Common use of Borrowing Base Determination Clause in Contracts

Borrowing Base Determination. Notwithstanding the following provisions of this Section, the Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled Borrowing Base redetermination initiated by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be determined pursuant to the following provisions of this Section. On or before September 1, 2000, the Borrower shall furnish to the Agent information sufficient to update to an effective date of June 1, 2000, the most recent petroleum engineering reports provided to the Agent prior to Closing relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Upon receipt of such report, the Agent shall, in the normal course of business make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks and subsequent written notification from the Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April 1 and October 1 until the Facility Termination Date, beginning April 1, 2001, the Borrower shall furnish to the Agent a report, in form and substance satisfactory to the Agent, which report shall set forth, as of each preceding January 1 or July 1, as applicable, the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Each report to be provided on or before each April 1 shall be a complete report relating to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties prepared by an independent petroleum engineer or firm of engineers reasonably satisfactory to the Agent. Each report to be provided on or before each October 1 shall simply update the previous complete report, and may be prepared by the Borrower's own engineers and shall be certified by the President or Chief Financial Officer of the Borrower. Upon receipt of each such report, the Agent shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks

Borrowing Base Determination. Notwithstanding The initial Borrowing Base is hereby established at $2,450,000.00. Subject to the following other provisions of this SectionAgreement, the Borrowing Base shall be as set forth automatically reduced commencing on Schedule 2.06 attached hereto, as further reduced from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October June 1, 2000, (b) by the occurrence of an Event of Default, or (c) any unscheduled Monthly Borrowing Base redetermination initiated by Reduction, which is initially established at $50,000.00, and continuing on the Agent and approved by first day of each successive month through the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the next Borrowing Base shall be determined pursuant to the following provisions of determination as set forth in this SectionSection 2.05. On or before September 1, 2000, the Borrower shall furnish to the Agent Bank information sufficient to update to an effective date of June July 1, 2000, the most recent petroleum engineering reports provided to the Agent Bank prior to Closing relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Upon receipt of such report, the Agent Bank shall, in the normal course of business make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks and subsequent written notification from the Agent Bank to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April March 1 and October September 1 until the Facility Revolving Loan Termination Date, beginning April 1, 2001, the Borrower shall furnish to the Agent Bank a report, in form and substance satisfactory to the AgentBank, which report shall set forth, as of each preceding January 1 or July 1, as applicable, the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Each report to be provided on or before each April March 1 shall be a complete report relating to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties prepared by an independent petroleum engineer or firm of engineers reasonably satisfactory to the AgentBank. Each report to be provided on or before each October September 1 shall simply update the previous complete report, and may be prepared by the Borrower's own engineers and shall be certified by the President or Chief Financial Executive Officer of the Borrower. Upon receipt of each such report, the Agent Bank shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by written notification from the Required BanksBank to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section 2.05. The Bank may redetermine the Borrowing Base and the Monthly Borrowing Base Reduction, at any time, and from time to time, which redetermination shall become effective upon written notification from the Bank to the Borrower and which, subject to the other provisions of this

Borrowing Base Determination. Notwithstanding The Borrowing Base in effect as of the following provisions Closing is Three Hundred Fifteen Million Dollars ($315,000,000.00) based upon the Netherland Xxxxxx Report dated as of this SectionJanuary 23, 2004, relative to the Proved Reserves attributable to the Oil and Gas Properties of the Borrower included in such Reserve Report. The Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced re-determined from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled Borrowing Base redetermination initiated by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be determined pursuant to the following provisions of this Section. On or before September each October 1 and April 1, 2000commencing October 1, 2004, until the Facility Termination Date, the Borrower shall furnish to the Administrative Agent information sufficient to update to an effective date a Reserve Report, which shall set forth, as of June each preceding