Common use of Additional Subject Fields Clause in Contracts

Additional Subject Fields. To the extent not otherwise restricted or prohibited by agreements existing or effective at the time of such acquisition or development, and in all cases subject to such agreements, all fields and leases in the State of California, or located in California state waters or Federal waters offshore of the State of California, that PXP acquires or develops during the term of this Agreement shall constitute Subject Fields effective as of the date of such acquisition or development, provided that PXP gives written notice of the pending acquisition or development of such a field or lease as soon as possible prior to its acquisition or development and CoP has thirty (30) Days from receipt of such notice to notify PXP in writing whether CoP elects to reject said field or lease based on its determination that notwithstanding its exercise of commercially reasonable efforts it will not be able to process the Sales Volume expected to be produced from such field or lease at, and/or transport such Sales Volume to, one of CoP’s California refineries, in which case such field or lease shall not be deemed to be or have been a “Subject Field.” If CoP fails to respond in such time period the field or lease will be deemed to be a “Subject Field.” The pricing and delivery location for Delivery Amounts produced from such additional fields and leases shall be as mutually agreed by the Parties or as otherwise determined pursuant hereto. For purposes of the foregoing sentence, with respect to fields and leases located within the geographic boundaries of existing Subject Fields or that are otherwise considered by the applicable regulatory authority to be a part of a field included within a current Subject Field, and provided that the Sales Volumes produced from such fields and leases is of Substantially the Same Quality as that produced from such Subject Field, then the Parties shall be deemed to have agreed that the pricing and delivery location for Delivery Amounts produced from such fields and leases shall be the same as that for such Subject Field. For purposes of this Agreement, Sales Volumes shall have “Substantially the Same Quality” as other Sales Volumes if its sulfur content does not vary from the other by more than 1% by weight, its total acid number (or “TAN”) does not exceed 0.3 mg and if its gravity does not vary from the other by more than 5 degrees API. If the Parties fail to agree, and are not otherwise deemed to have agreed, on the pricing and/or delivery location for Delivery Amounts produced from such fields and leases on or before the 30th calendar day following the acquisition or development of such fields or leases by PXP, then the Parties shall refer the determination of such pricing and delivery location to arbitration pursuant to Section 10.1, and upon such determination, such pricing and/or delivery location shall thenceforth apply to such fields and leases. During the period, if any, commencing with the date such fields and leases constitute Subject Fields (the “New Fields”) and ending upon the last Day of the last Delivery Month ending prior to the agreement of the Parties (or the decision of the Arbitrator, as applicable) as to pricing and/or delivery location, as applicable (the “New Field Pre-Agreement Period”), the Parties shall use, for purposes of temporary payment for and delivery of Delivery Amounts from such New Fields, the pricing and/or delivery location, as applicable, set forth below: (i) If the delivery location has not been so agreed or determined by arbitration, the delivery location during the New Field Pre-Agreement Period shall be the location at which Delivery Amounts produced from such New Field pass from equipment or locations owned or controlled by PXP, or owned or controlled by a third party designated to make delivery on behalf of PXP. (ii) If the pricing has not been so agreed or determined by arbitration, the pricing during the New Field Pre-Agreement Period shall be determined as if such New Field belonged to the Posting Group whose “Specified Gravity” under Exhibit 3 is closest to the average gravity of the Delivery Amounts then being produced from such Subject Field (and if two such Posting Groups have Specified Gravities that are equally close to such average gravity, then the Posting Group with the higher Specified Gravity shall apply for purposes of this clause). From and after the termination of such New Field Pre-Agreement Period, the pricing and delivery location agreed by the Parties (or selected by the Arbitrator, as applicable), shall thenceforth apply subject to the terms of this Agreement. If the pricing provisions applied during the New Field Pre-Agreement Period differ from those following the New Field Pre-Agreement Period as a result of the mutual agreement of the Parties or the decision of the Arbitrator, in each case pursuant to this Section, then the Parties shall account for such difference in pricing in the next invoice from CoP pursuant to this Agreement, which accounting shall be in the form of a credit or debit and which will include interest from the date such New Field Pre-Agreement Period prices were paid until the date of such invoice, calculated at the interest rate provided in Section 4.2. If any fields or leases acquired or developed by PXP would constitute a Subject Field pursuant to this Section 2.1(d) but for the existence of restrictions or prohibitions contained in agreements existing or effective at the time of such acquisition, then upon the termination of such restrictions, prohibitions or agreements, such fields and leases shall then be subject to this Section as if the date of such termination was the date of acquisition.

