Common use of Operation of the Mortgaged Property Clause in Contracts

Operation of the Mortgaged Property. Whether or not the Borrower is the operator of the Mortgaged Property, the Borrower will, at the Borrower’s own expense, (a) do all things necessary to keep unimpaired the Borrower’s rights in the Mortgaged Property (subject to any permitted abandonment provisions hereinbelow), (b) cause the lands described in Exhibit A to be maintained, developed, protected against drainage, and continuously operated for the production of hydrocarbons in a good and workmanlike manner as would a prudent operator, and in accordance with generally accepted practices and applicable operating agreements, and (c) cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe and comply with all terms and provisions, express or implied, of the Mineral Properties, and all agreements and contracts of any type relating to the Mortgaged Property, in order to keep the same in full force and effect, including maintenance of productive capacity of each well or unit comprising the Mortgaged Property, and will not, without the prior written consent of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness); provided, however, that the Borrower may, to the extent expressly required by the terms of any such lease under a “▇▇▇▇ clause” or similar provision, or to the extent otherwise required by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the Lender, the Borrower will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (or properties unitized therewith) so long as such well is capable (or is subject to being made capable through drilling, reworking or other operations which it would be commercially feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness but considering the cost of such drilling, reworking and other operations). The Borrower will not without the express prior written consent of the Lender elect not to participate in a proposed operation on the Mortgaged Property where the effects of such election would be the forfeiture either temporarily (i.e., until a certain sum of money is received out of the forfeited interest) or permanently of any interest in the Mortgaged Property.

Operation of the Mortgaged Property. Whether So long as the Indebtedness or any part thereof remains unpaid, and whether or not the Borrower Mortgagor is the operator of the Mortgagor’s Mortgaged Property, the Borrower willMortgagor shall, at the Borrower’s its own expense, (a) : 2.5.1 do all things necessary to keep unimpaired the BorrowerMortgagor’s rights in the Mortgaged Property and not, except (subject i) in the ordinary course of business or (ii) to any permitted abandonment provisions hereinbelow)the extent expressly provided in the Credit Agreement, (bx) enter into any operating agreement with respect to the Mortgaged Property, (y) abandon any well, or (z) forfeit, surrender or release any oil and gas lease or any rights in the Mortgaged Property, without the prior written consent of the Administrative Agent; 2.5.2 cause the lands described in Exhibit A to be maintained, developed, protected against drainage, and continuously operated for the production of hydrocarbons Hydrocarbons in a good and workmanlike manner as would a prudent operator, and in accordance with generally accepted practices and practices, applicable operating agreements, and (c) all applicable federal, state and local laws, rules and regulations, excepting those being contested in good faith; Exhibit F 2.5.3 cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe ; 2.5.4 cause the Operating Equipment to be kept in good and comply effective operating condition and all repairs, renewals, renovations, replacements, additions and improvements thereof or thereto, needful to the production of Hydrocarbons from the lands described in Exhibit A, to be promptly made as would a prudent operator; 2.5.5 cause the Mortgaged Property to be kept free and clear of liens, charges and encumbrances of every character, other than (1) the lien and security interest hereof, (2) taxes constituting a lien but not due and payable, (3) defects or irregularities in title, and liens, charges or encumbrances, which are not such as to interfere materially with all terms and provisionsthe development, express operation or implied, value of the Mineral PropertiesMortgaged Property and not such as to affect materially title thereto, (4) those set forth or referred to in Exhibit A, (5) those being contested by the Mortgagor in good faith in such manner as not to jeopardize the Trustee’s and all agreements the Lenders’ rights in and contracts of any type relating to the Mortgaged Property, (6) other Permitted Encumbrances, (7) liens and security interest securing the First Lien Facility and (8) those consented to in order to keep writing by the Administrative Agent; and 2.5.6 carry insurance with financially sound and reputable insurance companies and in amounts and covering such risks as are in accordance with normal industry practice for companies engaged in similar businesses and owning similar properties in the same general areas in full force and effect, including maintenance of productive capacity of each well or unit comprising the Mortgaged Property, and will not, without the prior written consent of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness); provided, however, that the Borrower may, to the extent expressly required by the terms of any such lease under a “▇▇▇▇ clause” or similar provision, or to the extent otherwise required by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the Lender, the Borrower will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (or properties unitized therewith) so long as such well is capable (or is subject to being made capable through drilling, reworking or other operations which it would be commercially feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness but considering the cost of such drilling, reworking and other operations). The Borrower will not without the express prior written consent of the Lender elect not to participate in a proposed operation on the Mortgaged Property where the effects of such election would be the forfeiture either temporarily (i.e., until a certain sum of money is received out of the forfeited interest) or permanently of any interest in the Mortgaged Propertylocated.

