Common use of Call on Production Clause in Contracts

Call on Production. (a) On Oil - If not already reserved by another party, Seller hereby reserves, at its option, the option to buy any and all oil and other liquid hydrocarbons produced from or attributable to the Assets from the Effective Date to May 1, 2000 at 7:00 a.m. (b) Applicable price - The price to be paid shall be: (i) Seller's posted market price at the well▇ ▇▇▇ oil or condensate, or if Seller has no posted price at the well prevailing in the field where produced for substance of like grade and gravity. If there are no such posted price, the price to be paid by Seller will be the average price being paid by purchasing companies in the field or locality where the Assets are located for substance of like grade and gravity. (ii) Seller shall never be required to pay a price higher than the price allowed by State or Federal statutes or regulations in effect at the time of purchase.