Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than: (a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes. (b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months. (c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes. (d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole. (e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 5 contracts
Samples: Credit Agreement (Samson Resources Corp), Credit Agreement (Samson Resources Corp), Fourth Amendment Agreement (Samson Resources Corp)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty-six (66) month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree)agreement. However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 5 contracts
Samples: Credit Agreement (Vine Energy Inc.), Credit Agreement (Vine Resources Inc.), Credit Agreement (Vine Resources Inc.)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject The Borrower shall obtain, or cause to Section 10.10(b)be obtained by an Other Swap Pledgor, no later than thirty (30) days after the Closing Date and will at all times thereafter maintain, or cause to be maintained by an Other Swap Pledgor, in full force and effect one or more Hedge Agreements in respect of commodities entered into not for speculative purposes the net aggregate notional volumes for which amount equal to one hundred percent (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements100%) do not exceed, as of the date Outstanding Principal Amount of the latest hedging transaction is entered into under a Hedge Agreement, 85% of Loans from time to time (the “Aggregate Notional Amount”) approved by the Administrative Agent in its reasonable discretion with (i) during Eurohypo or its Affiliates or (ii) one or more other banks or insurance companies as counterparties (each a “Third-Party Counterparty”), which is effective to cause the period All-in-Rate as to the Aggregate Notional Amount commencing on no later than the date that is thirty (30) days after the Closing Date through and including April 1(or, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initiallyif such day is not a Business Day, the Sponsor Development Plan delivered on first Business Day thereafter) to be not in excess of eight percent (8.0%) per annum through the Hedging Termination Date. Upon the Closing Date, and (B) at any time after the Sponsor Development Plan is required Borrower shall deliver, or cause to be delivered by an Other Swap Pledgor, a Hedge Agreement Pledge, substantially in the form of Exhibit G-1 attached hereto, together with, within thirty (30) days after the Closing Date, the applicable bid package, confirmation and other documentation for such Hedge Agreement (including, without limitation, a certificate from an Authorized Officer of the Borrower certifying that a Hedge Agreement has been entered into on the terms set forth in the confirmation) as may be reasonably acceptable to the Administrative Agent evidencing compliance with the Borrower’s obligations under the provisions of this Section 8.19, and within ten (10) days after the delivery of each such Hedge Agreement (or within the thirty (30) day period referred to above) shall deliver the applicable counterparty acknowledgment. Any Hedge Agreement shall require monthly fixed rate and floating rate payments and be based on a LIBO Rate of interest having, at the Borrower’s option, successive Interest Periods (an “Interest Rate Hedge Period”) of one, two, three, six or twelve months or such other Interest Periods satisfactory to the Administrative Agent in its reasonable discretion. Notwithstanding anything to the contrary contained in this Section 8.19, the Borrower or any Other Swap Pledgor shall be entitled to enter into one or more Hedge Agreements in excess of the Aggregate Notional Amount, up to the total amount of the Commitments or providing interest rate protection for periods that extend beyond the Hedging Termination Date (each such agreement, but only to the extent that it, after giving effect to all other Hedge Agreements maintained pursuant to this Section 9.14(c)(vi8.19(a), relates to a notional amount in excess of the most recent Sponsor Development Plan Aggregate Notional Amount or provides interest rate protection for periods that extend beyond the Hedging Termination Date, is referred to herein as an “Excess Hedge Agreement”) on terms acceptable to the Borrower or such Other Swap Pledgor; provided, however, that Borrower shall deliver, or cause to be delivered pursuant thereto) and (ii) at any time thereafterby an Other Swap Pledgor, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Administrative Agent’s request in accordance with the time requirements set forth in this Section 9.14(a)8.19(a), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts Hedge Agreement Pledge with respect to each Excess Hedge Agreement, substantially in the Credit Parties’ reasonably anticipated projected production from form of Exhibit G-2 attached hereto, together with the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior counterparty’s acknowledgment and other instruments provided to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesdelivered thereunder.
(b) IfThe Borrower’s obligations under any Hedge Agreement shall not be secured by the Deeds of Trust and shall not be secured by any Lien on or in all or any portion of the collateral under the Security Documents, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated direct or indirect interest in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar monthsother Property (other than as permitted pursuant to Section 9.02(i)).
(c) Other Any Hedge Agreements (other than any Agreement with a Third-Party Counterparty is herein called a “Third-Party Hedge Agreements in Agreement.” With respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this to each Third-Party Hedge Agreement maintained with respect to the Aggregate Notional Amount and each Excess Hedge Agreement pledged to the Administrative Agent pursuant to Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: 8.19(a): (i) any commodity Hedging the Third-Party Counterparty providing such Third-Party Hedge Agreement intendedmust have a long term credit rating no lower than “A” from S&P or “A2” from Xxxxx’x at the time of entry into such Third-Party Hedge Agreement; provided, at inception of executionhowever, to hedge or manage any of if there is a difference in the risks related to existing then current S&P rating and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and Xxxxx’x rating, the lesser rating shall be applicable; (ii) any the form and substance thereof must be satisfactory to the Administrative Agent in its reasonable discretion and in all respects and (iii) each counterparty thereunder shall have delivered to the Administrative Agent a counterparty’s acknowledgment in the form attached to the Hedge Agreement intended, at inception of execution, Pledge applicable thereto (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries such other form as may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent acceptable to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamAdministrative Agent in its reasonable discretion).
Appears in 4 contracts
Samples: Loan Agreement (Douglas Emmett Inc), Loan Agreement (Douglas Emmett Inc), Loan Agreement (Douglas Emmett Inc)
Hedge Agreements. The (a) Subject to Section 10.9, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements with Secured Hedge Counterparties in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 8590% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Developed Producing Reserves (as forecast forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered pursuant to Section 9.14(a)9.13(a), in the case of each of clauses as applicable) for any month (i) and (ii) abovecollectively, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts Hedge Agreements with Secured Hedge Counterparties with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Developed Producing Reserves of the Credit Parties as forecast forecasted based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not exceed 90% of the reasonably anticipated projected production after giving effect to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive an enforceable acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(bii) If, after Hedge Agreements with a Secured Hedge Counterparty entered into with the end purpose and effect of (i) fixing or limiting interest rates on a principal amount of indebtedness of any calendar monthCredit Party that is accruing interest at a variable rate or (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is accruing interest at a fixed rate (in each case including Hedge Agreements entered into to unwind or offset other permitted Hedge Agreements), the Borrower determines provided that the aggregate volume notional amount of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements does not (on a net basis) exceed the seventy five percent (75.0%) of the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time such thatHedge Agreement is entered into, at that such timeHedge Agreements are not entered into for speculative purposes and such Hedge Agreements do not, future hedging volumes will not exceed 100% in any case, have a tenor beyond the maturity date of reasonably anticipated projected production for the then-current and any succeeding calendar monthssuch Indebtedness.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(db) It is understood that for purposes of this Section 10.1010.9, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted and/or reasonably anticipated projected Hydrocarbon production from Oil and Gas Properties of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecastedreasonably anticipated) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ec) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b10.9(a), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated projected Hydrocarbon production from the Credit Parties’ total Proved Reserves Oil and Gas Properties based upon the Initial Reserve Reports or the most recent Reserve Report delivered pursuant to Section 9.14(a9.13(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 3 contracts
Samples: Credit Agreement (Mach Natural Resources Lp), Credit Agreement (Mach Natural Resources Lp), Credit Agreement (Mach Natural Resources Lp)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not 715000788 12406500715000788 12406500 contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 2 contracts
Samples: Fifth Amendment and Waiver Agreement (Samson Resources Corp), Fifth Amendment and Waiver Agreement (Samson Resources Corp)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty-six (66) month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), and without limiting the ability of the Borrower to enter into incremental hedging in connection with a Permitted Acquisition pursuant to the first sentence of this Section 10.10(a), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 2 contracts
Samples: Credit Agreement (Athlon Energy Inc.), Credit Agreement (Athlon Energy Inc.)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements with Approved Counterparties in respect of commodities Hydrocarbons entered into not for speculative purposes purposes, the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than (i) puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, eighty-five percent (85% %) of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)9.13(a), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty (60) month period from the date of creation of such hedging arrangement arrangement, based on daily volumes on an annual basis; provided, however, notwithstanding the foregoing volume limitation, the Borrower and/or the Restricted Subsidiaries may enter into Hedge Agreements in respect of purchased puts and floors not intended to be physically settled so long as the net notional volumes of all Hedge Agreements in respect of Hydrocarbons subject to this Section 10.10(a) do not exceed (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements), as of the date the latest hedging transaction is created entered into under a Hedge Agreement, one hundred percent (100%) of the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.13(a), as applicable) for the sixty (60) month period from the date of creation of such hedging arrangement, based on daily volumes on an annual basis (the “Ongoing Xxxxxx”), (ii) any Permitted Bond Hedge Transaction(s), and (iii) any Permitted Warrant Transaction. In no event shall any Hedge Agreement entered into by the Credit Parties have a tenor longer than sixty (60) months. In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of fifteen percent (15% %) of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than one hundred percent (100%) of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party Guarantor signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 thirty (30) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 thirty (30) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of Hydrocarbons or equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a9.13(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
(e) Notwithstanding anything to the contrary herein, the Borrower or any other Credit Party shall be permitted to enter into Hedge Agreements with respect to Hydrocarbons purchased from third parties to the extent such Hydrocarbons are intended to be consumed by the Borrower or any other Credit Party in their respective operations or used in connection with the Energy Business. In no event shall any Lien secure Hedge Agreements except pursuant to the Credit Documents, nor shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower and its Restricted Subsidiaries to post collateral, credit support (including in the form of letters of credit) or margin (other than, in each case, pursuant to the Credit Documents or to the extent required following Payment in Full) to secure their obligations under such Hedge Agreement or to cover market exposures, nor shall any Hedge Agreement be secured by any collateral other than Collateral pursuant to the Credit Documents.
Appears in 2 contracts
Samples: Credit Agreement (California Resources Corp), Credit Agreement (California Resources Corp)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable), in the case of each of clauses Hedging Agreements entered into after the Closing Date, not to exceed the forty-eight (i48) and (ii) above, for the 66 month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected Hydrocarbon production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected Hydrocarbon production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 ninety (90) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 forty-five (45) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 2 contracts
Samples: Credit Agreement (Vine Energy Inc.), Credit Agreement (Vine Energy Inc.)
Hedge Agreements. The Borrower (a) On each Closing Date on which the Issuer is issuing Floating Rate Notes, the Issuer must enter into one or more Hedge Agreements with one or more Eligible Hedge Providers. Each Hedge Agreement will notbe secured by the lien of this Master Indenture.
(b) For so long as any Series or Class of Floating Rate Notes remains Outstanding, the Issuer must maintain one or more Hedge Agreements with an aggregate notional balance (x) equal to or exceeding the product of (i) seventy percent (70%) and will (ii) the aggregate Outstanding Principal Balance of all such Series or Classes of Floating Rate Notes (the amount described in this clause (x), the “Minimum Hedging Amount”) and (y) less than or equal to the product of (i) one hundred five percent (105%) and (ii) the aggregate Outstanding Principal Balance of all such Series or Classes of Floating Rate Notes (the amount described in this clause (y), the “Maximum Hedging Amount” and, collectively with the Minimum Hedging Amount, the “Hedging Requirement”). Notwithstanding any other term or provision of this Master Indenture, but subject to Section 10.05 hereof: without the consent of Noteholders, the Issuer and the Indenture Trustee may amend this Master Indenture from time to time, with the prior written consent of all Hedge Providers and subject to receipt of Rating Agency Confirmation, to stipulate different percentages for the Minimum Hedging Amount or the Maximum Hedging Amount.
(c) If the Issuer is not permit any Restricted Subsidiary toable to meet the Minimum Hedging Amount, it must, within ninety-five (95) days, use reasonable commercial efforts to enter into one or more Hedge Agreements, or, if the reason for such non-compliance is that a Hedge Agreement has terminated in its entirety, but Floating Rate Notes remain outstanding, enter into any one or more replacement Hedge Agreements with any Person other than:
at least sufficient to meet the Minimum Hedging Amount. If, at the expiration of such ninety-five (a95) Subject day period the Issuer has been unable to Section 10.10(b), enter into additional or replacement Hedge Agreements in respect order to meet the Minimum Hedging Amount, the Requisite Majority (in its sole discretion) may direct the Indenture Trustee on behalf of commodities entered into not for speculative purposes the net notional volumes for which Issuer to enter into, maintain or terminate (when aggregated with other commodity in whole or in part), one or more Hedge Agreements then selected by the Requisite Majority (in effectits sole discretion) such that, other than putsafter giving effect to such action, floors and basis differential swaps the Issuer will be in compliance with the Hedging Requirement. In the event the Requisite Majority determines to direct the Indenture Trustee to enter into, maintain or terminate (in whole or in part) a Hedge Agreement on volumes already hedged pursuant the Issuer’s behalf, the Requisite Majority shall promptly send a copy of any such agreement to other Hedge Agreementsthe Issuer.
(d) do not exceed, as of the date the latest hedging transaction is entered into under If contemplated by a Hedge Agreement, 85% the Issuer may enter into off-setting interest rate transactions in order to comply with the Hedging Requirement.
(e) Except as otherwise provided in this Master Indenture or the applicable Series Supplement, payments by the Issuer to Hedge Providers shall be made to such Hedge Providers on each Payment Date in accordance with the Flow of Funds and payments by Hedge Providers to the Issuer shall be made to the Collections Account.
(f) If a Hedge Provider (a “Designated Hedge Provider”) is the “defaulting party” or “affected party” under a Hedge Agreement (a “Designated Hedge Agreement”) and, as a result, the Issuer is entitled to terminate such Designated Hedge Agreement, then, promptly after the Issuer becomes aware thereof, the Issuer (i) during shall notify the period commencing Indenture Trustee and each Rating Agency and (ii) shall use commercially reasonable efforts to arrange for another Eligible Hedge Provider (a “Replacement Hedge Provider”) to enter into a replacement Hedge Agreement (a “Replacement Hedge Agreement”) with the Issuer to the extent that the Issuer would be required to enter into a Hedge Agreement under Section 3.16(c) hereof if the Designated Hedge Agreement were not in effect (and subject to the timing, and the rights of the Requisite Majority, specified in Section 3.16(c) hereof); provided that, subject to the terms of the Designated Hedge Agreement, the Issuer shall terminate such Designated Hedge Agreement at or prior to the time the Issuer enters into such Replacement Hedge Agreement. In connection with any termination in whole of a Hedge Agreement if the Issuer is entering, or will enter, into a Replacement Hedge Agreement, the Administrator, on behalf and at the direction of the Issuer, will establish with the Indenture Trustee a securities and cash account (a “Replacement and Termination Receipts Account”). The Issuer will deposit (or cause to be deposited) in the Replacement and Termination Receipts Account (x) any Hedge Termination Value paid by the Hedge Provider under the terminating Hedge Agreement to the Issuer, which Hedge Termination Value may be used by the Issuer to make payments required to a Replacement Hedge Provider in connection with a Replacement Hedge Agreement; and (y) any initial payment from a Replacement Hedge Provider that will be used to satisfy any obligation to pay a Hedge Termination Value to the Hedge Provider under the terminating Hedge Agreement. A Replacement and Termination Receipts Account will not be considered to be an Indenture Account for purposes of this Master Indenture and funds standing to its credit will not be considered to be Collateral for purposes of this Master Indenture. All amounts from time to time held in each Replacement and Termination Receipts Account shall be held (a) in the name of the Indenture Trustee, for the benefit of the Issuer, and (b) in the custody and under the “Control” (as such term is defined in the UCC) of the Indenture Trustee, for the purposes and on the Closing Date through terms set forth in this Master Indenture.
