Hedging Limitations Clause Samples
The Hedging Limitations clause restricts the extent to which a party may engage in hedging activities related to the subject matter of the agreement. Typically, this clause sets boundaries on the types, amounts, or timing of hedging transactions, such as prohibiting speculative trades or limiting hedges to those that directly offset contractual exposures. Its core function is to prevent excessive or inappropriate hedging that could increase risk, distort market behavior, or undermine the intent of the agreement.
Hedging Limitations. Borrower and Guarantors shall not enter into any Hedge Transaction related to crude oil, natural gas, or other commodities, except hedging required by Lender and except for Hedge Transactions which meet the following requirements:
(i) Hedge Transactions resulting in a cap or ceiling on the price to be received by Borrower and Guarantors, involving in the aggregate at any time not more than ninety percent (90%) of Borrower’s and Guarantors’ anticipated production from its proved developed producing oil and gas properties (as forecast in Lender’s most recent engineering valuation of Borrower’s oil and gas properties) and calculated separately for oil and for natural gas; provided, however, that Borrower may enter into Hedge Transactions resulting only in a floor price per barrel or mcf that exceed these volume limitations to the extent that Borrower reasonably anticipates increased production from its oil and gas properties; and
(ii) Hedge Transactions that would not result in a cap or ceiling price per barrel or mcf lower than the base case price used by Lender in the most-recent engineering evaluation of Borrower’s and Guarantors’ oil and gas properties, adjusted for variances between the hedging price and Borrower’s and Guarantors’ actual product price as determined by Lender, or otherwise at hedging prices acceptable to Lender; and
(iii) Hedge Transactions that would result in a cap or ceiling price per barrel or mcf higher than or equal to the base case price used by Lender in the most-recent engineering evaluation of Borrower’s oil and gas properties, adjusted for variances between the hedging price and Borrower’s actual product price as determined by Lender, or otherwise at hedging prices acceptable to Lender; and
(iv) Hedge Transactions that would result in a fixed price per barrel or mcf higher than or equal to the base case price used by Lender in the most-recent engineering evaluation of Borrower’s oil and gas properties, adjusted for variances between the hedging price and Borrower’s actual product price as determined by Lender, or otherwise at hedging prices acceptable to Lender; and
(v) Hedge Transactions that include a “price floor” or comparable financial hedge or risk management agreement acceptable to Lender in all respects (including, without limitation, price and term); and
(vi) Hedge Transactions that are each for a period not to exceed twenty-four (24) months or twelve (12) months beyond the Termination Date; and
(vii) Hedge Transaction...
Hedging Limitations. No Loan Party shall enter into any Hedge Contract (or any trade or transaction thereunder) except for the Hedge Contracts:
(a) Subject to Section 6.15(b), Hedge Contracts which have a tenor not greater than sixty (60) months with an Approved Counterparty (or trade or transactions thereunder) in respect of commodities entered into not for speculative purposes the notional volumes for which (when aggregated with other commodity Hedge Contracts then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Contracts) do not exceed, as of the date the latest hedging trade or transaction is entered into under a Hedge Contract,
(i) for the 12-month period from the date such hedging trade or transaction is created, (x) 85% of the reasonably anticipated production of natural gas, (y) 85% of the reasonably anticipated production of oil and (z) 85% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Proven Reserves as set forth on the most recent Engineering Report,
(ii) for the 12-month period commencing with the first anniversary of the date such hedging trade or transaction is created, (x) 85% of the reasonably anticipated production of natural gas, (y) 85% of the reasonably anticipated production of oil and (z) 85% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Proven Reserves as set forth on the most recent Engineering Report,
(iii) for the 12-month period commencing with the second anniversary of the date such hedging trade or transaction is created, (x) 75% of the reasonably anticipated production of natural gas, (y) 75% of the reasonably anticipated production of oil and (z) 75% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Proven Reserves as set forth on the most recent Engineering Report,
(iv) for the 12-month period commencing with the third anniversary of the date such hedging trade or transaction is created, (x) 75% of the reasonably anticipated production of natural gas, (y) 75% of the reasonably anticipated production of oil and (z) 75% of the reasonably anticipated production of natural gas liquids and condensate, in each case, from the Proven Reserves as set forth on the most recent Engineering Report, and
(v) for the 12-month period commencing with the fourth anniversary of the date such hedging trade or transaction is created, (x) ...
Hedging Limitations. The Borrower shall not enter into any Hedge Contract (or any trade or transaction thereunder) except for the Hedge Contracts entered into in the ordinary course of business and not for speculative purposes.
