Common use of Limitation on Hedging Clause in Contracts

Limitation on Hedging. No Credit Party shall, nor shall it permit any of its Subsidiaries to enter into or maintain a position in any Hedging Arrangement which, (a) is for speculative purposes or is for any purpose other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Subsidiaries’ operations; (b) is secured (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit Agreement) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to put up money, assets, letters of credit, or other security or includes any deferred premium payment; (c) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months following any date of determination: (i) covers notional volumes in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of 85% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iii) covers notional volumes in excess of 85% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; (e) with respect to Hedging Arrangements related to commodities for the 37th through 60th month following any date of determination: (i) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; or (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; (ii) results in the aggregate notional amount of all such Hedging Arrangements exceeding 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; (iii) is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement is made is rated lower than A by S & P or A2 by ▇▇▇▇▇’▇; (iv) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, is with a counterparty that is not a Lender or an Affiliate of a Lender; or (v) has a floating rate index that does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gas, crude oil or natural gas liquids, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such that, at such time, future hedging volumes will otherwise comply with this Section 6.15 on a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as of the date of such certificate the Borrower is in compliance with this Section 6.15.

Limitation on Hedging. No Credit Party shall, nor shall it permit any of its Subsidiaries to enter into to, (a) purchase, assume, or maintain hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement which, for speculative purposes; or (ab) be party to or otherwise enter into any Hedging Arrangement which (i) is entered into for speculative purposes or is for any purpose reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Subsidiaries’ operations; , or (bii) (A) covers notional volumes in excess of 90% of the anticipated production of gas volumes attributable to PDP Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 2.2, (B) covers notional volumes in excess of 90% of the anticipated production of natural gas liquids volumes attributable to PDP Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 2.2 or (C) with respect to Hedging Arrangements entered into after the Closing Date, covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Credit Parties) in excess of 90% of the anticipated production of oil volumes attributable to PDP Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 2.2 for each month during the period such Hedging Arrangement is in effect; provided, however, that the volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps, or (iii) is longer than 60 months in duration from the date such Hedging Arrangement is entered into, or (iv) is secured (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit AgreementCounterparty) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to put up money, assets, letters of credit, assets or other security or includes any deferred premium payment; . Furthermore, no Credit Party shall be party to or otherwise enter into any Hedging Arrangement which relates to interest rates if (cA) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months following any date of determination: (i) covers notional volumes in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of 85% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iii) covers notional volumes in excess of 85% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; (e) with respect to Hedging Arrangements related to commodities for the 37th through 60th month following any date of determination: (i) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; or (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; , (iiB) results in the aggregate notional amount of all such Hedging Arrangements exceeding exceeds 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; to be hedged by such Hedging Arrangements, (iiiC) such Hedging Arrangement is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement is made is rated lower than A by S & P or A2 by ▇▇▇▇▇’▇; , (ivD) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, such Hedging Arrangement is with a counterparty that is not a Lender or an Affiliate of a Lender; or , or (vE) has a the floating rate index that of such Hedging Arrangement does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gas, crude oil or natural gas liquids, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such that, at such time, future hedging volumes will otherwise comply with this Section 6.15 on a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as of the date of such certificate the Borrower is in compliance with this Section 6.15.

Limitation on Hedging. No Credit Party shall, nor shall it permit any of its Subsidiaries to enter into or maintain a position in any Hedging Arrangement which, (a) is for speculative purposes or is for any purpose other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Subsidiaries’ operations; (b) is secured (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit AgreementCounterparty) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to put up money, assets, letters of credit, or other security or includes any deferred premium payment; (c) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months following any date of determination: (i) covers notional volumes in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (ii) covers notional volumes in excess of 85% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (iii) covers notional volumes in excess of 85% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; (e) with respect to Hedging Arrangements related to commodities for the 37th through 60th month following any date of determination: (i) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing PDP Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (ii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing PDP Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (iii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing PDP Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; or (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; (ii) results in the aggregate notional amount of all such Hedging Arrangements exceeding 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; (iii) is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement is made is rated lower than A by S & P or A2 by ▇▇▇▇▇’▇; (iv) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, is with a counterparty that is not a Lender or an Affiliate of a Lender; or (v) has a floating rate index that does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement. ; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gas, crude oil or natural gas liquids, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such that, at such time, future hedging volumes will otherwise comply with this Section 6.15 on a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as of the date of such certificate the Borrower is in compliance with this Section 6.15.” (k) Section 6.19 of the Credit Agreement is amended to read in its entirety as follows:

