16 GFM OG32401-Ci 22N 17Ww 6,200 4 17 GPM OG22401-A3 22N Tew 3,300 6 116,500 PHILLIPS PETROLEUM COMPANY Decision and Order SCHEDULE A CG324@1-Ala STA.45 OG-224@1-AIE_,. wf sszt ns a of 4' ‘ 4 1 29 1 4 0 1142 763 950 21 -1 5 1 29 1 4 1 1142 776 11 8 0.000000 ”5 1 29 1 4 2 1536 763 5 10 60.740295 >5 1 29 1 4 3 1715 766 10 8 22.701065 . a 0G267a1 .

é ! ‘ i w oGsz4a1-ae \e | ¢) GGi24@i-AéA CG31401-4a + ? + = 4": 1 cs 7 “=e q «|| cozz4a1-as re | & : :

} { ' | i i ' | | : = | | | | eG3z4@1-A3 | | ci : , j Ni . ' > i iJ s ' ! ( I | | Cl ae i . GG224@1-cz : | | ! * i i i ? 1 i ogazeecs SS ' v wave Decision and Order 123 F.T.C.

APPENDIX I ASSET MAINTENANCE AGREEMENT This Asset Maintenance Agreement ("Agreement") is by and between Phillips Petroleum Company ("Phillips"), a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business at Phillips Building, Bartlesville, Oklahoma; and the Federal Trade Commission ("Commission"), an independent agency of the United States Government, established under the Federal Trade Commission Act of 1914, 15 U.S.C. 41, et seq. (collectively thea 1 7 1 9 0 585 1161 224 56 -1 5 1 7 1 9 1 585 1161 224 56 96.124092 Parties). PREMISES Whereas, Phillips through its subsidiary GPM Gas Corporation ("GPM"), agreed to acquire certain gas-gathering assets of ANR Pipeline Company ("ANR"), a subsidiary of the Coastal Corporation ("Coastal"), pursuant to an agreement dated January 12, 1996, hereinafter Acquisition; and Whereas, the Commission is investigating the Acquisition to determine if it would violate any of the statutes enforced by the Commission; and Whereas, if the Commission accepts the Agreement Containing Consent Order, the Commission is required to place it on the public record for a period of sixty (60) days for public comment and may subsequently withdraw such acceptance pursuant to the provisions of Section 2.34 of the Commission's Rules;

Whereas, Phillips and Coastal may consummate the acquisition upon provisional acceptance by the Commission of the Agreement Containing Consent Order; and Whereas, the Commission is concerned that if an agreement is not reached preserving the status quo ante of the assets to be divested pursuant to the Agreement Containing Consent Order ("the Schedule A assets") during the period prior to their divestitures, that any divestiture resulting from any administrative proceeding challenging the legality of the Acquisition might not be possible, or might produce a less than effective remedy; and PHILLIPS PETROLEUM COMPANY 979 952 Decision and Order Whereas, the Commission is concerned that prior to divestiture to the acquirer, it may be necessary to preserve the continued viability and competitiveness of the Schedule A assets; and Whereas, the purpose of this Agreement and of the Consent Order is to preserve the Schedule A assets pending the divestiture to the acquirer approved by the Federal Trade Commission under the terms of the order, in order to remedy any anticompetitive effects of the Acquisition; and Whereas, Phillips entering into this Agreement shall in no way be construed as an admission by Phillips that the Acquisition is illegal; and Whereas, Phillips understands that no act or transaction contemplated by this Agreement shall be deemed immune or exempt from the provisions of the antitrust laws, or the Federal Trade Commission Act by reason of anything contained in this Agreement; Now, therefore, in consideration of the Commission's agreement that, unless the Commission determines to reject the Consent Order, it will not seek further relief from the parties with respect to the Acquisition, except that the Commission may exercise any and all rights to enforce this Agreement and the Consent Order annexed hereto and made a part thereof, and, in the event the required divestiture is not accomplished, to appoint a trustee to seek divestiture of the Schedule A assets, the Parties agree as follows: TERMS OF AGREEMENT 1. Phillips agrees to execute the Agreement Containing Consent Order and, upon its issuance, to be bound by the Consent Order. The Parties further agree that each term defined in the Consent Order shall have the same meaning in this Agreement. 2. Unless the Commission brings an action to seek to enjoin the proposed Acquisition pursuant to Section 13(b) of the Federal Trade Commission Act, 15. U.S.C. 53(b), and obtains a temporary restraining order or preliminary injunction blocking the proposed Acquisition, Phillips and Coastal will be free to close the Acquisition any time after the Commission has provisionally accepted the Agreement Containing Consent Order.

3. Phillips agrees that from the date this Agreement is accepted until the earlier of the dates listed in subparagraphs 3.a - 3.b, it will comply with the provisions of this Agreement: Decision and Order 123 F.T.C.

a. Three business days after the Commission withdraws its acceptance of the Consent Order pursuant to the provisions of Section 2.34 of the Commission's Rules; or b. On the day the divestiture set out in the Consent Order has been completed.

4. From the later of the date of this Agreement or from the date of their acquisition, until the divestiture set out in the Consent Order has been completed, Phillips shall maintain the viability, competitiveness and marketability of the Schedule A assets and shall not cause the wasting or deterioration of the Schedule A assets, nor shall Phillips encumber or otherwise impair their viability. 5.a. From the time that Phillips acquires the Schedule A assets that are currently owned by ANR until their divestiture has been completed in pertinent part, Phillips will offer to gather gas on those Schedule A assets on the same terms and conditions offered by ANR on the date of their transfer.

b. From the time that this Agreement is accepted by the Commission until Phillips divests in pertinent part the Schedule A assets that it owns as of the date of the Agreement, Phillips will continue to purchase or gather gas from wells connected to those assets on the same terms and conditions in effect as of the date of this Agreement.

c. If a producer, operator, or shipper executes a waiver of its rights under this paragraph, Phillips may contract on such other terms and conditions as it may deem appropriate. 6. Should the Commission seek in any proceeding to compel Phillips to divest itself of the assets to be acquired from Coastal or to seek any other injunctive or equitable relief, Phillips shall not raise any objection based upon the expiration of the applicable Hart-Scott-Rodino Antitrust Improvements Act waiting period or the fact that the Commission has not sought to enjoin the Acquisition. Phillips also waives all rights to contest the validity of this Agreement.

7. For the purpose of determining or securing compliance with this Agreement, subject to any legally recognized privilege, and upon written request with reasonable notice to Phillips and to their principal offices, Phillips shall permit any duly authorized representative or representatives of the Commission: PHILLIPS PETROLEUM COMPANY 981.

952 Decision and Order a. Access during the office hours of Phillips, in the presence of counsel, to inspect and copy all books; ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of Phillips relating to compliance with this Agreement; and b. Upon five (5) days' notice to Phillips and without restraint or interference from them, to interview officers or employees of Phillips, who may have counsel present, regarding any such matters. 8. This Agreement shall not be binding until approved by the Commission.

Complaint 123 F.T.C,