(g) If a Hedge Provider is required to post collateral under a Hedge Agreement (“Hedge Collateral”), the Administrator, on behalf and including April 1at the direction of the Issuer, 2014will establish with the Indenture Trustee a securities and cash account (a “Hedge Collateral Account”). The Hedge Collateral will be deposited in the Hedge Collateral Account; provided that the Hedge Collateral will not be considered to be Collateral for purposes of this Master Indenture and the Hedge Collateral Account will not be considered to be an Indenture Account for purposes of this Master Indenture. All amounts from time to time held in each Hedge Collateral Account shall be held (a) in the name of the Indenture Trustee, reasonably projected Hydrocarbon production volumes for the benefit of the Issuer, and (b) in the custody and under the “Control” (as forecast such term is defined in the UCC) of the Indenture Trustee, for the purposes and on the terms set forth in this Master Indenture. If a Hedge Agreement is terminated and a Hedge Collateral Account has been established with respect to the related Hedge Provider, then either: (x) if a Hedge Termination Value is determined to be payable by the Issuer to such Hedge Provider, then the Issuer shall direct the Indenture Trustee to transfer to such Hedge Provider such Hedge Termination Value and, outside of the Flow of Funds, the relevant Hedge Collateral; or (y) if a Hedge Termination Value is determined to be payable by such Hedge Provider to the Issuer, and (A) initiallyif such Hedge Provider pays such Hedge Termination Value to the Issuer when due and payable, then the Sponsor Development Plan delivered on Issuer shall direct the Closing DateIndenture Trustee to immediately return the relevant Hedge Collateral to such Hedge Provider outside of the Flow of Funds, and (B) at any time after if such Hedge Provider does not pay such Hedge Termination Value to the Sponsor Development Plan is required Issuer when due and payable, then the Issuer shall direct the Indenture Trustee to the extent necessary to liquidate such Hedge Collateral and to transfer such Hedge Collateral or the proceeds thereof to the Collections Account in an amount equal to the lesser of (I) such Hedge Termination Value and (II) the amounts standing to the credit of such Hedge Collateral Account (and such Hedge Provider’s obligation to pay such Hedge Termination Value shall be delivered pursuant deemed to Section 9.14(c)(vihave been satisfied to the extent, but only to the extent, that such amounts are so transferred to the Collections Account), and the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at Issuer shall direct the Indenture Trustee to pay any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case proceeds of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not Hedge Collateral in excess of 15% such Hedge Termination Value to such Hedge Provider outside of the Credit Parties’ existing projected production prior to the consummation Flow of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesFunds.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 2 contracts
Samples: Master Indenture (Trinity Industries Inc), Master Indenture (Trinity Industries Inc)
Hedge Agreements. The (a) During a Borrowing Base Trigger Period, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements in respect of commodities that are non-speculative (including Hedge Agreements entered into not for speculative purposes the net notional volumes for which (when aggregated with to unwind or offset other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other permitted Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in ); provided that:
(A) initially, the Sponsor Development Plan delivered on the Closing Date, and any such Hedge Agreement does not have a term greater than sixty (B60) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during the period between entered into;
(iB) the date at all times, on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of net basis, (A) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such Proposed Acquisition is consummated, month in such forthcoming period and (B) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in each of the second through fifth years of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 80% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such acquisition is terminated and month in such forthcoming period;
(C) notwithstanding the limitations set forth in clause (ii) of this Section 11.10(a), in contemplation of a Permitted Acquisition, the Borrower and its Restricted Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas (including natural gas liquids) and crude oil, calculated separately, for each month in the forthcoming five year period covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (A) after the execution of a definitive agreement with respect to a proposed Acquisition, but in any event no earlier than 90 days prior to the proposed Funding Date of such Permitted Acquisition and (B) in the event such agreement is terminated or such Acquisition is otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into (or such longer period as may be reasonably acceptable to which the Administrative Agent in the event the proposed closing of such Permitted Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days after such termination or the end of such 90 day (or longer) period, as applicable, the Borrower shall and shall cause the Restricted Subsidiaries to novate, unwind or otherwise dispose of market sensitive Hedge Agreements to the extent necessary to be in compliance with the limitations set forth in clause (ii) of this Section 11.10(a); and
(D) so long as the Borrower and the Restricted Subsidiaries properly identify and consistently report such xxxxxx, the Borrower and the Restricted Subsidiaries may agree). However, all such incremental utilize crude oil xxxxxx as a substitute for hedging contracts natural gas liquids.
(ii) Hedge Agreements entered into with respect to the purpose and effect of (i) fixing or limiting interest rates on a Proposed Acquisition must be terminated principal amount of indebtedness of any Credit Party that is accruing interest at a variable rate or unwound within 90 days following the date such acquisition (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is terminated. It is understood that commodity accruing interest at a fixed rate (in each case including Hedge Agreements which mayentered into to unwind or offset other permitted Hedge Agreements), from provided that the aggregate notional amount of such Hedge Agreements does not (on a net basis) exceed the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumessuch Hedge Agreement is entered into.
(b) If, after the end of any calendar monthDuring an Investment Grade Period, the Borrower determines that the aggregate volume of all commodity hedging transactions will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than (i) Hedge Agreements not for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes speculative purposes entered into to other production for hedge or mitigate risks to which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has or may have exposure (including with respect to commodity prices), or otherwise unwind existing (ii) Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
purposes entered into in order to effectively cap, collar or exchange interest rates (dfrom fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Restricted Subsidiary and (iii) other Hedge Agreements not for speculative purposes permitted under the risk management policies approved by the Borrower’s Board of Directors from time to time and not subject the Borrower and its Subsidiaries to material speculative risks. It is understood that for purposes of this Section 10.1011.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 2 contracts
Samples: Credit Agreement (California Resources Corp), Credit Agreement (California Resources Corp)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional notational volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 2 contracts
Samples: Credit Agreement (KKR Financial Holdings LLC), Credit Agreement (KKR Financial Holdings LLC)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than, in the case of the Borrower or a Guarantor, a Hedge Bank (as defined in the Senior DIP Credit Agreement) and, then, only so long as:
(a) Subject to Section 10.10(b), any such Hedge Agreements in respect of commodities entered into Agreement does not for speculative purposes the net notional volumes for which have a term greater than sixty (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements60) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period months from the date such hedging arrangement Hedge Agreement is created entered into;
(b) at all times, on a net basis, (A) the “Ongoing aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from ) shall not exceed 90% of the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such month in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a forthcoming period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated aggregate notional volume for each of natural gas (including natural gas liquids) and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). Howevercrude oil, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity calculated separately, covered by market sensitive Hedge Agreements which may, from time to time, “hedge” for any month in each of the same volumes, but different elements second through fifth years of commodity risk thereof, the forthcoming five year period (other than Excluded Xxxxxx) shall not be aggregated together when calculating exceed 80% of the foregoing limitations on notional volumes.
total Proved Reserves of natural gas (bincluding natural gas liquids) Ifand crude oil production, after the end of any calendar monthcalculated separately, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated each such month in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.forthcoming period;
(c) Other any such Hedge Agreement is non-speculative (including Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.to unwind or offset other permitted Hedge Agreements); and
(d) the Borrower and the Subsidiaries properly identify and consistently report such xxxxxx, the Borrower and the Subsidiaries may utilize crude oil xxxxxx as a substitute for hedging natural gas liquids. It is understood that for purposes of this Section 10.1011.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any existing debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, Subsidiaries and (B) for foreign exchange or currency exchange management. Notwithstanding anything to the contrary in this Section 11.10, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination provisions of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower this Agreement or any other Credit Party subsequent Document, the Borrower will not permit any Non-Debtor Subsidiary, nor will any Non-Debtor Subsidiary be permitted, to the publication of such Reserve Report including the Borrower’s or enter into any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamHedge Agreements with any Person.
Appears in 1 contract
Samples: Junior Secured Debtor in Possession Credit Agreement (California Resources Corp)
Hedge Agreements. The Borrower will notPurchase, and will not permit any Restricted Subsidiary toassume, incur, enter into or maintain any Hedge Agreements Agreement with any Person other than:
Person, except for Hedge Agreements (and derivatives transactions pursuant to any such Hedge Agreement) entered into in the ordinary course of business with Approved Hedge Counterparties and not for speculative purposes, and on terms and conditions reasonably satisfactory to the Administrative Agent, to (a) Subject hedge or manage Hydrocarbon price risks to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has actual exposure as a part of its normal business operations, and (b) hedge or otherwise unwind manage interest rate risk existing Hedge Agreements or arising with respect to the outstanding principal amount of any of the Loans; provided that such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) cause the aggregate notional amount of Hydrocarbons under all such Hedge Agreements then in effect to exceed at any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any time eighty percent (80%) of the risks related to existing and or “reasonably forecasted Hydrocarbon production from Proved Developed Producing Reserves” of the Borrower and the Restricted Subsidiaries for such month during the period such Hedge Agreement is in effect, or (ii) have a term of more than three (3) years (or, if earlier, the Termination Date). As used in this Section, “reasonably forecasted production from Proved Developed Producing Reserves” means the forecasted production of Hydrocarbons attributable to Proved Developed Producing Reserves of the Borrower and its Restricted Subsidiaries (whether as reflected in the most recent Engineering Report delivered to the Administrative Agent pursuant to Section 6.03, after giving effect to any pro forma adjustments for the consummation of any acquisitions or not contracted) dispositions of Proved Developed Producing Reserves of the Borrower and (ii) its Restricted Subsidiaries since the effective date of such Engineering Report. Once the Borrower or any Restricted Subsidiary enters into any Hedge Agreement intended(or any derivatives transaction pursuant to any Hedge Agreement), at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination terms and conditions of such Hedge Agreements is Agreement and such transaction may not speculative taken as a wholebe amended or modified in any material respect, nor may such Hedge Agreement or derivative transaction be cancelled, without the prior written consent of the Administrative Agent.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Hedge Agreements. The Sections 10.10(a)(i) and (iv) of the Credit Agreement are each hereby amended and restated in their respective entirety to read as follows:
(i) subject to the proviso below, as of the end of each fiscal quarter, on a net basis, the aggregate daily notional volume determined on a month by month basis for each of natural gas, natural gas liquids and crude oil, calculated separately, covered by all Hedge Agreements with a term greater than sixty (60) months from the date each such Hedge Agreement is entered into shall not exceed 20% of the average consolidated daily production volumes of natural gas, natural gas liquids and crude oil, calculated separately, of the Borrower will notand its Restricted Subsidiaries for the most recently ended four fiscal quarter period (after giving pro forma effect to any Dispositions permitted under Section 10.4 during such period, and will not permit excluding the effect of any force majeure events during such period), and the Borrower shall and shall cause the Restricted Subsidiary toSubsidiaries to promptly, but in any event within forty-five (45) days following the end of each fiscal quarter, enter into Hedge Terminations to the extent necessary to be in compliance with the limitations set forth in this clause (i) (but no Default or Event of Default shall be deemed to have arisen during such 45 day period); provided, that, notwithstanding the foregoing and regardless of whether such percentage limitation is exceeded, the Borrower and the Restricted Subsidiaries shall have no obligation to enter into any Hedge Agreements with any Person other than:
Terminations (aand no Default or Event of Default shall arise hereunder from exceeding such percentage limitation) Subject to Section 10.10(b), unless long-dated Hedge Agreements subject to this clause are within 24 months of their scheduled maturity date (in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts obligation shall arise only with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves long-dated Hedge Agreements that are within 24 months of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation their scheduled maturity date, with Hedge Terminations for long-dated Hedge Agreements with a scheduled maturity date outside of such Proposed Acquisition for a 24 month period not exceeding 36 months from at the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production option of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements satisfy such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(brequirement), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.;
Appears in 1 contract
Hedge Agreements. The Borrower will notPurchase, and will not permit any Restricted Subsidiary toassume, incur, enter into or maintain any Hedge Agreements Agreement with any Person other than:
Person, except for Hedge Agreements (and derivatives transactions pursuant to any such Hedge Agreement) entered into in the ordinary course of business with Approved Hedge Counterparties and not for speculative purposes, and on terms and conditions reasonably satisfactory to the Administrative Agent, to (a) Subject hedge or manage Hydrocarbon price risks to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has actual exposure as a part of its normal business operations, and (b) hedge or otherwise unwind manage interest rate risk existing Hedge Agreements or arising with respect to the outstanding principal amount of any of the Loans; provided that such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) cause the aggregate notional amount of Hydrocarbons under all such Hedge Agreements then in effect to exceed at any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any time eighty percent (80%) of the risks related to existing and or “reasonably forecasted Hydrocarbon production from Proved Developed Producing Reserves” of the Borrower and the Restricted Subsidiaries for such month during the period such Hedge Agreement is in effect, or (ii) have a term of more than three (3) years (or, if earlier, the Termination Date). As used in this Section, “reasonably forecasted production from Proved Developed Producing Reserves” means the forecasted production of Hydrocarbons attributable to Proved Developed Producing Reserves of the Borrower and its Restricted Subsidiaries (whether as reflected in the most recent Engineering Report delivered to the Administrative Agent pursuant to Section 6.03, after giving effect to any pro forma adjustments approved by the Administrative Agent for the consummation of any acquisitions or not contracted) dispositions of Proved Developed Producing Reserves of the Borrower and (ii) its Restricted Subsidiaries since the effective date of such Engineering Report. Once the Borrower or any Restricted Subsidiary enters into any Hedge Agreement intended(or any derivatives transaction pursuant to any Hedge Agreement), at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination terms and conditions of such Hedge Agreements is Agreement and such transaction may not speculative taken as a wholebe amended or modified in any material respect, nor may such Hedge Agreement or derivative transaction be cancelled, without the prior written consent of the Administrative Agent.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject The Borrower shall obtain, or cause to Section 10.10(b)be obtained by an Other Swap Pledgor, no later than thirty (30) days after the Closing Date and will at all times thereafter maintain, or cause to be maintained by an Other Swap Pledgor, in full force and effect one or more Hedge Agreements in respect of commodities entered into not for speculative purposes the net aggregate notional volumes for which amount equal to one hundred percent (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements100%) do not exceed, as of the date Outstanding Principal Amount of the latest hedging transaction is entered into under a Hedge Agreement, 85% of Loans from time to time (the “Aggregate Notional Amount”) approved by the Administrative Agent in its reasonable discretion with (i) during Eurohypo or its Affiliates or (ii) one or more other banks or insurance companies as counterparties (each a “Third-Party Counterparty”), which is effective to cause the period All-in-Rate as to the Aggregate Notional Amount commencing on no later than the date that is thirty (30) days after the Closing Date through and including April 1(or, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initiallyif such day is not a Business Day, the Sponsor Development Plan delivered on first Business Day thereafter) to be not in excess of eight percent (8.0%) per annum through the Hedging Termination Date. Upon the Closing Date, and (B) at any time after the Sponsor Development Plan is required Borrower shall deliver, or cause to be delivered by an Other Swap Pledgor, a Hedge Agreement Pledge, substantially in the form of Exhibit G-1 attached hereto, together with, within thirty (30) days after the Closing Date, the applicable bid package, confirmation and other documentation for such Hedge Agreement (including, without limitation, a certificate from an Authorized Officer of the Borrower certifying that a Hedge Agreement has been entered into on the terms set forth in the confirmation) as may be reasonably acceptable to the Administrative Agent evidencing compliance with the Borrower’s obligations under the provisions of this Section 8.19, and within ten (10) days after the delivery of each such Hedge Agreement (or within the thirty (30) day period referred to above) shall deliver the applicable counterparty acknowledgment. Any Hedge Agreement shall require monthly fixed rate and floating rate payments and be based on a LIBO Rate of interest having, at the Borrower’s option, successive Interest Periods (an “Interest Rate Hedge Period”) of one, two, three, six or twelve months or such other Interest Periods satisfactory to the Administrative Agent in its reasonable discretion. Notwithstanding anything to the contrary contained in this Section 8.19, the Borrower or any Other Swap Pledgor shall be entitled to enter into one or more Hedge Agreements in excess of the Aggregate Notional Amount, up to the total amount of the Commitments or providing interest rate protection for periods that extend beyond the Hedging Termination Date (each such agreement, but only to the extent that it, after giving effect to all other Hedge Agreements maintained pursuant to this Section 8.19(a), relates to a notional amount in excess of the Aggregate Notional Amount or provides interest rate protection for periods that extend beyond the Hedging Termination Date, is referred to herein as an “Excess Hedge Agreement”) on terms acceptable to the Borrower or such Other Swap Pledgor; provided, however, that Borrower shall deliver, or cause to be delivered by an Other Swap Pledgor, upon the Administrative Agent’s request in accordance with the time requirements set forth in this Section 8.19(a), a Hedge Agreement Pledge with respect to each Excess Hedge Agreement, substantially in the form of Exhibit G-2 attached hereto, together with the counterparty’s acknowledgment and other instruments provided to be delivered thereunder.
