Common use of Hedge Transactions Clause in Contracts

Hedge Transactions. (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any Hedge Transaction except that the Borrower or other Loan Party shall be permitted to enter into, as of any date Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower or other Loan Party with respect to which the aggregate notional volumes covered thereby do not exceed, when aggregated and netted with all other Hedge Transactions (other than “put” options) of the Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction that may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.18, there shall be no prohibition under this Agreement or any other Loan Document against the Borrower or any other Loan Party entering into “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, or (ii) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions 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. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent.

Hedge Transactions. (a) The Borrower will not, and nor will not Borrower permit any other Credit Party to, enter into or, subject to clause (B) of its Restricted Subsidiaries the proviso in the first sentence of Section 9.5, permit to exist any Oil and Gas Hedge Transactions (other than purchased put options or price floors with respect to Hydrocarbons) (a) with a duration longer than five years from the date the applicable Oil and Gas Hedge Transaction is entered into or (b) whereby the volume of Hydrocarbons with respect to which a settlement payment is calculated would exceed (i) for the first 24 months after the date of execution of such Hedge Transaction (the “First Measurement Period”), 100% and (ii) for the first 36 months immediately following the First Measurement Period, 75%, in each case, (x) of Borrower’s anticipated production (assuming no curtailment or interruption of transportation for such anticipated production) from Proved Mineral Interests and (y) without duplication of the “put” and “call”, notional quantities of any collars. Borrower will not, nor will Borrower permit any other Credit Party to, enter into any Hedge Transaction except that the Borrower commodity, interest rate, currency or other Loan Party shall be permitted to enter intoswap, as of any date Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower option, collar or other Loan Party with respect derivative transaction pursuant to which any Credit Party speculates on the aggregate notional volumes covered thereby do not exceed, when aggregated and netted with all other Hedge Transactions (other than “put” options) of the Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction that may, from time to time, “hedge” the same volumes, but different elements movement of commodity risk thereof (e.g.prices, commodity price risk versus basis risk)securities prices, shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary interest rates, financial markets, currency markets or other items; provided that, nothing contained in this Section 6.18, there 9.10 shall be no prohibition under this Agreement or prohibit any other Loan Document against the Borrower or any other Loan Credit Party from (a) entering into “put” options not otherwise prohibited hereunder, in each case, so long as interest rate swaps or other interest rate hedge transactions pursuant to which such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation Credit Party xxxxxx interest rate risk with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party interest reasonably anticipated to be secured incurred pursuant to this Agreement, (b) entering into Oil and Gas Hedge Transactions otherwise permitted by the Liens granted to the Administrative Agent under the Security Documentsthis Section 9.10, or (iic) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposuresmaking Permitted Investments. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions 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. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent.

Hedge Transactions. (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, enter into any Hedge Transaction except that the Borrower or Transactions with any Person other Loan Party shall be permitted to enter into, as of any date than: (a) Hedge Transactions with an Approved Counterparty related to bona fide (and in respect of commodities entered into not speculative) hedging activities of for speculative purposes the Borrower or other Loan Party with respect to which the aggregate net notional volumes covered thereby for which (when aggregated with other commodity Hedge Transactions then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Transactions) do not exceed, when aggregated and netted with all other Hedge Transactions (other than “put” options) as of the Borrower and date the other Loan Parties then in effectlatest Hedging Transaction is entered into, for any month during the period from the then-current date until four (4) years after the then-current date, 8590% of the Borrower’s reasonably anticipated quarterly production of oil, natural gas and natural gas liquids, calculated separately, from the other Loan Credit Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), total Proved Developed Producing Reserves and 8550% of the Borrower’s reasonably anticipated quarterly production of oil, natural gas and natural gas liquids, calculated separately, from the other Loan Credit Parties’ total Proved Developed Non-Producing Reserves; provided, that, with respect to Hedge Transactions for commodities the net notional volumes for which are in respect of reasonably anticipated projected production during any of the months of August through October of any year, in no event