Common use of Conduct of Operations Clause in Contracts

Conduct of Operations. (a) The Partners agree to participate in the Partnership’s program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may participate with others in the drilling of xxxxx and it may enter into partnerships or other such arrangements. (b) The Partnership shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership the right to take in kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if the Managing General Partner is the operator of such Lease, the Managing General Partner shall enter into written agreements with every other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind so as not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal income tax purposes. (c) The relationship of the Partnership and the Managing General Partner (or an Affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c), and except to the extent inconsistent with this Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989, with a provision reserving the right to take production in-kind, naming the Partnership as a non-operator, and with the accounting procedure to govern as the accounting procedures under such operating agreements. (d) The Managing General Partner is not expected to act as the operator of the Partnership Well, and the Managing General Partner may designate such other persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (e) The Partnership shall enter into a Turnkey Drilling Contract with the Managing General Partner or its Affiliates as described in the Placement Memorandum. (f) The funds of the Partnership shall not be commingled with the funds of any other Person. (g) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership.

Conduct of Operations. (a) The Partners agree to participate in the Partnership’s program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may participate with others in the drilling of xxxxx and it may enter into partnerships or other such arrangements. (b) The Partnership shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership the right to take in kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if the Managing General Partner is the operator of such Lease, the Managing General Partner shall enter into written agreements with every other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind so as not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal income tax purposes. (c) The relationship of the Partnership and the Managing General Partner (or an Affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c), and except to the extent inconsistent with this Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989, with a provision reserving the right to take production in-kind, naming the Partnership as a non-operator, and with the accounting procedure to govern as the accounting procedures under such operating agreements. (d) The Managing General Partner is not expected to act as the operator of the Partnership WellXxxxx, and the Managing General Partner may designate such other persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (e) The Partnership shall enter into a Turnkey Drilling Contract with the Managing General Partner or its Affiliates as described in the Placement Memorandum. (f) The funds of the Partnership shall not be commingled with the funds of any other Person. (g) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership.

Conduct of Operations. (a) The Partners agree to participate in the Partnership’s 's program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s 's opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may participate with others in the drilling of xxxxx wxxxx and it may enter into partnerships or other such arrangements. (b) The Partnership shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership the right to take in kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if the Managing General Partner is the operator of such Lease, the Managing General Partner shall enter into written agreements with every other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind so as not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal income tax purposes. (c) The relationship of the Partnership and the Managing General Partner (or an Affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c), and except to the extent inconsistent with this Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989, with a provision reserving the right to take production in-kind, naming the Partnership as a non-operator, and with the accounting procedure to govern as the accounting procedures under such operating agreements. (d) The Managing General Partner is not expected to act as the operator of the Partnership WellWxxxx, and the Managing General Partner may designate such other persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (e) The Partnership shall enter into a Turnkey Drilling Contract with the Managing General Partner or its Affiliates as described in the Placement Memorandum. (f) The funds of the Partnership shall not be commingled with the funds of any other Person. (g) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s 's possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership.

