Common use of ALLOCATIONS TO PARTICIPANTS Clause in Contracts

ALLOCATIONS TO PARTICIPANTS. Allocations for Capital Account purposes shall be in accordance with the following: (a) The Participants recognize the provision for taking production in kind, as provided elsewhere in the Agreement, as each Participant's right to determine a market for the sale of a proportionate share of production subject to SUBPARAGRAPH 3.3(H) below. All items of income, gain, deduction, loss, credit or tax attribute arising from the sale and marketing of such production shall be allocated to the Participant who designated such market. (b) Exploration expenses and development cost deductions shall be allocated among the Participants in accordance with their respective contributions to such expenses and costs. (c) Depreciation and amortization deductions with respect to a depreciable Asset shall be allocated among the Participants in accordance with their respective contributions to the adjusted basis of the Asset which gives rise to the depreciation, amortization or loss deduction. (d) Production and operating cost deductions shall be allocated among the Participants in accordance with their respective contributions to such costs. (e) Deductions for depletion (to the extent of the amount of such deductions that would have been determined for Capital Account purposes if only cost depletion were allowable for federal income tax purposes) shall be allocated to the Participants in accordance with their respective contributions to the adjusted basis of the depletable property. Any remaining depletion deductions shall be allocated to the Participants so that, to the extent possible, the Participants receive the same total amounts of percentage depletion as they would have received if percentage depletion were allocated to the Participants in proportion to their respective shares of the gross income used as the basis for calculating the federal income tax deduction for percentage depletion. (f) Subject to SUBPARAGRAPH 3.3(H) below, gross income on the sale of production shall be allocated in accordance with the Participants' rights to share in the proceeds of such sale. (g) Except as provided in SUBPARAGRAPH 3.3(H) below, gain or loss on the sale of a depreciable or depletable asset shall be allocated so that, to the extent possible, the net amount reflected in the Participants' Capital Account with respect to such property (taking into account the cost of such property, depreciation, amortization, depletion or other cost recovery deductions and gain or loss) most closely reflects the Participants' Participating Interests. (h) Gains and losses on the sale of all or substantially all the Assets of the tax partnership shall be allocated so that, to the extent possible, the Participants' resulting Capital Account balances are in the same ratio as their Participating Interests at the time of such sale. (i) The Participants acknowledge that expenses and deductions allocable under the preceding provisions of this PARAGRAPH may be required to be capitalized into production under Section 263A of the Code. With respect to such capitalized expenses or deductions, the allocation of gross income on the sale of production shall be adjusted, in any reasonable manner consistently applied by the Manager, so that the same net amount (subject possibly to timing differences) is reflected in the Capital Accounts as if such expenses or deductions were instead deductible and allocated pursuant to the preceding provisions of this PARAGRAPH. (j) All deductions and losses that are not otherwise allocated in this PARAGRAPH shall be allocated among the Participants in accordance with their respective contributions to the costs producing each such deduction or to the adjusted basis of the Asset producing each such loss. (k) Any recapture of exploration expenses under Section 617(b)(1)(A) of the Code, and any disallowance of depletion under Section 617(b)(1)(B) of the Code, shall be borne by the Participants in the same manner as the related exploration expenses were allocated to, or claimed by, them. (l) All other items of income and gain shall be allocated to the Participants in accordance with their Participating Interests. (m) If a reduced Participating Interest is restored pursuant to SECTION 9.6, the Manager shall endeavor to allocate items of income, gain, loss, and deduction (in the same year as the restoration of such Participating Interest or, if necessary, in subsequent years) so as to cause the Capital Account balances of the Participants to be the same as they would have been if the restored Participating Interest had never been reduced. (n) If the Participants' Participating Interests change during any taxable year of the tax partnership, the distributive share of items of income, gain, loss and deduction of each Participant shall be determined in any manner (1) permitted by Section 706 of the Code, and (2) agreed on by both Participants. If the Participants cannot agree on a method, the method shall be determined by the Manager in consultation with the tax partnership's tax advisers, with preference given to the interim closing-of-the-books method except where application of that method would result in undue administrative expense in relationship to the amount of the items to be allocated.

