Common use of Residue Gas Clause in Contracts

Residue Gas. The Residue Gas attributable to the Gas delivered hereunder shall be allocated on a Btu basis, based on a factor, the numerator of which will be the wellhead delivered Btus of Supplier’s Gas delivered under this Agreement, reduced by subtracting (1) Supplier’s calculated Btus extracted as Plant Products and (2) Supplier’s allocated Plant Fuel and hydrogen sulfide, and the denominator of which will be the sum of all Plant wellhead delivered Btus, reduced by subtracting the calculated Btus extracted as Plant Products, actual Btus of Plant Fuel, and hydrogen sulfide, such factor to be multiplied by the total Plant Residue Gas available at the tailgate of the Plant. Supplier may use Gas produced from the Dedicated Acreage and/or Dedicated Well(s) for the purpose of developing and operating same, including the use of Gas for Gas lifting or for pressure maintenance and/or cycling operations, but Company shall not be obligated to return Residue Gas to Supplier’s lease for use in the development and operation of the Dedicated Acreage and/or Dedicated Well(s); it being Supplier’s obligation to make arrangements to receive any such Residue Gas at the tailgate of the Plant. In the event that the amount of Residue Gas taken by Supplier for in connection with its operations on the Dedicated Acreage or on the Dedicated Well exceeds the amount of Supplier’s share of such Residue Gas for such Month, Company shall charge Supplier for such excess Residue Gas based on Company’s cost for and expenses to acquire such excess Residue Gas.