(b) The Borrower’s obligations under any Hedge Agreement shall not be secured by the Deeds of Trust and shall not be secured by any Lien on or in all or any portion of the collateral under the Security Documents, any direct or indirect interest in the Borrower or any other Property (other than as permitted pursuant to Section 9.14(c)(vi9.02(i)).
(c) Any Hedge Agreement with a Third-Party Counterparty is herein called a “Third-Party Hedge Agreement.” With respect to each Third-Party Hedge Agreement maintained with respect to the Aggregate Notional Amount and each Excess Hedge Agreement pledged to the Administrative Agent pursuant to Section 8.19(a): (i) the Third-Party Counterparty providing such Third-Party Hedge Agreement must have a long term credit rating no lower than “A” from S&P or “A2” from Xxxxx’x at the time of entry into such Third-Party Hedge Agreement; provided, however, if there is a difference in the then current S&P rating and the Xxxxx’x rating, the lesser rating shall be applicable; (ii) the form and substance thereof must be satisfactory to the Administrative Agent in its reasonable discretion and in all respects and (iii) each counterparty thereunder shall have delivered to the Administrative Agent a counterparty’s acknowledgment in the form attached to the Hedge Agreement Pledge applicable thereto (or in such other form as may be acceptable to the Administrative Agent in its reasonable discretion).
(d) Reserved.
(e) If the Borrower fails for any reason or cause whatsoever to secure and maintain, or cause to be secured and maintained by an Other Swap Pledgor, a Hedge Agreement with respect to the Aggregate Notional Amount as and when required to do so hereunder, such failure shall constitute an Event of Default and the Administrative Agent shall be entitled to exercise all rights and remedies available to it under this Agreement (for the benefit of the Lenders) and the other Loan Documents or otherwise, including the right (but not the obligation) of the Administrative Agent to secure or otherwise enter into one or more Hedge Agreements with respect to the Aggregate Notional Amount with a Lender for and on behalf of the Borrower without such action constituting a cure of such Event of Default and without waiving the Administrative Agent’s or the Lenders’ rights arising out of or in connection with such Event of Default. If the Administrative Agent shall enter into a Hedge Agreement with a Lender in accordance with its right to do so pursuant to this subsection (e), then (i) the most recent Sponsor Development Plan delivered pursuant theretoterms and provisions of any such Hedge Agreement, including the term thereof, shall be determined by the Administrative Agent in its sole discretion (except that the maximum notional amount of all such Hedge Agreements shall not exceed the Aggregate Notional Amount) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from Borrower shall pay all of the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) Administrative Agent’s costs and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, expenses in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”)therewith, including any fees charged by the Credit Parties may also enter into incremental hedging contracts with respect to applicable counterparty, attorneys’ fees and disbursements, and the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves cost of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not additional title insurance in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which an amount determined by the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following necessary to protect the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, Administrative Agent and the Lenders from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) potential funding losses under any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as provided by a wholeLender.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Samples: Loan Agreement (Douglas Emmett Inc)
Hedge Agreements. The (a) During a Borrowing Base Trigger Period, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements in respect of commodities that are non-speculative (including Hedge Agreements entered into not for speculative purposes the net notional volumes for which (when aggregated with to unwind or offset other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other permitted Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in ); provided that:
(A) initially, the Sponsor Development Plan delivered on the Closing Date, and any such Hedge Agreement does not have a term greater than sixty (B60) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during the period between entered into;
(iB) the date at all times, on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of net basis, (A) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such Proposed Acquisition is consummated, month in such forthcoming period and (B) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in each of the second through fifth years of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 80% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such acquisition is terminated and month in such forthcoming period;
(C) notwithstanding the limitations set forth in clause (ii) of this Section 11.10(a), in contemplation of a Permitted Acquisition, the Borrower and its Restricted Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas (including natural gas liquids) and crude oil, calculated separately, for each month in the forthcoming five year period covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (A) after the execution of a definitive agreement with respect to a proposed Acquisition, but in any event no earlier than 90 days prior to the proposed Funding Date of such Permitted Acquisition and (B) in the event such agreement is terminated or such Acquisition is otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into (or such longer period as may be reasonably acceptable to which the Administrative Agent in the event the proposed closing of such Permitted Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days after such termination or the end of such 90 day (or longer) period, as applicable, the Borrower shall and shall cause the Restricted Subsidiaries to novate, unwind or otherwise dispose of market sensitive Hedge Agreements to the extent necessary to be in compliance with the limitations set forth in clause (ii) of this Section 11.10(a); and
(D) so long as the Borrower and the Restricted Subsidiaries properly identify and consistently report such xxxxxx, the Borrower and the Restricted Subsidiaries may agree). However, all such incremental utilize crude oil xxxxxx as a substitute for hedging contracts natural gas liquids.
(ii) Hedge Agreements entered into with respect to the purpose and effect of (i) fixing or limiting interest rates on a Proposed Acquisition must be terminated principal amount of indebtedness of any Credit Party that is accruing interest at a variable rate or unwound within 90 days following the date such acquisition (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is terminated. It is understood that commodity accruing interest at a fixed rate (in each case including Hedge Agreements which mayentered into to unwind or offset other permitted Hedge Agreements), from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines provided that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination notional amount of such Hedge Agreements is does not speculative taken (on a net basis) exceed the outstanding principal balance of the variable or fixed rate, as a whole.
(e) For purposes the case may be, Indebtedness of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon Parties at the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of time such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamHedge Agreement is entered into.
Appears in 1 contract
Samples: Credit Agreement
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject After the Closing Date, the Issuer may from time to Section 10.10(b), time enter into Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps if on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date on which the latest hedging transaction is entered Issuer enters into under a Hedge Agreement, 85% of (i) during the period commencing each Hedge Counterparty entering into a Hedge Agreement on the Closing Date through such date (or any Affiliate of such Hedge Counterparty that shall have absolutely and including April 1, 2014, reasonably projected Hydrocarbon production volumes unconditionally guaranteed (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case using a form of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection guarantee complying with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts S&P’s then-current criteria with respect to guarantees) the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation obligations of such Proposed Acquisition for a period not exceeding 36 months from Hedge Counterparty under the date such hedging arrangement is created during relevant Hedge Agreement) shall be required to satisfy the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and Hedge Counterparty Ratings Requirement, (ii) the earliest of Issuer shall collaterally assign its rights under such Hedge Agreement to the Trustee pursuant to this Indenture and such Hedge Counterparty shall consent to such assignment and (Aiii) the date such Proposed Acquisition Rating Condition is consummated, satisfied. The Issuer shall enter into a Hedge Agreement only if (Bx) the date relevant Hedge Counterparty shall be required in accordance with the terms of such acquisition is terminated Hedge Agreement to pay additional amounts to the Issuer sufficient to cover any withholding tax due on payments made by such Hedge Counterparty to the Issuer under such Hedge Agreement, subject to the Issuer making customary payee tax representations and providing customary tax documentation and (Cy) 90 days such Hedge Agreement contains “limited recourse” and “non-petition” provisions equivalent to the “limited recourse” and “non-petition” provisions set forth herein (mutatis mutandis) and (z) the Rating Condition is satisfied. If on any Measurement Date after the Effective Date but prior to the end of the Reinvestment Period the Aggregate Principal Amount of all fixed rate Collateral Debt Obligations held by the Issuer as of such definitive acquisition agreement was executed date exceeds 30% of the Aggregate Collateral Balance for a period of 10 consecutive Business Days, the Issuer shall give notice to the Holders of the Controlling Class of such occurrence and, upon the request of a Majority of the Controlling Class and subject to the requirements in the preceding sentence, enter into a Hedge Agreement (or such longer period as in form and substance reasonably satisfactory to which the Administrative Agent may agree). However, Majority of the Controlling Class) intended to have a notional amount equal to the excess of the Aggregate Principal Amount of all such incremental hedging contracts entered into with respect fixed rate Collateral Debt Obligations over an amount equal to a Proposed Acquisition must be terminated or unwound within 90 days following 30% of the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesAggregate Collateral Balance.
(b) IfThe Trustee shall, after on behalf of the end of any calendar monthIssuer and in accordance with the Note Valuation Report, pay amounts due to each Hedge Counterparty under the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current on any Payment Date subject to and any succeeding calendar monthsin accordance with Section 11.01.
(c) Other Each Hedge Agreements (other than any Hedge Agreements Agreement shall provide that, in respect of equity any Hedge Counterparty or equity index swaps transferee:
(i) if the Hedge Rating Determining Party ceases to satisfy the Hedge Counterparty Ratings Requirement, then such Hedge Counterparty shall, within the period specified in the Hedge Agreement following such ratings downgrade (solely at the expense of the Hedge Counterparty), (x) enter into an agreement with the Issuer in the form of the ISDA Credit Support Annex providing for the posting of collateral and that satisfies the Rating Condition with respect to S&P or options(y) obtain a guarantee (using a form of guarantee complying with S&P’s then-current criteria with respect to guarantees) or make an assignment to a replacement Hedge Counterparty that has ratings at least equal to the Hedge Counterparty Ratings Requirement; and
(ii) if its Hedge Rating Determining Party fails to satisfy the Ratings Threshold, bond then the Hedge Counterparty shall either (x) immediately assign its rights and obligations in and under the related Hedge Agreement (at its own expense) to another Hedge Counterparty that has ratings at least equal to the Hedge Counterparty Ratings Requirement or bond price (y) enter into any other agreement with or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not arrangement for speculative purposesthe benefit of the Issuer and the Trustee that is reasonably satisfactory to the Trustee on behalf of the Issuer and that satisfies the Rating Condition.
(d) It is understood The Trustee shall, upon the Issuer entering into a Hedge Agreement, cause to be established one or more securities accounts, each of which shall be designated a “Hedge Counterparty Collateral Account”, which shall be held in the name of the Trustee as Entitlement Holder in trust for the benefit of the Secured Parties. The Trustee shall deposit all collateral received from any Hedge Counterparty under any Hedge Agreement in the related Hedge Counterparty Collateral Account. Any and all funds at any time on deposit in, or otherwise standing to the credit of, a Hedge Counterparty Collateral Account shall be held in trust by the Trustee for the benefit of the Secured Parties. The only permitted withdrawal from or application of funds on deposit in, or otherwise standing to the credit of, a Hedge Counterparty Collateral Account shall be (i) for application to obligations of the relevant Hedge Counterparty to the Issuer under the relevant Hedge Agreement that are not paid when due (whether when scheduled or upon early termination) or (ii) to return collateral to such Hedge Counterparty when and as required by the relevant Hedge Agreement (in each case as directed in writing by the Collateral Manager). The Trustee shall reinvest amounts in the Hedge Counterparty Collateral Account in accordance with the terms of the related Hedge Agreement, upon and as set forth in written direction from the Collateral Manager, and shall have no liability for purposes of this Section 10.10, the following Hedge Agreements any such investments. The Trustee shall not be deemed speculative or entered into for speculative purposes: (i) obligated to make any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of such investment in the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination absence of such Hedge Agreements is not speculative taken as a wholewritten instruction.
(e) For purposes The Hedge Agreements will provide that upon the default by the relevant Hedge Counterparty in the payment when due of its obligations to the Issuer under such Hedge Agreement, the Issuer shall promptly provide written notice thereof to the Trustee and, if applicable, any guarantor of such Hedge Counterparty’s obligations under such Hedge Agreement. Upon its receipt of such notice (or, if earlier, when the Trustee becomes aware of such default) the Trustee shall make a demand on such Hedge Counterparty, or any guarantor, if applicable, demanding payment forthwith. The Trustee shall give notice to the Noteholders and each Rating Agency upon the continuance of the failure by such Hedge Counterparty to perform its obligations for two Business Days following a demand made by the Trustee on such Hedge Counterparty.