Limitation on Hedging. No Credit Loan Party shall: (a) purchase, nor shall it permit assume, or hold (subject to the cure right set forth in the last proviso in Section 6.15(b) below) a speculative position in any of its Subsidiaries to commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (b) be party to, enter into, or otherwise maintain a position (subject to the cure right set forth in the last proviso in this Section 6.15(b)) any Hedging Arrangement which,: (ai) is entered into for speculative purposes or is for any purpose reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s 's or its Restricted Subsidiaries’ ' operations;, or (bii) is secured covers (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit Agreement) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any calculated separately for each type of its Subsidiaries to put up moneyHydrocarbon), assets, letters of credit, or other security or includes any deferred premium payment; (c) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months two years following any date of determination: (iA) covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Engineering Reserve Report under Section 5.2(c);for each month during the period such Hedging Arrangement is in effect, (iiB) covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) in excess of 85% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Engineering Reserve Report under Section 5.2(c);for each month during the period such Hedging Arrangement is in effect, or (iiiC) covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) in excess of 85% of the anticipated production of oil volumes attributable to Proven Reserves the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, as reflected in the most recently delivered Engineering Reserve Report under Section 5.2(c)for each month during the period such Hedging Arrangement is in effect; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps (it being understood, however, that the notional volumes associated with such put options and related calls, collars, or swaps;, shall not be double counted), or (eiii) with respect to Hedging Arrangements related to commodities covers (calculated separately for each type of Hydrocarbon), for the 37th through 60th month third, fourth and fifth years following any date of determination: (iA) covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) in excess of the greater of (Ax) 85% of the anticipated production of gas volumes attributable to PDP Reserves of the Borrower and its Restricted Subsidiaries and (y) 65% of the anticipated production of gas volumes attributable to total Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing of the Borrower and its Restricted Subsidiaries, in each case as reflected in the most recently delivered Engineering Reserve Report under Section 5.2(c);for each month during the period such Hedging Arrangement is in effect, (iiB) covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) in excess of the greater of (Ax) 85% of the anticipated production of natural gas liquids volumes attributable to PDP Reserves of the Borrower and its Restricted Subsidiaries and (y) 65% of the anticipated production of natural gas liquids volumes attributable to total Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing Reserves of the Borrower and its Restricted Subsidiaries, in each case as reflected in the most recently delivered Engineering Reserve Report under Section 5.2(c);for each month during the period such Hedging Arrangement is in effect, or (iiiC) covers notional volumes (in the aggregate, taking into account all other Hedging Arrangements entered into by the Loan Parties) in excess of the greater of (Ax) 85% of the anticipated production of oil volumes attributable to PDP Reserves of the Borrower and its Restricted Subsidiaries and (y) 65% of the anticipated production of oil volumes attributable to total Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing Reserves of the Borrower and its Restricted Subsidiaries, in each case as reflected in the most recently delivered Engineering Reserve Report under Section 5.2(c)for each month during the period such Hedging Arrangement is in effect; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; or swaps (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; (ii) results in it being understood, however, that the aggregate notional amount of all such Hedging Arrangements exceeding 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; (iii) is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement is made is rated lower than A by S & P or A2 by ▇▇▇▇▇’▇; (iv) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, is with a counterparty that is not a Lender or an Affiliate of a Lender; or (v) has a floating rate index that does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gasassociated with such put options and related calls, crude oil collars, or natural gas liquidsswaps, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”not be double counted), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such that, at such time, future hedging volumes will otherwise comply with this Section 6.15 on a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as of the date of such certificate the Borrower is in compliance with this Section 6.15.or

