Common use of Limitation on Hedging Clause in Contracts

Limitation on Hedging. (a) No Credit Party shall, nor shall it permit any of its Subsidiaries to: (i) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (ii) enter into any Hedging Arrangement which (A) 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 or its Subsidiaries’ operations, or (B) covers (calculated separately for each type of Hydrocarbon): (i.) for each full calendar month during the first twenty-four calendar months of the forthcoming sixty full calendar months following the time in question, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 85% of Proven Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 75% of Forecasted Production (as described in the report required to be delivered pursuant to Section 5.2(e)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately), attributable to Oil and Gas Properties of the Borrower and its Subsidiaries; or (ii.) for each full calendar month during the last thirty-six full calendar months of the forthcoming sixty full calendar months following the time in question, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 75% of Proven Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 50% of Forecasted Production (as described in the report required to be delivered pursuant to Section 5.2(e)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately) attributable to Oil and Gas Properties of the Borrower and its Subsidiaries; provided, however, that the volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps, or (C) is longer than 60 months in duration from the date such Hedging Arrangement is entered into; or (D) is secured (unless such Hedging Arrangement is with a Swap Counterparty and is secured by the Collateral pursuant to the Credit Documents) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to provide collateral; or (E) unless such counterparty is a Lender, an Affiliate of a Lender or such other Person who has (or who has an affiliate that guarantees such Hedging Arrangement, and such affiliate has) at the time the Hedging Arrangement is made, credit ratings of A-or better from S&P or A3 or better from Xxxxx’x; or (iii) be party to, or enter into, any Hedging Arrangement which relates to interest rates if (A) such Hedging Arrangement relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above, (B) the aggregate notional amount of all such Hedging Arrangements exceeds 75% of the anticipated outstanding principal balance of the Debt under this Agreement to be hedged by such Hedging Arrangements, or if the term of such Hedging Arrangements extends beyond the Maturity Date, (C) such Hedging Arrangement is with a Lender, an Affiliate of a Lender or such other Person who has who, at the time the Hedging Arrangement is made, has credit ratings that are lower than A- by S & P or A3 by Xxxxx’x (or such counterparty has a guarantor of its obligations who is rated lower than such levels), (D) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, such Hedging Arrangement is made by the Borrower or one of its Subsidiaries with a counterparty that is not a Lender or an Affiliate of a Lender (unless such Hedging Arrangement is unsecured), or (E) the floating rate index of such Hedging Arrangement does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement. (b) In no event shall the aggregate notional volume of all Hedging Arrangements in respect of commodities for a particular month exceed 100% of the actual production for each of crude oil, natural gas and natural gas liquids, calculated separately, in the previous calendar month. After the end of any calendar month, if the aggregate notional volumes of all Hedging Arrangements in respect of commodities exceeded 100% of the actual production for any of crude oil, natural gas or natural gas liquids, calculated separately, in such calendar month, an Event of Default shall occur and the Borrower shall immediately notify the Administrative Agent of such Event of Default. (c) For purposes of determining compliance under this Section 6.15(a)(ii)(B) and (b), basis differential Hedging Arrangements shall not be included in Hedging Arrangements so long as the volumes of such basis differential Hedging Arrangements are not in excess of the volumes of the underlying commodity Hedging Arrangements.