Operation of the Mortgaged Property. Whether So long as the Indebtedness or not the Borrower is the operator of the Mortgaged Propertyany part thereof remains unpaid, the Borrower willMortgagor shall, at the BorrowerMortgagor’s own expense, : (a) do Do all things necessary that a prudent operator, if Mortgagor is the operator, similarly situated would do to keep keep, or cause to be kept, in full force and effect, the Leases and Units and to keep, or cause to be kept, unimpaired the BorrowerMortgagor’s rights in the Mortgaged Property (subject to and not, except as would be done by a prudent operator similarly situated, abandon any permitted abandonment provisions hereinbelow)well or forfeit, surrender or release any Lease or Unit or any rights in the Mortgaged Property without the prior written consent of the Mortgagee; (b) cause Cause the lands described in Exhibit A Lands to be reasonably maintained, developed, protected against drainage, and continuously operated for the production of hydrocarbons Hydrocarbons in a good and workmanlike manner as would a prudent operator, if the Mortgagor is the “operator” or owner, if the Mortgagor is a non-operating working interest owner, similarly situated, and in accordance with generally accepted practices in the oil and gas industry, applicable operating agreements, all covenants (both expressed and implied), terms and conditions contained in any assignment or farmout agreement under or through which an interest in the Leases or Units is now held, and all applicable federal, state and local laws, rules and regulations, excepting those being contested in good faith; (c) To the extent Mortgagor is the operator or the holder of working interests in the Leases, cause to be paid, promptly as and when due and payable, all applicable rentals and royalties payable in with respect of to the Mortgaged PropertyProperty and cause to be paid, in accordance with the Mortgagor’s current practices, the Mortgagor’s share of all applicable costs and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe , excepting those being contested in good faith; (d) To the extent Mortgagor is the operator, cause the Operating Equipment to be maintained in the same manner as would be maintained by a prudent operator similarly situated; (e) Cause Mortgagor’s interest in the Mortgaged Property to be kept free and comply clear of Liens and charges of every character, other than Permitted Encumbrances; (f) Cause to be paid in accordance with ▇▇▇▇▇▇▇▇▇’s current payment practices (if any) before the same become past due, all terms bills for actual labor and provisionsmaterial, express or implied, of the Mineral Properties, and all agreements and contracts of any type relating with respect to the Mortgaged Property, never to permit to be fixed thereon any lien, even though inferior to the lien hereof, for any such bills which may be legally due and payable, and never to permit to be created or to exist, in order respect of any of the Mortgaged Property, any other or additional lien on a parity with or superior to keep the same in full force lien hereof; (g) To the extent the Mortgagor is operator, permit the Mortgagee, its agents and effectrepresentatives, including maintenance of productive capacity of each well or unit comprising at their own risk, after advance notice to go upon, examine, inspect and remain on the Mortgaged Property, and will not, without to go upon the prior written consent of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness); provided, however, that the Borrower may, to the extent expressly required by the terms of any such lease under a “▇▇▇▇▇▇▇ clause” or similar provision, or to the extent otherwise required by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the Lender, the Borrower will not abandon or consent to the abandonment floor of any well producing from the Mortgaged Property (Well or properties unitized therewith) so long as such well is capable (▇▇▇▇▇ at any time drilled or is subject being drilled thereon, and to being made capable through drillingstrap, reworking or other operations which it would be commercially feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness but considering the cost of such drillinggauge, reworking measure and other operations). The Borrower will not without the express prior written consent of the Lender elect not to participate in a proposed operation inspect any and all tanks at any time on the Mortgaged Property where or holding oil, gasoline or casinghead gasoline therefrom; and the effects Mortgagor shall do all things reasonably necessary or proper to enable the holder hereunder to exercise said rights ; and (h) Mortgagor shall obtain and maintain insurance and provide Mortgagee with copies of such election would be certificates of insurance to the forfeiture either temporarily (i.e., until a certain sum of money is received out extent required under Section 5.05 of the forfeited interest) or permanently of any interest Credit Agreement. The representations and warranties in this Section 2.7 apply to all the Mortgaged Property, but no breach of this Section 2.7 is actionable by the Mortgagee unless the breach or breaches affect properties having an aggregate value of $100,000.00 and such breach or breaches individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

Operation of the Mortgaged Property. Whether or not the Borrower Mortgagor is the operator of the Mortgaged Property, the Borrower Mortgagor will, at the Borrower’s Mortgagor's own expense, (a) do all things necessary to keep unimpaired the Borrower’s Mortgagor's rights in the Mortgaged Property (subject to any permitted abandonment provisions hereinbelow), (b) use its best efforts to cause the lands described in Exhibit A "A" to be maintained, developed, protected against drainage, and continuously operated for the production of hydrocarbons in a good and workmanlike manner as would a prudent operator, and in accordance with generally accepted practices and applicable operating agreements, and (c) cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower Mortgagor will observe and comply with all terms and provisions, express or implied, of the Mineral Properties, and all agreements and contracts of any type relating to the Mortgaged Property, in order