shall the Borrower or any Restricted Subsidiary enter into Hedge Transactions with respect to more than 65% of reasonably anticipated production of oil, natural gas (for and natural gas related liquids, calculated separately, from the Credit Parties’ total Proved Developed Producing Reserves for any of such months (and in no event shall the Borrower or any Restricted Subsidiary enter into Hedge TransactionsTransactions with respect to any of the reasonably anticipated quarterly production of oil, natural gas and natural gas liquids, calculated separately, from the Credit Parties’ total Proved Developed Non-Producing Reserves for any of such months), (provided further that, with respect to the amount of such reduction of permitted Hedge Transactions in respect of the months of August through October of any year, such amount may be used to increase amounts otherwise permitted during the remaining portion of each year), in each case, 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 monthhedging arrangement (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 Hedge Transactions with respect to the Credit Parties’ reasonably anticipated production of oil, natural gas and natural gas liquids, calculated separately, from the Borrower’s and the other Loan Credit Parties’ Oil total Proved Reserves as forecast based upon the most recent Reserve Report having notional volumes not in excess of 90% of the Credit Parties’ existing projected production prior to the consummation of such Proposed Acquisition (provided that the aggregate of all Hedge Transactions in respect of commodities shall not, in any event, exceed 90% of the reasonably anticipated projected production of oil, natural gas and Gas Properties constituting proved developed producing reserves. natural gas liquids, calculated separately, from the Credit Parties Proved Developed Producing Reserves 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 (bi) 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, (B) the date of termination of such Proposed Acquisition and (C) 120 days after the date of execution of such definitive acquisition agreement (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 not later than the earlier of (i) if the Proposed Acquisition has not yet been consummated, 120 days (or such longer period to the extent approved in writing by the Administrative Agent) following the date on which such Credit Party executed such definitive acquisition agreement and (ii) 30 days following the date such Proposed Acquisition is terminated, in each case, to the extent the aggregate notional volumes hedged in anticipation of such Proposed Acquisition exceed the volumes permitted for Ongoing Xxxxxx. It is understood that commodity Hedge Transaction that Transactions which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof (e.g., commodity price risk versus basis risk)thereof, shall not be aggregated together when calculating the foregoing limitations on notional volumes. (b) Other Hedge Transactions (other than any Hedge Transactions 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. (c) Notwithstanding anything to the contrary in It is understood that for purposes of this Section 6.1810.10, there the following Hedge Transactions shall not be no prohibition under this Agreement deemed speculative or entered into for speculative purposes: (i) any other Loan Document against commodity Hedge Transaction intended, at inception of execution, to hedge or manage any of the risks related to existing and/or reasonably anticipated projected Hydrocarbon production from reserves of the Borrower or its Restricted Subsidiaries (whether or not contracted) and (ii) any Hedge Transaction 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 reasonably anticipated) of the Borrower or its Restricted Subsidiaries, (B) to manage commodity portfolio exposure associated with changes in interest rates, (C) to hedge any exposure that the Borrower or its Restricted Subsidiaries may have to counterparties under other Loan Party entering into “put” options Hedge Transactions such that the combination of such Hedge Transactions is not otherwise prohibited hereunder, in each case, so long speculative taken as such agreements are entered into with an Approved Counterparty in the ordinary course of business a whole or (D) for the purpose of hedging against fluctuations of commodity pricesforeign exchange or currency exchange management. (d) Neither the Borrower nor any Restricted Subsidiary will enter For purposes of entering into any Hedge Transaction for the purpose of speculation with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirementor maintaining Ongoing Xxxxxx under Section 10.10(a), agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, or (ii) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions such that, at such time, future hedging volumes will not exceed 100% of reasonably anticipated projected Hydrocarbon production for from the then-current and any succeeding calendar months. For purposes of this Section 6.18, forecasts of projected production shall equal Credit Parties’ total Proved Reserves based upon the projections for proved developed producing reserves of each crude oil and natural gas set out in Initial Reserve Report or the most recent Reserve Report delivered pursuant to the Administrative Agent Section 9.14(a), as applicable, shall be revised in good faith to account for any increase or reductions decrease therein anticipated based on because of information obtained by the Borrower or any other Credit Party subsequent to the publication of the such Reserve Report, 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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agentstream.

