Common use of Delivery Point and Pressure Clause in Contracts

Delivery Point and Pressure. 4.1 Producer, at its own expense, shall construct, equip, maintain, and operate all facilities (including, but not limited to, all necessary separation, dehydration, and/or compression) necessary to deliver Producer’s Gas to Processor at the Delivery Point at such pressure as is required and sufficient to enter Processor’s Delivery Point, but not to exceed 1,075 psig. 4.2 If the Processor provides compression for the Producer’s Gas other than Plant recompression, the Processor shall provide or cause to be provided each stage of compression for an initial fee of 6.16¢ per MCF per stage, and Producer will provide its pro rata share of fuel required for operating such compressor(s), in order that Gas dedicated hereunder will meet the pressure requirements at the Plant inlet. Commencing April 1, 1995, and each April 1st thereafter, the compression fee set forth herein will be adjusted upward or downward, in proportion to the percentage increase or decrease in the average hourly earnings of crude petroleum and Gas production workers for the last calendar year, compared to the previous calendar year, as shown by the “Index of the Average Hourly Earnings of Crude Petroleum and Gas Production Workers” as published by the Bureau of Labor Statistics of the United States Department of Labor. 4.3 The fuel used for inlet compression will be handled according to Paragraphs 10.1 or 10.6(c) depending on the source of the fuel. 4.4 Processor, at its own expense, shall construct, equip, maintain, and operate all meters and facilities necessary to measure Producer’s Gas at the Delivery Point(s); 4.5 As of the effective date, Processor has installed the initial portion of a Gathering System with a number of pipelines, trunklines, and laterals in the Contract Area as shown in Exhibit “A.” It is expected that Processor will expand the Gathering System to handle new w▇▇▇▇ which will be connected to additional Delivery Points within the Contract Area. To expeditiously handle expansion of the Gathering System, the Processor and Producer agree to the following terms: a. Producer shall provide written notice to Processor of Producer’s intent to drill a well or w▇▇▇▇ on lands within the Contract Area or lands pooled therewith and request that Processor initiate the construction of necessary pipelines and related facilities to connect the Delivery Point(s) for the well or w▇▇▇▇ to the existing Gathering System (hereinafter “pipeline expansion”). Processor shall notify Producer of the estimated costs of the right-of-way portion of the pipeline expansion, and if those costs exceed $40,000, Producer shall have ten days from receipt of notice to make a written election for Processor to proceed with the pipeline expansion or to rescind its request for the pipeline expansion. If Producer elects to proceed with the pipeline expansion, Processor may decline to construct the pipeline expansion if it determines that it would not be profitable to do so. In such event, Producer may construct the pipeline expansion at its sole cost. The pipeline expansion must meet all Processor’s specifications, and Processor will be responsible for the meter station and connection to the Gathering System. The Processor may, at its election, acquire the ownership of the pipeline expansion installed by the Producer by reimbursing Producer for the actual pipeline expansion costs with no allowance for inflation or depreciation. Producer agrees to execute all assignments or contracts deemed necessary to accomplish the transfer to Processor of title to the pipeline expansion, including rights-of-way and easements. In the event neither Processor nor Producer elect to construct the necessary pipeline expansion to connect the Delivery Point to the existing Gathering System, then this Agreement shall terminate as to the Gas from the well or w▇▇▇▇ to be connected to that Delivery Point. b. If Producer timely elects to proceed with pipeline expansion where right-of-way costs exceed $40,000 or the estimated cost does not exceed $40,000, and Processor has agreed to construct the pipeline expansion, Processor shall cause commencement of construction as soon as practicable after the later of right-of-way acquisition or commencement of drilling of the well. c. Producer shall guarantee reimbursement to Processor of the total actual cost associated with each pipeline expansion (including, but not limited to, the costs of right-of-way, construction, and materials) according to the following calculations: R = C — ($0.215 * V) Where:

Delivery Point and Pressure. 4.1 Producer, at its own expense, shall construct, equip, maintain, and operate all facilities (including, but not limited to, all necessary separation, dehydration, and/or compression) necessary to deliver Producer’s Gas to Processor at the Delivery Point at such pressure as is required and sufficient to enter Processor’s Delivery Point, but not to exceed 1,075 psig. 4.2 If the Processor provides compression for the Producer’s Gas other than Plant recompression, the Processor shall provide or cause to be provided each stage of compression for an initial fee of 6.16¢ (**) per MCF per stage, and Producer will provide its pro rata share of fuel required for operating such compressor(s), in order that Gas dedicated hereunder will meet the pressure requirements at the Plant inlet. Commencing April 1, 1995(**), and each April 1st (**) thereafter, the compression fee set forth herein will be adjusted upward or downward, in proportion to the percentage increase or decrease in the average hourly earnings of crude petroleum and Gas production workers for the last calendar year, compared to the previous calendar year, as shown by the “Index of the Average Hourly Earnings of Crude Petroleum and Gas Production Workers(**)” as published by the Bureau of Labor Statistics of the United States Department of Labor. 4.3 The fuel used for inlet compression will be handled according to Paragraphs 10.1 or 10.6(c) depending on the source of the fuel. 4.4 Processor, at its own expense, shall construct, equip, maintain, and operate all meters and facilities necessary to measure Producer’s Gas at the Delivery Point(s); 4.5 As of the effective date, Processor has installed the initial portion of a Gathering System with a number of pipelines, trunklines, and laterals in the Contract Area as shown in Exhibit “A.” It is expected that Processor will expand the Gathering System to handle new w▇▇▇▇ which will be connected to additional Delivery Points within the Contract Area. To expeditiously handle expansion of the Gathering System, the Processor and Producer agree to the following terms: a. Producer shall provide written notice to Processor of Producer’s intent to drill a well or w▇▇▇▇ on lands within the Contract Area or lands pooled therewith and request that Processor initiate the construction of necessary pipelines and related facilities to connect the Delivery Point(s) for the well or w▇▇▇▇ to the existing Gathering System (hereinafter “pipeline expansion”). Processor shall notify Producer of the estimated costs of the right-of-way portion of the pipeline expansion, and if those costs exceed $40,000(**), Producer shall have ten days from receipt of notice to make a written election for Processor to proceed with the pipeline expansion or to rescind its request for the pipeline expansion. If Producer elects to proceed with the pipeline expansion, Processor may decline to construct the pipeline expansion if it determines that it would not be profitable to do so. In such event, Producer may construct the pipeline expansion at its sole cost. The pipeline expansion must meet all Processor’s specifications, and Processor will be responsible for the meter station and connection to the Gathering System. The Processor may, at its election, acquire the ownership of the pipeline expansion installed by the Producer by reimbursing Producer for the actual pipeline expansion costs with no allowance for inflation or depreciation. Producer agrees to execute all assignments or contracts deemed necessary to accomplish the transfer to Processor of title to the pipeline expansion, including rights-of-way and easements. In the event neither Processor nor Producer elect to construct the necessary pipeline expansion to connect the Delivery Point to the existing Gathering System, then this Agreement shall terminate as to the Gas from the well or w▇▇▇▇ to be connected to that Delivery Point. b. If Producer timely elects to proceed with pipeline expansion where right-of-way costs exceed $40,000 (**) or the estimated cost does not exceed $40,000(**), and Processor has agreed to construct the pipeline expansion, Processor shall cause commencement of construction as soon as practicable after the later of right-of-way acquisition or commencement of drilling of the well. c. Producer shall guarantee reimbursement to Processor of the total actual cost associated with each pipeline expansion (including, but not limited to, the costs of right-of-way, construction, and materials) according to the following calculations: R = C — ($0.215 * V) Where:**)