Common use of ADDITIONAL SOURCES Clause in Contracts

ADDITIONAL SOURCES. As to additional committed sources on the committed acreage not yet in production as of the date of this Contract, upon production in economic quantities, Seller will commence and complete with due diligence the construction of the facilities necessary to enable Seller to deliver the committed gas at the Delivery Points mutually agreed between Buyer and Seller, and Buyer will cause prompt commencement and complete with due diligence construction of the facilities necessary and economically feasible in Buyer’s sole discretion to enable Buyer or its gas gathering contractor to receive deliveries of gas at the Delivery Points. If Buyer determines it is not economically feasible to construct the facilities for any additional committed source, Seller may, but shall not be obligated to, construct the facilities necessary to deliver gas into Buyer’s then existing facilities, or to pay all or a portion of Buyer’s estimated connection costs for the additional source, as mutually agreed. If neither Buyer nor Seller elect to construct the necessary facilities, either party may cancel this Contract as to the affected well upon 30 Days advance written notice to the other and gas from this well shall be released from commitment to this Contract. For purposes of this section B.2, “economic quantities” of gas from any well shall mean that Seller’s share of net operating revenues (the expected sum of Seller’s percentage of revenues attributable to sales of Plant Products and Residue Gas) from such well is sufficient to offset the actual operating costs thereof.