In the late 1970s, Pursue and several other entities acquire oil and gas leasehold interests in the Thomasville Field. The Field produces sour gas containing high levels of sulfur dioxide. The partners spend approximately $53 million to build a processing facility of which $42 million is financed with industrial revenue bonds issued by various governmental entities. The bond indentures set forth a formula by which the processing fees are calculated so that the creditors will be paid back. Thereafter, Pursue enters into a long term contract to sell natural gas to Southern Natural Gas Co. In 1993, the contract is amended through a buy down agreement and Pursue receives nearly $39 million out of a total payment of $79 million to the various partners and agrees to lower the contract price of natural gas from $11.00 to $3.75/MCF and eventually to the spot market price.
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