July 1 or January 1, 2000as applicable, the most recent petroleum engineering reports provided Proved Reserves attributable to the Oil and Gas Properties of the Borrower included in such Reserve Report. Each October Reserve Report may be prepared by the Borrower's own engineers and shall be certified by the President or other Responsible Officer of the Borrower. Each April Reserve Report shall be a complete report prepared by independent reservoir engineers acceptable to Administrative Agent prior to Closing relative relating to the Proved Reserves attributable to the Borrowing Base Oil and Gas PropertiesProperties of the Borrower included in such Reserve Report. Upon receipt of each such reportReserve Report, the Administrative Agent shall, in within forty-five (45) days following the normal course delivery of business such Reserve Report, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the Borrowing Base until the effective date of the next redetermination of the Borrowing Base as set forth in this Section 2.06. The Administrative Agent may, subject to approval of the Required Banks, and must, upon the request of the Required Banks, redetermine the Borrowing Base at any time, and from time to time, which redetermination shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction Base, as set forth in this Section. ThereafterThe Administrative Agent shall have the right to initiate one unscheduled redetermination of the Borrowing Base between any two consecutive scheduled redeterminations thereof by requesting in writing, on or before each April 1 and October 1 until the Facility Termination Datenot more than once between any two consecutive scheduled deliveries of Reserve Reports, beginning April 1, 2001, that the Borrower shall furnish to the Agent a report, in form and substance satisfactory to the Agent, which report shall set forth, as of each preceding January 1 or July 1, as applicable, provide an unscheduled Reserve Report regarding the Proved Reserves attributable to the Oil and Gas Properties of the Borrower included in such Reserve Report with an effective date not more than ninety (90) days prior to Borrower's delivery of such Reserve Report to Administrative Agent, and such Reserve Report shall be delivered to Administrative Agent within ninety (90) days after Borrower's receipt of such written request. The Borrower shall have the right to request, by written notice to Administrative Agent, one unscheduled redetermination of the Borrowing Base between any two consecutive scheduled redeterminations thereof, subject to contemporaneously providing to Administrative Agent a Reserve Report with an effective date not more than ninety (90) days prior to the date of such notice. If at any time the Required Banks cannot otherwise agree on a redetermination of the Borrowing Base, then the Borrowing Base, shall be set on the basis of the Administrative Agent's calculation of the "weighted arithmetic average" (as hereinafter calculated) of the Borrowing Base, as determined by each individual Bank and communicated to Administrative Agent in writing. However, the amount of the Borrowing Base shall never be increased at any time without the unanimous consent of the Banks, notwithstanding anything else herein to the contrary. For purposes of this paragraph, the "weighted arithmetic average" of the Borrowing Base shall be determined by first multiplying the Borrowing Base proposed in writing to Administrative Agent by each Bank by such Bank's Percentage Share, and then adding the results of each such calculation, with the resultant sum being the Borrowing Base. The Borrowing Base shall represent the Required Banks' approval of the Administrative Agent's determination, in accordance with their customary lending practices, of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties and the Borrower acknowledges, for purposes of this Agreement, such determination by the Administrative Agent as being the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties. Each report to be provided on or before In making any redetermination of the Borrowing Base, the Administrative Agent and the Banks shall apply the parameters and other credit factors consistently applied then generally being utilized by the Administrative Agent and each April 1 shall be a complete report relating such Bank, respectively, for Borrowing Base redeterminations for other similarly situated borrowers. The Borrower, Required Banks and the Administrative Agent acknowledge that (a) due to the Proved Reserves attributable uncertainties of the oil and gas extraction process, the Borrowing Base Oil and Gas Properties are not subject to evaluation with a high degree of accuracy and are subject to potential rapid deterioration in value, and (b) for this reason and the difficulties and expenses involved in liquidating and collecting against the Borrowing Base Oil and Gas Properties, the Administrative Agent's determination of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties prepared by contains an independent petroleum engineer or firm of engineers reasonably satisfactory to the Agent. Each report to be provided on or before each October 1 shall simply update the previous complete reportequity cushion, and may be prepared which equity cushion is acknowledged by the Borrower's own engineers and shall be certified by Borrower as essential for the President or Chief Financial Officer adequate protection of the Borrower. Upon receipt of each such report, the Agent shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks.