ALLOCATIONS TO PARTICIPANTS. Allocations for Capital Account purposes shall be in accordance with the following: (a) The Participants recognize the provision for taking production in kind, as provided elsewhere in the Agreement, as each Participant's ’s right to determine a market for the sale of a proportionate share of production subject to SUBPARAGRAPH 3.3(HSubparagraph 3.3(h) below. All items of income, gain, deduction, loss, credit or tax attribute arising from the sale and marketing of such production shall be allocated to the Participant who designated such market. (b) Exploration expenses and development cost deductions shall be allocated among the Participants in accordance with their respective contributions to such expenses and costs. (c) Depreciation and amortization deductions with respect to a depreciable Asset shall be allocated among the Participants in accordance with their respective contributions to the adjusted basis of the Asset which gives rise to the depreciation, amortization or loss deduction. (d) Production and operating cost deductions shall be allocated among the Participants in accordance with their respective contributions to such costs. (e) Deductions for depletion (to the extent of the amount of such deductions that would have been determined for Capital Account purposes if only cost depletion were allowable for federal income tax purposes) shall be allocated to the Participants in accordance with their respective contributions to the adjusted basis of the depletable property. Any remaining depletion deductions shall be allocated to the Participants so that, to the extent possible, the Participants receive the same total amounts of percentage depletion as they would have received if percentage depletion were allocated to the Participants in proportion to their respective shares of the gross income used as the basis for calculating the federal income tax deduction for percentage depletion. (f) Subject to SUBPARAGRAPH 3.3(HSubparagraph 3.3(h) below, gross income on the sale of production shall be allocated in accordance with the Participants' ’ rights to share in the proceeds of such sale. (g) Except as provided in SUBPARAGRAPH 3.3(HSubparagraph 3.3(h) below, gain or loss on the sale of a depreciable or depletable asset shall be allocated so that, to the extent possible, the net amount reflected in the Participants' ’ Capital Account with respect to such property (taking into account the cost of such property, depreciation, amortization, depletion or other cost recovery deductions and gain or loss) most closely reflects the Participants' ’ Participating Interests. (h) Gains and losses on the sale of all or substantially all the Assets of the tax partnership shall be allocated so that, to the extent possible, the Participants' ’ resulting Capital Account balances are in the same ratio as their Participating Interests at the time of such sale. (i) The Participants acknowledge that expenses and deductions allocable under the preceding provisions of this PARAGRAPH may be required to be capitalized into production under Section 263A of the Code. With respect to such capitalized expenses or deductions, the allocation of gross income on the sale of production shall be adjusted, in any reasonable manner consistently applied by the Manager, so that the same net amount (subject possibly to timing differences) is reflected in the Capital Accounts as if such expenses or deductions were instead deductible and allocated pursuant to the preceding provisions of this PARAGRAPH{Intentionally Omitted.] (j) All deductions and losses that are not otherwise allocated in this PARAGRAPH Paragraph shall be allocated among the Participants in accordance with their respective contributions to the costs producing each such deduction or to the adjusted basis of the Asset producing each such loss. (k) Any recapture of exploration expenses under Section 617(b)(1)(A) of the Code, and any disallowance of depletion under Section 617(b)(1)(B) of the Code, shall be borne by the Participants in the same manner as the related exploration expenses were allocated to, or claimed by, them. (l) All other items of income and gain shall be allocated to the Participants in accordance with their Participating Interests. (m) If a reduced Participating Interest is restored pursuant to SECTION Section 9.6, the Manager shall endeavor to allocate items of income, gain, loss, and deduction (in the same year as the restoration of such Participating Interest or, if necessary, in subsequent years) so as to cause the Capital Account balances of the Participants to be the same as they would have been if the restored Participating Interest had never been reduced. (n) If the Participants' ’ Participating Interests change during any taxable year of the tax partnership, the distributive share of items of income, gain, loss and deduction of each Participant shall be determined in any manner (1) permitted by Section 706 of the Code, and (2) agreed on by both Participants. If the Participants cannot agree on a method, the method shall be determined by the Manager in consultation with the tax partnership's ’s tax advisers, with preference given to the interim closing-of-the-books method except where application of that method would result in undue administrative expense in relationship to the amount of the items to be allocated. (o) “Nonrecourse deductions,” as defined by Treas. Reg. Section 1.704-2(b)(1) shall be allocated between the Participants in proportion to their Participating Interests.