(f) If at any time any Hedge Agreement becomes subject to early termination due to the occurrence of an “event of default” or a “termination event” (each as defined in the relevant Hedge Agreement) where the Hedge Counterparty is the sole defaulting party or the affected party, the Issuer shall give prompt written notice thereof to the Trustee, and the Issuer and the Trustee shall take such actions (following the expiration of any applicable grace period) to enforce the rights of the Issuer and the Trustee thereunder, as instructed in writing by the Collateral Manager and as may be permitted by the terms of such Hedge Agreement and consistent with the terms hereof, and shall apply the proceeds of any such actions (including the proceeds of the liquidation of any collateral pledged by such Hedge Counterparty) to the costs of such actions and to the cost of entering into a replacement Hedge Agreement to be arranged and entered into by the Issuer on such terms with respect to which the Issuer has satisfied the Rating Condition. Any costs attributable to entering into a replacement Hedge Agreement which exceed the sum of the proceeds of the liquidation of the terminated Hedge Agreement shall be borne by the “defaulting party” or maintaining Ongoing Xxxxxx sole “affected party” (each as defined in the relevant Hedge Agreement) with respect to the applicable “event of default” or “termination event.” In determining the amount payable under Section 10.10(a) and Section 10.10(b)the terminated Hedge Agreement, respectively, forecasts of reasonably projected Hydrocarbon production volumes the Issuer will seek quotations from “Reference Market-makers” (as forecast defined in the Sponsor Development Planrelevant Hedge Agreement) that satisfy the Hedge Counterparty Ratings Requirement. In addition, the Issuer will use its best efforts to cause the termination of a Hedge Agreement to become effective simultaneously with the entry into a replacement Hedge Agreement described as aforesaid.
(g) Each Hedge Agreement shall provide that (i) any amount payable to the Hedge Counterparty thereunder shall be subject to the Priority of Payments and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based (ii) such Hedge Agreement is subject to termination upon the most recent Reserve Report delivered pursuant earlier to Section 9.14(a)occur of (x) an Event of Default followed by the liquidation of the Collateral in accordance with this Indenture and (y) any redemption in whole of the Notes. Satisfaction of the Rating Condition will not be required in connection with such termination, but shall be revised to account for required in connection with any increase or decrease therein anticipated because other termination of information obtained by Borrower a Hedge Agreement or any other Credit Party subsequent reduction in the notional amount thereof unless no payment is due to the publication relevant Hedge Counterparty as a result of such Reserve Report including the Borrower’s termination or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamreduction.
Appears in 1 contract
Samples: Indenture (MCG Capital Corp)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary other Loan Party to, (1) enter into any Hedge Agreements for speculative purposes or (2) enter into any Hedge Agreements with any Person other than:
than (ai) Subject to Section 10.10(b), (A) Hedge Agreements in respect of commodities entered into commodities, (B) with an Approved Counterparty, (C) with a tenor not for speculative purposes to exceed 48 months, and (D) the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, effect other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction such Hedge Agreement is entered into under a Hedge Agreementexecuted, 8590% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (from Oil and Gas Properties of the Loan Parties classified as forecast “proved developed producing” in (A) initially, the Sponsor Development Plan delivered on Initial Reserve Report or thereafter the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be Reserve Report most recently delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above8.11, for the 66 each month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition Hedge Agreement is terminated. It is understood entered into, in each case, for crude oil, provided that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, volume limitations above shall not be aggregated together when calculating the foregoing limitations on notional volumes.
apply to (bX) Ifshort puts or (Y) long put options contracts that are not related to corresponding calls, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketingcollars, or otherwise unwind existing Hedge Agreements such thatswaps, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(cii) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10interest rates with an Approved Counterparty effectively converting interest rates from floating to fixed, the following notional amounts of which (when aggregated with all other Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or and the other Loan Parties then in effect effectively converting interest rates from floating to fixed) do not contracted) exceed, as of the date such Hedge Agreement is entered into, 75% of the then outstanding principal amount of the Borrower’s Debt for borrowed money which bears interest at a floating rate and (iiiii) Other Hedge Agreements with an Approved Counterparty. In no event shall any Hedge Agreement intendedcontain any requirement, at inception of execution, (A) to hedge agreement or manage covenant for the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Loan Party subsequent to post collateral or margin to secure their obligations under such Hedge Agreement or to cover market exposures; provided, however, that (1) the publication of such Reserve Report including foregoing shall not prohibit or be deemed to prohibit the Borrower’s Secured Hedge Obligations from being secured by the Security Instruments and (2) the foregoing shall not prohibit or be deemed to prohibit the Borrower or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions Loan Party to post collateral or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streammargin in connection with Section 9.03(e)(y).
Appears in 1 contract
Samples: Credit Agreement (Berry Corp (Bry))
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for with an Approved Counterparty that are non-speculative purposes the net notional volumes for which (when aggregated with other commodity including Hedge Agreements then in effectentered into to unwind or offset other permitted Hedge Agreements); provided that, at any time other than putswhen, floors during any Investment Grade Period, the Borrower has both a Rating from Xxxxx’x of Baa3 or better and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as a Rating from S&P of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of BBB- or better:
(i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes any such Hedge Agreement does not have a term greater than sixty (as forecast in (A60) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during entered into;
(ii) at all times, on a net basis, the aggregate notional volume for each of natural gas, natural gas liquids and crude oil, calculated separately, covered by market sensitive Hedge Agreements (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas, natural gas liquids and crude oil production, calculated separately, for each month in the forthcoming five year period;
(iii) notwithstanding the limitations set forth in clause (ii) of this Section 10.10(a), in contemplation of a Permitted Acquisition, the Borrower and its Restricted Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas, natural gas liquids and crude oil, calculated separately, for each month in the forthcoming five year period between covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas, natural gas liquids and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (iA) on or after the date on which such Credit Party signs of execution of a definitive acquisition agreement with respect to a proposed Permitted Acquisition, but in connection with a Proposed any event no earlier than 90 days prior to the proposed closing date of such Permitted Acquisition and (iiB) in the earliest of (A) the date event such Proposed agreement is terminated or such Permitted Acquisition is consummated, (B) the date such acquisition is terminated and (C) otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into (or such longer period as may be reasonably acceptable to which the Administrative Agent in the event the proposed closing of such Permitted Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days (or such longer period as the Administrative Agent may agree). Howeveragree in its reasonable discretion) after such termination or the end of such 90 day (or longer) period, all such incremental hedging contracts entered into with respect as applicable, the Borrower shall and shall cause the Restricted Subsidiaries to a Proposed Acquisition must be terminated novate, unwind or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity otherwise dispose of market sensitive Hedge Agreements which mayto the extent necessary to be in compliance with the limitations set forth in clause (ii) of this Section 10.10(a); and
(iv) notwithstanding the separate calculation requirements for natural gas, from time to timenatural gas liquids and crude oil in clauses (ii) and (iii) above, “hedge” so long as the same volumesBorrower and the Restricted Subsidiaries properly identify and consistently report such xxxxxx, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesBorrower and the Restricted Subsidiaries may utilize crude oil xxxxxx as a substitute for hedging natural gas liquids.
(b) If, after Hedge Agreements entered into with the end purpose and effect of (i) fixing or limiting interest rates on a principal amount of indebtedness of any calendar monthCredit Party that is accruing interest at a variable rate or (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is accruing interest at a fixed rate (in each case including Hedge Agreements entered into to unwind or offset other permitted Hedge Agreements), provided that, at any time other than when, during any Investment Grade Period, the Borrower determines that has both a Rating from Xxxxx’x of Baa3 or better and a Rating from S&P of BBB- or better, the aggregate volume notional amount of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100Hedge Agreements does not (on a net basis) exceed 80% of actual production the principal balance of Hydrocarbons in the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties projected to be outstanding at the time such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries Hedge Agreement is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar monthsentered into.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes Notwithstanding any of entering the foregoing, the Borrower shall have thirty (30) days following the end of any Investment Grade Period (or such longer period as the Administrative Agent may agree) to enter into Hedge Terminations or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or otherwise take any other Credit Party subsequent actions necessary to comply with the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamhedging covenants in this Section 10.10.
Appears in 1 contract
Hedge Agreements. The (a) During a Borrowing Base Trigger Period, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements in respect of commodities that are non-speculative (including Hedge Agreements entered into not for speculative purposes the net notional volumes for which (when aggregated with to unwind or offset other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other permitted Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in ); provided that:
(A) initially, the Sponsor Development Plan delivered on the Closing Date, and any such Hedge Agreement does not have a term greater than sixty (B60) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during the period between entered into;
(iB) the date at all times, on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of net basis, (A) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such Proposed Acquisition is consummated, month in such forthcoming period and (B) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in each of the second through fifth years of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 80% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such acquisition is terminated and month in such forthcoming period;
(C) notwithstanding the limitations set forth in clause (i) of this Section 11.10(a), in contemplation of a Permitted Acquisition, the Borrower and its Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas (including natural gas liquids) and crude oil, calculated separately, for each month in the forthcoming five year period covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (A) after the execution of a definitive agreement with respect to a proposed Acquisition, but in any event no earlier than 90 days prior to the proposed Funding Date of such Permitted Acquisition and (B) in the event such agreement is terminated or such Acquisition is otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into (or such longer period as may be reasonably acceptable to which the Administrative Agent in the event the proposed closing of such Permitted Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days after such termination or the end of such 90 day (or longer) period, as applicable, the Borrower shall and shall cause the Subsidiaries to novate, unwind or otherwise dispose of market sensitive Hedge Agreements to the extent necessary to be in compliance with the limitations set forth in clause (i) of this Section 11.10(a); and
(D) so long as the Borrower and the Subsidiaries properly identify and consistently report such xxxxxx, the Borrower and the Subsidiaries may agree). However, all such incremental utilize crude oil xxxxxx as a substitute for hedging contracts natural gas liquids.
(ii) Hedge Agreements entered into with respect to the purpose and effect of (i) fixing or limiting interest rates on a Proposed Acquisition must be terminated principal amount of indebtedness of any Credit Party that is accruing interest at a variable rate or unwound within 90 days following the date such acquisition (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is terminated. It is understood that commodity accruing interest at a fixed rate (in each case including Hedge Agreements which mayentered into to unwind or offset other permitted Hedge Agreements), from provided that the aggregate notional amount of such Hedge Agreements does not (on a net basis) exceed the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumessuch Hedge Agreement is entered into.
(b) If, after the end of any calendar monthDuring an Investment Grade Period, the Borrower determines that the aggregate volume of all commodity hedging transactions will not, and will not permit any Subsidiary to, enter into any Hedge Agreements with any Person other than (i) Hedge Agreements not for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes speculative purposes entered into to other production for hedge or mitigate risks to which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has or may have exposure (including with respect to commodity prices), or otherwise unwind existing (ii) Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
purposes entered into in order to effectively cap, collar or exchange interest rates (dfrom fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary and (iii) other Hedge Agreements not for speculative purposes permitted under the risk management policies approved by the Borrower’s Board of Directors from time to time and not subject the Borrower and its Subsidiaries to material speculative risks. It is understood that for purposes of this Section 10.1011.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject The Borrower shall obtain , or cause to Section 10.10(b)be obtained by an Other Swap Pledgor, no later than thirty (30) days after the Closing Date and will at all times thereafter maintain, or cause to be maintained by an Other Swap Pledgor, in full force and effect one or more Hedge Agreements in respect of commodities entered into not for speculative purposes the net aggregate notional volumes for which amount equal to one hundred percent (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements100%) do not exceed, as of the date Outstanding Principal Amount of the latest hedging transaction is entered into under a Hedge Agreement, 85% of Loans from time to time (the “Aggregate Notional Amount”) approved by the Administrative Agent in its reasonable discretion with (i) during Eurohypo or its Affiliates or (ii) one or more other banks or insurance companies as counterparties (each a “Third-Party Counterparty”), which is effective to cause the period All-in-Rate as to the Aggregate Notional Amount commencing on no later than the date that is thirty (30) days after the Closing Date through and including April 1(or, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initiallyif such day is not a Business Day, the Sponsor Development Plan delivered on first Business Day thereafter) to be not in excess of eight percent (8.0%) per annum through the Hedging Termination Date. Upon the Closing Date, and (B) at any time after the Sponsor Development Plan is required Borrower shall deliver, or cause to be delivered by an Other Swap Pledgor, a Hedge Agreement Pledge, substantially in the form of Exhibit G-1 attached hereto, together with, within thirty (30) days after the Closing Date, the applicable bid package, confirmation and other documentation for such Hedge Agreement (including, without limitation, a certificate from an Authorized Officer of the Borrower certifying that a Hedge Agreement has been entered into on the terms set forth in the confirmation) as may be reasonably acceptable to the Administrative Agent evidencing compliance with the Borrower’s obligations under the provisions of this Section 8.19, and within ten (10) days after the delivery of each such Hedge Agreement (or within the thirty (30) day period referred to above) shall deliver the applicable counterparty acknowledgment. Any Hedge Agreement shall require monthly fixed rate and floating rate payments and be based on a LIBO Rate of interest having, at the Borrower’s option, successive Interest Periods (an “Interest Rate Hedge Period”) of one, two, three, six or twelve months or such other Interest Periods satisfactory to the Administrative Agent in its reasonable discretion. Notwithstanding anything to the contrary contained in this Section 8.19, the Borrower or any Other Swap Pledgor shall be entitled to enter into one or more Hedge Agreements in excess of the Aggregate Notional Amount, up to the total amount of the Commitments or providing interest rate protection for periods that extend beyond the Hedging Termination Date (each such agreement, but only to the extent that it, after giving effect to all other Hedge Agreements maintained pursuant to this Section 9.14(c)(vi8.19(a), relates to a notional amount in excess of the most recent Sponsor Development Plan Aggregate Notional Amount or provides interest rate protection for periods that extend beyond the Hedging Termination Date, is referred to herein as an “Excess Hedge Agreement”) on terms acceptable to the Borrower or such Other Swap Pledgor; provided, however, that Borrower shall deliver, or cause to be delivered pursuant thereto) and (ii) at any time thereafterby an Other Swap Pledgor, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Administrative Agent’s request in accordance with the time requirements set forth in this Section 9.14(a)8.19(a), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts Hedge Agreement Pledge with respect to each Excess Hedge Agreement, substantially in the Credit Parties’ reasonably anticipated projected production from form of Exhibit G-2 attached hereto, together with the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior counterparty’s acknowledgment and other instruments provided to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesdelivered thereunder.
