Common use of Subsequent Determinations of Borrowing Base Clause in Contracts

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least semi-annually on the dates set forth herein below and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 of each year, Borrowers shall furnish to the Bank on or prior to December 1 each year, beginning December 1, 2001, for Panhandle and beginning December 1, 2002 for Wood Oil and if the Bank so requests, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 31, respectively, of each such year, an engineering report in form and substance satisfactory to Bank prepared by an independent petroleum engineer as is acceptable to Bank, covering the Oil and Gas Properties, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) such other information concerning the value of the Oil and Gas Properties as Bank may reasonably deem necessary. Bank shall by written notice to Borrowers, no later than sixty (60) days after receipt of such information set forth above, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 (herein called the "DETERMINATION DATE") and continuing until but not including the next date as of which the Borrowing Base is redetermined. Notwithstanding the foregoing, the first such Determination Date will be January 1, 2002. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereof. If Borrowers do not furnish all such information, reports and data by the date specified in the first sentence of this Section 5(b), unless such failure is of no fault of Borrowers, the Bank may nonetheless designate the Borrowing Base at any amount which the Bank determines in its reasonable discretion and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. The Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which it in its reasonable discretion assigns to such Oil and Gas Properties of Borrowers at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers and its affiliates) as the Bank customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Bank has no obligation to designate the Borrowing Base at any particular amount, except in the exercise of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise, and that the Bank's commitment to advance funds hereunder is determined by reference to the Borrowing Base from time to time in effect.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least semi-annually on the dates set forth herein below May 1 and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 November 1 of each yearyear beginning May 1, Borrowers shall furnish to the Bank on 2002 or prior to December as an Unscheduled Redetermination. By March 1 each year, beginning December March 1, 20012002, for Panhandle and beginning December 1, 2002 for Wood Oil and if Borrower shall furnish to the Bank so requests, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 31, respectively, of each such year, Lenders an engineering report in form and substance reasonably satisfactory to Bank Agent prepared by an independent petroleum engineer as is engineering firm acceptable to BankAgent, covering said engineering report to utilize economic and pricing parameters used by the Oil and Gas PropertiesAgent as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information information, reports and data concerning the value of the Oil and Gas Properties as Bank may Agent shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank By September 1 of each year beginning September 1, 2002, or within thirty (30) days after either (i) receipt of notice from Agent that the Lenders require an Unscheduled Redetermination, or (ii) the Borrower gives notice to Agent of its desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Lenders an engineering report in form and substance reasonably satisfactory to Agent, said internally prepared engineering report to utilize economic and pricing parameters used by the Agent as established from to time, together with such other information, reports and data concerning the value of such Oil and Gas Properties. Agent shall by written notice to Borrowers, the Borrower no later than sixty (60) days after receipt May 1 and November 1 of such information set forth aboveeach year, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 or within a reasonable time thereafter (herein called the "DETERMINATION DATEDetermination Date") and continuing until but not including ), notify the next date as Borrower of which the determination by the Lenders of the new Borrowing Base is redetermined. Notwithstanding for the foregoing, the first period beginning on such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is to be made by the BankLenders, the Bank Agent shall notify Borrowers the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers do the Borrower does not furnish all such information, reports and data by the any date specified in the first sentence of this Section 5(b7(b), unless such failure is of no fault of Borrowersthe Borrower, the Bank Lenders may nonetheless designate the Borrowing Base at any amount amounts which the Bank determines Lenders in its their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Bank receives Lenders receive all such information, reports and data, whereupon the Bank Lenders shall designate a new Borrowing Base as described above. The Bank procedure for determining the Borrowing Base at each redetermination shall be that the Agent shall determine the Borrowing Base and submit the same to the Lenders. Increases in the Borrowing Base will require approval of all Lenders, but other changes in the Borrowing Base will be subject to the approval of Majority Lenders. If any redetermined Borrowing Base is not approved by Majority Lenders within twenty (20) days after submission to the Lenders by the Agent, the Agent shall notify each of the Lenders that the proposed Borrowing Base has not been approved and each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined based upon the weighted arithmetic average of the proposed amounts submitted by each Lender, said proposals to be weighted according to each Lender's Commitment. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which it such Lender in its reasonable sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties of Borrowers the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers the Borrower and its affiliatesaffiliates and the Current Exchange Rate) as the Bank such Lender customarily considers in evaluating similar oil and gas credits. If at any time any of the Oil and Gas Properties are sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment, if any, required to be made pursuant to Section 12(p) hereof. The Borrowing Base shall be additionally reduced from time to time pursuant to the provisions of Sections 2(d) hereof. It is expressly understood that the Bank has Lenders have no obligation to designate the Borrowing Base at any particular amountamounts, except in the exercise of its good faith their discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise. Provided, and however, that the Bank's commitment Lenders shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of the Commitment.