Hedging Limitations. Borrower and Guarantors shall not enter into any Hedge Transaction related to crude oil, natural gas, or other commodities, except hedging required by Lender and except for Hedge Transactions which meet the following requirements:
(i) Hedge Transactions resulting in a cap on the price to be received by Borrower and Guarantors, involving in the aggregate at any time not more than eighty percent (80%) of Guarantors’ anticipated production from their proved developed producing oil and gas properties (as forecast in Lender’s most recent engineering valuation of the Properties); provided, however, that (1) Hedge Transactions relating to oil volumes from the Wolf Mountain 15-2-7-87 well in Routt County, Colorado, shall be limited to not more than forty percent (40%) of Guarantors’ anticipated production from that well until such time as the well constitutes twenty percent (20%) or less of the total present value of Guarantors’ proved developed producing oil and gas properties (as forecast in Lender’s most recent engineering valuation of Infinity Energy Resources, Inc. January 9, 2007 Page 11 of 32 the Properties), and (2) there shall be no limitation on the volume of Hedge Transactions resulting only in a floor price per barrel or mcf; and
(ii) Hedge Transactions that would not result in a fixed price per barrel or mcf lower than the base case price used by Lender in the most-recent engineering evaluation of Guarantors’ oil and gas properties, adjusted for variances between the hedging price and Guarantors’ actual product price as determined by Lender, in each case as disclosed by Lender to Borrower, or otherwise at hedging prices acceptable to Lender as disclosed to Borrower; and
(iii) Hedge Transactions that are each for a period not to exceed forty-eight (48) months; and
(iv) To the extent that Lender requires Hedge Transactions in connection with a Borrowing Base, Hedge Transactions where, in each case, the underlying contracts are with Lender or Hedge Provider, as counterparty, with a counter-party (or the parent entity thereof) who at the time the contract is made has long-term obligations rated BBB or better by Standard & Poor’s Ratings Group or Baa or better by M▇▇▇▇’▇ Investors Services, Inc., or with a counter-party that is otherwise approved by Lender in writing; and
(v) Hedge Transactions that are not effective at concurrent or overlapping periods of time on the same volumes of production on both a physical and financial basis, unless the combined vo...
Hedging Limitations. No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to,
Hedging Limitations. Borrowers shall not enter into any Hedge Transaction related to crude oil, natural gas, or other commodities, except hedging required by Agent and Banks and except for Hedge Transactions which meet the following requirements:
(i) Hedge Transactions resulting in a cap on the price to be received by Borrowers, involving in the aggregate at any time not more than ninety percent (90%) of Borrowers= anticipated production from its proved developed producing oil and gas properties (as forecast in Agent and Banks= most recent engineering valuation of the Properties); provided, however, that there shall be no limitation on the volume of Hedge Transactions resulting only in a floor price per barrel or mcf; and
(ii) Hedge Transactions that would not result in a price per barrel or mcf lower than the base case price used by Agent and Banks in the most-recent engineering evaluation of Borrowers= oil and gas properties, adjusted for variances between the hedging price and Borrowers= actual product price as determined by Agent and Banks, or otherwise at hedging prices acceptable to Agent; and
(iii) Hedge Transactions that include a Aprice floor@ or comparable financial hedge or risk management agreement acceptable to Agent in all respects (including, without limitation, price and term); and Tandem Energy Corporation, et al March 14, 2008 Page 11 of 26
(iv) Hedge Transactions that are each for a period not to exceed sixty (60) months or twelve (12) months beyond the Termination Date; and
(v) Hedge Transactions where, in each case, the underlying contracts are with one or more of Agent, Banks, or Hedge Providers, as counterparty, with a counter-party (or the parent entity thereof) acceptable to Agent and who at the time the contract is made has long-term obligations rated BBB+ or better by Standard & Poor=s Ratings Group or Baa1 or better by ▇▇▇▇▇=s Investors Services, Inc., or with a counter-party that is otherwise approved by Agent in writing; and
(vi) Hedge Transactions that are not effective at concurrent or overlapping periods of time on the same volumes of production on both a physical and financial basis, unless the combined volumes are in compliance with the volume limitations set forth above. Borrowers may enter into swaps, collars, floors, caps, options, corridors, or other contracts, as such terms are commonly referred to in the capital markets, which are intended to reduce or eliminate the risk of fluctuation in interest rates for the purpose and effect of fix...
Hedging Limitations. The Company shall notify the Holder of the scheduled date of the consummation of any Major Transaction immediately following the close of regular hours of trading on the fourth Trading Day preceding the scheduled consummation of a Major Transaction. During the next three Trading Days following such notice Holder agrees that it will not enter into or engage in any short-selling transaction or participate in any hedging activity with respect to the Common Stock. Holder agrees that it will not enter into any transaction involving the Company’s Common Stock or any derivative thereof while in possession of material nonpublic information.