Hedge Transactions. (a) The Borrower will not, nor will Borrower permit any other Credit Party to, enter into or, subject to clause (B) of the proviso in the first sentence of Section 9.5, permit to exist any Oil and Gas Hedge Transactions (other than (x) purchased put options or price floors with respect to Hydrocarbons and (y) Oil and Gas Hedge Transactions Liquidated, or to be Liquidated, pursuant to the Legacy Asset Disposition Agreement) (i) with a duration longer than five years from the date the applicable Oil and Gas Hedge Transaction is entered into or (ii) whereby the volume of Hydrocarbons with respect to which a settlement payment is calculated would exceed (A) for the first 24 months after the date of execution of such Hedge Transaction (the “First Measurement Period”), 100% and (B) for the first 36 months immediately following the First Measurement Period, 75%, in each case, (x) of Borrower’s anticipated production (assuming no curtailment or interruption of transportation for such anticipated production) from Proved Mineral Interests and (y) without duplication of the “put” and “call”, notional quantities of any collars. Borrower will not, nor will Borrower permit any other Credit Party to, enter into any commodity, interest rate, currency or other swap, option, collar or other derivative transaction pursuant to which any Credit Party speculates on the movement of commodity prices, securities prices, interest rates, financial markets, currency markets or other items; provided that, nothing contained in this Section 9.10(a) shall prohibit any Credit Party from (1) entering into interest rate swaps or other interest rate hedge transactions pursuant to which such Credit Party xxxxxx interest rate risk with respect to the interest reasonably anticipated to be incurred pursuant to this Agreement, (2) entering into Oil and Gas Hedge Transactions otherwise permitted by this Section 9.10(a) or Section 9.10(b), (3) making Permitted Investments or (4) entering into the Renewable Product Purchase Documents and performing its obligations thereunder; (b) Borrower the other Credit Parties may enter into Hedge Agreements that would be permitted by Section 9.10(a) pertaining to Mineral Interests to be acquired pursuant to a Specified Acquisition; provided that Hedge Agreements pursuant to this Section 9.10(b) must be Liquidated upon the earlier to occur of: (i) the date that is 90 days after the execution of the purchase and sale agreement relating to the Specified Acquisition to the extent that such Specified Acquisition has not been consummated by such date and (ii) any Credit Party knows with reasonable certainty that the Specified Acquisition will not be consummated; and (c) Borrower will not, and will not permit any of its Restricted Subsidiaries other Credit Party to, enter into Liquidate any Hedge Transaction except that the Borrower or other Loan Party shall be permitted to enter into, as of any date Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower or other Loan Party with respect to which the aggregate notional volumes covered thereby do not exceed, when aggregated and netted with all other Hedge Transactions Agreement (other than “put” optionsHedge Agreements Liquidated, or to be Liquidated, pursuant to the Legacy Asset Disposition Agreement) in respect of commodities unless (x) if such Swap Liquidation would result in an automatic redetermination of the Borrowing Base pursuant to Section 4.6, Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction that may, from time to time, “hedge” the same volumes, but different elements of commodity risk delivers reasonable prior written notice thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.18, there shall be no prohibition under this Agreement or any other Loan Document against the Borrower or any other Loan Party entering into “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, or (ii) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions 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. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent, and (y) if a Borrowing Base Deficiency would result from such Swap Liquidation as a result of an automatic redetermination of the Borrowing Base pursuant to Section 4.6, Borrower prepays Borrowings, prior to or contemporaneously with the consummation of such Swap Liquidation to the extent that such prepayment would have been required under Section 2.6(a) after giving effect to such automatic redetermination of the Borrowing Base.