ALLOCATIONS TO PARTICIPANTS. Allocations for Capital Account tax purposes shall be in accordance with the following: (a) The Participants recognize the provision for taking production in kind, as provided elsewhere in the Agreement, as each Participant's right to determine a market for the sale of a proportionate share of production subject to SUBPARAGRAPH 3.3(H) below. All items of income, gain, deduction, loss, credit or tax attribute arising from the sale and marketing of such production shall be allocated to the Participant who designated such market. (b) Exploration expenses and development cost deductions shall be allocated among the Participants in accordance with their respective contributions to such expenses and costs. (cb) Depreciation Subject to Subsection 2.3(l) below, depreciation and amortization loss deductions with respect to a depreciable Asset shall be allocated among the Participants in accordance with their respective contributions to the adjusted basis of the Asset which gives rise to the depreciation, amortization or loss deductiondepreciation expense. (dc) Production and operating cost deductions shall be allocated among the Participants in accordance with their respective contributions to the qualified investment (as defined in the Code) in such costsAsset. (ed) Deductions for Subject to Subsection 2.3(l) below, cost depletion and any loss deduction with respect to a depletable property (to the extent as defined in Section 614 of the amount of such deductions that would have been determined for Capital Account purposes if only cost depletion were allowable for federal income tax purposesCode) shall be allocated to the Participants in accordance with their respective contributions to the adjusted basis of the depletable property. Any remaining Percentage depletion deductions under Section 613 of the Code shall be allocated to the Participants so thatin accordance with their respective contributions to the adjusted basis of the depletable property. Percentage depletion under Section 613 of the Code shall be allocated: (i) first, in the same manner as cost depletion to the extent it does not exceed cost depletion; and (ii) second, to the extent possible, the Participants receive the same total amounts of percentage depletion as they would have received if percentage depletion were allocated exceeds cost depletion, to the Participants in the same proportion to as their respective shares distributive share of gross income from the depletable property (as determined under Section 613(c) of the gross income used as Code) for the basis for calculating the federal income tax deduction for percentage depletionyear in which such depletion is allowable. (f) Subject to SUBPARAGRAPH 3.3(H) below, gross income on the sale of production shall be allocated in accordance with the Participants' rights to share in the proceeds of such sale. (g) Except as provided in SUBPARAGRAPH 3.3(H) below, gain or loss on the sale of a depreciable or depletable asset shall be allocated so that, to the extent possible, the net amount reflected in the Participants' Capital Account with respect to such property (taking into account the cost of such property, depreciation, amortization, depletion or other cost recovery deductions and gain or loss) most closely reflects the Participants' Participating Interests. (h) Gains and losses on the sale of all or substantially all the Assets of the tax partnership shall be allocated so that, to the extent possible, the Participants' resulting Capital Account balances are in the same ratio as their Participating Interests at the time of such sale. (i) The Participants acknowledge that expenses and deductions allocable under the preceding provisions of this PARAGRAPH may be required to be capitalized into production under Section 263A of the Code. With respect to such capitalized expenses or deductions, the allocation of gross income on the sale of production shall be adjusted, in any reasonable manner consistently applied by the Manager, so that the same net amount (subject possibly to timing differences) is reflected in the Capital Accounts as if such expenses or deductions were instead deductible and allocated pursuant to the preceding provisions of this PARAGRAPH. (je) All deductions and losses that which are not otherwise allocated described in this PARAGRAPH Subsections 2.3(a) through (d) above, shall be allocated among the Participants in accordance with their respective contributions to the costs producing each such deduction or to the adjusted basis of the Asset producing each such loss. (kf) Any recapture of exploration expenses under If Section 617(b)(1)(A) 12.1 of the CodeAgreement (directing that each Participant shall take in kind and separately dispose of its share of all Products) is interpreted to mean only that a Participant is authorized to direct the disposition of its share of Products by the partnership, all income, gains, or losses realized by the partnership from such disposition shall be allocated to such Participant, and any disallowance of depletion under deductions arising from expenditures incurred by such Participant in connection with such disposition (to the extent they are attributed to the partnership) shall also be allocated to such Participant. If, pursuant to Section 617(b)(1)(B) 11.2 of the CodeAgreement, shall be borne by the Participants in