Limitation on Hedging. No Credit Party shallThe Borrower shall not, nor shall it permit any of its Subsidiaries to enter into or maintain a position in any Hedging Arrangement which,to: (a) is purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedge Contract for speculative purposes purposes, or (b) be party to or otherwise enter into any Hedge Contract which (i) is entered into for any purpose reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Subsidiaries’ 's operations; (b) is secured (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit Agreement) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to put up money, assets, letters of credit, or other security or includes any deferred premium payment; (c) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months following any date of determination: (i) covers notional volumes in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of 8590% of the anticipated production of gas volumes, in excess of 90% of the anticipated production of natural gas liquids volumes or in excess of 90% of the anticipated production of oil volumes, in each of the foregoing, during the period such Hedge Contract is in effect and attributable to Proven PDP Reserves of the Borrower and its Subsidiariesthe Guarantors, as reflected in (A) the most recently delivered Engineering Report under Section 5.2(c); 5.06(h)(i) or (iiiB) covers notional volumes a statement, in excess of 85% of form and substance satisfactory to the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its SubsidiariesAdministrative Agent, as reflected in the most recently delivered by an Independent Engineer (which Engineering Report under Section 5.2(cor statement from the Independent Engineer may be updated in good faith by the Borrower); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; , (e) with respect to Hedging Arrangements related to commodities for the 37th through 60th month following any date of determination: (iiii) covers fluctuations in interest rates (including conversions from floating interest rates to fixed interest rates) for notional volumes principal amounts in excess of the greater of (A) 65100% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing Debt for borrowed money of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iiiv) covers notional volumes in excess of the has a term greater of than five years, or (A) 65% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; or (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; (ii) results in the aggregate notional amount of all such Hedging Arrangements exceeding 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; (iiiv) is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement contract is made is has long-term obligations rated lower less than A A- or A3, respectively, by S & P S&P or A2 by ▇▇▇▇▇’'▇; (iv) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, is with a counterparty that is not a Lender or an Affiliate of a Lender; or (vc) has a floating rate index that does not generally match the index used be party to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gas, crude oil or natural gas liquids, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such thatenter into any Hedge Contract (i) which is secured other than Hedge Contracts with Lender Swap Counterparties which are secured by the Collateral pursuant to the Loan Documents or (ii) which obligates any Loan Party or Subsidiary to any margin call requirements including any requirement to post cash collateral, at such time, future hedging volumes will otherwise comply with this Section 6.15 on property collateral or a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as letter of the date of such certificate the Borrower is in compliance with this Section 6.15credit.

Limitation on Hedging. No Credit Party shallThe Borrower shall not, nor shall it permit any of its Subsidiaries to enter into or maintain a position in any Hedging Arrangement which,to: (a) is purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedge Contract for speculative purposes purposes, or (b) be party to or otherwise enter into any Hedge Contract which (i) is entered into for any purpose reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Subsidiaries’ operations; (b) is secured (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit Agreement) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to put up money, assets, letters of credit, or other security or includes any deferred premium payment; (c) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months following any date of determination: (i) covers notional volumes in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of 8590% of the anticipated production of gas volumes, in excess of 90% of the anticipated production of natural gas liquids volumes or in excess of 90% of the anticipated production of oil volumes, in each of the foregoing, during the period such Hedge Contract is in effect and attributable to Proven PDP Reserves of the Borrower and its Subsidiariesthe Guarantors, as reflected in (A) the most recently delivered Engineering Report under Section 5.2(c); 5.06(g)(i) or (iiiB) covers notional volumes a statement, in excess of 85% of form and substance satisfactory to the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its SubsidiariesAdministrative Agent, as reflected in the most recently delivered Engineering Report under Section 5.2(c)by an Independent Engineer; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; (e) with respect to Hedging Arrangements related to commodities for the 37th through 60th month following any date of determination: (i) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (ii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); (iii) covers notional volumes in excess of the has a term greater of than five years, or (A) 65% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c); provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps; or (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; (ii) results in the aggregate notional amount of all such Hedging Arrangements exceeding 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; (iiiiv) is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement contract is made is has long-term obligations rated lower less than A A- or A3, respectively, by S & P S&P or A2 by ▇▇▇▇▇’▇; (iv) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, is with a counterparty that is not a Lender or an Affiliate of a Lender; or (vc) has a floating rate index that does not generally match the index used be party to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gas, crude oil or natural gas liquids, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such thatenter into any Hedge Contract (i) which is secured other than Hedge Contracts with Lender Swap Counterparties which are secured by the Collateral pursuant to the Loan Documents or (ii) which obligates any Loan Party or Subsidiary to any margin call requirements including any requirement to post cash collateral, at such time, future hedging volumes will otherwise comply with this Section 6.15 on property collateral or a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as letter of the date of such certificate the Borrower is in compliance with this Section 6.15credit.