Conduct of Operations. (a) Operations of the Partnership shall be conducted as follows: (1) The Managing General Partner shall establish a program of operations for the Partnership. (2) The Investor Partners agree to participate in the Partnership’s program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may and it is expected that it will participate with others in the drilling of xxxxx and it may enter into partnerships joint ventures, partnerships, or other such arrangements. (b) All transactions between the Partnership and the Managing General Partner or its affiliates shall be on terms no less favorable than those terms which could be obtained between the Partnership and independent third parties dealing at arm’s-length, subject to the provisions of Section 5.07. (c) The Partnership shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership the right to take in in-kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, Lease exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if an affiliate of the Managing General Partner is the operator of such Lease, the Managing General Partner shall enter has entered into written agreements with every other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind, unless, in the opinion of counsel to the Partnership, the failure to reserve such right to take in-kind so as will not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal federal income tax purposes. (cd) The relationship of the Partnership and the Managing General Partner (or an Affiliate any affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c), preceding paragraph and except to the extent inconsistent with this Partnership Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989Agreement-1982, with a provision reserving the right to take production in-kind, naming the Partnership as a non-operator, kind and with the a current accounting procedure promulgated by the Council of Petroleum Accountant Societies of North America to govern as the accounting procedures under such operating agreementsagreement. (de) The Managing General Partner is not expected to act as the operator of the Partnership Well, and the Managing General Partner may designate or agree to (and enter into written Agreements with and for) such other persons Persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (ef) In the event that any affiliate of the Managing General Partner serves as an operator on any partnership xxxxx, it will do so pursuant to a model form operating agreement issued by the American Association of Petroleum Landmen and an accounting procedure for joint operations issued by the Council of Petroleum Accountants Societies of North America. Such affiliate shall receive fees not in excess of the competitive rate for the area, typically in the form of per well charges for each producing well. (g) The Managing General Partner shall be reimbursed by the Partnership for Direct Costs and Administrative Costs incurred and paid by it. All other expenses shall be borne by the Partnership. (h) The Managing General Partner and its affiliates may but are not required to enter into other transactions (embodied in a written contract) with the Partnership, such as providing services, supplies, and equipment, and shall be entitled to compensation for such services at prices and on terms that are competitive in the geographic area of operations. (i) The Partnership shall enter into a Turnkey Drilling Contract with make no loans to the Managing General Partner or its Affiliates as described in the Placement Memorandumany affiliate thereof. (fj) Neither the Managing General Partner nor any affiliate shall loan any funds to the Partnership. (k) The funds of the Partnership shall not be commingled with the funds of any other Person. (gl) Notwithstanding any provision herein to the contrary, no creditor shall receive, as a result of making any loan, a direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor. (m) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership. Except as permitted under Section (II)(H)(3) of the North American Securities Administrators Association Statement of Policy on Oil and Gas Programs, no agreement (including this Agreement) between the Managing General Partner and the Partnership shall limit any fiduciary duty to the Partnership owed by the Managing General Partner under any applicable law.