Additional Subject Fields. To the extent not otherwise restricted or prohibited by agreements existing or effective at the time of such acquisition or development, and in all cases subject to such agreements, all fields and leases in the State of California, or located in California state waters or Federal waters offshore of the State of California, that PXP ERG acquires or develops during the term of this Agreement shall constitute Subject Fields effective as of the date of such acquisition or development, provided that PXP gives written notice of the pending acquisition or development of such a field or lease as soon as possible prior to its acquisition or development and CoP has thirty (30) Days from receipt of such notice to notify PXP in writing whether CoP elects to reject said field or lease based on its determination that notwithstanding its exercise of commercially reasonable efforts it will not be able to process the Sales Volume expected to be produced from such field or lease at, and/or transport such Sales Volume to, one of CoP’s California refineries, in which case such field or lease shall not be deemed to be or have been a “Subject Field.” If CoP fails to respond in such time period the field or lease will be deemed to be a “Subject Field.” . The pricing and delivery location for Delivery Amounts produced from such additional fields and leases (the “New Fields”) shall be as mutually agreed by the Parties or as otherwise determined pursuant hereto. For purposes of the foregoing sentence, with respect to fields and leases located within the geographic boundaries of existing Subject Fields or that are otherwise considered by the applicable regulatory authority to be a part of a field included within a current Subject Field, and provided that the Sales Volumes produced from such fields and leases is of Substantially the Same Quality as that produced from such Subject Field, then the Parties shall be deemed to have agreed that the pricing and delivery location for Delivery Amounts produced from such fields and leases shall be the same as that for such Subject Field. For purposes of this Agreement, Sales Volumes shall have “Substantially the Same Quality” as other Sales Volumes if its sulfur sulphur content does not vary from the other by more than 1% by weight, its total acid number (or “TAN”) does not exceed 0.3 mg weight and if its gravity does not vary from the other by more than 5 degrees API. If the Parties fail to agree, and are not otherwise deemed to have agreed, on the pricing and/or delivery location for Delivery Amounts produced from such fields and leases the New Fields on or before the 30th calendar day following the acquisition or development of such fields or leases by PXPERG, then the Parties shall refer the determination of such pricing and delivery location to arbitration pursuant to Section 10.1, and upon such determination, such pricing and/or delivery location shall thenceforth apply to such fields and leasesthe New Fields. During the period, if any, commencing with the date such fields and leases constitute Subject Fields (the “New Fields”) and ending upon the last Day of the last Delivery Month ending prior to the agreement of the Parties (or the decision of the Arbitrator, as applicable) as to pricing and/or delivery location, as applicable (the “New Field Pre-Agreement Period”), the Parties shall use, for purposes of temporary payment for and delivery of Delivery Amounts from such New Fields, the pricing and/or delivery location, as applicable, set forth below: (i) If the delivery location has not been so agreed or determined by arbitration, the delivery location during the New Field Pre-Agreement Period shall be the location at which Delivery Amounts produced from such New Field pass from equipment or locations owned or controlled by PXPERG, or owned or controlled by a third party designated to make delivery on behalf of PXPERG. (ii) If the pricing has not been so agreed or determined by arbitration, the pricing during the New Field Pre-Agreement Period shall be determined as if such New Field belonged to the Posting Group Subject Field whose “Specified Gravity” under Exhibit 3 API gravity is generally closest to the average gravity of the Delivery Amounts then being produced from such Subject Field (and if two such Posting Groups have Specified Gravities that are equally close to such average gravity, then the Posting Group with the higher Specified Gravity shall apply for purposes of this clause)New Field. From and after the termination of such New Field Pre-Agreement Period, the pricing and delivery location agreed by the Parties (or selected by the Arbitrator, as applicable), shall thenceforth apply subject to the terms of this Agreement. If the pricing provisions applied during the New Field Pre-Agreement Period differ from those following the New Field Pre-Agreement Period as a result of the mutual agreement of the Parties or the decision of the Arbitrator, in each case pursuant to this Section, then the Parties shall account for such difference in pricing in the next invoice from CoP ConocoPhillips pursuant to this Agreement, which accounting shall be in the form of a credit or debit and which will include interest from the date such New Field Pre-Agreement Period prices were paid until the date of such invoice, calculated at the interest rate provided in Section 4.2. If any fields or leases acquired or developed by PXP ERG would constitute a Subject Field pursuant to this Section 2.1(d) but for the existence of restrictions or prohibitions contained in agreements existing or effective at the time of such acquisition, then upon the termination of such restrictions, prohibitions or agreements, such fields and leases shall then be subject to this Section as if the date of such termination was the date of acquisition.