Borrowing Base Determination. Notwithstanding The Borrowing Base in effect as of the following provisions of this Section, the Closing is One Hundred Million Dollars ($100,000,000.00). The Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced re-determined from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled Borrowing Base redetermination initiated by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be determined pursuant to the following provisions of this Section. On or before September April 1, 20002002, the Borrower shall furnish to the Administrative Agent information sufficient to update to an effective date of June January 1, 20002002, the most recent petroleum engineering reports provided to the Administrative Agent prior to Closing relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Upon receipt of such reportinformation, the Administrative Agent shall, in the normal course of business make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction Base, which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April 1 and October 1 until the Facility Termination Date, beginning April October 1, 20012002, the Borrower shall furnish to the Administrative Agent a report, in form and substance satisfactory to the Administrative Agent, which report shall set forth, as of each preceding January 1 or July 1, as applicable, the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Each report to be provided on or before each April 1 shall be a complete report relating to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties prepared by an independent petroleum engineer or firm of engineers reasonably satisfactory to the Administrative Agent. Each report to be provided on or before each October 1 shall simply update the previous complete report, and may be prepared by the Borrower's own engineers and shall be certified by the President or Chief Financial Officer of the Borrower. Upon receipt of each such report, the Administrative Agent shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base as set forth in this Section 2.06. The Administrative Agent may, subject to approval of the Required Banks, and must, upon the request of the Required Banks, redetermine the Borrowing Base at any time, and from time to time, which redetermination shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base, as set forth in this Section. The Administrative Agent may request in writing that the Borrower provide a Reserve Report regarding the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties with an effective date not more than ninety (90) days prior to Borrower's delivery of such Reserve Report to Administrative Agent, and such Reserve Report shall be delivered to Administrative Agent within ninety (90) days after Borrower's receipt of such written request. The Borrower shall have the right to request, by written notice to Administrative Agent, one unscheduled redetermination of the Borrowing Base between any two scheduled redeterminations thereof, subject to contemporaneously providing to Administrative Agent a Reserve Report with an effective date not more than ninety (90) days prior to the date of such notice. If at any time the Required Banks cannot otherwise agree on a redetermination of the Borrowing Base, then the Borrowing Base, shall be set on the basis of the Administrative Agent's calculation of the "weighted arithmetic average" (as hereinafter calculated) of the Borrowing Base, as determined by each individual Bank and communicated to Administrative Agent in writing. However, the amount of the Borrowing Base shall never be increased at any time without the unanimous consent of the Banks, notwithstanding anything else herein to the contrary. For purposes of this paragraph, the "weighted arithmetic average" of the Borrowing Base shall be determined by first multiplying the Borrowing Base proposed in writing to Administrative Agent by each Bank by such Bank's Percentage Share, and then adding the results of each such calculation, with the resultant sum being the Borrowing Base. The Borrowing Base shall represent the Required Banks' approval of the Administrative Agent's determination, in accordance with its customary lending practices, of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties and the Borrower acknowledges, for purposes of this Agreement, such determination by the Administrative Agent as being the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties. In making any redetermination of the Borrowing Base, the Administrative Agent and the Banks shall apply the parameters and other credit factors consistently applied then generally being utilized by the Administrative Agent and each such Bank, respectively, for Borrowing Base redeterminations for other similarly situated borrowers. The Borrower, Required Banks and the Administrative Agent acknowledge that (a) due to the uncertainties of the oil and gas extraction process, the Borrowing Base Oil and Gas Properties are not subject to evaluation with a high degree of accuracy and are subject to potential rapid deterioration in value, and (b) for this reason and the difficulties and expenses involved in liquidating and collecting against the Borrowing Base Oil and Gas Properties, the Administrative Agent's determination of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties contains an equity cushion, which equity cushion is acknowledged by the Borrower as essential for the adequate protection of the Banks.

Borrowing Base Determination. Notwithstanding The Borrowing Base in effect as of the following provisions of this Section, the Closing is Sixty-Five Million Dollars ($65,000,000). The Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced re-determined from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled Borrowing Base redetermination initiated by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be determined pursuant to the following provisions of this Section. On or before September October 1, 20002001, the Borrower shall furnish to the Administrative Agent information sufficient to update to an effective date of June 1, 20002001, the most recent petroleum engineering reports provided to the Administrative Agent prior to Closing relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Upon receipt of such reportinformation, the Administrative Agent shall, in the normal course of business make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction Base, which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April 1 and October 1 until the Facility Termination Date, beginning April 1, 20012002, the Borrower shall furnish to the Administrative Agent a report, in form and substance satisfactory to the Administrative Agent, which report shall set forth, as of each preceding January 1 or July 1, as applicable, the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Each report to be provided on or before each April 1 shall be a complete report relating to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties prepared by an independent petroleum engineer or firm of engineers reasonably satisfactory to the Administrative Agent. Each report to be provided on or before each October 1 shall simply update the previous complete report, and may be prepared by the Borrower's own engineers and shall be certified by the President or Chief Financial Officer of the Borrower. Upon receipt of each such report, the Agent shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banksor

Borrowing Base Determination. Notwithstanding The Borrowing Base in effect as of the following provisions of this Section, the Closing is One Hundred Million Dollars ($100,000,000.00). The Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced re-determined from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled Borrowing Base redetermination initiated by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be determined pursuant to the following provisions of this Section. On or before September April 1, 20002003, the Borrower shall furnish to the Administrative Agent information sufficient to update to an effective date of June January 1, 20002003, the most recent petroleum engineering reports provided to the Administrative Agent prior to Closing relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Upon receipt of such reportinformation, the Administrative Agent shall, in the normal course of business make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction Base, which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April 1 and October 1 until the Facility Termination Date, beginning April October 1, 20012003, the Borrower shall furnish to the Administrative Agent a report, in form and substance satisfactory to the Administrative Agent, which report shall set forth, as of each preceding January 1 or July 1, as applicable, the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Each report to be provided on or before each April 1 shall be a complete report relating to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties prepared by an independent petroleum engineer or firm of engineers reasonably satisfactory to the Administrative Agent. Each report to be provided on or before each October 1 shall simply update the previous complete report, and may be prepared by the Borrower's own engineers and shall be certified by the President or Chief Financial Officer of the Borrower. Upon receipt of each such report, the Administrative Agent shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base as set forth in this Section 2.06. The Administrative Agent may, subject to approval of the Required Banks, and must, upon the request of the Required Banks, redetermine the Borrowing Base at any time, and from time to time, which redetermination shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base, as set forth in this Section. The Administrative Agent may request in writing that the Borrower provide a Reserve Report regarding the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties with an effective date not more than ninety (90) days prior to Borrower's delivery of such Reserve Report to Administrative Agent, and such Reserve Report shall be delivered to Administrative Agent within ninety (90) days after Borrower's receipt of such written request. The Borrower shall have the right to request, by written notice to Administrative Agent, one unscheduled redetermination of the Borrowing Base between any two scheduled redeterminations thereof, subject to contemporaneously providing to Administrative Agent a Reserve Report with an effective date not more than ninety (90) days prior to the date of such notice. If at any time the Required Banks cannot otherwise agree on a redetermination of the Borrowing Base, then the Borrowing Base, shall be set on the basis of the Administrative Agent's calculation of the "weighted arithmetic average" (as hereinafter calculated) of the Borrowing Base, as determined by each individual Bank and communicated to Administrative Agent in writing. However, the amount of the Borrowing Base shall never be increased at any time without the unanimous consent of the Banks, notwithstanding anything else herein to the contrary. For purposes of this paragraph, the "weighted arithmetic average" of the Borrowing Base shall be determined by first multiplying the Borrowing Base proposed in writing to Administrative Agent by each Bank by such Bank's Percentage Share, and then adding the results of each such calculation, with the resultant sum being the Borrowing Base. The Borrowing Base shall represent the Required Banks' approval of the Administrative Agent's determination, in accordance with its customary lending practices, of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties and the Borrower acknowledges, for purposes of this Agreement, such determination by the Administrative Agent as being the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties. In making any redetermination of the Borrowing Base, the Administrative Agent and the Banks shall apply the parameters and other credit factors consistently applied then generally being utilized by the Administrative Agent and each such Bank, respectively, for Borrowing Base redeterminations for other similarly situated borrowers. The Borrower, Required Banks and the Administrative Agent acknowledge that (a) due to the uncertainties of the oil and gas extraction process, the Borrowing Base Oil and Gas Properties are not subject to evaluation with a high degree of accuracy and are subject to potential rapid deterioration in value, and (b) for this reason and the difficulties and expenses involved in liquidating and collecting against the Borrowing Base Oil and Gas Properties, the Administrative Agent's determination of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties contains an equity cushion, which equity cushion is acknowledged by the Borrower as essential for the adequate protection of the Banks.