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least semi-annually on the dates set forth herein below December 1 and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 June 1 of each yearyear beginning December 1, Borrowers 2006, or as Unscheduled Redeterminations. The Borrower shall furnish to the Bank on or prior to December as soon as possible but in any event no later than May 1 and November 1 of each year, beginning December November 1, 2001, for Panhandle 2007 with an effective date of March 31 and beginning December 1, 2002 for Wood Oil and if the Bank so requests, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 3130, respectively, of each such year, with an engineering report in form and substance satisfactory to the Bank prepared by an independent petroleum engineer as is engineering firm acceptable to BankBank and, for the May 1 report, by an in-house engineering report (a third party report is not necessary for the May 1 report) covering the Oil and Gas PropertiesProperties based upon PV/9 utilizing economic and pricing parameters used by Bank as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information concerning the value of the Oil and Gas Properties as the Bank may shall deem necessary to determine the value of the Oil and Gas Properties. Within thirty (30) days after either (i) receipt of notice from Bank that the Bank require an Unscheduled Redetermination, or (ii) a Borrower gives notice to Bank of its desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Bank an engineering report in form and substance satisfactory to Bank prepared by Borrower’ in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used by the Bank as established from time to time, together with such other information, reports and data concerning the value of the Oil and Gas Properties as Bank shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank shall by written notice to Borrowers, the Borrower no later than sixty August 1 and February 1 of each year, or within a reasonable time thereafter (60) days after receipt herein called the “Determination Date”), notify the Borrower of such information set forth above, designate the designation by the Bank of the new Borrowing Base available to Borrowers hereunder during for the period beginning on each December 31 and June 30 (herein called the "DETERMINATION DATE") and continuing until but not including the next date as of which the Borrowing Base is redetermined. Notwithstanding the foregoing, the first such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify Borrowers the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, Base and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers do the Borrower does not furnish all such information, reports and data by the any date specified in the first sentence of this Section 5(b4(b), unless such failure is of no fault of Borrowers, the Bank may nonetheless designate the Borrowing Base at any amount amounts which the Bank determines in its reasonable discretion determines and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. The Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which it Bank in its reasonable discretion (using such methodology, assumptions and discounts rates as Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties and other Collateral of Borrowers the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers the Borrower and its affiliates) as the Bank customarily considers in evaluating similar oil and gas credits, but Bank in its discretion shall not be required to give any additional positive value to any Oil and Gas Property over the current economic and pricing parameters used by Bank for such Determination Date which additional value is derived directly from a hedging, forward sale or swap agreement covering such Oil and Gas Property as of the date of such determination. It is expressly understood that the Bank has no obligation to designate the Borrowing Base at any particular amountamounts, except in the exercise of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise. Provided, and that however, the Bank's commitment Bank shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of the Revolving Commitment or its legal or internal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank Banks at least semi-annually on the dates set forth herein below and the Bank Banks may make additional redeterminations a redetermination at any time it appears to the Bank, in the exercise of its discretion, that there has been and shall make a material change in the value redetermination if and when requested by Borrower. In connection with each such determination of the Oil Borrowing Base, the Banks shall also determine the Monthly Commitment Reduction. Such Borrowing Base and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective Monthly Commitment Reduction determinations shall be made on or before each November 20 and May 20, commencing November 20, 1998, the same to be effective as of September 30 of each year, Borrowers shall furnish to the Bank on or prior to December November 1 each year, beginning December and May 1, 2001, for Panhandle and beginning December commencing November 1, 2002 for Wood Oil and if the Bank so requests1998, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times dates as Bank determined at the discretion of Majority Banks. Borrower may likewise request more frequent Borrowing Base redeterminations and Banks shall request for an Unscheduled Redeterminationmake the same if and when requested. In making such determinations, all information, Banks may utilize such reports and data which appraisals as Borrower may furnish to Banks through Agent under other provisions hereof with respect to the Bank has then requested concerning Collateral, including the Oil and Gas Properties, said information required pursuant to include, but not be limited toSection 12(a)(iii), (i) revenue and lifting costs summary report for all Oil and Gas Propertiesiv), (iiv) as of September 30 and March 31, respectively, of each such year, an engineering report in form and substance satisfactory to Bank prepared by an independent petroleum engineer as is acceptable to Bank, covering the Oil and Gas Properties, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) vi), together with such other information concerning data as Banks may deem appropriate under the value of the Oil and Gas Properties as Bank may reasonably deem necessary. Bank shall by written notice to Borrowersthen circumstance, no later than sixty (60) days after receipt of such information set forth above, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 (herein called the "DETERMINATION DATE") and continuing until but not including the next date as of which the Borrowing Base is redetermined. Notwithstanding the foregoing, the first such Determination Date will be January 1, 2002. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereof. If Borrowers do not furnish all such information, reports and data by the date specified in the first sentence of this Section 5(b), unless such failure is of no fault of Borrowers, the Bank may nonetheless designate the Borrowing Base at any amount which the Bank determines in its reasonable discretion and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. The Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which it in its reasonable discretion assigns to such Oil and Gas Properties of Borrowers at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow and projections of cash flow, businessprovided that nothing herein shall be construed to require that Banks or Agent shall or should obtain and pay for any reports, propertiesappraisals or other data from third parties in connection therewith. Such determinations shall be made by Banks in accordance with their respective customary practices and standards for loans in similar amounts to borrowers similarly situated, prospectsat the times and under the circumstances then prevailing which are considered by each Bank in its discretion, management subject only to the requirement that such determination shall be reasonable and ownership made in good faith. If the Banks cannot otherwise agree on the Borrowing Base or Monthly Commitment Reduction, each Bank will submit in writing to the Agent its proposed Borrowing Base and Monthly Commitment Reduction and the Borrowing Base and Monthly Commitment Reduction shall be set on the basis of Borrowers the lowest Borrowing Base and its affiliateshighest Monthly Commitment Reduction proposed by any Bank. If at any time any of the Collateral is sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment required to be made pursuant to Section 13(e) as hereof. If a non-scheduled Borrowing Base redetermination is made, such non-scheduled redetermined Borrowing Base shall become effective immediately upon Agent giving notice thereof to the Borrower. Provided, however, that no Bank customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Bank has no shall ever have an obligation to designate the a Borrowing Base at any particular amount, except in the exercise an amount such that such Bank's Commitment Percentage thereof is in excess of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein legal or otherwise, and that the Bank's commitment to advance funds hereunder is determined by reference to the Borrowing Base from time to time in effectinternal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least Lenders semi-annually on the dates set forth herein below April 1 and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 of each year, Borrowers shall furnish to the Bank on or prior to December 1 each year, beginning December 1, 2001, for Panhandle and beginning December 1, 2002 for Wood Oil and if the Bank so requests, within sixty days of April October 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times 2004 or as Bank shall request for an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and Redeterminations. By March 31, respectively, of 1 each such year, beginning March 1, 2004, Borrower shall furnish to the Lenders an engineering report in form and substance reasonably satisfactory to Bank Agent prepared by an independent petroleum engineer as is engineering firm acceptable to BankAgent, covering said engineering report to utilize economic and pricing parameters used by the Oil and Gas PropertiesAgent as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information information, reports and data concerning the value of the Oil and Gas Properties as Bank may Agent shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank By September 1 of each year beginning September 1, 2004, or within thirty (30) days after either (i) receipt of notice from Agent that the Lenders require an Unscheduled Redetermination, or (ii) the Borrower gives notice to Agent of its desire to have an Unscheduled Redetermination performed, in each case the Borrower shall furnish to the Lenders an engineering report in form and substance reasonably satisfactory to Agent, said engineering report to utilize economic and pricing parameters used by the Agent as established from to time, together with such other information, reports and data concerning the value of such Oil and Gas Properties. Agent shall by written notice to Borrowers, the Borrower no later than sixty (60) days after receipt April 1 and October 1 of such information set forth aboveeach year, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 or within a reasonable time thereafter (herein called the "DETERMINATION DATEDetermination Date") and continuing until but not including ), notify the next date as Borrower of which the designation by the Lenders of the new Borrowing Base is redetermined. Notwithstanding for the foregoing, the first period beginning on such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is to be made by the BankLenders, the Bank Agent shall notify Borrowers the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers do the Borrower does not furnish all such information, reports and data by the any date specified in the first sentence of this Section 5(b7(b), unless such failure is reasonably determined by the Agent to be of no fault of Borrowersthe Borrower, the Bank may Lenders nonetheless designate the Borrowing Base at any amount amounts which the Bank determines Lenders in its their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Bank receives Lenders receive all such information, reports and data, whereupon the Bank Lenders shall designate a new Borrowing Base as described above. The Bank procedure for determining the Borrowing Base at each redetermination shall be that the Agent shall determine the Borrowing Base and submit the same to the Lenders. Increases in the Borrowing Base will require approval of all Lenders, but other reaffirmation or changes in the Borrowing Base will be subject to the approval of Required Lenders. If any redetermined Borrowing Base is not approved by Required Lenders within twenty (20) days after submission to the Lenders by the Agent, the Agent shall notify each of the Lenders that the proposed Borrowing Base has not been approved and each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined (in all cases except those involving an increase of the Borrowing Base which requires approval of all Lenders) based upon the weighted arithmetic average of the proposed amounts submitted by each Lender, said proposals to be weighted according to each Lender's Commitment. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which it such Lender in its reasonable sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties of Borrowers the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers the Borrower and its affiliates) as the Bank such Lender customarily considers in evaluating similar oil and gas credits. If at any time any of the Oil and Gas Properties are sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment, if any, required to be made pursuant to Section 12(r) hereof. It is expressly understood that the Bank has Lenders have no obligation to designate the Borrowing Base at any particular amountamounts, except in the exercise of its good faith their discretion, whether in relation to the Revolving Loan Commitment made herein Commitments or otherwise. Provided, and however, that the Bank's commitment Lenders shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of the Commitment.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank Lenders at least semi-annually on the dates set forth herein below and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 of each year, Borrowers shall furnish to the Bank on or prior to December 1 and June 1 of each year, beginning December 1, 2001, for Panhandle and beginning December 1, 2002 for Wood Oil and if 2021 or as Unscheduled Redeterminations. The Borrower shall furnish to the Bank so requests, within sixty days of April Agent as soon as possible but in any event no later than November 1 of each year year, beginning April November 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for 2021 with an Unscheduled Redeterminationeffective date of the prior October 1, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 31, respectively, of each such year, with an engineering report in form and substance satisfactory to Bank the Agent prepared by an independent petroleum engineer as is engineering firm acceptable to Bank, Agent or by an in-house engineering report covering the Oil and Gas PropertiesProperties based upon PV/9 utilizing economic and pricing parameters used by Agent as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information concerning the value of the Oil and Gas Properties as Bank may the Lender shall deem necessary to determine the value of the Oil and Gas Properties. By May 1 of each year, beginning May 1, 2022, with an effective date of the prior April 1, or within thirty (30) days after either (i) receipt of notice from Agent that a Lender requires an Unscheduled Redetermination, or (ii) Borrower gives notice to Agent of its desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Agent and the Lenders an engineering report in form and substance satisfactory to Agent prepared by Borrower’s in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used by the Lenders as established from time to time, together with such other information, reports and data concerning the value of the Oil and Gas Properties as the Lenders shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank Upon receipt of such report, the Administrative Agent shall evaluate the information contained therein and shall, in good faith, propose a new Borrowing Base (the “Proposed Borrowing Base”) as determined pursuant to paragraph “(c)” below. Agent shall by written notice to Borrowers, the Borrower no later than sixty June 1 and December 1 of each year, or within a reasonable time thereafter (60) days after receipt herein called the “Determination Date”), notify the Borrower of such information set forth above, designate the designation by the Lenders of the new Borrowing Base available to Borrowers hereunder during for the period beginning on each December 31 and June 30 (herein called the "DETERMINATION DATE") and continuing until but not including the next date as of which the Borrowing Base is redetermined. Notwithstanding the foregoing, the first such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is made by the BankLenders, the Bank Agent shall notify Borrowers the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, Base and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers do the Borrower does not furnish all such information, reports and data by the any date specified in the first sentence of this Section 5(b2.6(b), unless such failure is of no fault of Borrowers, the Bank Lenders may nonetheless designate the Borrowing Base at any amount which the Bank determines Lenders in its their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Bank receives Lenders receive all such information, reports and data, whereupon the Bank Lenders shall designate a new Borrowing Base as described above. The Bank Lenders shall determine the amount of the Borrowing Base based upon the loan collateral value which it Lenders in its reasonable their discretion (using such methodology, assumptions and discounts rates as Lenders customarily use in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties and other Collateral of Borrowers the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers the Borrower and its affiliates) as the Bank Lenders customarily considers consider in evaluating similar oil and gas credits, but Lenders in their discretion shall not be required to give any additional positive value to any Oil and Gas Property over the current economic and pricing parameters used by Lenders for such Determination Date which additional value is derived directly from a Hedging Contract covering such Oil and Gas Property as of the date of such determination. It is expressly understood that the Bank has Lenders have no obligation to designate the Borrowing Base at any particular amountamount or to ever increase the Borrowing Base, except in the exercise of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise. Provided, and that further, the Bank's commitment Lenders shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of the Revolving Commitment or its legal or internal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank Banks at least semi-annually on the dates set forth herein below April 1 and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 October 1 of each year, Borrowers beginning April 1, 1998, or as Unscheduled Redeterminations. In connection with each such redetermination of the Borrowing Base, the Banks shall also redetermine the Monthly Commitment Reduction. Borrower shall furnish to the Bank on Banks as soon as possible but in any event no later than March 1 or prior to December September 1 of each year, beginning December March 1, 2001, for Panhandle and beginning December 1998 or September 1, 2002 for Wood Oil and if 1998, as the Bank so requestscase may be, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 31, respectively, of each such year, with an engineering report in form and substance satisfactory to Bank Agent prepared by an independent petroleum engineer as is acceptable to Bank, Agent covering the Oil and Gas PropertiesProperties utilizing pricing parameters used by Agent as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information concerning the value of the Collateral as the Banks may deem necessary to determine the value of such Collateral. By March 1 and by September 1 (being the date other than the date on which Borrower shall have provided the engineering report prepared by the independent petroleum engineer) of each year thereafter, beginning March 1, 1998 or September 1, 1998, as the case may be, or within thirty (30) days after either (i) receipt of notice from Agent that it requires an Unscheduled Redetermination, or (ii) Borrower give notice to Agent of their desire to have an Unscheduled Redetermination performed, Borrower shall furnish to the Banks an engineering report in form and substance satisfactory to the Banks prepared by Borrower's in-house engineering staff valuing the Oil and Gas Properties using substantially the same methodology utilized by the independent petroleum engineer who prepared the most recent independent engineering report, together with such other information, reports and data concerning the value of the Collateral as Bank may the Banks shall deem reasonably deem necessary. Bank shall by written notice necessary to Borrowers, no later than sixty (60) days after receipt determine the value of such information set forth aboveCollateral. The engineering reports furnished March 1 and September 1 pursuant to this Section 7 shall be prepared as of the preceding December 31 and June 30, designate respectively. Agent shall notify Borrower of the new Borrowing Base available to Borrowers hereunder during Base, Sublimits (as hereinafter defined) and Monthly Commitment Reduction for the period beginning on each December 31 and June 30 the date of such notice (herein called the "DETERMINATION DATEDetermination Date") and continuing until until, but not including including, the next date as of which the Borrowing Base is redetermined. Notwithstanding the foregoing, the first such Determination Date will be January 1, 2002Date. If an Unscheduled Redetermination is made by the BankBanks, the Bank Agent shall notify Borrowers Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers Borrower do not furnish all such information, reports and data by the date specified in the first sentence of this Section 5(b7(b), unless such failure is of no fault of BorrowersBorrower, the Bank Banks may nonetheless designate the Borrowing Base Base, Sublimits and Monthly Commitment Reduction at any amount amounts which the Bank determines Banks determine in its reasonable their discretion and may redesignate the Borrowing Base from time to time thereafter until the Bank receives Banks receive all such information, reports and data, whereupon the Bank Banks shall designate a new Borrowing Base Base, Sublimits and Monthly Commitment Reduction as described above. The Bank Banks shall determine the amount of the Borrowing Base based upon the loan collateral value which it in its reasonable discretion (using such methodology, assumptions and discounts rates as each Bank customarily uses in assigning collateral value to oil and gas properties) assigns to such Oil and Gas Properties of Borrowers Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers Borrower and its affiliates) as the each Bank customarily considers in evaluating similar oil and gas credits. If the Banks cannot otherwise agree on the Borrowing Base, Sublimits or Monthly Commitment Reduction, each Bank shall submit in writing to the Agent its proposed Borrowing Base and Monthly Commitment Reduction and the Borrowing Base and Monthly Commitment Reduction shall be set on the basis of the lowest Borrowing Base and Sublimits, and highest Monthly Commitment Reduction proposed by any Bank. If at any time any of the Collateral is sold by Borrower, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the value assigned to such collateral by the Banks as of the most recent Borrowing Base redetermination. It is expressly understood that the each Bank has no obligation to designate the Borrowing Base Base, Sublimits or the Monthly Commitment Reduction at any particular amount, except in the exercise of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise, and that the Bank's Banks' commitment to advance funds hereunder is determined by reference to the Borrowing Base from time to time in effect. Provided, however, that the Banks shall never have the obligation to designate a Borrowing Base in excess of its legal or internal lending limits. If Borrower is ever required to purchase and redeem any of the Senior Unsecured Notes or if any portion of the Senior Unsecured Notes become due for any reason, the Borrowing Base shall immediately and automatically be reduced to $0.