Hedge Transactions. (a) The Borrower will not, nor will Borrower permit any other Credit Party to, enter into or, subject to clause (B) of the proviso in the first sentence of Section 9.5, permit to exist any Oil and Gas Hedge Transactions (other than (x) purchased put options or price floors with respect to Hydrocarbons and (y) Oil and Gas Hedge Transactions Liquidated, or to be Liquidated, pursuant to the Legacy Asset Disposition Agreement) (i) with a duration longer than five years from the date the applicable Oil and Gas Hedge Transaction is entered into or (ii) whereby the volume of Hydrocarbons with respect to which a settlement payment is calculated would exceed (A) for the first 24 months after the date of execution of such Hedge Transaction (the “First Measurement Period”), 100% and (B) for the first 36 months immediately following the First Measurement Period, 75%, in each case, (x) of Borrower’s anticipated production (assuming no curtailment or interruption of transportation for such anticipated production) from Proved Mineral Interests and (y) without duplication of the “put” and “call”, notional quantities of any collars. Borrower will not, nor will Borrower permit any other Credit Party to, enter into any commodity, interest rate, currency or other swap, option, collar or other derivative transaction pursuant to which any Credit Party speculates on the movement of commodity prices, securities prices, interest rates, financial markets, currency markets or other items; provided that, nothing contained in this Section 9.10(a) shall prohibit any Credit Party from (1) entering into interest rate swaps or other interest rate hedge transactions pursuant to which such Credit Party hxxxxx interest rate risk with respect to the interest reasonably anticipated to be incurred pursuant to this Agreement, (2) entering into Oil and Gas Hedge Transactions otherwise permitted by this Section 9.10(a) or Section 9.10(b), or (3) making Permitted Investments or (4) entering into the Renewable Product Purchase Documents and performing its obligations thereunder; (b) Borrower the other Credit Parties may enter into Hedge Agreements that would be permitted by Section 9.10(a) pertaining to Mineral Interests to be acquired pursuant to a Specified Acquisition; provided that Hedge Agreements pursuant to this Section 9.10(b) must be Liquidated upon the earlier to occur of: (i) the date that is 90 days after the execution of the purchase and sale agreement relating to the Specified Acquisition to the extent that such Specified Acquisition has not been consummated by such date and (ii) any Credit Party knows with reasonable certainty that the Specified Acquisition will not be consummated; and (c) Borrower will not, and will not permit any of its Restricted Subsidiaries other Credit Party to, enter into Liquidate any Hedge Transaction except that the Borrower or other Loan Party shall be permitted to enter into, as of any date Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower or other Loan Party with respect to which the aggregate notional volumes covered thereby do not exceed, when aggregated and netted with all other Hedge Transactions Agreement (other than “put” optionsHedge Agreements Liquidated, or to be Liquidated, pursuant to the Legacy Asset Disposition Agreement) in respect of commodities unless (x) if such Swap Liquidation would result in an automatic redetermination of the Borrowing Base pursuant to Section 4.6, Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction that may, from time to time, “hedge” the same volumes, but different elements of commodity risk delivers reasonable prior written notice thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.18, there shall be no prohibition under this Agreement or any other Loan Document against the Borrower or any other Loan Party entering into “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, or (ii) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions 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. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent, and (y) if a Borrowing Base Deficiency would result from such Swap Liquidation as a result of an automatic redetermination of the Borrowing Base pursuant to Section 4.6, Borrower prepays Borrowings, prior to or contemporaneously with the consummation of such Swap Liquidation to the extent that such prepayment would have been required under Section 2.6(a) after giving effect to such automatic redetermination of the Borrowing Base.

Hedge Transactions. (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any commodity Hedge Transaction except that the Borrower or other Loan Credit Party shall be permitted to enter into, as of any date date, commodity Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower or other Loan Credit Party with respect to which the aggregate notional volumes covered thereby do not exceed, subject to clause (b) below, when aggregated and netted with all other commodity Hedge Transactions (other than “put” options) of the Borrower and the other Loan Credit Parties then in effect, (i) for any month during the period from the then-current date until four (4) years first 24 months after the then-current datedate of execution of such Hedge Transaction (the “First Measurement Period”), 85100% and (ii) for any month during the first 36 months immediately following the First Measurement Period, 75%, in each case, of the Borrower’s and the other Loan Credit Parties’ reasonably anticipated projected production (assuming no curtailment or interruption of transportation for such anticipated production) of (A) crude oil (for crude oil related Hedge Transactions), ) and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of (B) natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Credit Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction Transactions that may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.189.18, there shall be no prohibition under this Agreement or any other Loan Document Paper against the Borrower or any other Loan Credit Party entering into purchased “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation (whether with respect to the levels of commodity prices in the futurefuture or otherwise). (e) In no event shall any Hedge Swap Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Swap Agreement or to cover market exposures, ; provided that this sentence shall not (i) prevent an Approved Counterparty a Lender Swap Provider from requiring the obligations under its Hedge Swap Agreement with any Loan Credit Party to be secured by the Liens granted to the Administrative Agent under the Security DocumentsInstruments, or (ii) prohibit any Loan Credit Party from being party to any Hedge Swap Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Credit Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Credit Party’s obligations under such Hedge Swap Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 60 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Credit Parties to, within five twenty (520) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Credit Parties are marketing, or otherwise unwind existing commodity Hedge Transactions 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. (h) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any Hedge Transactions in respect of interest rates with an Approved Counterparty, except as follows: (i) Hedge Transactions effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all other Hedge Transactions of the Borrower and the other Credit Parties then in effect effectively converting interest rates from fixed to floating) do not exceed 100% of the then outstanding principal amount of the Credit Parties’ Obligations for borrowed money that bears interest at a fixed rate and (ii) Hedge Transactions effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Hedge Transactions of the Borrower and the other Credit Parties then in effect effectively converting interest rates from floating to fixed) do not exceed 100% of the then outstanding principal amount of the Credit Parties’ Obligations for borrowed money that bears interest at a floating rate. For purposes of this Section 6.189.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent.

