Allocations to Parties Sample Clauses

Allocations to Parties. Allocations for Capital Account purposes shall be in accordance with the following: (a) Exploration and development cost deductions shall be allocated between the parties in accordance with their respective contributions to such costs. (b) Depreciation and loss deductions with respect to any depreciable asset shall be allocated between the parties in accordance with their respective contributions to the adjusted basis of the asset which gives rise to the depreciation or loss deduction. (c) Production and operating cost deductions, if any, shall be allocated between the parties in accordance with their respective contributions to such costs. (d) 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 parties in accordance with their respective contributions to the adjusted basis of the depletable property. Any remaining depletion deductions shall be allocated to the parties so that, to the extent possible, the parties receive the same total amounts of percentage depletion as they would have received if percentage depletion were allocated to the parties in proportion to their respective shares of the gross income used as the basis for calculating the federal income tax deduction for percentage depletion. (e) Subject to Section 3.3(g) below, gross income, if any, on the sale of production shall be allocated in accordance with the parties’ rights to share in the proceeds of such sale. (f) Except as provided in Section 3.3(g) 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 parties’ Capital Accounts 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 parties’ interest in the Property as set forth in the Agreement (determined without regard to this Exhibit). (g) 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 parties’ resulting Capital Account balances are in the same ratio as their interests in the Property as set forth in the Agreement (determined without regard to this Exhibit) at the time of such sale. (h) All deductions and losses that are not oth...