Subsequent Determinations of Borrowing Base. The Borrowing Base shall be redetermined every ninety (90) days for the first year the Commitment is outstanding, beginning ninety (90) days after the Effective Date. Subsequent determinations of the Borrowing Base made after the first year, shall be made by the Bank at least Lenders semi-annually on the dates set forth herein below May 1 and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 November 1 of each yearyear beginning November 1, Borrowers shall furnish to the Bank on 2002 or prior to December as Unscheduled Redeterminations. By March 1 each year, beginning December March 1, 20012002, for Panhandle and beginning December 1, 2002 for Wood Oil and if Borrower shall furnish to the Bank so requests, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 31, respectively, of each such year, Lenders an engineering report in form and substance reasonably satisfactory to Bank Agent prepared by an independent petroleum engineer as is engineering firm acceptable to BankAgent, covering said engineering report to utilize economic and pricing parameters used by the Oil and Gas PropertiesAgent as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information information, reports and data concerning the value of the Oil and Gas Properties as Bank may Agent shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank By September 1 of each year beginning September 1, 2001, or within thirty (30) days after either (i) receipt of notice from Agent that the Lenders require an Unscheduled Redetermination, or (ii) the Borrower gives notice to Agent of its desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Lenders an engineering report in form and substance reasonably satisfactory to Agent, said internally prepared engineering report to utilize economic and pricing parameters used by the Agent as established from to time, together with such other information, reports and data concerning the value of such Oil and Gas Properties. Agent shall by written notice to Borrowers, the Borrower no later than sixty (60) days after receipt May 1 and November 1 of such information set forth aboveeach year, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 or within a reasonable time thereafter (herein called the "DETERMINATION DATEDetermination Date") and continuing until but not including ), notify the next date as Borrower of which the determination by the Lenders of the new Borrowing Base is redetermined. Notwithstanding for the foregoing, the first period beginning on such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is to be made by the BankLenders, the Bank Agent shall notify Borrowers the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers do the Borrower does not furnish all such information, reports and data by the any date specified in the first sentence of this Section 5(b7(b), unless such failure is of no fault of Borrowersthe Borrower, the Bank Lenders may nonetheless designate the Borrowing Base at any amount amounts which the Bank determines Lenders in its their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Bank receives Lenders receive all such information, reports and data, whereupon the Bank Lenders shall designate a new Borrowing Base as described above. The Bank procedure for determining the Borrowing Base at each redetermination shall be that the Agent shall determine the Borrowing Base and submit the same to the Lenders. Increases in the Borrowing Base will require approval of all Lenders, but other changes in the Borrowing Base will be subject to the approval of Majority Lenders. If any redetermined Borrowing Base is not approved by Majority Lenders within twenty (20) days after submission to the Lenders by the Agent, the Agent shall notify each of the Lenders that the proposed Borrowing Base has not been approved and each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined based upon the weighted arithmetic average of the proposed amounts submitted by each Lender, said proposals to be weighted according to each Lender's Commitment. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which it such Lender in its reasonable sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties of Borrowers the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers the Borrower and its affiliatesaffiliates and the Current Exchange Rate) as the Bank such Lender customarily considers in evaluating similar oil and gas credits. If at any time any of the Oil and Gas Properties are sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment, if any, required to be made pursuant to Section 12(q) hereof. The Borrowing Base shall be additionally reduced from time to time pursuant to the provisions of Sections 2(d) hereof. It is expressly understood that the Bank has Lenders have no obligation to designate the Borrowing Base at any particular amountamounts, except in the exercise of its good faith their discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise. Provided, and however, that the Bank's commitment Lenders shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of the Commitment.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least semi-annually on the dates set forth herein below May 1 and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 November 1 of each yearyear beginning May 1, Borrowers 2000 or as Unscheduled Redeterminations. The Borrower shall furnish to the Bank on or prior to December as soon as possible but in any event no later than April 1 of each year, beginning December 1, 2001, for Panhandle and beginning December 1, 2002 for Wood Oil and if the Bank so requests, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as 2000, or within thirty (30) days after either (i) receipt of notice from Bank shall request for that it requires an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, or (ii) as the Borrower give notice to Bank of September 30 and March 31their desire to have an Unscheduled Redetermination performed, respectively, of each such year, with an engineering report in form and substance satisfactory to Bank prepared by an independent Borrower and audited by a petroleum engineer as is engineering firm acceptable to Bank, covering valuing the Oil and Gas PropertiesProperties utilizing economic and pricing parameters used by Bank as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information information, report and data concerning the value of the Oil and Gas Properties as Bank may shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank shall by written notice to Borrowers, the Borrower no later than sixty (60) days after receipt May 1 and November 1 of such information set forth aboveeach year, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 or within a reasonable time thereafter (herein called the "DETERMINATION DATEDetermination Date") and continuing until but not including the next date as of which the ), designate a new Borrowing Base is redetermined. Notwithstanding for the foregoing, the first period beginning on such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify Borrowers the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If Borrowers the Borrower do not furnish all such information, reports and data by the date specified in the first sentence of this Section 5(b7(b), unless such failure is of no fault of Borrowersthe