Limitation on Commodity Swap Contracts Sample Clauses
The Limitation on Commodity Swap Contracts clause restricts the extent to which parties can enter into or maintain commodity swap agreements under a contract. Typically, this clause sets quantitative or qualitative limits, such as capping the notional amount of swaps, specifying eligible commodities, or requiring compliance with regulatory standards. Its core practical function is to manage and mitigate financial risk exposure related to commodity price fluctuations, ensuring that neither party takes on excessive or unintended risk through derivative transactions.
Limitation on Commodity Swap Contracts. The Borrower will not enter into any contract for a commodity swap or other protection agreement or option designed to protect against fluctuations in commodity prices (which, for greater certainty, includes both physically and financially settled ▇▇▇▇▇▇) (collectively, the “Commodity Swap Contracts”).
Limitation on Commodity Swap Contracts. The Borrower shall not, and shall not permit any Material Subsidiary to, enter into, purchase or assume any contract for a commodity (including physical sales arrangements for Petroleum Substances) or a commodity swap or other protection agreement which establishes a fixed commodity price or a minimum or maximum commodity price, including a collar, commodity future or option and other similar agreements, but excluding any put options purchased by the Borrower or a Material Subsidiary if the associated premium is fully paid concurrently with the acquisition of such put option and no other amounts are required to be paid in connection with the acquisition of it (collectively, the “Commodity Swap Contracts”) if the term of any such Commodity Swap Contract entered into, purchased or assumed exceeds three (3) years or, in the case of Commodity Swap Contracts involving any Petroleum Substances, if the aggregate amounts contracted under all Commodity Swap Contracts (calculated on a daily basis) at the time any such Commodity Swap Contract is entered into, purchased, assumed or otherwise becomes binding upon a Borrower or a Material Subsidiary exceeds, or would exceed as a result of such Commodity Swap Contract, on a rolling basis for the next three (3) years:
(i) for the first year of such rolling three (3) year period, seventy percent (70%) of Average Daily Sales Volumes;
Limitation on Commodity Swap Contracts. The Borrower will not, and will not permit any other Loan Party to, enter into any contract for a commodity swap or other protection agreement or option designed to protect against fluctuations in commodity prices (which, for greater certainty, includes both physically and financially settled ▇▇▇▇▇▇) (collectively, the “Commodity Swap Contracts”) if (i) the term of any such contracts exceeds three years, (ii) it is entered into for speculative purposes, or (iii) at the time of entry of such contract, the Net Aggregated Notional Amount hedged under such contract and all other Commodity Swap Contracts outstanding at such time and after giving effect thereto, would exceed (A) 75% of the forecasted average daily production (net of royalties) of the Borrower Group Members for the first year from such time, (B) 75% of the forecasted average daily production (net of royalties) of the Borrower Group Members for the second year from such time, or (C) 50% of the forecasted average daily production (net of royalties) of the Borrower Group Members for the third year from such time, in each case (x) calculated on a commodity-by-commodity basis for oil and natural gas liquids, on the one hand, and natural gas, on the other hand, and as adjusted for acquisitions and divestitures during the applicable period in a manner satisfactory to the Agent, acting reasonably, and based on the then most recent management forecast or, if available, the most recent budget approved by the Borrower’s Board of Directors; provided that the Borrower Group Members may exceed such limits set forth in clauses (A) through (C), as applicable, if, and to the extent that at such time, (i) they obtain the prior written consent of the Required Lenders, or (ii) such applicable limit is exceeded due to it entering into fixed price commodity puts allowing it to put production to a counterparty and having a term of 36 months or less, any premium is paid at the time of entry into any such puts and the Net Aggregated Notional Amount hedged under all Commodity Swap Contracts, including such puts, does not exceed 100% of such average daily oil and natural gas liquids or natural gas production, as applicable, (net of royalties) as so adjusted. Notwithstanding the foregoing, the Borrower will not permit PROP to enter into any Commodity Swap Contracts.
Limitation on Commodity Swap Contracts. The Borrower will not, and will not permit any other Loan Party to, enter into any contract for a commodity swap or other protection agreement or option designed to protect against fluctuations in commodity prices (which, for greater certainty, includes both physically and financially settled ▇▇▇▇▇▇) (collectively, the “Commodity Swap Contracts”) if:
(i) the term of any such Commodity Swap Contract exceeds three years; or
(ii) the aggregate amounts hedged by the Loan Parties under all Commodity Swap Contracts on the date such Commodity Swap Contract is entered into and after giving effect thereto exceed:
(A) 85% of the aggregate average daily production of (I) crude oil, (II) natural gas, (III) condensates and (IV) natural gas liquids (determined in each case net of royalties) of the Loan Parties as set forth in the most recent Forecasts in the first year after the date such Commodity Swap Contract is entered into;
(B) 75% of the aggregate average daily production of (I) crude oil, (II) natural gas, (III) condensates and (IV) natural gas liquids (determined in each case net of royalties) of the Loan Parties as set forth in the most recent Forecasts in the second year after the date such Commodity Swap Contract is entered into; or
(C) 65% of the aggregate average daily production of (I) crude oil, (II) natural gas, (III) condensates and (IV) natural gas liquids (determined in each case net of royalties) of the Loan Parties as set forth in the most recent Forecasts in the third year after the date such Commodity Swap Contract is entered into. For certainty, the Mandatory ▇▇▇▇▇▇ shall be deemed to be in compliance with this Section 12.3(e).
Limitation on Commodity Swap Contracts. The Borrower will not, and will not permit any other Loan Party to, enter into any contract for a commodity swap or other protection agreement or option designed to protect against fluctuations in commodity prices (which, for greater certainty, includes both physically and financially settled ▇▇▇▇▇▇) (collectively, the “Commodity Swap Contracts”) if the term of any such Commodity Swap Contract exceeds four years or the aggregate amounts hedged under all Commodity Swap Contracts at the time such contract is entered into and after giving effect thereto exceeds 70% for the first and second year of the term of such Commodity Swap Contract and 50% for the third and fourth years thereof of the average daily production of (i) crude oil, (ii) natural gas liquids, and (iii) natural gas (determined in each case on a commodity by commodity basis (net of royalties) of the Loan Parties during the immediately preceding Fiscal Quarter, as adjusted for acquisitions and divestitures during such Fiscal Quarter in a manner satisfactory to the Agent, acting reasonably.
Limitation on Commodity Swap Contracts. The Borrower will not, and will not permit any other Loan Party to, enter into any Commodity Swap Contracts if the term of any such Commodity Swap Contract exceeds four years or the aggregate amounts hedged under all Commodity Swap Contracts at the time such contract is entered into and after giving effect thereto exceeds 70% for the first and second year of the term of such Commodity Swap Contract and 50% for the third and fourth years thereof of the average daily production of (i) crude oil, (ii) natural gas liquids, and (iii) natural gas (determined in each case on a commodity by commodity basis (net of royalties) of the Loan Parties during the immediately preceding Fiscal Quarter, as adjusted for acquisitions and divestitures during such Fiscal Quarter in a manner satisfactory to the Agent, acting reasonably.