Limitation on Hedging. No Credit Party shall, nor shall it permit any of its Subsidiaries to enter into or maintain a position in any Hedging Arrangement which, (a) is for speculative purposes or is for any purpose other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Subsidiaries’ operations; (b) is secured (unless such Hedging Arrangement is with a Swap Counterparty as defined in the First Lien Credit AgreementCounterparty) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to put up money, assets, letters of credit, or other security or includes any deferred premium payment; (c) with respect to Hedging Arrangements related to commodities, is longer than 60 months in duration from the date such Hedging Arrangement is entered into; (d) with respect to Hedging Arrangements related to commodities for the first 36 months following any date of determination: (i) covers notional volumes in excess of 85% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (ii) covers notional volumes in excess of 85% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (iii) covers notional volumes in excess of 85% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars collars, or swaps; (e) with respect to Hedging Arrangements related to commodities for the 37th through 60th month following any date of determination: (i) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of gas volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of gas volumes attributable to Proved Developed Producing PDP Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (ii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of natural gas liquids volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of natural gas liquids volumes attributable to Proved Developed Producing PDP Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; (iii) covers notional volumes in excess of the greater of (A) 65% of the anticipated production of oil volumes attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the anticipated production of oil volumes attributable to Proved Developed Producing PDP Reserves of the Borrower and its Subsidiaries, in each case as reflected in the most recently delivered Engineering Report under Section 5.2(c)2.2; provided, however, that the foregoing volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars collars, or swaps; or (f) with respect to Hedging Arrangements related to interest rates: (i) relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above; (ii) results in the aggregate notional amount of all such Hedging Arrangements exceeding 75% of the anticipated outstanding principal balance of the Debt under this Agreement and the First Lien Credit Agreement; (iii) is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement is made is rated lower than A by S & P or A2 by ▇▇▇▇▇’▇; (iv) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, is with a counterparty that is not a Lender or an Affiliate of a Lender; or (v) has a floating rate index that does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement; provided that, if, as of any Test Date the aggregate notional volumes of all Hedging Arrangements covering natural gas, crude oil or natural gas liquids, respectively, for any month in the fiscal quarter preceding such Test Date exceed the actual volumes of production for the Borrower and its Subsidiaries for such commodity for such month, then Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm Mountain Time on such Test Date, a statement setting forth in reasonable detail the calculation of such determination and (B) no later than 15 days after such Test Date, (1) furnish to Administrative Agent an updated Engineering Report (the “Updated Report”), (2) terminate, create off-setting positions or otherwise unwind existing Hedging Arrangements such that, at such time, future hedging volumes will otherwise comply with this Section 6.15 on a going forward basis, and (3) furnish to Administrative Agent a certificate executed by a Responsible Officer certifying that as of the date of such certificate the Borrower is in compliance with this Section 6.15.