to keep the same in full force and effect, including including, without limitation, maintenance of productive capacity of each well or unit comprising the Mortgaged Property, and will not, without the prior written consent, which consent shall not be unreasonably withheld, of the LenderMortgagee, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on in the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the IndebtednessMortgage); provided, however, however that the Borrower Mortgagor may, to the extent expressly required by the terms of any such lease under a “▇▇▇▇ "Pugh clause” " or similar provision, or to the extent otherwise required otherwis▇ ▇▇quired by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the LenderMortgagee, the Borrower which consent shall not be unreasonably withheld, Mortgagor will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (or properties unitized therewith) so long as such well is capable (or is subject to being made capable through drilling, reworking or other operations which it would be commercially feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness but considering the cost of such drilling, reworking and other operations). The Borrower Mortgagor will not without the express prior written consent of the Lender Mortgagee, which consent shall not be unreasonably withheld, elect not to participate in a proposed operation on the Mortgaged Property where the effects of such election would be the forfeiture either temporarily (i.e., until a certain sum of money is received out of the forfeited interest) or permanently of any interest in the Mortgaged Property.

Operation of the Mortgaged Property. Whether So long as the Indebtedness or any part thereof remains unpaid, and whether or not the Borrower Mortgagor is the operator of the Mortgaged Property, the Borrower willMortgagor shall, at the Borrower’s Mortgagor's own expense, : (a) do Do or cause to be done all things necessary to keep unimpaired the Borrower’s Mortgagor's rights in the Mortgaged Property (subject to and not, except in the ordinary course of business, abandon any permitted abandonment provisions hereinbelow)well or forfeit, surrender or release any oil and gas lease or any rights in the Mortgaged Property; (b) cause Cause the lands described in Exhibit A to be maintained, developed, protected against drainage, and continuously operated for the production of hydrocarbons Hydrocarbons in a good and workmanlike manner as would a prudent operator, and in accordance with generally accepted practices and practices, applicable operating agreements, and all applicable federal, state and local laws, rules and regulations, excepting those being contested in good faith; (c) cause Cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe ; (d) Cause the Operating Equipment to be kept in good and comply with all terms and provisions, express or implied, of the Mineral Propertieseffective operating condition, and all agreements repairs, renewals, replacements, additions and contracts improvements thereof or thereto, and needful to the production of any type relating Hydrocarbons from the lands described in Exhibit A, to be promptly made; (e) Cause the Mortgaged Property to be kept free and clear of liens, charges and encumbrances of every character, other than (l) the lien hereof, (2) taxes constituting a lien but not due and payable, (3) defects or irregularities in title, and liens, charges or encumbrances, which are not such as to interfere materially with the development, operation or value of the Mortgaged Property and not such as to affect materially title thereto, (4) those being contested by the Mortgagor in good faith and in such manner as not to jeopardize the Mortgagee's rights in and to the Mortgaged Property, and (5) those consented to in order writing by the Mortgagee; and (f) Carry with standard insurance companies and in amounts satisfactory to keep the Mortgagee the following public liability and property damage insurance in respect of all activities in which the Mortgagor might incur personal liability for the death of or injury to an employee or third person, or damage to or destruction of another's property; and (2) to the extent such insurance is carried by others engaged in similar undertakings in the same general areas in full force and effect, including maintenance of productive capacity of each well or unit comprising which the Mortgaged PropertyProperty is located, insurance in respect of the Operating Equipment, against loss or damage by fire, lightning, hail, tornado, flood, explosion and will notother similar risks, without with loss payable endorsements in favor of the Mortgagee, as its interests may appear and a provision for maximum time for prior written consent notice to the Mortgagee of cancellation; and the Mortgagee may apply any part or all proceeds of such insurance when it may receive the same toward part or full satisfaction of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (Indebtedness whether or not such well is located on the Mineral Properties)then due, or located on any unit containing may at its sole option deliver all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness); provided, however, that the Borrower may, proceeds to the extent expressly required by Mortgagor for the terms repair or replacement of any such lease under a “▇▇▇▇ clause” or similar provision, or to the extent otherwise required by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent parts of the Lender, the Borrower will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (as may have been damaged or properties unitized therewith) so long as such well is capable (or is subject to being made capable through drilling, reworking or other operations which it would be commercially feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness but considering the cost of such drilling, reworking and other operations). The Borrower will not without the express prior written consent of the Lender elect not to participate in a proposed operation on the Mortgaged Property where the effects of such election would be the forfeiture either temporarily (i.e., until a certain sum of money is received out of the forfeited interest) or permanently of any interest in the Mortgaged Propertydestroyed.