Conduct of Operations. (a) Operations of the Partnership shall be conducted as follows: (i) The Managing General Partner shall establish a program of operations for the Partnership. (ii) The Investor Partners agree to participate in the Partnership’s program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may and it is expected that it will participate with others in the drilling of xxxxx and it may enter into partnerships joint ventures, partnerships, joint operating agreements, or other such arrangements. (b) All transactions between the Partnership and the Managing General Partner or its Affiliates shall be on terms no less favorable than those terms that could be obtained between the Partnership and independent third parties dealing at arm’s length, subject to the provisions of Section 5.7. (c) The Partnership shall not participate in any joint operations on any co-owned Lease lease unless there has been acquired or reserved on behalf of the Partnership the right to take in in-kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, lease exclusive of production which may be used in development and production operations on the Lease lease and production unavoidably lost, and, if an Affiliate of the Managing General Partner is the operator of such Leaselease, the Managing General Partner shall enter has entered into written agreements with every other person or entity Person owning any working or operating interest reserving to such person or entity Person a similar right to take in-kind, unless, in the opinion of counsel to the Partnership, the failure to reserve such right to take in-kind so as will not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal federal income tax purposes. (cd) The relationship of the Partnership and the Managing General Partner (or an any Affiliate retaining or acquiring an interest) as co-owners in Leasesleases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c), preceding paragraph and except to the extent inconsistent with this Partnership Agreement, shall be governed by the AAPL American Association of Petroleum Landsmen Form 610 Model Operating Agreement-1989610-1989, with a provision reserving the right to take production in-kind, naming the Partnership as a non-operator, kind and with the a current accounting procedure promulgated by the Council of Petroleum Accountant Societies of North America to govern as the accounting procedures under such operating agreementsagreement. (de) The Managing General Partner is not expected to act as the operator of the Partnership Well, and the Managing General Partner may designate or agree to (and enter into written agreements with and for) such other persons Persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (ef) In the event that any Affiliate of the Managing General Partner serves as an operator on any Partnership xxxxx, it will do so pursuant to a model form operating agreement issued by the American Association of Petroleum Landmen and an accounting procedure for joint operations issued by the Council of Petroleum Accountants Societies of North America. Such Affiliate shall receive fees not in excess of the competitive rate for the area, typically in the form of per well charges for each producing well. (g) The Managing General Partner shall be reimbursed by the Partnership for Direct Costs and Administrative Costs incurred and paid by it. Notwithstanding the previous sentence, the Managing General Partner shall still bear a percentage of the Direct Costs and Administrative Costs equal to its percentage of revenue participation in the Partnership, except with regard to Direct Costs that are classified as drilling or acquisition related costs, which shall be allocated 1% to the Managing General Partner. All other expenses shall be borne by the Partnership. Administrative Costs and other charges for goods and services must be fully supportable as to the necessity thereof and the reasonableness of the amount charged. Direct Costs shall be billed directly to and paid by the Partnership to the extent practicable. Administrative Costs must be reasonably allocated to the Partnership on the basis of assets, revenues, time records or other methods (including expenses) conforming with generally accepted accounting principles. An independent certified public accountant shall audit such allocations annually and provide written attestation annually, to be included as part of the Partnership’s annual report, that the method used to make allocations was consistent with the method described in the prospectus and that the total amount of costs allocated did not materially exceed the amounts incurred by the Managing General Partner. If the Managing General Partner subsequently decides to allocate expenses in a manner different from that described in the prospectus, such change shall be reported to the Partners together with an explanation of why such change was made and the basis used for determining the reasonableness of the new allocation method. No portion of salaries, benefits, compensation or remuneration of controlling Persons shall be reimbursed as Administrative Costs. (h) The Managing General Partner and its Affiliates may but are not required to enter into other transactions (embodied in a written contract) with the Partnership, such as providing services, supplies, and equipment, and shall be entitled to compensation for such services at prices and on terms that are competitive in the geographic area of operations. (i) The Partnership shall enter into a Turnkey Drilling Contract with make no loans to the Managing General Partner or any Affiliate thereof. (j) The Managing General Partner shall not borrow monies for the business of the Partnership if such financing shall provide that the lender has recourse against any Investor Partner. The Partnership may borrow funds to acquire new properties, drill new xxxxx, conduct maintenance operations on Partnership properties or conduct activities necessary to preserve Partnership property. The proceeds of the Partnership’s borrowings cannot be used to make distributions to the Partners or Unit Holders or to pay fees to the Managing General Partner or its Affiliates as described Affiliates, other than to reimburse them for amounts they have paid to third parties on behalf of the Partnership in the Placement Memorandumnormal course of the Partnership business. (fk) The funds of the Partnership shall not be commingled with the funds of any other Person; notwithstanding the above, the Managing General Partner may establish a master fiduciary account pursuant to which separate subtrust accounts are maintained for the benefit of affiliated programs, provided, the Partnership’s funds are protected from the claims of such other programs and their creditors. The prohibition of this subsection shall not apply to investments meeting the requirements of Section 6.3(h) of this Agreement. (gl) Notwithstanding any provision herein to the contrary, no creditor shall receive, the prohibition of this subsection shall not apply to investments meeting the requirements of Section 6.3(h) of the Agreement as a result of making any loan, a direct or indirect interest in the profits, capital, or property of the Partnership other than as a secured creditor. (m) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership. Except as permitted under Section (II)(H)(3) of the North American Securities Administrators Association (“NASAA”) Statement of Policy on Oil and Gas Programs, no agreement (including this Agreement) between the Managing General Partner and the Partnership shall limit any fiduciary duty to the Partners owed by the Managing General Partner under any applicable law.

Conduct of Operations. (a) The Partners Joint Venturers agree to participate in the Partnership’s Joint Venture's program of operations as established by the Managing General PartnerJoint Venture Manager; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s Joint Venture Manager's opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership Joint Venture may participate with others in the drilling of xxxxx and wellx xxx it may enter into partnerships joint ventures, partnerships, or other such arrangements. (b) The Partnership Joint Venture shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership Joint Venture the right to take in kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if the Managing General Partner Joint Venture Manager is the operator of such Lease, the Managing General Partner Joint Venture Manager shall enter into written agreements with every other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind so as not to result in the Partnership Joint Venture being treated as a member of an association taxable as a corporation for Federal income tax purposes. (c) The relationship of the Partnership Joint Venture and the Managing General Partner Joint Venture Manager (or an Affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c5.5.2(c), and except to the extent inconsistent with this Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989Agreement-1982, with a provision reserving the right to take production in-kind, naming the Partnership Joint Venture Manager as operator and the Joint Venture as a non-operator, and with the accounting procedure to govern as the accounting procedures under such operating agreements. (d) The Managing General Partner Joint Venture Manager is not expected to act as the operator of all Joint Venture wellx, xxd the Partnership Well, and the Managing General Partner Joint Venture Manager may designate such other persons as it deems appropriate to conduct the actual drilling and producing operations of the PartnershipJoint Venture. (e) As operator of Joint Venture wellx, xxe Joint Venture Manager or its Affiliates shall receive per-well charges for each producing well based on the Working Interest acquired by the Joint Venture. These per-well charges shall be subject to annual adjustment beginning January 1, 1998 as provided in the accounting procedures of the operating agreements. (f) The Partnership Joint Venture shall enter into a Turnkey Drilling Contract turnkey drilling contract with the Managing General Partner Joint Venture Manager or its Affiliates as described in the Placement Memorandum. (fg) The funds of the Partnership Joint Venture shall not be commingled with the funds of any other Person. (gh) The Managing General Partner Joint Venture Manager shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the PartnershipJoint Venture, whether or not in the Managing General Partner’s Joint Venture Manager's possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the PartnershipJoint Venture.