Hedge Transactions. (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, enter into any Hedge Transaction except that Transactions at any time or with any Person, other than: (a) Hedge Transactions entered into by the Borrower or other Loan Party shall be permitted to enter into, as of any date Hedge Transactions Subsidiary with an Approved Counterparty related that are non-speculative (including Hedge Transactions entered into to bona fide unwind or offset other permitted Hedge Transactions); provided that: (i) any such Hedge Transaction does not have a term greater than sixty (60) months from the date such Hedge Transaction is 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 Hedge Transactions for any fiscal quarter during the forthcoming sixty (60) month period (other than Excluded Xxxxxx) shall not speculativeexceed 85% of the projected volume for such fiscal quarter, as forecasted based upon the most recent Reserve Report, of natural gas, natural gas liquids and crude oil production, calculated separately, for each such quarter in the then forthcoming sixty (60) hedging activities month period (the “Ongoing Xxxxxx”); (iii) in addition to, and notwithstanding the limitations set forth in clause (ii) of this Section 10.10(a), in contemplation of, and prior to the consummation of, an acquisition of Oil and Gas Properties (whether as a direct acquisition of Oil and Gas Properties or through a Permitted Acquisition) by the Borrower or any of its Subsidiaries, the Borrower or any other Loan Credit Party with respect to which may enter into additional Hedge Transactions such that the aggregate notional volumes for each of natural gas, natural gas liquids and crude oil, calculated separately, for each fiscal quarter in the forthcoming 60 month period covered thereby by such additional Hedge Transactions do not exceed, when aggregated and netted with all other Hedge Transactions (other than “put” options) of the Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, exceed 85% of the Borrower’s projected volume of natural gas, natural gas liquids and crude oil production, calculated separately, from the other Loan Parties’ reasonably anticipated reasonable estimated projected production from Proved Developed Producing Reserves to be acquired for each fiscal quarter in such forthcoming period; provided that such additional Hedge Transactions are entered into during the period between (A) the date on which such Credit Party signs a definitive acquisition agreement in connection with such acquisition and (B) the earliest of crude oil (for crude oil related Hedge Transactions1) the date such acquisition is consummated, (2) the date such acquisition is terminated and (3) 90 days after such definitive agreement was executed (or such longer period as to which the Administrative Agent may agree); provided further that all such incremental hedging contracts entered into with respect to such acquisition shall be terminated or unwound not later than the earlier of (x) if the acquisition has not yet been consummated, 90 days (or such longer period to the extent that such longer period is approved in writing by the Administrative Agent) following the date on which such Credit Party signs a definitive acquisition agreement in connection with such acquisition and 85% of (y) thirty (30) days following the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions)date such acquisition is terminated, in each case, to the extent the aggregate notional volumes hedged in anticipation of such acquisition exceed the volumes permitted for Ongoing Xxxxxx; and (iv) any such monthHedge Transaction that might require an Approved Counterparty to make a payment to the Borrower or a Subsidiary of the Borrower (whether a termination payment or otherwise) shall have as a counterparty a Lender or an Affiliate of a Lender at the time such Hedge Transaction is entered into. For purposes of this Section 10.10(a), from so long as the Borrower’s Borrower properly identifies and consistently reports such xxxxxx, the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reservesBorrower may utilize crude oil xxxxxx as a substitute for hedging natural gas liquids. (b) It is understood that commodity Hedge Transaction that may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.18, there shall be no prohibition under this Agreement or any other Loan Document against Transactions entered into by the Borrower or any other Loan Party entering into “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose and effect of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with fixing or limiting interest rates on a principal amount of indebtedness of any Loan Credit Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, that is accruing interest at a variable rate or (ii) prohibit obtaining variable interest rates on a principal amount of indebtedness of any Loan Credit Party from being party that is accruing interest at a fixed rate (in each case including Hedge Transactions entered into to any unwind or offset other permitted Hedge Agreement with an Approved Counterparty Transactions), provided that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter the aggregate notional amount of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement Transactions does not (on a net basis) exceed the outstanding principal balance of the variable or to cover market exposures. (f) Neither fixed rate, as the Borrower nor any case may be, Indebtedness of its Restricted Subsidiaries shall enter into any the Credit Parties at the time such Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (gc) If, after the end It is understood that for purposes of any calendar monthclauses (a) and (b) of this Section 10.10, the following Hedge Transactions with Approved Counterparties 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 determines or its Subsidiaries (whether or not contracted) and (ii) any Hedge Transaction 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 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 aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more its Subsidiaries may have to counterparties under other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions such that, at that the combination of such time, future hedging volumes will Hedge Transactions is not exceed 100% of reasonably anticipated projected production for the then-current and any succeeding calendar months. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent speculative taken as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agentwhole.