Operation of the Mortgaged Property. Whether So long as the Indebtedness or any part thereof remains unpaid, and whether or not the Borrower Mortgagor is the operator of the Mortgagor’s Mortgaged Property, the Borrower willMortgagor shall, at the Borrower’s its own expense, (a) : 2.5.1 do all things necessary to keep unimpaired the BorrowerMortgagor’s rights in the Mortgaged Property and not, except (subject i) in the ordinary course of business or (ii) to any permitted abandonment provisions hereinbelow)the extent expressly provided in the Credit Agreement, (bx) enter into any operating agreement with respect to the Mortgaged Property, (y) abandon any well, or (z) forfeit, surrender or release any oil and gas lease or any rights in the Mortgaged Property, without the prior written consent of the Trustee; 2.5.2 cause the lands described in Exhibit A to be maintained, developed, protected against drainage, and continuously operated for the production of hydrocarbons Hydrocarbons in a good and workmanlike manner as would a prudent operator, and in accordance with generally accepted practices and practices, applicable operating agreements, and (c) all applicable federal, state and local laws, rules and regulations, excepting those being contested in good faith; 2.5.3 cause to be paid, promptly as and when due and payable, all rentals and royalties payable in respect of the Mortgaged Property, and all expenses incurred in or arising from the operation or development of the Mortgaged Property. The Borrower will observe ; 2.5.4 cause the Operating Equipment to be kept in good and comply effective operating condition and all repairs, renewals, renovations, replacements, additions and improvements thereof or thereto, needful to the production of Hydrocarbons from the lands described in Exhibit A, to be promptly made as would a prudent operator; 2.5.5 cause the Mortgaged Property to be kept free and clear of liens, charges and encumbrances of every character, other than (1) the lien and security interest hereof, (2) taxes constituting a lien but not due and payable, (3) defects or irregularities in title, and liens, charges or encumbrances, which are not such as to interfere materially with all terms and provisionsthe development, express operation or implied, value of the Mineral PropertiesMortgaged Property and not such as to affect materially title thereto, (4) those set forth or referred to in Exhibit A, (5) those being contested by the Mortgagor in good faith in such manner as not to jeopardize the Trustee’s and all agreements the Lenders’ rights in and contracts of any type relating to the Mortgaged Property, (b) other Permitted Encumbrances and (7) those consented to in order to keep writing by the Administrative Agent; and 2.5.6 carry insurance with financially sound and reputable insurance companies and in amounts and covering such risks as are in accordance with normal industry practice for companies engaged in similar businesses and owning similar properties in the same general areas in full force and effect, including maintenance of productive capacity of each well or unit comprising the Mortgaged Property, and will not, without the prior written consent of the Lender, surrender, abandon or release (or otherwise reduce its rights under) any such lease, in whole or in part, so long as any well situated thereon (whether or not such well is located on the Mineral Properties), or located on any unit containing all or any part of such leases, is capable (or is subject to being made capable through drilling, reworking or other operations which it would be economically feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness); provided, however, that the Borrower may, to the extent expressly required by the terms of any such lease under a “▇▇▇▇ clause” or similar provision, or to the extent otherwise required by law, confirm to the lessor thereof that the lease has by its terms terminated as to any specified portion thereof on which no such well exists. Without the express prior written consent of the Lender, the Borrower will not abandon or consent to the abandonment of any well producing from the Mortgaged Property (or properties unitized therewith) so long as such well is capable (or is subject to being made capable through drilling, reworking or other operations which it would be commercially feasible to conduct) of producing hydrocarbons in commercial quantities (as determined without considering the effect of this Mortgage or the Indebtedness but considering the cost of such drilling, reworking and other operations). The Borrower will not without the express prior written consent of the Lender elect not to participate in a proposed operation on the Mortgaged Property where the effects of such election would be the forfeiture either temporarily (i.e., until a certain sum of money is received out of the forfeited interest) or permanently of any interest in the Mortgaged Propertylocated.