Common use of Commodity Contracts Clause in Contracts

Commodity Contracts. Following entry of the Hedging Order, Swap Contracts entered into to hedge prices on oil, natural gas and natural gas liquids expected to be produced by the Loan Parties, provided that at all times: (i) no such contract fixes a price for a term of more than 60 months from the date that such Swap Contract is executed; (ii) other than basis differential swaps, basis hedging arrangements and any repurchases (whether effectuated via mutually agreeable close-out or purchase of offsetting options) of sold call transactions entered into prior to the Petition Date (or expirations thereof), the notional volumes for which (when aggregated with other Swap Contracts then in effect other than basis differential swaps) do not exceed, as of the date such Swap Contract is executed, (A) 90% of the reasonably anticipated projected Oil and Gas Production for each calendar month in the calendar year 2021 for each of crude oil, natural gas and natural gas liquids, calculated separately and (B) for any other time period, 80% of the reasonably anticipated projected Oil and Gas Production for each calendar month for each of crude oil, natural gas and natural gas liquids, calculated separately; (iii) each such Swap Contract is with a Lender or an Affiliate of a Lender; (iv) no such commodity Swap Contracts shall be permitted to be in a form other than (A) swap transactions covering identical volumes of crude oil, natural gas or natural gas liquids and identical months, (B) deferred premium purchased puts for volumes of crude oil, natural gas or natural gas liquids, (C) collars (other than three-way collars) covering identical volumes of crude oil, natural gas or natural gas liquids and identical months, (D) sold call transactions entered into prior to the Petition Date, (E) mutually negotiated close-out of, or purchase of offsetting options to terminate, (in whole or in part) sold call transactions entered into prior to the Petition Date, other than on a deferred premium basis or (F) basis differential swaps or basis hedging arrangements; (v) the Loan Parties shall not novate, offset or otherwise terminate any Swap Contract entered into to hedge prices on oil, natural gas and natural gas liquids expected to be produced by the Loan Parties if such action would have the effect of cancelling, offsetting or otherwise reducing positions under Required Swap Contracts (x) without the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed) or (y) pursuant to the Hedging Order; it being understood that options used to modify sold call transactions in accordance with Section 8.09(a)(iv)(D) shall be permitted, and that this provisions shall not limit the assignment or transfer or novation of any Swap Contract from one Lender or Affiliate of a Lender to another Lender or Affiliate of a Lender; and (vi) no such contract (other than a Lender Swap Contract) requires Borrower to post, or otherwise pledge as collateral, any money, assets, or other security against the event of its nonperformance prior to actual default by Borrower in performing its obligations thereunder.

Commodity Contracts. Following entry of the Hedging Order, Swap Contracts entered into to hedge prices on oil, natural gas and natural gas liquids expected to be produced by the Loan PartiesBorrower, provided that at all times: (i) no such contract fixes a price for a term of more than 60 months from the date that such Swap Contract is executed; (ii) other than basis differential swaps, basis hedging arrangements and any repurchases (whether effectuated via mutually agreeable close-out or purchase of offsetting options) of sold call transactions entered into prior to the Petition Date (or expirations thereof), the notional volumes for which (when aggregated with other Swap Contracts then in effect other than puts and floors purchased by Borrower and basis differential swapsswaps on volumes already hedged pursuant to other Swap Contracts) do not exceed, as of the date such Swap Contract is executed, : (A) 9080% of the Borrower’s aggregate reasonably anticipated projected Projected Oil and Gas Production for each calendar month during the first three (3) year period during which such Swap Contract is in effect for each of crude oil, natural gas and natural gas liquids, calculated separately; and (B) 85% of the total proved production as included in the calendar year 2021 most recently delivered Reserve Report for each month during the period starting three (3) years after such Swap Contract goes into effect for each of crude oil, natural gas and natural gas liquids, calculated separately; provided that in no event shall the aggregate notional amount of all Swap Contracts exceed 100% of the actual production for each of crude oil, natural gas and natural gas liquids, calculated separately and (B) for any other time period, 80% of in the reasonably anticipated projected Oil and Gas Production for each previous calendar month for each prior to the effectiveness of crude oil, natural gas and natural gas liquids, calculated separatelysuch Swap Contract; (iii) each such Swap Contract is with a Lender or an Affiliate of a Lender; (iv) no such commodity Swap Contracts shall be permitted to be in a form other than (A) swap transactions covering identical volumes of crude oil, natural gas or natural gas liquids and identical months, (B) deferred premium purchased puts for volumes of crude oil, natural gas or natural gas liquids, (C) collars (other than three-way collars) covering identical volumes of crude oil, natural gas or natural gas liquids and identical months, (D) sold call transactions entered into prior to the Petition Date, (E) mutually negotiated close-out of, or purchase of offsetting options to terminate, (in whole or in part) sold call transactions entered into prior to the Petition Date, other than on a deferred premium basis or (F) basis differential swaps or basis hedging arrangements; (v) the Loan Parties shall not novate, offset or otherwise terminate any Swap Contract entered into to hedge prices on oil, natural gas and natural gas liquids expected to be produced by the Loan Parties if such action would have the effect of cancelling, offsetting or otherwise reducing positions under Required Swap Contracts (x) without the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed) or (y) pursuant to the Hedging Order; it being understood that options used to modify sold call transactions in accordance with Section 8.09(a)(iv)(D) shall be permitted, and that this provisions shall not limit the assignment or transfer or novation of any Swap Contract from one Lender or Affiliate of a Lender to another Lender or Affiliate of a Lender; and (vi) no such contract (other than a Lender Swap Contract) requires Borrower to post, or otherwise pledge as collateral, any put up money, assets, or other security against the event of its nonperformance prior to actual default by Borrower in performing its obligations thereunder; and (iv) each such contract is with (i) a Lender or an Affiliate of a Lender or (ii) a counterparty who is unsecured who at the time the contract is entered into maintains a minimum debt rating of BBB or Baa2 as determined either by Standard & Poor’s Corporation or ▇▇▇▇▇’▇ Investors Service, Inc. and is otherwise reasonably acceptable to Agent. At all times, clause (a)(ii)(B) above shall be deemed to refer to the most recent Reserve Report or internally-prepared engineering data received by Agent under Section 4.02 or 4.03 hereof, as applicable. Notwithstanding the foregoing, the Borrower and its Subsidiaries may enter into (i) Swap Contracts relating to put and floor options and (ii) basis differential swaps on volumes already hedged pursuant to other Swap Contracts.