Common use of Interests of Parties Clause in Contracts

Interests of Parties. 2.1 Except as otherwise provided in this Agreement, the Property shall be owned as shown on Exhibit "A" attached hereto and made a part hereof for all purposes. 2.2 Subject to the rights of Chevron U.S.A. Inc. to purchase production from the Lease and to the other provisions hereof, each Party shall own and shall have the right to receive in kind and to separately dispose of its proportionate share of the oil and gas production from the Lease which shall be delivered to such Party, at its option, at the outlet of the production facilities on the production facilities platform(s); or to its credit in the pipeline to which the well or ▇▇▇▇▇ or production facilities platform(s) may be connected. Any extra expenditure incurred in the receiving in kind or separate disposition by any Party of its proportionate share of the production shall be borne by such Party. Where a Party hereto elects to receive in kind or separately dispose of its share of production, such Party shall have the obligation to make payment of all royalties and other burdens (including the Production Payment reserved or owned by Chevron U.S.A. Inc.) attributable to the share of production taken or disposed of by such electing Party and such Party shall furnish Operator with full information regarding such royalty and other payments. In the event that a Party does not elect to receive in kind or separately dispose of its share of production and such share is sold by Operator pursuant to the provisions of Paragraph 2.3, Operator shall make the royalty and other payments on production attributable to such share, but shall not be liable to the party(s) that owns such share for any good faith failure to make any such payment properly or punctually. 2.3 In the event any Party shall fail to take in kind or separately dispose of its proportionate share of production from the Lease, Operator shall have the right, but not the obligation to purchase such production or sell it to others for the time being, at the best price obtainable which shall in no event be less than the price which Operator receives for its portion of the production from the Lease. Operator's authority to sell such production shall be revocable at the will of the owner thereof, and the term of any contract for the sale of such production shall be for no longer period than is commensurate with the minimum needs of the industry under the particular circumstances and in no event longer than one year. Any such purchase or sale by Operator shall be subject always to the right of the owner of the production to exercise at any time its right to take in kind, or separately dispose of, its share of all production not previously delivered to a purchaser. Notwithstanding the foregoing, the Parties agree to apply and be bound by the terms and provisions of the Gas Balancing Agreement in the form attached hereto as Exhibit "C" and made a part hereof for all purposes. 2.4 Each Party shall execute all division orders and contracts of sale relating to its interest in production from the Lease, or authorize execution by Operator on its behalf; provided, however, no Party shall be forced to share an available market with any other Party hereto.