(b) IfThe Borrower’s obligations under any Hedge Agreement shall not be secured by the Deeds of Trust and shall not be secured by any Lien on or in all or any portion of the collateral under the Security Documents, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated direct or indirect interest in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar monthsother Property (other than as permitted pursuant to Section 9.02(i)).
(c) Other Any Hedge Agreements (other than any Agreement with a Third-Party Counterparty is herein called a “Third-Party Hedge Agreements in Agreement.” With respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this to each Third-Party Hedge Agreement maintained with respect to the Aggregate Notional Amount and each Excess Hedge Agreement pledged to the Administrative Agent pursuant to Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: 8.19(a): (i) any commodity Hedging the Third-Party Counterparty providing such Third-Party Hedge Agreement intendedmust have a long term credit rating no lower than “A” from S&P or “A2” from Xxxxx’x at the time of entry into such Third-Party Hedge Agreement; provided, at inception of executionhowever, to hedge or manage any of if there is a difference in the risks related to existing then current S&P rating and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and Xxxxx’x rating, the lesser rating shall be applicable; (ii) any the form and substance thereof must be satisfactory to the Administrative Agent in its reasonable discretion and in all respects and (iii) each counterparty thereunder shall have delivered to the Administrative Agent a counterparty’s acknowledgment in the form attached to the Hedge Agreement intended, at inception of execution, Pledge applicable thereto (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries such other form as may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent acceptable to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamAdministrative Agent in its reasonable discretion).
Appears in 1 contract
Samples: Loan Agreement (Douglas Emmett Inc)
Hedge Agreements. The (a) During a Credit Rating Trigger Period, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements in respect of commodities that are non-speculative (including Hedge Agreements entered into not for speculative purposes the net notional volumes for which (when aggregated with to unwind or offset other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other permitted Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in ); provided that:
(A) initially, the Sponsor Development Plan delivered on the Closing Date, and any such Hedge Agreement does not have a term greater than sixty (B60) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during the period between entered into;
(iB) the date at all times, on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of net basis, (A) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such Proposed Acquisition is consummated, month in such forthcoming period and (B) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in each of the second through fifth years of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 80% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such acquisition is terminated and month in such forthcoming period;
(C) notwithstanding the limitations set forth in clause (i) of this Section 11.10(a), in contemplation of a Permitted Acquisition, the Borrower and its Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas (including natural gas liquids) and crude oil, calculated separately, for each month in the forthcoming five year period covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (A) after the execution of a definitive agreement with respect to a Permitted Acquisition, but in any event no earlier than 90 days prior to the proposed funding date of such Permitted Acquisition and (B) in the event such agreement is terminated or such Permitted Acquisition is otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into, then within 15 days after such termination or the end of such 90 day (or longer as soon as commercially practicable thereafter, but in any event within 180 days) period, as applicable, the Borrower shall and shall cause the Subsidiaries to novate, unwind or otherwise dispose of market sensitive Hedge Agreements to the extent necessary to be in compliance with the limitations set forth in clause (i) of this Section 11.10(a); and
(D) so long as the Borrower and the Subsidiaries properly identify and consistently report such longer period xxxxxx, the Borrower and the Subsidiaries may utilize crude oil xxxxxx as to which the Administrative Agent may agree). However, all such incremental a substitute for hedging contracts natural gas liquids.
(ii) Hedge Agreements entered into with respect to the purpose and effect of (i) fixing or limiting interest rates on a Proposed Acquisition must be terminated principal amount of indebtedness of any Credit Party that is accruing interest at a variable rate or unwound within 90 days following the date such acquisition (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is terminated. It is understood that commodity accruing interest at a fixed rate (in each case including Hedge Agreements which mayentered into to unwind or offset other permitted Hedge Agreements), from provided that the aggregate notional amount of such Hedge Agreements does not (on a net basis) exceed the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumessuch Hedge Agreement is entered into.
(b) If, after the end of any calendar monthDuring an Investment Grade Period, the Borrower determines that the aggregate volume of all commodity hedging transactions will not, and will not permit any Subsidiary to, enter into any Hedge Agreements with any Person other than (i) Hedge Agreements not for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes speculative purposes entered into to other production for hedge or mitigate risks to which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has or may have exposure (including with respect to commodity prices), or otherwise unwind existing (ii) Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
purposes entered into in order to effectively cap, collar or exchange interest rates (dfrom fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary and (iii) other Hedge Agreements not for speculative purposes permitted under the risk management policies approved by the Borrower’s Board of Directors from time to time and not subject the Borrower and its Subsidiaries to material speculative risks. It is understood that for purposes of this Section 10.1011.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 fifty-four (54) month period from the date of creation of such hedging arrangement is created (the “Ongoing XxxxxxHxxxxx”). In addition to the Ongoing XxxxxxHxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), and without limiting the ability of the Borrower to enter into incremental hedging in connection with a Permitted Acquisition within the limitations set forth in the first sentence of this Section 10.10(a), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created created, during the period between (i1) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii2) the earliest of (Aa) the date of consummation of such Proposed Acquisition, (b) the date of termination of such Proposed Acquisition is consummated, and (Bc) one-hundred twenty (120) days after the date such acquisition is terminated and (C) 90 days after of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However; provided, however, notwithstanding the foregoing, in no event shall the notional volumes of incremental hedging contracts entered into in connection with a Proposed Acquisition exceed 85% of the reasonably anticipated Hydrocarbon production from the total Proved Reserves attributable to the properties to be acquired pursuant to the Proposed Acquisition, for each of crude oil, natural gas and natural gas liquids, calculated separately, as forecast based upon a Reserve Report delivered to the Administrative Agent in connection therewith; provided, further, that all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 ninety (90) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that (x) the foregoing limitations shall in any event exclude basis differential swaps, put contracts and floors and (y) commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.;
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.;
(dc) It it is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or and/or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.; and
(ed) For for purposes of entering into or maintaining Ongoing Xxxxxx Hxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx wxxxx and additions to or deletions from anticipated future production from new xxxxx wxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject The Borrower shall obtain, or cause to Section 10.10(b)be obtained by an Other Swap Pledgor, on or prior to the Closing Date and will at all times thereafter maintain, or cause to be maintained by an Other Swap Pledgor, in full force and effect, one or more Hedge Agreements in respect of commodities entered into not for speculative purposes the net aggregate notional volumes for which amount equal to at least one hundred percent (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements100%) do not exceed, as of the date Outstanding Principal Amount of the latest hedging transaction is entered into under a Loans at such time (the “Aggregate Notional Amount”), which Hedge Agreement, 85% of (iAgreement(s) during shall be approved by the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast Administrative Agent in its reasonable discretion with (A) initiallyEurohypo or its Affiliates, or (B) one or more other banks or insurance companies as counterparties (each a “Third-Party Counterparty”), which is effective to cause the All-in-Rate as to the applicable Aggregate Notional Amount not to exceed 4.446% per annum through the Hedging Termination Date. Notwithstanding the foregoing, the Sponsor Development Plan delivered parties acknowledge that the Operating Partnership has obtained a Hedge Agreement in the notional amount of $400,000,000 (the “Existing Hedge Agreement”) from PNC Bank, National Association (“PNC”), with an effective date of September 1, 2010, and a termination date of July 1, 2015 (subject to adjustment for the applicable business day convention as provided therein), that requires floating rate payments based on the one month LIBO Rate of interest and monthly fixed rate payments of 2.446%, and that such Hedge Agreement is sufficient to satisfy the foregoing requirements, subject to Borrower’s other rights and obligations under this Section 8.19. On or prior to the Closing Date, and (B) at any time after the Sponsor Development Plan is required Borrower shall cause to be delivered by the Operating Partnership, a Hedge Agreement Pledge in form and substance satisfactory to the Administrative Agent, together with the Existing Hedge Agreement and other documentation for the Existing Hedge Agreement as may be reasonably acceptable to the Administrative Agent, and within thirty (30) days following the Closing Date deliver the counterparty acknowledgment executed by PNC in the form attached to the Hedge Agreement Pledge or in form and substance otherwise satisfactory to the Administrative Agent. Any Hedge Agreement shall require monthly fixed rate and floating rate payments and be based on a LIBO Rate of interest having, at the Borrower’s option, successive Interest Periods (an “Interest Rate Hedge Period”) of one, two, three, six or twelve months or such other Interest Periods satisfactory to the Administrative Agent in its reasonable discretion. Notwithstanding anything to the contrary contained in this Section 8.19, the Borrower or any Other Swap Pledgor shall be entitled to enter into one or more Hedge Agreements in excess of the Aggregate Notional Amount, up to the total amount of the Commitments or providing interest rate protection for periods that extend beyond the Hedging Termination Date (each such agreement, but only to the extent that it, after giving effect to all other Hedge Agreements maintained pursuant to this Section 9.14(c)(vi8.19(a), relates to a notional amount in excess of the most recent Sponsor Development Plan Aggregate Notional Amount or provides interest rate protection for periods that extend beyond the Hedging Termination Date, is referred to herein as an “Excess Hedge Agreement”) on terms acceptable to the Borrower or such Other Swap Pledgor; provided, however, that Borrower shall deliver, or cause to be delivered pursuant thereto) and (ii) at any time thereafterby an Other Swap Pledgor, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Administrative Agent’s request in accordance with the time requirements set forth in this Section 9.14(a)8.19(a), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts Hedge Agreement Pledge with respect to each Excess Hedge Agreement, substantially in the Credit Parties’ reasonably anticipated projected production from form of Exhibit G-2 attached hereto, together with the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not counterparty’s acknowledgment and other instruments provided to be delivered thereunder. Notwithstanding anything in excess of 15% of the Credit Parties’ existing projected production prior this Section 8.19 to the consummation contrary, except for the Existing Hedge Agreement, none of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest Eurohypo or its Affiliates, or any Lender or any Affiliate of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereofLender, shall not be aggregated together when calculating enter into a Hedge Agreement with the foregoing limitations on notional volumesBorrower as a counterparty.
(b) IfThe Borrower’s obligations under any Hedge Agreement shall not be secured by the Deeds of Trust and shall not be secured by any Lien on or in all or any portion of the collateral under the Security Documents, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated direct or indirect interest in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar monthsother Property.
(c) Other Any Hedge Agreements (other than any Agreement with a Third-Party Counterparty is herein called a “Third-Party Hedge Agreements in Agreement.” With respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this to each Third-Party Hedge Agreement maintained with respect to the Aggregate Notional Amount and each Excess Hedge Agreement pledged to the Administrative Agent pursuant to Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: 8.19(a): (i) any commodity Hedging the Third-Party Counterparty providing such Third-Party Hedge Agreement intendedmust have a long term credit rating no lower than “A” from S&P or “A2” from Mxxxx’x at the time of entry into such Third-Party Hedge Agreement; provided, at inception of executionhowever, to hedge or manage any of if there is a difference in the risks related to existing then current S&P rating and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and Mxxxx’x rating, the lesser rating shall be applicable; (ii) any the form and substance thereof must be satisfactory to the Administrative Agent in its reasonable discretion and in all respects and (iii) each counterparty thereunder shall have delivered to the Administrative Agent a counterparty’s acknowledgment in the form attached to the Hedge Agreement intended, at inception of execution, Pledge applicable thereto (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries such other form as may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent acceptable to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamAdministrative Agent in its reasonable discretion).
Appears in 1 contract
Samples: Loan Agreement (Douglas Emmett Inc)
Hedge Agreements. The (a) During a Borrowing Base Trigger Period, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements in respect of commodities that are non-speculative (including Hedge Agreements entered into not for speculative purposes the net notional volumes for which (when aggregated with to unwind or offset other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other permitted Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in ); provided that:
(A) initially, the Sponsor Development Plan delivered on the Closing Date, and any such Hedge Agreement does not have a term greater than sixty (B60) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during the period between entered into;
(iB) the date at all times, on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of net basis, (A) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such Proposed Acquisition is consummated, month in such forthcoming period and (B) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in each of the second through fifth years of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 80% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such acquisition is terminated and month in such forthcoming period;
(C) notwithstanding the limitations set forth in clause (ii) of this Section 11.10(a)(i), in contemplation of a Permitted Acquisition, the Borrower and its Restricted Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas (including natural gas liquids) and crude oil, calculated separately, for each month in the forthcoming five year period covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (A) after the execution of a definitive agreement with respect to a proposed Acquisition, but in any event no earlier than 90 days prior to the proposed Funding Date of such Permitted Acquisition and (B) in the event such agreement is terminated or such Acquisition is otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into (or such longer period as may be reasonably acceptable to which the Administrative Agent in the event the proposed closing of such Permitted Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days after such termination or the end of such 90 day (or longer) period, as applicable, the Borrower shall and shall cause the Restricted Subsidiaries to novate, unwind or otherwise dispose of market sensitive Hedge Agreements to the extent necessary to be in compliance with the limitations set forth in clause (ii) of this Section 11.10(a)(i); and
(D) so long as the Borrower and the Restricted Subsidiaries properly identify and consistently report such xxxxxx, the Borrower and the Restricted Subsidiaries may agree). However, all such incremental utilize crude oil xxxxxx as a substitute for hedging contracts natural gas liquids.
(ii) Hedge Agreements entered into with respect to the purpose and effect of (i) fixing or limiting interest rates on a Proposed Acquisition must be terminated principal amount of indebtedness of any Credit Party that is accruing interest at a variable rate or unwound within 90 days following the date such acquisition (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is terminated. It is understood that commodity accruing interest at a fixed rate (in each case including Hedge Agreements which mayentered into to unwind or offset other permitted Hedge Agreements), from provided that the aggregate notional amount of such Hedge Agreements does not (on a net basis) exceed the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumessuch Hedge Agreement is entered into.
(b) If, after the end of any calendar monthDuring an Investment Grade Period, the Borrower determines that the aggregate volume of all commodity hedging transactions will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than (i) Hedge Agreements not for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes speculative purposes entered into to other production for hedge or mitigate risks to which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has or may have exposure (including with respect to commodity prices), or otherwise unwind existing (ii) Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
purposes entered into in order to effectively cap, collar or exchange interest rates (dfrom fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Restricted Subsidiary and (iii) other Hedge Agreements not for speculative purposes permitted under the risk management policies approved by the Borrower’s Board of Directors from time to time and not subject the Borrower and its Subsidiaries to material speculative risks. It is understood that for purposes of this Section 10.1011.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Closing Date Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)) or (b), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty-six (66) month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree)agreement. However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Closing Date Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a) or (b), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Samples: Credit Agreement (Vine Energy Inc.)
