RATE OF PRODUCTION. Grantor shall use its best efforts to prudently operate and produce the Subject ▇▇▇▇▇ (or, if any Subject ▇▇▇▇▇ are operated by a third party, cause the Subject ▇▇▇▇▇ to be prudently operated and produced) in accordance with the terms of the joint operating agreements and in accordance with good engineering practices and the following requirements: (i) the amount of Hydrocarbons produced from any Subject Well shall not exceed in any Month the lower of (x) the maximum amount that in the good faith judgment of the operator is capable of producing at its maximum efficient rate of flow or (y) the respective allowable rate of flow under applicable orders, rules, regulations or laws, if any; (ii) the amount of Hydrocarbons produced from the Subject ▇▇▇▇▇ shall be in the good faith judgment of the operator sufficient to prevent a net migration of Hydrocarbons from the reservoirs to which proved reserves are attributed underlying the Subject Interest; and (iii) subject to field rules established by governmental authorities having or asserting jurisdiction, the amount of Hydrocarbons produced from the Subject ▇▇▇▇▇ shall be equitable and ratable, based on factors used in determining such field rules.
Appears in 3 contracts
Sources: Production Agreement, Production Agreement (Adino Energy Corp), Production Agreement (Adino Energy Corp)