Borrowing Base Determination. Notwithstanding (a) The Borrower Representative shall deliver, as soon as available and in any event not later than 15 Business Days after the following provisions end of this Sectioneach fiscal month (or, solely in the case of the calendar months ending March 31, 2014, April 30, 2014, and May 31, 2014, not later than 30 calendar days after such date), or more frequently if the Borrower Representative may elect, including on or prior to the closing date of any Permitted Acquisition or any other Investment permitted under Section 8.3 (Investments) where the acquired assets are intended to be included in the Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced from time (to time the extent permitted by the mandatory prepayments made pursuant definition of Borrowing Base), a Borrowing Base Certificate as of the last calendar day of such preceding fiscal month (or in the case of a voluntary delivery of a Borrowing Base Certificate at the election of the Borrower Representative, a subsequent date on or prior to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled such Borrowing Base redetermination initiated Certificate) executed by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf Responsible Officer of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be determined pursuant to the following provisions of this Section. On or before September 1, 2000, the Borrower shall furnish to the Agent Representative, together with supporting information sufficient to update to an effective date of June 1in connection therewith, 2000together with any additional reports, the most recent petroleum engineering reports provided to the Agent prior to Closing relative to the Proved Reserves attributable statements and reconciliations with respect to the Borrowing Base Oil as required by clause (e) below and Gas Propertiesas the Administrative Agent may reasonably request. Upon receipt of such report, the Agent shall, in the normal course of business make During a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Banks and subsequent written notification from the Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April 1 and October 1 until the Facility Termination Date, beginning April 1, 2001Weekly Reporting Period, the Borrower Representative shall furnish to the Agent a report, in form and substance satisfactory to the Agent, which report shall set forthdeliver, as soon as available and in any event not later than 5:00 p.m. (New York City time) three Business Days after the last calendar day of each week, an additional Borrowing Base Certificate as of the last calendar day of such preceding January 1 or July 1calendar week executed by a Responsible Officer of the Borrower Representative, as applicabletogether with supporting information in connection therewith, the Proved Reserves attributable and with any additional reports, statements and reconciliations with respect to the Borrowing Base Oil as required by clause (e) below and Gas Propertiesas the Administrative Agent may otherwise reasonably request. Each report to be provided on or before each April 1 shall be a complete report relating Notwithstanding anything to the Proved Reserves attributable contrary in this Section 6.11(a), no later than one Business Day prior to the consummation of an Asset Sale (or merger, consolidation or amalgamation that constitutes an Asset Sale) permitted pursuant to Section 8.4 (Sale of Assets) (or such later date as the Administrative Agent may agree in its sole discretion) of (i) Collateral that is included in the Borrowing Base with an aggregate value in excess of $7,500,000 (measured at the time of such Asset Sale) to any Person other than a Borrower or (ii) any Stock of a Borrower to any Person other than a Borrower or any Holding Company that results in the disposition of Collateral that is included in the Borrowing Base with an aggregate value in excess of $7,500,000 (measured at the time of such Asset Sale), then in each case the Borrower Representative shall deliver to the Administrative Agent a revision to the Borrowing Base Oil and Gas Properties prepared by an independent petroleum engineer or firm of engineers reasonably satisfactory Certificate most recently delivered to the Administrative Agent in accordance with the terms of this Agreement demonstrating the effect of such Asset Sale on the Borrowing Base (on a Pro Forma Basis), and shall, in each case, thereafter deliver such supporting information as may be reasonably requested by the Administrative Agent. Each report Borrowing Base Certificate delivered to be provided the Administrative Agent in accordance with the terms of this Agreement shall set forth the aggregate amount of all Last-Out Qualified Secured Obligations, in each case based on or before each October 1 shall simply update the previous complete report, and may be prepared by latest information that is available to the Borrower's own engineers and shall be certified by the President or Chief Financial Officer Borrowers as of the Borrower. Upon receipt date of each such report, the Agent shall, in the normal course of business, make a determination of the Borrowing Base and the Monthly Borrowing Base Reduction which shall become effective upon approval by the Required Bankscertificate.