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty-six (66) month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), and without limiting the ability of the Borrower to enter into incremental hedging in connection with a Permitted Acquisition within the limitations set forth in the first sentence of this Section 10.10(a), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 forty-two (42) months from the date such hedging arrangement is created created, during the period between (i1) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii2) the earliest of (Aa) the date of consummation of such Proposed Acquisition, (b) the date of termination of such Proposed Acquisition is consummated, and (Bc) one-hundred twenty (120) days after the date such acquisition is terminated and (C) 90 days after of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However; provided, however, notwithstanding the foregoing, in no event shall the notional volumes of incremental hedging contracts entered into in connection with a Proposed Acquisition exceed 85% of the reasonably anticipated Hydrocarbon production from the total Proved Reserves attributable to the properties to be acquired pursuant to the Proposed Acquisition, for each of crude oil, natural gas and natural gas liquids, calculated separately, as forecast based upon a Reserve Report delivered to the Administrative Agent in connection therewith; provided, further, that all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 ninety (90) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that (x) the foregoing limitations shall in any event exclude basis differential swaps, put contracts and floors and (y) commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.;
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.;
(dc) It it is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or and/or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.; and
(ed) For for purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will notand the Restricted Subsidiaries have not entered into, and will shall not permit any Restricted Subsidiary to, enter into or assume any Hedge Agreements with any Person other thanof the type described in clause (ii) of the definition thereof; provided, however, that the Borrower and the Restricted Subsidiaries may enter into or assume:
(a) Subject Hedge Agreements which provide for a floor, but not a cap in an amount not to Section 10.10(bexceed during any calendar year 100% of the Borrower’s and the Restricted Subsidiaries’ total projected production from Oil and Gas Properties, which constitute Proved Producing Reserves for such year; and
(b) Hedge Agreements which provide for a cap (including fixed price swaps), provided that all such Hedge Agreements in respect of commodities entered into shall not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of cover more than,
(i) during for the calculation period commencing on the Closing Date through then-current date and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered ending on the Closing Datecorresponding day of the eighteenth (18th) month following the then-current date (or if such eighteenth month has no corresponding date, and (B) at any time after then ending on the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case last day of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the eighteenth month)(the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed AcquisitionEighteen Month Period”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest greater of (A) 90% of the date such Proposed Acquisition is consummatedBorrower’s and the Restricted Subsidiaries’ total projected production of oil and 75% of the Borrower’s and the Restricted Subsidiaries’ total projected production of natural gas, or (B) 75% of the Borrower’s and the Restricted Subsidiaries’ total projected production of oil and natural gas (on an equivalency basis in which one (1) barrel of oil shall be equivalent to six (6) thousand cubic feet of natural gas), in each case from Oil and Gas Properties which constitute Proved Producing Reserves; and
(ii) for the calculation period commencing on the first day immediately following the last day of the Eighteen Month Period and ending exactly three years after the then-current date, 75% of the Borrower’s and the Restricted Subsidiaries’ total projected production of oil and natural gas (on an equivalency basis in which one (1) barrel of oil shall be equivalent to six (6) thousand cubic feet of natural gas) from Oil and Gas Properties which constitute Proved Producing Reserves; further provided that (w) no such Hedge Agreement shall have a tenor of more than three (3) years from the date of such acquisition is terminated and Hedge Agreement; (Cx) 90 days after such definitive acquisition agreement was executed in no event shall the Borrower or its Restricted Subsidiaries enter into or assume any Speculative Transactions; (or such longer period as to which the Administrative Agent may agree). However, y) all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries Subsidiary is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for a party shall be with counterparties acceptable to the then-current and any succeeding calendar months.
Administrative Agent (c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10clause (y), the following Hedge Agreements Banks and their respective Affiliates and ChevronTexaco, Inc., Xxxxxx Xxxxxxx Xxxx Xxxxxx, Inc., X. Xxxx, Inc., and Cinergy Corp. and their respective Affiliates shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) be acceptable counterparties); and (iiz) any Hedge Agreement intended, all production projections shall be equal at inception of execution, (A) all times to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of projections set out in the Borrower or its most current Reserve Report then available for the Borrower’s and the Restricted Subsidiaries’ Oil and Gas Properties which constitute Proved Producing Reserves, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by the Borrower or any other Credit Party Restricted Subsidiary subsequent to the publication of such Reserve Report (including the Borrower’s or any other Credit Party’s internal forecasts of actual production decline rates for existing xxxxx and additions to or deletions from anticipated future production increases or decreases due to new development or acquisitions or dispositions (to the extent otherwise permitted) of Oil and Gas Properties). As used herein, “Speculative Transaction” means a Hedge Agreement which would cause the Borrower and its Restricted Subsidiaries to have in place Hedging Agreements covering at any time more than 100% of the Borrower’s and its Restricted Subsidiaries’ total projected production of oil or more than 100% of the Borrower’s and its Restricted Subsidiaries’ total projected production of natural gas, in each case, from new xxxxx Proved Producing Reserves on an individual commodity basis (and acquisitions coming not on stream or failing to come on streaman equivalency basis).
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements with Approved Counterparties in respect of commodities Hydrocarbons entered into not for speculative purposes purposes, the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 forty-eight (48) month period from the date of creation of such hedging arrangement arrangement, based on daily volumes on an annual basis; provided, however, notwithstanding the foregoing volume limitation, the Borrower and/or the Restricted Subsidiaries may enter into Hedge Agreements in respect of purchased puts and floors not intended to be physically settled so long as the net notional volumes of all Hedge Agreements in respect of Hydrocarbons subject to this Section 10.10(a) do not exceed (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements), as of the date the latest hedging transaction is created entered into under a Hedge Agreement, 100% of the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable) for the forty-eight (48) month period from the date of creation of such hedging arrangement, based on daily volumes on an annual basis (the “Ongoing Xxxxxx”). In no event shall any Hedge Agreement entered into by the Credit Parties have a tenor longer than forty-eight (48) months. In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party Guarantor signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 thirty (30) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 thirty (30) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of Hydrocarbons or equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary (other than EHP Midco and its Subsidiaries, prior to the EHP Discharge Date) to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements with Approved Counterparties in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 8580% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 forty-eight (48) month period from the date of creation of such hedging arrangement is created arrangement, based on daily volumes on an annual basis (the “Ongoing Xxxxxx”). In no event shall any Hedge Agreement entered into by the Credit Parties have a tenor longer than forty-eight (48) months. In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party Guarantor signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 thirty (30) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent Majority Lenders may agreeagree in their reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 thirty (30) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of Hydrocarbons or equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty (60) month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 ninety (90) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 ninety (90) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements with Approved Counterparties in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85the greater of (x) 80% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable) and (y) 95% of the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Developed Producing Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable), in the each case of each of clauses (i) and (ii) above, for the 66 sixty-six (66) month period from the date of creation of such hedging arrangement is created arrangement, based on daily volumes on an annual basis (the “Ongoing Xxxxxx”). In no event shall any Hedge Agreement entered into by the Credit Parties have a tenor longer than sixty-six (66) months. In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 ninety (90) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 ninety (90) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of Hydrocarbons or equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management[reserved], (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves or total Proved Developed Producing Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower Subject to the Hedging Order, no Debtor will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
than (a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into with Hedge Banks not for speculative purposes entered into to hedge or mitigate risks to which any Debtor has or may have exposure (including with respect to commodity prices) and (b) Hedge Agreements with Hedge Banks not for speculative purposes entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Debtor; provided that notwithstanding the net foregoing, no Debtor will be permitted to enter into any Hedge Agreement to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Debtors if, at the time such Hedge Agreement is entered into, (1) the term of such Hedge Agreement exceeds 60 months or (2) the notional volumes for which of Hydrocarbons subject to such Hedge Agreement (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of exceed (x) for the 24-month period from the date the latest hedging transaction such Hedge Agreement is entered into under a Hedge Agreementexecuted, 8590% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon projected monthly production from Oil and Gas Properties which are classified as Proved Developed Producing Reserves or (y) for the Credit Parties’ total 24-month period ending immediately after the 24-month period described in the foregoing clause (x), 80% of the reasonably anticipated projected monthly production from Oil and Gas Properties which are classified as Proved Developed Producing Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clause (x) and (y), calculated separately for (i) crude oil and (ii) natural gas and natural gas liquids, taken together, and in the case of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by the Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamAgent in accordance with Section 9.12).
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Hedge Agreements. (a) The Borrower will not, and will not permit any Restricted Subsidiary other Loan Party to, (1) enter into any Hedge Agreements for speculative purposes or (2) enter into any Hedge Agreements with any Person other than:
than (ai) Subject to Section 10.10(b), (A) Hedge Agreements in respect of commodities entered into commodities, (B) with an Approved Counterparty, (C) with a tenor not for speculative purposes to exceed 48 months, and (D) the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, effect other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction such Hedge Agreement is entered into under a Hedge Agreementexecuted, 8590% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (from Oil and Gas Properties of the Loan Parties classified as forecast “proved developed producing” in (A) initially, the Sponsor Development Plan delivered on Initial Reserve Report or thereafter the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be Reserve Report most recently delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above8.11, for the 66 each month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition Hedge Agreement is terminated. It is understood entered into, in each case, for crude oil, provided that commodity the volume limitations above shall not apply to (X) short puts or (Y) long put options contracts that are not related to corresponding calls, collars, or swaps, (ii) Hedge Agreements in respect of interest rates with an Approved Counterparty effectively converting interest rates from floating to fixed, the notional amounts of which may(when aggregated with all other Hedge Agreements of the Borrower and the other Loan Parties then in effect effectively converting interest rates from floating to fixed) do not exceed, from time as US 8447371v.4 of the date such Hedge Agreement is entered into, 75% of the then outstanding principal amount of the Borrower’s Debt for borrowed money which bears interest at a floating rate and (iii) Other Hedge Agreements with an Approved Counterparty. In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any other Loan Party to timepost collateral or margin to secure their obligations under such Hedge Agreement or to cover market exposures; provided, “hedge” however, that (1) the same volumes, but different elements of commodity risk thereof, foregoing shall not prohibit or be aggregated together when calculating deemed to prohibit the Secured Hedge Obligations from being secured by the Security Instruments and (2) the foregoing limitations on notional volumesshall not prohibit or be deemed to prohibit the Borrower or any other Loan Party to post collateral or margin in connection with Section 9.03(e)(y).
(b) If, after on the end last day of any calendar month, the Borrower determines that the aggregate volume notional volumes of all commodity hedging transactions Hedge Agreements in respect of commodities pursuant to Section 9.18(a)(i) to which the Borrower or any other Loan Party is a party and for which settlement payments were calculated in such calendar month exceeded 100exceeds 90% of the actual production of Hydrocarbons (for crude oil) from the proved developed producing Oil and Gas Properties of the Loan Parties in such calendar month (other than (X) short puts or (Y) long puts, floors, and basis differential swaps on volumes hedged by other Hedge Agreements), then the Borrower shall, or shall cause each other Loan Party to, Liquidate existing Hedge Agreements pursuant to Section 9.18(a)(i) within fifteen (15) Business Days after the end of such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at after giving effect to such timeLiquidation, future hedging notional volumes will not exceed 100% of reasonably anticipated projected production of Hydrocarbons (for crude oil) from the proved developed producing Oil and Gas Properties of the Loan Parties for the then-current month and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Samples: Credit Agreement (Berry Corp (Bry))
Hedge Agreements. (a) The Borrower will not, and will not permit any Restricted Subsidiary other Loan Party to, enter into any Hedge Agreements with any Person other than:
than (ai) Subject to Section 10.10(b), (A) Hedge Agreements in respect of commodities entered into commodities, (B) with an Approved Counterparty, (C) with a tenor not for speculative purposes to exceed 48 months, and (D) the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, effect other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction such Hedge Agreement is entered into under a Hedge Agreementexecuted, 8590% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (from Oil and Gas Properties of the Loan Parties classified as forecast “proved developed producing” in (A) initially, the Sponsor Development Plan delivered on Initial Reserve Report or thereafter the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be Reserve Report most recently delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above8.11, for the 66 each month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition Hedge Agreement is terminated. It is understood entered into, in each case, for crude oil, provided that commodity the volume limitations above shall not apply to put options contracts that are not related to corresponding calls, collars, or swaps, (ii) Hedge Agreements in respect of interest rates with an Approved Counterparty effectively converting interest rates from floating to fixed, the notional amounts of which may(when aggregated with all other Hedge Agreements of the Borrower and the other Loan Parties then in effect effectively converting interest rates from floating to fixed) do not exceed, from time as of the date such Hedge Agreement is entered into, 75% of the then outstanding principal amount of the Borrower’s Debt for borrowed money which bears interest at a floating rate and (iii) Other Hedge Agreements with an Approved Counterparty. In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any other Loan Party to timepost collateral or margin to secure their obligations under such Hedge Agreement or to cover market exposures; provided, “hedge” however, that (1) the same volumes, but different elements of commodity risk thereof, foregoing shall not prohibit or be aggregated together when calculating deemed to prohibit the Secured Hedge Obligations from being secured by the Security Instruments and (2) the foregoing limitations on notional volumesshall not prohibit or be deemed to prohibit the Borrower or any other Loan Party to post collateral or margin in connection with Section 9.03(e)(y).
(b) If, after on the end last day of any calendar month, the Borrower determines that the aggregate volume notional volumes of all commodity hedging transactions Hedge Agreements in respect of commodities pursuant to Section 9.18(a)(i) to which the Borrower or any other Loan Party is a party and for which settlement payments were calculated in such calendar month exceeded 100exceeds 90% of the actual production of Hydrocarbons (for crude oil) from the proved developed producing Oil and Gas Properties of the Loan Parties in such calendar month (other than puts, floors, and basis differential swaps on volumes hedged by other Hedge Agreements), then the Borrower shall, or shall cause each other Loan Party to, Liquidate existing Hedge Agreements pursuant to Section 9.18(a)(i) within fifteen (15) Business Days after the end of such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at after giving effect to such timeLiquidation, future hedging notional volumes will not exceed 100% of reasonably anticipated projected production of Hydrocarbons (for crude oil) from the proved developed producing Oil and Gas Properties of the Loan Parties for the then-current month and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Samples: Credit Agreement (Berry Corp (Bry))
Hedge Agreements. The Borrower (a) On each Closing Date on which the Issuer is issuing Floating Rate Equipment Notes, the Issuer must enter into one or more Hedge Agreements with one or more Eligible Hedge Providers. Each Hedge Agreement will notbe secured by the lien of this Master Indenture.