Hedge Transactions. (a) The Borrower will not, nor will Borrower permit any other Credit Party to, enter into or, subject to clause (B) of the proviso in the first sentence of Section 9.5, permit to exist any Oil and Gas Hedge Transactions (other than (x) purchased put options or price floors with respect to Hydrocarbons and (y) Oil and Gas Hedge Transactions Liquidated, or to be Liquidated, pursuant to the Legacy Asset Disposition Agreement) (i) with a duration longer than five years from the date the applicable Oil and Gas Hedge Transaction is entered into or (ii) whereby the volume of Hydrocarbons with respect to which a settlement payment is calculated would exceed (A) for the first 24 months after the date of execution of such Hedge Transaction (the “First Measurement Period”), 100% and (B) for the first 36 months immediately following the First Measurement Period, 75%, in each case, (x) of Borrower’s anticipated production (assuming no curtailment or interruption of transportation for such anticipated production) from Proved Mineral Interests and (y) without duplication of the “put” and “call”, notional quantities of any collars. Borrower will not, nor will Borrower permit any other Credit Party to, enter into any commodity, interest rate, currency or other swap, option, collar or other derivative transaction pursuant to which any Credit Party speculates on the movement of commodity prices, securities prices, interest rates, financial markets, currency markets or other items; provided that, nothing contained in this Section 9.10(a) shall prohibit any Credit Party from (1) entering into interest rate swaps or other interest rate hedge transactions pursuant to which such Credit Party hxxxxx interest rate risk with respect to the interest reasonably anticipated to be incurred pursuant to this Agreement, (2) entering into Oil and Gas Hedge Transactions otherwise permitted by this Section 9.10(a) or Section 9.10(b), or (3) making Permitted Investments; (b) Borrower the other Credit Parties may enter into Hedge Agreements that would be permitted by Section 9.10(a) pertaining to Mineral Interests to be acquired pursuant to a Specified Acquisition; provided that Hedge Agreements pursuant to this Section 9.10(b) must be Liquidated upon the earlier to occur of: (i) the date that is 90 days after the execution of the purchase and sale agreement relating to the Specified Acquisition to the extent that such Specified Acquisition has not been consummated by such date and (ii) any Credit Party knows with reasonable certainty that the Specified Acquisition will not be consummated; and (c) Borrower will not, and will not permit any of its Restricted Subsidiaries other Credit Party to, enter into Liquidate any Hedge Transaction except that the Borrower or other Loan Party shall be permitted to enter into, as of any date Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower or other Loan Party with respect to which the aggregate notional volumes covered thereby do not exceed, when aggregated and netted with all other Hedge Transactions Agreement (other than “put” optionsHedge Agreements Liquidated, or to be Liquidated, pursuant to the Legacy Asset Disposition Agreement) in respect of commodities unless (x) if such Swap Liquidation would result in an automatic redetermination of the Borrowing Base pursuant to Section 4.6, Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction that may, from time to time, “hedge” the same volumes, but different elements of commodity risk delivers reasonable prior written notice thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.18, there shall be no prohibition under this Agreement or any other Loan Document against the Borrower or any other Loan Party entering into “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation with respect to the levels of commodity prices in the future. (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, provided that this sentence shall not (i) prevent an Approved Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, or (ii) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five (5) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing Hedge Transactions 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. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent, and (y) if a Borrowing Base Deficiency would result from such Swap Liquidation as a result of an automatic redetermination of the Borrowing Base pursuant to Section 4.6, Borrower prepays Borrowings, prior to or contemporaneously with the consummation of such Swap Liquidation to the extent that such prepayment would have been required under Section 2.6(a) after giving effect to such automatic redetermination of the Borrowing Base.

