Common use of Uneconomic Operation Clause in Contracts

Uneconomic Operation. 6.2.1 Gatherer reserves the right, on a not unduly discriminatory or preferential basis, to reject or seek renegotiation of the terms under which Gatherer shall continue the gathering of Shipper’s Crude Oil on the Facilities should Gatherer determine that gathering Shipper’s Crude Oil at any CRP becomes Uneconomic because of insufficient volume, or if all or part of Gatherer’s Facilities receiving Shipper’s Crude Oil becomes Uneconomic to operate, maintain, or repair because of the delivery of insufficient volumes of Shipper’s Crude Oil. Gatherer has the right to deem a CRP and any associated part of the Facilities “Uneconomic” if the average BPD over a ninety (90) Day period at a particular CRP is less than twenty (20) BPD for a CRP with one production well behind such CRP and thirty (30) BPD for a CRP with more than one production well behind such CRP; provided, however, that no Initial CRP or any part of the Facilities connecting the Initial CRPs to the Delivery Point(s) as of the Commencement Date, as such Facilities and Initial CRPs are set forth on Exhibit C-1, shall ever be deemed Uneconomic during the Primary Term. In the event of a CRP or part of the Facilities being declared Uneconomic, Gatherer shall have the right to suspend receipt of Shipper’s Crude Oil at that CRP or part of the Facilities, without liability as long as such condition exists, by giving Shipper ninety (90) Days advance written Notice of such suspension. During the ninety (90) Day Notice period, the Parties agree to meet to discuss and negotiate in good faith new terms for the applicable CRP or part of the Facilities under which Gatherer would continue to gather Shipper’s Crude Oil for transportation on the Facilities. If the Parties are unable to reach agreement as to a remedy to such condition within thirty (30) Days of the end of the Notice period, either Shipper or Gatherer may cause the CRP(s) or part(s) of the Facilities in question and any part of the Dedication intended for delivery to such CRP(s) or part(s) of the Facilities shall be permanently released from this Agreement.

Uneconomic Operation. 6.2.1 Gatherer reserves the right, on a not unduly discriminatory or preferential basis, to reject or seek renegotiation of the terms under which Gatherer shall continue the gathering of Shipper’s Crude Oil on the Facilities should Gatherer determine that gathering Shipper’s Crude Oil at any CRP becomes Uneconomic because of insufficient volume, or if all or part of Gatherer’s Facilities receiving Shipper’s Crude Oil becomes Uneconomic to operate, maintain, or repair because of the delivery of insufficient volumes of Shipper’s Crude Oil. Gatherer has the right to deem a CRP and any associated part of the Facilities “Uneconomic” if the average BPD over a ninety (90) Day period at a particular CRP is less than twenty (20) BPD for a CRP with one production well behind such CRP the point and thirty (30) BPD for a CRP with more than one production well behind such CRPthe point; provided, however, that no Initial CRP or any part of the Facilities connecting the Initial CRPs to the Delivery Point(s) as of the Commencement Date, as such Facilities and Initial CRPs are set forth on Exhibit C-1C1, shall ever be deemed Uneconomic during the Primary Term. In the event of a CRP or part of the Facilities being declared Uneconomic, Gatherer shall have the right to suspend receipt of Shipper’s Crude Oil at that CRP or part of the Facilities, without liability as long as such condition exists, by giving Shipper ninety (90) Days advance written Notice of such suspension. During the ninety (90) Day Notice period, the Parties agree to meet to discuss and negotiate in good faith new terms for the applicable CRP or part of the Facilities under which Gatherer would continue to gather Shipper’s Crude Oil for transportation on the Facilities. If the Parties are unable to reach agreement as to a remedy to such condition within thirty (30) Days of the end of the Notice period, either Shipper or Gatherer may cause the CRP(s) or part(s) of the Facilities in question and any part of the Dedication intended for delivery to such CRP(s) or part(s) of the Facilities shall be permanently released from this Agreement. 6.2.2 During any Secondary Term, in the event Gatherer declares all or part of Gatherer’s Facilities Uneconomic, Gatherer shall have the right to suspend operations of the Facilities or the affected part thereof without liability as long as such condition exists by providing Shipper with ninety (90) Days advance written Notice of the suspension. The Parties agree to meet within fifteen (15) Days after receipt of such Notice to discuss and negotiate in good faith alternative terms to remedy such Uneconomic Facilities condition. If the Parties are unable to reach agreement as to a remedy to such condition within thirty (30) Days of the end of the Notice period, Gatherer may elect to terminate gathering operations with respect to all of its Facilities if it has been declared Uneconomic or such part as has been declared Uneconomic and shall provide Shipper thirty (30) Days prior written Notice of its intent to terminate such operations. If Gatherer terminates all or part of its gathering operations pursuant to this Sub-Section, either Shipper or Gatherer shall have the right to and may so cause the Dedication impacted by such termination to be permanently released from this Agreement.