(b) For so long as any Series or Class of Floating Rate Equipment Notes remains Outstanding, the Issuer must maintain one or more Hedge Agreements with an aggregate notional balance (x) equal to or exceeding the minimum amount (if any) established in connection with the issuance of such Series or Class (the amount described in this clause (x), the “Minimum Hedging Amount”) and will (y) less than or equal to the maximum amount (if any) established in connection with the issuance of such Series or Class (the amount described in this clause (y), the “Maximum Hedging Amount” and, collectively with the Minimum Hedging Amount, the “Hedging Requirement”). Notwithstanding any other term or provision of this Master Indenture, but subject to Section 10.05 hereof, without the consent of Noteholders, the Issuer and the Indenture Trustee may amend this Master Indenture from time to time, with the prior written consent of all Hedge Providers and subject to receipt of Rating Agency Confirmation, to stipulate different percentages for the Minimum Hedging Amount or the Maximum Hedging Amount for such Class or Series, as applicable.
(c) If the Issuer is not permit able to meet the Minimum Hedging Amount, with respect to any Restricted Subsidiary toSeries or Class of Floating Rate Equipment Notes, it must, within ninety-five (95) days, use reasonable commercial efforts to enter into one or more Hedge Agreements, or, if the reason for such non-compliance is that a Hedge Agreement has terminated in its entirety, but Floating Rate Equipment Notes remain outstanding, enter into any one or more replacement Hedge Agreements with any Person other than:
at least sufficient to meet the Minimum Hedging Amount. If, at the expiration of such ninety-five (a95) Subject day period the Issuer has been unable to Section 10.10(b), enter into additional or replacement Hedge Agreements in respect order to meet the Minimum Hedging Amount, the Requisite Majority (in its sole discretion) may direct the Indenture Trustee on behalf of commodities entered into not for speculative purposes the net notional volumes for which Issuer to enter into, maintain or terminate (when aggregated with other commodity in whole or in part), one or more Hedge Agreements then selected by the Requisite Majority (in effectits sole discretion) such that, other than putsafter giving effect to such action, floors and basis differential swaps the Issuer will be in compliance with the Hedging Requirement. In the event the Requisite Majority determines to direct the Indenture Trustee to enter into, maintain or terminate (in whole or in part) a Hedge Agreement on volumes already hedged pursuant the Issuer’s behalf, the Requisite Majority shall promptly send a copy of any such agreement to other Hedge Agreementsthe Issuer.
(d) do not exceed, as of the date the latest hedging transaction is entered into under If contemplated by a Hedge Agreement, 85% the Issuer may enter into off-setting interest rate transactions in order to comply with the Hedging Requirement.
(e) Except as otherwise provided in this Master Indenture or the applicable Series Supplement, payments by the Issuer to Hedge Providers shall be made to such Hedge Providers on each Payment Date in accordance with the Flow of Funds and payments by Hedge Providers to the Issuer shall be made to the Collections Account.
(f) If a Hedge Provider is the “defaulting party” or “affected party” under a Hedge Agreement (a “Designated Hedge Agreement”) and, as a result, the Issuer is entitled to terminate such Designated Hedge Agreement, then, promptly after the Issuer becomes aware thereof, the Issuer (i) during shall notify the period commencing Indenture Trustee and each Rating Agency and (ii) shall use commercially reasonable efforts to arrange for another Eligible Hedge Provider (a “Replacement Hedge Provider”) to enter into a replacement Hedge Agreement (a “Replacement Hedge Agreement”) with the Issuer to the extent that the Issuer would be required to enter into a Hedge Agreement under Section 3.16(c) hereof if the Designated Hedge Agreement were not in effect (and subject to the timing, and the rights of the Requisite Majority, specified in Section 3.16(c) hereof); provided that, subject to the terms of the Designated Hedge Agreement, the Issuer shall terminate such Designated Hedge Agreement at or prior to the time the Issuer enters into such Replacement Hedge Agreement. In connection with any termination in whole of a Hedge Agreement if the Issuer is entering, or will enter, into a Replacement Hedge Agreement, the Administrator, on behalf and at the direction of the Issuer, will establish with the Indenture Trustee a securities and cash account (a “Replacement and Termination Receipts Account”). The Issuer will deposit (or cause to be deposited) in the Replacement and Termination Receipts Account (x) any Hedge Termination Value paid by the Hedge Provider under the terminating Hedge Agreement to the Issuer, which Hedge Termination Value may be used by the Issuer to make payments required to a Replacement Hedge Provider in connection with a Replacement Hedge Agreement; and (y) any initial payment from a Replacement Hedge Provider that will be used to satisfy any obligation to pay a Hedge Termination Value to the Hedge Provider under the terminating Hedge Agreement. A Replacement and Termination Receipts Account will not be considered to be an Indenture Account for purposes of this Master Indenture and funds standing to its credit will not be considered to be Collateral for purposes of this Master Indenture. All amounts from time to time held in each Replacement and Termination Receipts Account shall be held (a) in the name of the Indenture Trustee, for the benefit of the Issuer, and (b) in the custody and under the “Control” (as such term is defined in the UCC) of the Indenture Trustee, for the purposes and on the Closing Date through terms set forth in this Master Indenture.
(g) If a Hedge Provider is required to post collateral under a Hedge Agreement (“Hedge Collateral”), the Administrator, on behalf and including April 1at the direction of the Issuer, 2014will establish with the Indenture Trustee a securities and cash account (a “Hedge Collateral Account”). The Hedge Collateral will be deposited in the Hedge Collateral Account; provided that the Hedge Collateral will not be considered to be Collateral for purposes of this Master Indenture and the Hedge Collateral Account will not be considered to be an Indenture Account for purposes of this Master Indenture. All amounts from time to time held in each Hedge Collateral Account shall be held (a) in the name of the Indenture Trustee, reasonably projected Hydrocarbon production volumes for the benefit of the Issuer, and (b) in the custody and under the “Control” (as forecast such term is defined in the UCC) of the Indenture Trustee, for the purposes and on the terms set forth in this Master Indenture. If a Hedge Agreement is terminated and a Hedge Collateral Account has been established with respect to the related Hedge Provider, then either: (x) if a Hedge Termination Value is determined to be payable by the Issuer to such Hedge Provider, then the Issuer shall direct the Indenture Trustee to transfer to such Hedge Provider such Hedge Termination Value and, outside of the Flow of Funds, the relevant Hedge Collateral; or (y) if a Hedge Termination Value is determined to be payable by such Hedge Provider to the Issuer, and (A) initiallyif such Hedge Provider pays such Hedge Termination Value to the Issuer when due and payable, then the Sponsor Development Plan delivered on Issuer shall direct the Closing DateIndenture Trustee to immediately return the relevant Hedge Collateral to such Hedge Provider outside of the Flow of Funds, and (B) at any time after if such Hedge Provider does not pay such Hedge Termination Value to the Sponsor Development Plan is required Issuer when due and payable, then the Issuer shall direct the Indenture Trustee to the extent necessary to liquidate such Hedge Collateral and to transfer such Hedge Collateral or the proceeds thereof to the Collections Account in an amount equal to the lesser of (I) such Hedge Termination Value and (II) the amounts standing to the credit of such Hedge Collateral Account (and such Hedge Provider’s obligation to pay such Hedge Termination Value shall be delivered pursuant deemed to Section 9.14(c)(vihave been satisfied to the extent, but only to the extent, that such amounts are so transferred to the Collections Account), and the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at Issuer shall direct the Indenture Trustee to pay any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case proceeds of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not Hedge Collateral in excess of 15% such Hedge Termination Value to such Hedge Provider outside of the Credit Parties’ existing projected production prior to the consummation Flow of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesFunds.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
Appears in 1 contract
Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 sixty-six (66) month period from the date of creation of such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary (other than EHP Midco and its Subsidiaries, prior to the EHP Discharge Date) to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements with Approved Counterparties in respect of commodities Hydrocarbons entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 8580% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (ias applicable) and (ii) above, for the 66 forty-eight (48) month period from the date of creation of such hedging arrangement is created arrangement, based on daily volumes on an annual basis (the “Ongoing Xxxxxx”). In no event shall any Hedge Agreement entered into by the Credit Parties have a tenor longer than forty-eight (48) months. In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party Guarantor signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 thirty (30) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 thirty (30) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of Hydrocarbons or equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements with a Lender or Affiliate of a Lender in respect of commodities entered into not for speculative purposes the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 8590% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Developed Producing Reserves (as forecast forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered pursuant to Section 9.14(a)9.13(a), in the case of each of clauses as applicable) for any month (i) and (ii) abovecollectively, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts Hedge Agreements with a Lender or Affiliate of a Lender with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Developed Producing Reserves of the Credit Parties as forecast forecasted based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not exceed 90% of the reasonably anticipated projected production after giving effect to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive an enforceable acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(bii) If, after Hedge Agreements with a Lender or Affiliate of a Lender entered into with the end purpose and effect of (i) fixing or limiting interest rates on a principal amount of indebtedness of any calendar monthCredit Party that is accruing interest at a variable rate or (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is accruing interest at a fixed rate (in each case including Hedge Agreements entered into to unwind or offset other permitted Hedge Agreements), the Borrower determines provided that the aggregate volume notional amount of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements does not (on a net basis) exceed the seventy five percent (75.0%) of the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time such thatHedge Agreement is entered into, at that such timeHedge Agreements are not entered into for speculative purposes and such Hedge Agreements do not, future hedging volumes will not exceed 100% in any case, have a tenor beyond the maturity date of reasonably anticipated projected production for the then-current and any succeeding calendar monthssuch Indebtedness.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(db) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted and/or reasonably anticipated projected Hydrocarbon production from Oil and Gas Properties of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecastedreasonably anticipated) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ec) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated projected Hydrocarbon production from the Credit Parties’ total Proved Reserves Oil and Gas Properties based upon the Initial Reserve Reports or the most recent Reserve Report delivered pursuant to Section 9.14(a9.13(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
(d) Following the occurrence of any Overhedge Trigger, Borrower (or its applicable Subsidiary) shall have until the Overhedge Remedy Deadline in which to (i) increase production to a sufficient level to cause the aggregate notional volumes of all Hedge Agreements of the Credit Parties for any then-current or future month to be less than 90% of reasonably anticipated Hydrocarbon production for each such month and (ii) timely deliver evidence satisfactory to Administrative Agent evidencing its compliance with clause (a)(i) above. If an Overhedge Trigger occurs and is not timely remedied by Borrower (or the applicable Subsidiary) pursuant to the immediately preceding sentence, then within thirty (30) Business Days after any request by Administrative Agent, Borrower shall, or shall cause its Subsidiaries to, Liquidate Hedge Agreements sufficient to eliminate such excess hedging.
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Hedge Agreements. The (a) During a Credit Rating Trigger Period, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(ai) Subject to Section 10.10(b), Hedge Agreements in respect of commodities that are non-speculative (including Hedge Agreements entered into not for speculative purposes the net notional volumes for which (when aggregated with to unwind or offset other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other permitted Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in ); provided that:
(A) initially, the Sponsor Development Plan delivered on the Closing Date, and any such Hedge Agreement does not have a term greater than sixty (B60) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during the period between entered into;
(iB) the date at all times, on which such Credit Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of net basis, (A) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in the first year of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such Proposed Acquisition is consummated, month in such forthcoming period and (B) the date aggregate notional volume for each of natural gas (including natural gas liquids) and crude oil, calculated separately, covered by market sensitive Hedge Agreements for any month in each of the second through fifth years of the forthcoming five year period (other than Excluded Xxxxxx) shall not exceed 80% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, for each such acquisition is terminated and month in such forthcoming period;
(C) notwithstanding the limitations set forth in clause (i) of this Section 11.10(a), in contemplation of a Permitted Acquisition, the Borrower and its Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas (including natural gas liquids) and crude oil, calculated separately, for each month in the forthcoming five year period covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas (including natural gas liquids) and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (A) after the execution of a definitive agreement with respect to a Permitted Acquisition, but in any event no earlier than 90 days prior to the proposed funding date of such Permitted Acquisition and (B) in the event such agreement is terminated or such Acquisition is otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into, then within 15 days after such termination or the end of such 90 day (or longer as soon as commercially practicable thereafter, but in any event within 180 days) period, as applicable, the Borrower shall and shall cause the Subsidiaries to novate, unwind or otherwise dispose of market sensitive Hedge Agreements to the extent necessary to be in compliance with the limitations set forth in clause (i) of this Section 11.10(a); and
(D) so long as the Borrower and the Subsidiaries properly identify and consistently report such longer period xxxxxx, the Borrower and the Subsidiaries may utilize crude oil xxxxxx as to which the Administrative Agent may agree). However, all such incremental a substitute for hedging contracts natural gas liquids.
(ii) Hedge Agreements entered into with respect to the purpose and effect of (i) fixing or limiting interest rates on a Proposed Acquisition must be terminated principal amount of indebtedness of any Credit Party that is accruing interest at a variable rate or unwound within 90 days following the date such acquisition (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is terminated. It is understood that commodity accruing interest at a fixed rate (in each case including Hedge Agreements which mayentered into to unwind or offset other permitted Hedge Agreements), from provided that the aggregate notional amount of such Hedge Agreements does not (on a net basis) exceed the outstanding principal balance of the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties at the time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumessuch Hedge Agreement is entered into.