Conduct of Operations. (a) The Partners agree to participate in the Partnership’s 's program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s 's opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may participate with others in the drilling of xxxxx and it may enter into partnerships or other such arrangements. (b) The Partnership shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership the right to take in kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if the Managing General Partner is the operator of such Lease, the Managing General Partner shall enter into written agreements with every even/ other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind so as not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal income tax purposes. (c) The relationship of the Partnership and the Managing General Partner (or an Affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c), and except to the extent inconsistent with this Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989, with a provision reserving the right to take production in-kind, naming the Partnership as a non-operator, and with the accounting procedure to govern as the accounting procedures under such operating agreements. (d) The Managing General Partner is not expected to act as the operator of the Partnership WellXxxxx, and the Managing General Partner may designate such other persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (e) The Partnership shall enter into a Turnkey Drilling Contract with the Managing General Partner or its Affiliates as described in the Placement Memorandum. (f) The funds of the Partnership shall not be commingled with the funds of any other Person. (g) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s 's possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership.

Conduct of Operations. (a) The Partners agree to participate in the Partnership’s 's program of operations as established by the Managing General Partner; provided, however, that no well drilled to the point of setting casing need be completed if, in the Managing General Partner’s 's opinion, such well is unlikely to be productive of oil or gas in quantities sufficient to justify the expenditures required for well completion. The Partnership may participate with others in the drilling of xxxxx and it may enter into partnerships Partnerships, partnerships, or other such arrangements. (b) The Partnership shall not participate in any joint operations on any co-owned Lease unless there has been acquired or reserved on behalf of the Partnership the right to take in kind or separately dispose of its proportionate share of the oil and gas produced from such Lease, exclusive of production which may be used in development and production operations on the Lease and production unavoidably lost, and, if the Managing General Partner is the operator of such Lease, the Managing General Partner shall enter into written agreements with every other person or entity owning any working or operating interest reserving to such person or entity a similar right to take in-kind so as not to result in the Partnership being treated as a member of an association taxable as a corporation for Federal income tax purposes. (c) The relationship of the Partnership and the Managing General Partner (or an Affiliate retaining or acquiring an interest) as co-owners in Leases, except to the extent superseded by an operating agreement consistent with the provisions of Section 5.2(c5.5.2(c), and except to the extent inconsistent with this Agreement, shall be governed by the AAPL Form 610 Model Operating Agreement-1989, with a provision reserving the right to take production in-kind, . naming the Managing General Partner as operator and the Partnership as a non-operator, and with the accounting procedure to govern as the accounting procedures under such operating agreements. (d) The Managing General Partner is not expected to act as the operator of the Partnership Well, and the Managing General Partner may designate such other persons as it deems appropriate to conduct the actual drilling and producing operations of the Partnership. (e) As operator of the Partnership Well, the Managing General Partner or its Affiliates shall receive per-well charges for each producing well based on the Working Interest acquired by the Partnership. These per-well charges shall be subject to annual adjustment beginning January I, 2011 as provided in the accounting procedures of the operating agreements. (f) The Partnership shall enter into a Turnkey Drilling Contract turnkey drilling contract with the Managing General Partner or its Affiliates as described in the Placement Memorandum. (fg) The funds of the Partnership shall not be commingled with the funds of any other Person. (gh) The Managing General Partner shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Partnership, whether or not in the Managing General Partner’s 's possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Partnership.