the same manner as the related exploration expenses were allocated toManager purchases a Participant’s share if Product for its own account, or claimed bysells such share of Product, them. the net profits or losses from such sale (lcomputed after taking into account the reasonable expenses incurred) All other items of income and gain shall be allocated to the Participants in accordance with their Participating InterestsParticipant. (mg) If Subject to Subsection 2.3(l) below, any gain recognized on the sale or other disposition of a reduced Participating Interest is restored pursuant to SECTION 9.6, the Manager shall endeavor to allocate items of income, gain, loss, and deduction (in the same year as the restoration of such Participating Interest or, if necessary, in subsequent years) so as to cause the Capital Account balances of the Participants to be the same as they would have been if the restored Participating Interest had never been reduced. (n) If the Participants' Participating Interests change during any taxable year of the tax partnership, the distributive share of items of income, gain, loss and deduction of each Participant depreciable Asset shall be determined in any manner (1) permitted by Section 706 of the Code, and (2) agreed on by both Participants. If the Participants cannot agree on a method, the method shall be determined by the Manager in consultation with the tax partnership's tax advisers, with preference given to the interim closing-of-the-books method except where application of that method would result in undue administrative expense in relationship to the amount of the items to be allocated.:

ALLOCATIONS TO PARTICIPANTS. Allocations for Capital Account purposes shall be in accordance with the following: (a) The Participants recognize the provision for taking production in kind, as provided elsewhere in the Agreement, as each Participant's right to determine a market for the sale of a proportionate share of production subject to SUBPARAGRAPH 3.3(HSection 3.3(h) below. All items of income, gain, deduction, loss, credit or tax attribute arising from the sale and marketing of such production shall be allocated to the Participant who designated such market. (b) Exploration expenses and development cost deductions shall be allocated among the Participants in accordance with their respective contributions to such expenses and costs. (c) Depreciation and amortization loss deductions with respect to a depreciable Asset shall be allocated among the Participants in accordance with their respective contributions to the adjusted basis of the Asset which gives rise to the depreciation, amortization depreciation or loss deduction. (d) Production and operating cost deductions shall be allocated among the Participants in accordance with their respective contributions to such costs. (e) Deductions for depletion (to the extent of the amount of such deductions that would have been determined for Capital Account purposes if only cost depletion were allowable for federal income tax purposes) shall be allocated to the Participants in accordance with their respective contributions to the adjusted basis of the depletable property. Any remaining depletion deductions shall be allocated to the Participants so that, to the extent possible, the Participants receive the same total amounts of percentage depletion as they would have received if percentage depletion were allocated to the Participants in proportion to their respective shares of the gross income used as the basis for calculating the federal income tax deduction for percentage depletion. (f) Subject to SUBPARAGRAPH 3.3(HSubparagraph 3.3(h) below, gross income on the sale of production shall be allocated in accordance with the Participants' rights to share in the proceeds of such sale. (g) Except as provided in SUBPARAGRAPH 3.3(HSection 3.3(h) below, gain or loss on the sale of a depreciable or depletable asset shall be allocated so that, to the extent possible, the net amount reflected in the Participants' Capital Account with respect to such property (taking into account the cost of such property, depreciation, amortization, depletion or other cost recovery deductions and gain or loss) most closely reflects the Participants' Participating Interests. (h) Gains and losses on the sale of all or substantially all the Assets of the tax partnership shall be allocated so that, to the extent possible, the Participants' resulting Capital Account balances are in the same ratio as their Participating Interests at the time of such sale. (i) The Participants acknowledge that expenses and deductions allocable under the preceding provisions of this PARAGRAPH Section 3.3 may be required to be capitalized into production under Section 263A of the Code. With respect to such capitalized expenses or deductions, the allocation of gross income on the sale of production shall be adjusted, in any reasonable manner consistently applied by the Manager, so that the same net amount (subject possibly to timing differences) is reflected in the Capital Accounts as if such expenses or deductions were instead deductible and allocated pursuant to the preceding provisions of this PARAGRAPHSection 3.3. (j) All deductions and losses that are not otherwise allocated in this PARAGRAPH Section 3.3 shall be allocated among the Participants in accordance with their respective contributions