Hedge Transactions. (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any commodity Hedge Transaction except that the Borrower or other Loan Party shall be permitted to enter into, as of any date commodity Hedge Transactions with an Approved Counterparty related to bona fide (and not speculative) hedging activities of the Borrower or other Loan Party with respect to which the aggregate notional volumes covered thereby do not exceed, when aggregated and netted with all other commodity Hedge Transactions (other than “put” options) of the Borrower and the other Loan Parties then in effect, for any month during the period from the then-current date until four (4) years after the then-current date, 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of crude oil (for crude oil related Hedge Transactions), and 85% of the Borrower’s and the other Loan Parties’ reasonably anticipated projected production of natural gas (for natural gas related Hedge Transactions), in each case, for such month, from the Borrower’s and the other Loan Parties’ Oil and Gas Properties constituting proved developed producing reserves. (b) It is understood that commodity Hedge Transaction Transactions that may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof (e.g., commodity price risk versus basis risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes. (c) Notwithstanding anything to the contrary in this Section 6.18, there shall be no prohibition under this Agreement or any other Loan Document against the Borrower or any other Loan Party entering into “put” options not otherwise prohibited hereunder, in each case, so long as such agreements are entered into with an Approved Counterparty in the ordinary course of business for the purpose of hedging against fluctuations of commodity prices. (d) Neither the Borrower nor any Restricted Subsidiary will enter into any Hedge Transaction for the purpose of speculation (whether with respect to the levels of commodity prices in the futurefuture or otherwise). (e) In no event shall any Hedge Agreement contain any requirement, agreement or covenant for the Borrower or any Restricted Subsidiary to post collateral, credit support (including a letter of credit) or margin to secure their obligations under such Hedge Agreement or to cover market exposures, ; provided that this sentence shall not (i) prevent an Approved Lender Counterparty from requiring the obligations under its Hedge Agreement with any Loan Party to be secured by the Liens granted to the Administrative Agent under the Security Documents, or (ii) prohibit any Loan Party from being party to any Hedge Agreement with an Approved Counterparty that contains a requirement, agreement or covenant for any Person other than a Loan Party to post collateral, credit support (including a letter of credit) or margin to secure such Loan Party’s obligations under such Hedge Agreement or to cover market exposures. (f) Neither the Borrower nor any of its Restricted Subsidiaries shall enter into any Hedge Transaction with a term longer than 48 60 months from the date such transaction is entered into. (g) If, after the end of any calendar month, the Borrower determines that the aggregate volume of all commodity Hedge Transactions for which settlement payments were calculated in such calendar month exceeded 100% of actual production of crude oil and natural gas, calculated separately, in such calendar month, then the Borrower shall, or shall cause one or more other Loan Parties to, within five twenty (520) Business Days of such determinations terminate, create off-setting positions, allocate volumes to other production for which the Borrower and the other Loan Parties are marketing, or otherwise unwind existing commodity Hedge Transactions 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. (h) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any Hedge Transactions in respect of interest rates with an Approved Counterparty, except as follows: (i) Hedge Transactions effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all other Hedge Transactions of the Borrower and the other Loan Parties then in effect effectively converting interest rates from fixed to floating) do not exceed 100% of the then outstanding principal amount of the Loan Parties’ Indebtedness for borrowed money that bears interest at a fixed rate and (ii) Hedge Transactions effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Hedge Transactions of the Borrower and the other Loan Parties then in effect effectively converting interest rates from floating to fixed) do not exceed 100% of the then outstanding principal amount of the Loan Parties’ Indebtedness for borrowed money that bears interest at a floating rate. For purposes of this Section 6.18, forecasts of projected production shall equal the projections for proved developed producing reserves of each crude oil and natural gas set out in the most recent Reserve Report delivered to the Administrative Agent as revised in good faith to account for any increase or reductions therein anticipated based on information obtained by the Borrower subsequent to the publication of the such Reserve Report, including the Borrower’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 and Dispositions of Oil and Gas Properties, each as reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise satisfactory to the Administrative Agent.