Borrower, the Bank may nonetheless designate the Borrowing Base at any amount amounts which the Bank determines in its reasonable discretion and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. The Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which it Bank in its reasonable discretion (using such methodology, assumptions and discounts rates as Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties of Borrowers the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of Borrowers the Borrower and its affiliates) as the Bank customarily considers in evaluating similar oil and gas credits. If at any time any of the Oil and Gas Properties are sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the loan collateral value of the Oil and Gas Properties being sold by Borrower which the Bank in its discretion (using such methodology, assumptions and discount rates as the Bank customarily uses in assigning collateral value to oil and gas properties) assigned to such Oil and Gas Properties at the time in question. It is expressly understood that the Bank has no obligation to designate the Borrowing Base at any particular amountamounts, except in the exercise of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise, and that the Bank's commitment discretion. Provided, however, that Bank shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of its legal or internal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent ------------------------------------------- determinations of the Borrowing Base shall be made by the Bank Banks on June 1, 1997, and thereafter, at least semi-annually on the dates set forth herein below April 1 and the Bank may make additional redeterminations at any time it appears to the BankOctober 1 of each year beginning October 1, in the exercise of its discretion1997 or as Unscheduled Redeterminations. In connection with, that there has been a material change in the value and as of, each determination of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS")Borrowing Base, the Banks shall also redetermine the Monthly Commitment Reduction. Effective as of September 30 of each year, The Borrowers shall furnish to the Bank on or prior to December Banks as soon as possible but in any event no later than March 1 of each year, beginning December March 1, 20011997, for Panhandle and beginning December 1, 2002 for Wood Oil and if the Bank so requests, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times as Bank shall request for with an Unscheduled Redetermination, all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as of September 30 and March 31, respectively, of each such year, an engineering report Engineering Report in form and substance satisfactory to Bank the Agent prepared by an independent petroleum engineer as is engineering acceptable to Bank, Agent covering the Oil and Gas PropertiesProperties utilizing economic and pricing parameters used by Agent as established from time to time, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) together with such other information concerning the value of the Oil and Gas Properties as Bank may the Agent shall deem necessary to determine the value of the Oil and Gas Properties. By September 1 of each year, or within thirty (30) days after either (i) receipt of notice from Agent that the Banks require an Unscheduled Redetermination, or (ii) the Borrowers give notice to Agent of their desire to have an Unscheduled Redetermination performed, an engineering report in form and substance satisfactory to Agent prepared by Borrower's in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used by the Agent as established from time to time, together with such other information, reports and data concerning the value of the Oil and Gas Properties as Agent shall deem reasonably deem necessarynecessary to determine the value of such Oil and Gas Properties. Bank Agent shall by written notice to Borrowers, the Borrowers no later than sixty (60) days after receipt June 1, 1997, and thereafter on April 1 and October 1 of such information set forth aboveeach year, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 or within a reasonable time thereafter (herein called the "DETERMINATION DATEDetermination Date") and continuing until but not including ), notify the next date as Borrowers of which the designation by the Banks of the new Borrowing Base is redetermined. Notwithstanding and Monthly Commitment Reduction for the foregoing, the first period beginning on such Determination Date will be January 1and continuing until, 2002but not including, the next Determination Date. If an Unscheduled Redetermination is made by the BankBanks, the Bank Agent shall notify the Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, if anyBase and Monthly Commitment Reduction, and such new Borrowing Base and Monthly Commitment Reduction shall continue until redetermined pursuant to the provisions hereofnext Determination Date. If the Borrowers do not furnish all such information, reports and data by the date specified in the first sentence of this Section 5(b7(b), unless such failure is of no fault of the Borrowers, the Bank Banks may nonetheless designate the Borrowing Base and Monthly Commitment Reduction at any amount amounts which the Bank determines Banks determine in its reasonable their discretion and may redesignate the Borrowing Base and Monthly Commitment Reduction from time to time thereafter until the Bank receives Banks receive all such information, reports and data, whereupon the Bank Banks shall designate a new Borrowing Base and Monthly Commitment Reduction as described above. The Each Bank shall determine the amount of the Borrowing Base and Monthly Commitment Reduction based upon the loan collateral value which it such Bank in its reasonable discretion (using such methodology, assumptions and discounts rates as such Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties of the Borrowers at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrowers and its their affiliates) as the such Bank customarily considers in evaluating similar oil and gas credits, but such Bank in its discretion shall not be required to give any additional positive value to any Oil and Gas Property over the current economic and pricing parameters used by such Bank for such Determination Date which additional value is derived directly from a hedging, forward sale or swap agreement covering such Oil and Gas Property as of the date of such determination. If the Banks cannot otherwise agree on the Borrowing Base or the Monthly Commitment Reduction, each Bank shall submit in writing