to the costs producing each such deduction or to the adjusted basis of the Asset producing each such loss. (k) Any recapture of exploration expenses under Section 617(b)(1)(A) of the Code, and any disallowance of depletion under Section 617(b)(1)(B) of the Code, shall be borne by the Participants in the same manner as the related exploration expenses were allocated to, or claimed by, them. (l) All other items of income and gain shall be allocated to the Participants in accordance with their Participating Interests. (m) If a reduced Participating Interest is restored pursuant to SECTION 9.6Section 6.3(c) of the Agreement, the Manager shall endeavor to allocate items of income, gain, loss, and deduction (in the same year as the restoration of such Participating Interest or, if necessary, in subsequent years) so as to cause the Capital Account balances of the Participants to be the same as they would have been if the restored Participating Interest had never been reduced. (n) If the Participants' Participating Interests change during any taxable year of the tax partnership, the distributive share of items of income, gain, loss and deduction of each Participant shall be determined in any manner (1) permitted by Section 706 of the Code, and (2) agreed on by both Participants. If the Participants cannot agree on a method, the method shall be determined by the Manager in consultation with the tax partnership's tax advisers, with preference given to the interim closing-of-the-books method except where application of that method would result in undue administrative expense in relationship to the amount of the items to be allocated. (o) Nonrecourse deductions," as defined by Treasury Regulation Section 1.704-2(b)(1) shall be allocated between the Participants in proportion to their Participating Interests except as otherwise required by Treasury Regulation Section 1.704-2. (p) For purposes of this Section 3.3, items financed through indebtedness of, or from revenue of, the tax partnership, shall be treated as funded from contributions of the Participants made in proportion to their Participating Interests.

ALLOCATIONS TO PARTICIPANTS. Allocations for Capital Account tax purposes shall be in --------------------------- accordance with the following: (a) The Participants recognize the provision for taking production in kind, as provided elsewhere in the Agreement, as each Participant's right to determine a market for the sale of a proportionate share of production subject to SUBPARAGRAPH 3.3(H) below. All items of income, gain, deduction, loss, credit or tax attribute arising from the sale Exploration and marketing of such production development costs shall be allocated to the Participant who designated such market. (b) Exploration expenses and development cost as deductions shall be allocated among the Participants in accordance with their respective contributions to such expenses and costs. (cb) Depreciation and amortization deductions with respect to a depreciable Asset expenses shall be allocated as a deduction among the Participants in accordance with their respective contributions to the adjusted basis of the Asset which gives rise to the depreciation, amortization or loss deductiondepreciation expense. (c) The qualified investment for investment tax credit purposes with respect to any Asset shall be allocated among the Participants in accordance with their respective contributions to the qualified investment (as defined in the Code) in such Asset. (d) Production and operating cost deductions costs shall be allocated as deductions among the Participants in accordance with their respective contributions to such costs. (e) Deductions for Cost depletion (to the extent of the amount of such deductions that would have been determined for Capital Account purposes if only cost depletion were allowable for federal income tax purposes) shall be allocated to the Participants in accordance with their respective contributions to the adjusted basis for depletion purposes of each depletable Asset (as defined in Section 614 of the depletable property. Any remaining Code), and statutory depletion deductions in excess of cost depletion shall be allocated to the Participants so that, each Participant in ratio to the extent possiblerespective depletion allowance which would be allowable if each Participant were to be allowed depletion on the sales value of its share of Products sold, taking into account its share of costs and expenses otherwise allocated hereunder, provided that the Participants receive amount of statutory depletion shall not exceed the same total amounts of percentage depletion as they would have received if percentage depletion were allocated to the Participants in proportion to their respective shares of the Participant's gross income used from the Properties as defined in Code Section 613(c) times the basis for calculating the federal income tax deduction for percentage depletionstatutory depletion rate in Code Section 613(b). (f) Subject to SUBPARAGRAPH 3.3(H) below, gross income on the sale of production shall be allocated in accordance with the Participants' rights to share in the proceeds of such sale. (g) Except as provided in SUBPARAGRAPH 3.3(H) below, gain or loss on the sale of a depreciable or depletable asset shall be allocated so that, to the extent possible, the net amount reflected in the