Common use of Hedging Requirements Clause in Contracts

Hedging Requirements. Other than the Hedge Contracts required to be entered into and maintained pursuant to Section 5.12 hereof or the last sentence of this Section 6.14, the Borrower shall not, nor shall it permit any of its Subsidiaries to, (a) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement or similar hedge arrangement for speculative purposes, (b) be party to or otherwise enter into any Hedge Contract which (i) is entered into for reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s operations, (ii) covers notional volumes in excess of 80% of the anticipated production volumes attributable to “proved, developed and producing” Proven Reserves of the Borrower and its Subsidiaries during the period such hedge arrangement is in effect, or (iii) is longer than five years in duration from the date such Hedge Contract is entered into, or (c) enter into any Hedge Contract prior to January 1, 2011 which covers production of natural gas unless the notional volumes of existing Hedge Contracts cover less than 80% of the anticipated production volumes of natural gas attributable to “proved, developed and producing” Proven Reserves of the Borrower and its Subsidiaries. Furthermore, on or prior to the 10th Business Day following the Effective Date, the Borrower shall have entered into and thereafter maintain (or shall have caused the applicable Subsidiary to have entered into and thereafter maintain) Hedge Contracts covering at least 75% of the anticipated production volumes attributable to “proved, developed and producing” Proven Reserves of the Borrower and its Subsidiaries through December 31, 2014, as set forth in the initial Independent Engineering Report delivered under Section 3.01(a)(ix) and at such prices acceptable to the Administrative Agent.

Hedging Requirements. Other than the Hedge Contracts required to be entered into and maintained pursuant to Section 5.12 hereof or the last sentence of this Section 6.14, the Borrower shall not, nor shall it permit any of its Subsidiaries to, (a) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement or similar hedge arrangement for speculative purposes, (b) be party to or otherwise enter into any Hedge Contract which (i) is entered into for reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s operations, (ii) covers notional volumes in excess of 80% of the anticipated production volumes attributable to “proved, developed and producing” Proven Reserves of the Borrower and its Subsidiaries during the period such hedge arrangement is in effect, or (iii) is longer than five years in duration from the date such Hedge Contract is entered into, or (c) enter into any Hedge Contract prior to January 1, 2011 which covers production of natural gas unless the notional volumes of existing Hedge Contracts cover less than 80% of the anticipated production volumes of natural gas attributable to “proved, developed and producing” Proven Reserves of the Borrower and its Subsidiaries. Furthermore, on or prior to the 10th Business Day following the Effective Date, the Borrower shall have entered into and thereafter maintain (or shall have caused the applicable Subsidiary to have entered into and thereafter maintain) Hedge Contracts covering at least 75% of the anticipated production volumes attributable to “proved, developed and producing” Proven Reserves of the Borrower and its Subsidiaries through [December 31, 2014], as set forth in the initial Independent Engineering Report delivered under Section 3.01(a)(ix) and at such prices acceptable to the Administrative Agent.