Borrowing Base Determination. Notwithstanding The Borrowing Base in effect as of the following provisions of this Section, the Closing is One Hundred Forty Million Dollars ($140,000,000.00). The Borrowing Base shall be as set forth on Schedule 2.06 attached hereto, as further reduced from time to time by the mandatory prepayments made pursuant to Section 2.08 hereof, from the date of Closing until the earlier of: (a) October 1, 2000, (b) the occurrence of an Event of Default, or (c) any unscheduled Borrowing Base redetermination initiated by the Agent and approved by the Required Banks based on a substantive, adverse change in economic conditions generally applicable to independent producers operating in, and/or oil and gas properties located in, the Texas/Louisiana Gulf Coast and/or the Gulf of Mexico Outer Continental Shelf. Thereafter, the Borrowing Base shall be re-determined semi-annually pursuant to the following provisions of this Section. On or before September October 1, 20002002, the Borrower shall furnish to the Administrative Agent information sufficient to update to an effective date of June July 1, 20002002, the most recent petroleum engineering reports Reserve Report provided to the Administrative Agent prior to Closing relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Upon receipt of such reportinformation, the Agent Arrangers shall, in the normal course of business business, make a joint determination of the Borrowing Base and the Monthly Borrowing Base Reduction Base, which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base and the Monthly Borrowing Base Reduction as set forth in this Section. Thereafter, on or before each April 1 and October 1 until the Facility Termination Date, beginning April 1, 20012003, the Borrower shall furnish to the Administrative Agent a reportReserve Report, in form and substance satisfactory to the Administrative Agent, which report shall set forth, as of each preceding January 1 or July 1, as applicable, the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties. Each report Reserve Report that is due to be provided submitted to the Administrative Agent on or before each April 1 shall be a complete report relating prepared by an independent petroleum engineer or firm of engineers acceptable to Administrative Agent, and each Reserve Report due to be submitted on or before October 1 or each year shall be prepared under the supervision of the chief petroleum engineer of Borrower and shall simply update, to its effective date, the last complete Reserve Report provided to Administrative Agent. Upon receipt of each such Reserve Report, the Arrangers shall, in the normal course of business, make a joint determination of the Borrowing Base which shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower, and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base as set forth in this Section 2.06. The Arrangers may, subject to approval of the Required Banks, and must, upon the request of the Required Banks, redetermine the Borrowing Base at any time, and from time to time, which redetermination shall become effective upon approval by the Required Banks and subsequent written notification from the Administrative Agent to the Borrower and which, subject to the other provisions of this Agreement, shall be the basis on which the Borrowing Base shall thereafter be calculated until the effective date of the next redetermination of the Borrowing Base, as set forth in this Section. Not more often than two times in any calendar year, the Administrative Agent may request in writing that the Borrower provide a Reserve Report regarding the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties prepared by with an independent petroleum engineer or firm effective date not more than ninety (90) days prior to Borrower's delivery of engineers reasonably satisfactory such Reserve Report to the Administrative Agent. Each report to be provided on or before each October 1 shall simply update the previous complete report, and may such Reserve Report shall be prepared by the delivered to Administrative Agent within ninety (90) days after Borrower's own engineers and shall be certified by the President or Chief Financial Officer of the Borrower. Upon receipt of each such reportwritten request. The Borrower shall have the right to request, the Agent shallby written notice to Administrative Agent, in the normal course of business, make a determination one unscheduled redetermination of the Borrowing Base and between any two scheduled redeterminations thereof, subject to contemporaneously providing to Administrative Agent a Reserve Report with an effective date not more than ninety (90) days prior to the Monthly date of such notice. If at any time the Arrangers cannot otherwise agree on a redetermination of the Borrowing Base, then the proposed Borrowing Base Reduction which shall become effective upon be set on the basis of the Administrative Agent's calculation of the "weighted arithmetic average" (as hereinafter calculated) of the Borrowing Base, as determined by each Arranger and communicated to Administrative Agent in writing, and such Borrowing Base, calculated by the Administrative Agent based on the "weighted arithmetic average" of each Borrowing Base proposed by the respective Arrangers, shall then be subject to the approval by of the Required Banks. However, the amount of the Borrowing Base shall never be increased at any time without the unanimous consent of the Banks, notwithstanding anything else herein to the contrary. For purposes of this paragraph, the "weighted arithmetic average" of the Borrowing Base shall be determined by first multiplying the Borrowing Base proposed in writing to Administrative Agent by each Arranger by the ratio such Arranger's Percentage Share over the sum of the Percentage Shares of all Arrangers, and then adding the results of each such calculation, with the resultant sum being the Borrowing Base to be submitted to the Banks for approval as provided herein. The Borrowing Base shall represent the Required Banks' approval of the Arrangers' determination, in accordance with their customary lending practices, of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties and the Borrower acknowledges, for purposes of this Agreement, such determination by the Arrangers as being the maximum loan amount that can be supported by the Borrowing Base Oil and Gas Properties. In making any redetermination of the Borrowing Base, the Arrangers and the other Banks shall apply the parameters and other credit factors consistently applied, then generally being utilized by the Arrangers and each such Bank, respectively, for Borrowing Base redeterminations for other similarly situated borrowers. The Borrower, Required Banks and the Arrangers acknowledge that (a) due to the uncertainties of the oil and gas extraction process, the Borrowing Base Oil and Gas Properties are not subject to evaluation with a high degree of accuracy and are subject to potential rapid deterioration in value, and (b) for this reason and the difficulties and expenses involved in liquidating and collecting against the Borrowing Base Oil and Gas Properties, the Arrangers' determination of the maximum loan amount with respect to the Borrowing Base Oil and Gas Properties contains an equity cushion, which equity cushion is acknowledged by the Borrower as essential for the adequate protection of the Banks.