Participants' Capital Account with respect to such property (taking into account the cost of such property, depreciation, amortization, depletion or other cost recovery deductions All costs and gain or loss) most closely reflects the Participants' Participating Interests. (h) Gains and losses on the sale of all or substantially all the Assets of the tax partnership shall be allocated so that, to the extent possible, the Participants' resulting Capital Account balances are in the same ratio as their Participating Interests at the time of such sale. (i) The Participants acknowledge that expenses and deductions allocable under the preceding provisions of this PARAGRAPH may be required to be capitalized into production under Section 263A of the Code. With respect to such capitalized expenses or deductions, the allocation of gross income on the sale of production shall be adjusted, in any reasonable manner consistently applied by the Manager, so that the same net amount (subject possibly to timing differences) is reflected in the Capital Accounts as if such expenses or deductions were instead deductible and allocated pursuant to the preceding provisions of this PARAGRAPH. (j) All deductions and losses that which are not otherwise allocated described in this PARAGRAPH (a) through (e) above, shall be allocated among the Participants in accordance with their respective contributions to the such costs producing each such deduction or to the adjusted basis of the Asset producing each such lossand expenses. (kg) Any recapture of exploration expenses under Section 617(b)(1)(A) The provision for taking production in kind, as provided elsewhere in this Agreement, is recognized as each Participant's right to determine the market for a proportionate share of the Codesales. All items of income, deductions, and any disallowance credits arising from such marketing of depletion under Section 617(b)(1)(B) of the Code, production shall be borne recognized by the Participants in partnership and shall be allocated respectively to the same manner as the related exploration expenses were allocated to, or claimed by, themParticipant who designated such market. (lh) All other Except as provided in (1) and (2) immediately below, items of income, gain and/or loss reported by the partnership on federal and state partnership returns shall be allocated to the Participants realizing or bearing such items as provided in this Agreement: (1) Gain and/or loss arising from each sale, abandonment, or other disposition of Assets shall be allocated to each Participant in such a manner as will reflect the gain and/or loss that would have been includable in such Participant's respective income tax return if the Participants hereto (a) had elected to be excluded from Subchapter K of the Code and/or any similar provisions of applicable state laws, and (b) had made the same elections that were made by the partnership pursuant to Section 1.2 above. The computation of gain and/or loss shall take into account each Participant's share of the proceeds derived from each sale or other disposition, selling expenses and the Participant's respective contributions to the unadjusted cost basis of such Asset, less any allowed or allowable depreciation, amortization or other deductions which have been allocated to each Participant. (2) If the application of the preceding paragraph (1) results in the allocation of gains and/or losses in excess of the "ceiling limitation" imposes by Treasury Regulation Section 1.704-1(c)(i), the Participants agree that the entire gains and/or losses shall be determined at the partnership level. If such a determination results in a partnership gain, such gain shall be allocated to the Participant or Participants who otherwise would have been allocated a gain under the provisions of such Paragraph. If such at determination results in a partnership loss, such loss shall be allocated to the Participant or Participants who otherwise would have been allocated a loss under such Paragraph. (i) Any recapture of depreciation, exploration under Section 617, and any other item of deduction or credit shall be allocated among the Participants in accordance with their Participating Interests. (m) If a reduced Participating Interest is restored pursuant to SECTION 9.6, the Manager shall endeavor to allocate items of income, gain, loss, and deduction (in the same year as the restoration of such Participating Interest or, if necessary, in subsequent years) so as to cause the Capital Account balances sharing of the Participants to be the same as they would have been if the restored Participating Interest had never been reduceddepreciation, exploration, or other item of deduction or credit which is recaptured. (n) If the Participants' Participating Interests change during any taxable year of the tax partnership, the distributive share of items of income, gain, loss and deduction of each Participant shall be determined in any manner (1) permitted by Section 706 of the Code, and (2) agreed on by both Participants. If the Participants cannot agree on a method, the method shall be determined by the Manager in consultation with the tax partnership's tax advisers, with preference given to the interim closing-of-the-books method except where application of that method would result in undue administrative expense in relationship to the amount of the items to be allocated.