(b) If, after the end of any calendar monthDuring an Investment Grade Period, the Borrower determines that the aggregate volume of all commodity hedging transactions will not, and will not permit any Subsidiary to, enter into any Hedge Agreements with any Person other than (i) Hedge Agreements not for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes speculative purposes entered into to other production for hedge or mitigate risks to which the Borrower or any Restricted Subsidiaries is marketingSubsidiary has or may have exposure (including with respect to commodity prices), or otherwise unwind existing (ii) Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
purposes entered into in order to effectively cap, collar or exchange interest rates (dfrom fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary and (iii) other Hedge Agreements not for speculative purposes permitted under the risk management policies approved by the Borrower’s Board of Directors from time to time and not subject the Borrower and its Subsidiaries to material speculative risks. It is understood that for purposes of this Section 10.1011.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements in respect of commodities entered into not for with an Approved Counterparty that are non-speculative purposes the net notional volumes for which (when aggregated with other commodity including Hedge Agreements then in effectentered into to unwind or offset other permitted Hedge Agreements); provided that, at any time other than putswhen, floors during any Investment Grade Period, the Borrower has both a Rating from Xxxxx’x of Baa3 or better and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as a Rating from S&P of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of BBB- or better:
(i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes any such Hedge Agreement does not have a term greater than sixty (as forecast in (A60) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a)), in the case of each of clauses (i) and (ii) above, for the 66 month period from the date such hedging arrangement is created (the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement Hedge Agreement is created during entered into;
(ii) at all times, on a net basis, the aggregate notional volume for each of natural gas, natural gas liquids and crude oil, calculated separately, covered by market sensitive Hedge Agreements (other than Excluded Xxxxxx) shall not exceed 90% of the Projected Volume of natural gas, natural gas liquids and crude oil production, calculated separately, for each month in the forthcoming five year period;
(iii) notwithstanding the limitations set forth in clause (ii) of this Section 10.10(a) in contemplation of a Permitted Acquisition, the Borrower and its Restricted Subsidiaries may enter into additional market sensitive Hedge Agreements such that the aggregate notional volumes for each of natural gas, natural gas liquids and crude oil, calculated separately, for each month in the forthcoming five year period between covered by such additional market sensitive Hedge Agreements do not exceed 70% of the Projected Volume of natural gas, natural gas liquids and crude oil production, calculated separately, from the estimated reserves to be acquired in such Permitted Acquisition for each month in such forthcoming period; provided such additional Hedge Agreements are entered into (iA) on or after the date on which such Credit Party signs of execution of a definitive acquisition agreement with respect to a proposed Permitted Acquisition, but in connection with a Proposed any event no earlier than 90 days prior to the proposed closing date of such Permitted Acquisition and (iiB) in the earliest of (A) the date event such Proposed agreement is terminated or such Permitted Acquisition is consummated, (B) the date such acquisition is terminated and (C) otherwise not consummated within 90 days after such definitive acquisition agreement was executed initial additional market sensitive Hedge Agreements have been entered into (or such longer period as may be reasonably acceptable to which the Administrative Agent in the event the proposed closing of such Permitted Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days (or such longer period as the Administrative Agent may agree). Howeveragree in its reasonable discretion) after such termination or the end of such 90 day (or longer) period, all such incremental hedging contracts entered into with respect as applicable, the Borrower shall and shall cause the Restricted Subsidiaries to a Proposed Acquisition must be terminated novate, unwind or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity otherwise dispose of market sensitive Hedge Agreements which mayto the extent necessary to be in compliance with the limitations set forth in clause (ii) of this Section 10.10(a); and
(iv) notwithstanding the separate calculation requirements for natural gas, from time to timenatural gas liquids and crude oil in clauses (ii) and (iii) above, “hedge” so long as the same volumesBorrower and the Restricted Subsidiaries properly identify and consistently report such xxxxxx, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumesBorrower and the Restricted Subsidiaries may utilize crude oil xxxxxx as a substitute for hedging natural gas liquids.
(b) If, after Hedge Agreements entered into with the end purpose and effect of (i) fixing or limiting interest rates on a principal amount of indebtedness of any calendar monthCredit Party that is accruing interest at a variable rate or (ii) obtaining variable interest rates on a principal amount of indebtedness of any Credit Party that is accruing interest at a fixed rate (in each case including Hedge Agreements entered into to unwind or offset other permitted Hedge Agreements), provided that, at any time other than when, during any Investment Grade Period, the Borrower determines that has both a Rating from Xxxxx’x of Baa3 or better and a Rating from S&P of BBB- or better, the aggregate volume notional amount of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100Hedge Agreements does not (on a net basis) exceed 80% of actual production the principal balance of Hydrocarbons in the variable or fixed rate, as the case may be, Indebtedness of the Credit Parties projected to be outstanding at the time such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries Hedge Agreement is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar monthsentered into.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes Notwithstanding any of entering the foregoing, the Borrower shall have thirty (30) days following the end of any Investment Grade Period (or such longer period as the Administrative Agent may agree) to enter into Hedge Terminations or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or otherwise take any other Credit Party subsequent actions necessary to comply with the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on streamhedging covenants in this Section 10.10.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject On or prior to Section 10.10(b)the Initial Closing Date, the Issuer shall have entered into and will maintain at all times Hedge Agreements in respect (including by way of commodities entered into not for speculative purposes assignment and novation from the net notional volumes for which (when aggregated Seller to the Issuer) with other the purpose and effect of fixing commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% of prices covering at least (i) during NYMEX-WTI: 80% of projected crude Hydrocarbon production attributable to the period commencing on the Closing Date Wellbore Interests for each calendar month through and including April 130, 20142025, reasonably (ii) NYMEX-Xxxxx Hub: 80% of projected Hydrocarbon production volumes attributable to the Wellbore Interests for each calendar month through April 30, 2025, and (as forecast in (Aiii) initiallyNGL: 80% of projected Hydrocarbon production attributable to the Wellbore Interests for each calendar month through April 30, 2025. On or prior to the Sponsor Development Plan delivered on the Second Closing Date, the Issuer shall have entered into and will maintain at all times Hedge Agreements (including by way of assignment and novation from the Seller to the Issuer) with the purpose and effect of fixing commodity prices covering at least (i) NYMEX-WTI: 80% of projected crude Hydrocarbon production attributable to the Wellbore Interests for each calendar month through August 31, 2025, (ii) NYMEX-Xxxxx Hub: 80% of projected Hydrocarbon production attributable to the Wellbore Interests for each calendar month through August 31, 2025, and (Biii) NGL: 80% of projected Hydrocarbon production attributable to the Wellbore Interests for each calendar month through August 31, 2025.
(b) The Issuer will not be party to or in any manner be liable on any Hedge Agreements, except for Hedge Agreements entered into with the purpose and effect of fixing prices on crude oil, natural gas or natural gas liquids from reasonably anticipated production from the Wellbore Interests on market terms and conditions; provided that with respect to such Hedge Agreements, at any time all times (i) no such contract fixes a price for a period later than ninety-six (96) months after the Sponsor Development Plan such contract is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) entered into; and (ii) at any time thereafterthe aggregate monthly production of each of crude oil, the reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves natural gas liquids and natural gas, calculated separately, covered by all such contracts (as forecast based upon the most recent Reserve Report delivered pursuant to Section 9.14(a))determined, in the case of contracts that are not settled on a monthly basis, by a monthly proration reasonably acceptable to Hedge Counterparties) for any single month does not in the aggregate exceed ninety percent (90%) of the Issuer's reasonably anticipated Hydrocarbon production of crude oil, natural gas liquids and natural gas calculated separately (determined in a manner reasonably acceptable to Hedge Counterparties), from the Wellbore Interests anticipated to be sold in the ordinary course of business of the Issuer for such month. If, (A) on the date a conveyance under Section 5.11(d) of the applicable Asset Purchase Agreement or Section 2(d)(iii) of the Management Services Agreement occurs (after giving effect to such conveyance) or the date on which the Seller is required to pay to the Issuer a Title Adjustment Amount pursuant to Section 5.11(e) of the applicable Asset Purchase Agreement or (B) on the last day of any fiscal quarter, the combination of production volumes covered by Hedge Agreements for any calendar month exceeds 90% of reasonably projected Hydrocarbon production attributable to the Wellbore Interests for such month, based on the most recently delivered Reserve Report and as calculated separately for each of clauses crude oil, natural gas liquids and natural gas (determined in a manner reasonably acceptable to Hedge Counterparties), the Issuer shall, within five (5) Business Days of such date of conveyance (but, in the case of clause (A) only, in any event prior to the Payment Date relating to the Collection Period within which such date of conveyance occurs) or last day, terminate an appropriate portion of Hedge Agreements or enter into offsetting agreements that have the same effect such that the volumes subject to such Hedge Agreements or fixed price production sale agreements do not exceed 90% of reasonably projected Hydrocarbon production for each calendar month following such date or last day, as calculated separately for each of crude oil, natural gas liquids and natural gas.
(c) Notwithstanding the foregoing, the Issuer will not, incur or permit to exist (i) and any speculative Hedge Agreements or (ii) above, for any commodity Hedge Agreements that are or may be settled physically through the 66 month period from delivery of Hydrocarbons (other than any such Hedge Agreement described in this clause (ii) that has a term of sixty (60) days or less).
(d) To the date such hedging arrangement is created (extent that the “Ongoing Xxxxxx”). In addition to the Ongoing Xxxxxx, Issuer solicits a consent of Noteholders in connection with a proposed Permitted Acquisition (sale or release of a “Proposed Acquisition”)Wellbore Interest or other Collateral, the Credit Parties may also enter into incremental hedging contracts with respect Issuer shall include in any such solicitation details regarding any obligation to terminate a portion of a Hedge Agreement pursuant to part (b) hereof that would be implicated by such sale or release, including an estimate of payments to be made or received by the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party signs a definitive acquisition agreement Issuer in connection with a Proposed Acquisition and (ii) the earliest of (A) the date such Proposed Acquisition is consummated, (B) the date such acquisition is terminated and (C) 90 days after such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agree). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 days following the date such acquisition is terminated. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumestermination.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(d) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed speculative or entered into for speculative purposes: (i) any commodity Hedging Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(e) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the most recent Reserve Report delivered pursuant to Section 9.14(a), shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
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Hedge Agreements. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Hedge Agreements with any Person other than:
(a) Subject to Section 10.10(b), Hedge Agreements with Approved Counterparties in respect of commodities Hydrocarbons entered into not for speculative purposes purposes, the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than (i) puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) do not exceed, as of the date the latest hedging transaction is entered into under a Hedge Agreement, 85% ninety percent (90%) of (i) during the period commencing on the Closing Date through and including April 1, 2014, reasonably projected Hydrocarbon production volumes (as forecast in (A) initially, the Sponsor Development Plan delivered on the Closing Date, and (B) at any time after the Sponsor Development Plan is required to be delivered pursuant to Section 9.14(c)(vi), the most recent Sponsor Development Plan delivered pursuant thereto) and (ii) at any time thereafter, the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a)9.13(a), in the case of each of clauses (ias applicable) and (ii) above, for the 66 thirty-six (36) month period from the date of creation of such hedging arrangement arrangement, based on daily volumes on an annual basis; provided, however, notwithstanding the foregoing volume limitation, the Borrower and/or the Restricted Subsidiaries may enter into Hedge Agreements in respect of purchased puts and floors not intended to be physically settled so long as the net notional volumes of all Hedge Agreements in respect of Hydrocarbons subject to this Section 10.10(a) do not exceed (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements), as of the date the latest hedging transaction is created entered into under a Hedge Agreement, one hundred percent (100%) of the reasonably anticipated Hydrocarbon production of crude oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Reserves (as forecast based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.13(a), as applicable) for the thirty-six (36) month period from the date of creation of such hedging arrangement, based on daily volumes on an annual basis (the “Ongoing Xxxxxx”), (ii) any Permitted Bond Hedge Transaction(s), and (iii) any Permitted Warrant Transaction. If, after the end of any fiscal quarter, the Borrower determines that the aggregate volume of all commodity Hedge Agreements for which settlement payments were calculated in such fiscal quarter exceeded 100% of actual production of crude oil, natural gas and natural gas, calculated separately, in such fiscal quarter, then the Borrower shall, or shall cause one or more other Credit Parties to, within thirty (30) days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Credit Parties are marketing, or otherwise unwind existing commodity Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding fiscal quarters. In no event shall any Hedge Agreement entered into by the Credit Parties have a tenor longer than thirty-six (36) months. In addition to the Ongoing Xxxxxx, in connection with a proposed Permitted Acquisition or pending acquisition of Oil and Gas Properties (a “Proposed Acquisition”), the Credit Parties may also enter into incremental hedging contracts with respect to the Credit Parties’ reasonably anticipated projected production from the total Proved Reserves of the Credit Parties Borrower and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% ten percent (10%) of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than one hundred percent (100%) of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 thirty-six (36) months from the date such hedging arrangement is created during the period between (i) the date on which such Credit Party Guarantor signs a definitive acquisition agreement in connection with a Proposed Acquisition and (ii) the earliest of (A) the date of consummation of such Proposed Acquisition is consummatedAcquisition, (B) the date of termination of such acquisition is terminated Proposed Acquisition and (C) 90 thirty (30) days after the date of execution of such definitive acquisition agreement was executed (or such longer period as to which the Administrative Agent may agreeagree in its reasonable discretion). However, all such incremental hedging contracts entered into with respect to a Proposed Acquisition must be terminated or unwound within 90 thirty (30) days following the date of termination of such acquisition is terminatedProposed Acquisition. It is understood that commodity Hedge Agreements which may, from time to time, “hedge” the same volumes, volumes of commodity risk but different elements of commodity risk thereof, including where one or more such Hedge Agreements partially offset one or more other such Hedge Agreements, shall not be aggregated together when calculating the foregoing limitations on notional volumes.
(b) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity hedging transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of Hydrocarbons in such calendar month, then the Borrower shall terminate, create off-setting positions, allocate volumes to other production for which the Borrower or any Restricted Subsidiaries is marketing, or otherwise unwind existing Hedge Agreements such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months.
(c) Other Hedge Agreements (other than any Hedge Agreements in respect of Hydrocarbons or equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions) entered into not for speculative purposes.
(dc) It is understood that for purposes of this Section 10.10, the following Hedge Agreements shall not be deemed not to be speculative or entered into for speculative purposes: (i) any commodity Hedging Hedge Agreement intended, at inception of execution, to hedge or manage any of the risks related to existing and or forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Agreement intended, at inception of execution, (A) to hedge or manage the interest rate exposure associated with any debt securities, debt facilities or leases (existing or forecasted) of the Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency exchange management, (C) to manage commodity portfolio exposure associated with changes in interest rates or (D) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Hedge Agreements such that the combination of such Hedge Agreements is not speculative taken as a whole.
(ed) For purposes of entering into or maintaining Ongoing Xxxxxx under Section 10.10(a) and Section 10.10(b), respectively, forecasts of reasonably projected Hydrocarbon production volumes (as forecast in the Sponsor Development Plan) and reasonably anticipated Hydrocarbon production from the Credit Parties’ total Proved Reserves based upon the Initial Reserve Report or the most recent Reserve Report delivered pursuant to Section 9.14(a9.13(a), as applicable, shall be revised to account for any increase or decrease therein anticipated because of information obtained by Borrower or any other Credit Party subsequent to the publication of such Reserve Report including the Borrower’s or any other Credit Party’s internal forecasts of production decline rates for existing xxxxx and additions to or deletions from anticipated future production from new xxxxx and acquisitions coming on stream or failing to come on stream.
(e) Notwithstanding anything to the contrary herein, the Borrower or any other Credit Party shall be permitted to enter into Hedge Agreements with respect to Hydrocarbons purchased from third parties to the extent such Hydrocarbons are intended to be consumed by the Borrower or any other Credit Party in their respective operations or used in connection with the Energy Business. In no event shall any Lien secure Hedge Agreements except pursuant to the Credit Documents, nor shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower and its Restricted Subsidiaries to post collateral, credit support (including in the form of letters of credit) or margin (other than, in each case, pursuant to the Credit Documents or to the extent required following Payment in Full) to secure their obligations under such Hedge Agreement or to cover market exposures, nor shall any Hedge Agreement be secured by any collateral other than Collateral pursuant to the Credit Documents.
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Samples: Credit Agreement (Infinity Natural Resources, Inc.)