to the Agent its proposed Borrowing Base and Monthly Commitment Reduction and the Borrowing Base and Monthly Commitment Reduction shall be set on the basis of the lowest Borrowing Base and the highest Monthly Commitment Reduction proposed by any Bank. Notwithstanding any other provision herein to the contrary, the amount of the Borrowing Base may not be increased at any time without the approval of all Banks. If at any time any of the Oil and Gas Properties are sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment required to be made pursuant to Section 12(r) hereof. The Borrowing Base shall be additionally reduced from time to time pursuant to the provisions of Sections 2(e) and 2(f) hereof. It is expressly understood that the Bank has Banks have no obligation to designate the Borrowing Base or the Monthly Commitment Reduction at any particular amountamounts, except in the exercise of its good faith their discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise. Provided, and however, that the Bank's commitment Banks shall not have the obligation to advance funds hereunder is determined by reference to the designate a Borrowing Base from time to time in effectan amount in excess of its legal or internal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank Banks at least semi-annually on the dates set forth herein below and the Bank Banks may make additional redeterminations a redetermination at any time it appears to the Bank, in the exercise of its discretion, that there has been and shall make a material change in the value redetermination if and when requested by Borrower. In connection with each such determination of the Oil Borrowing Base, the Banks shall also determine the Monthly Commitment Reduction. Such Borrowing Base and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective Monthly Commitment Reduction determinations shall be made on or before each November 20 and May 20, commencing November 20, 2002, the same to be effective as of September 30 of each year, Borrowers shall furnish to the Bank on or prior to December November 1 each year, beginning December and May 1, 2001, for Panhandle and beginning December commencing November 1, 2002 for Wood Oil and if the Bank so requests2002, within sixty days of April 1 of each year beginning April 1, 2002 for Panhandle and for Wood Oil and at such other times dates as Bank determined at the discretion of Majority Banks. Borrower may likewise request more frequent Borrowing Base redeterminations and Banks shall request for an Unscheduled Redeterminationmake the same if and when requested. In making such determinations, all information, Banks may utilize such reports and data which appraisals as Borrower may furnish to Banks through Agent under other provisions hereof with respect to the Bank has then requested concerning Collateral, including the Oil and Gas Properties, said information required pursuant to include, but not be limited toSection 12(a)(iii), (i) revenue and lifting costs summary report for all Oil and Gas Propertiesiv), (iiv) as of September 30 and March 31, respectively, of each such year, an engineering report in form and substance satisfactory to Bank prepared by an independent petroleum engineer as is acceptable to Bank, covering the Oil and Gas Properties, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and (iv) vi), together with such other information concerning data as Banks may deem appropriate under the value of the Oil and Gas Properties as Bank may reasonably deem necessary. Bank shall by written notice to Borrowersthen circumstance, no later than sixty (60) days after receipt of such information set forth above, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and June 30 (herein called the "DETERMINATION DATE") and continuing until but not including the next date as of which the Borrowing Base is redetermined. Notwithstanding the foregoing, the first such Determination Date will be January 1, 2002. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the provisions hereof. If Borrowers do not furnish all such information, reports and data by the date specified in the first sentence of this Section 5(b), unless such failure is of no fault of Borrowers, the Bank may nonetheless designate the Borrowing Base at any amount which the Bank determines in its reasonable discretion and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. The Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which it in its reasonable discretion assigns to such Oil and Gas Properties of Borrowers at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow and projections of cash flow, businessprovided that nothing herein shall be construed to require that Banks or Agent shall or should obtain and pay for any reports, properties, prospects, management appraisals or other data from third parties in connection therewith. The procedure for determining the Borrowing Base and ownership of Borrowers and its affiliates) as the Bank customarily considers in evaluating similar oil and gas credits. It is expressly understood Monthly Commitment Reduction at each redetermination shall be that the Agent shall determine the Borrowing Base and Monthly Commitment Reduction and submit the same to the Banks. Increases in the Borrowing Base shall require the approval of all Banks, but all other changes in the Borrowing Base and Monthly Commitment Reduction shall require approval of Majority Banks. Such determinations shall be made by Banks in accordance with their respective customary practices and standards for loans in similar amounts to borrowers similarly situated, at the times and under the circumstances then prevailing which are considered by each Bank has in its discretion, subject only to the requirement that such determination shall be reasonable and made in good faith. If at any time any of the Collateral is sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment required to be made pursuant to Section 13(e) hereof. If a non-scheduled Borrowing Base redetermination is made, such non-scheduled redetermined Borrowing Base shall become effective immediately upon Agent giving notice thereof to the Borrower. Provided, however, that no Bank shall ever have an obligation to designate the a Borrowing Base at any particular amount, except in the exercise an amount such that such Bank’s Commitment Percentage thereof is in excess of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein legal or otherwise, and that the Bank's commitment to advance funds hereunder is determined by reference to the Borrowing Base from time to time in effectinternal lending limits.