Limitation on Hedging. (a) No Credit Party shall, nor shall it permit any of its Subsidiaries to: (i) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (ii) enter into any Hedging Arrangement which (A) 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 BorrowerParent’s or its Subsidiaries’ operations, or (B) covers (calculated separately for each type of Hydrocarbon): (i.) for each full calendar month during the first twenty-four calendar months of the forthcoming sixty full calendar months following the time in question, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 85% of Proven Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 75% of Forecasted Production (as described in the report required to be delivered pursuant to Section 5.2(e)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately), attributable to Oil and Gas Properties of the Borrower and its Subsidiaries; or (ii.) for each full calendar month during the last thirty-six full calendar months of the forthcoming sixty full calendar months following the time in question, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 75% of Proven Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 50% of Forecasted Production (as described in the report required to be delivered pursuant to Section 5.2(e)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately) attributable to Oil and Gas Properties of the Borrower and its Subsidiaries; provided, however, that the volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps, or (C) is longer than 60 months in duration from the date such Hedging Arrangement is entered into; or (D) is secured (unless such Hedging Arrangement is with a Swap Counterparty and is secured by the Collateral pursuant to the Credit Documents) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower Parent or any of its Subsidiaries to provide collateral; or (E) unless such counterparty is a Lender, an Affiliate of a Lender or such other Person who has (or who has an affiliate that guarantees such Hedging Arrangement, and such affiliate has) at the time the Hedging Arrangement is made, credit ratings of A-A- or better from S&P or A3 or better from Xxxxx’x; or (iii) be party to, or enter into, any Hedging Arrangement which relates to interest rates if (A) such Hedging Arrangement relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above, (B) the aggregate notional amount of all such Hedging Arrangements exceeds 75% of the anticipated outstanding principal balance of the Debt under this Agreement to be hedged by such Hedging Arrangements, or if the term of such Hedging Arrangements extends beyond the Maturity Date, (C) such Hedging Arrangement is with a Lender, an Affiliate of a Lender or such other Person who has who, at the time the Hedging Arrangement is made, has credit ratings that are lower than A- by S & P or A3 by Xxxxx’x (or such counterparty has a guarantor of its obligations who is rated lower than such levels), (D) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, such Hedging Arrangement is made by the Borrower Parent or one of its Subsidiaries with a counterparty that is not a Lender or an Affiliate of a Lender (unless such Hedging Arrangement is unsecured), or (E) the floating rate index of such Hedging Arrangement does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement. (b) In no event shall the aggregate notional volume of all Hedging Arrangements in respect of commodities for a particular month exceed 100% of the actual production for each of crude oil, natural gas and natural gas liquids, calculated separately, in the previous calendar month. After the end of any calendar month, if the aggregate notional volumes of all Hedging Arrangements in respect of commodities exceeded 100% of the actual production for any of crude oil, natural gas or natural gas liquids, calculated separately, in such calendar month, an Event of Default shall occur and the Borrower shall immediately notify the Administrative Agent of such Event of Default. (c) For purposes of determining compliance under this Section 6.15(a)(ii)(B) and (b), basis differential Hedging Arrangements shall not be included in Hedging Arrangements so long as the volumes of such basis differential Hedging Arrangements are not in excess of the volumes of the underlying commodity Hedging Arrangements.

Limitation on Hedging. (a) No Credit Party shall, nor shall it permit any of its Subsidiaries to: (i) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (ii) enter into any Hedging Arrangement which (A) 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 or its Subsidiaries’ operations, or (B) covers (calculated separately for each type of Hydrocarbon): (i.) for each full calendar month during the first twenty-four calendar months of the forthcoming sixty full calendar months following the time in question, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 85% of Proven Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 75% of Forecasted Production (as described in the report required to be delivered pursuant to Section 5.2(e)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately), attributable to Oil and Gas Properties of the Borrower and its Subsidiaries; or (ii.) for each full calendar month during the last thirty-six full calendar months of the forthcoming sixty full calendar months following the time in question, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 75% of Proven Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 50% of Forecasted Production (as described in the report required to be delivered pursuant to Section 5.2(e)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately) attributable to Oil and Gas Properties of the Borrower and its Subsidiaries; provided, however, that the volume limitations shall not apply to put option contracts that are not related to corresponding calls, collars or swaps, or (C) is longer than 60 months in duration from the date such Hedging Arrangement is entered into; or (D) is secured (unless such Hedging Arrangement is with a Swap Counterparty and is secured by the Collateral pursuant to the Credit Documents) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries to provide collateral; or (E) unless such counterparty is a Lender, an Affiliate of a Lender or such other Person who has (or who has an affiliate that guarantees such Hedging Arrangement, and such affiliate has) at the time the Hedging Arrangement is made, credit ratings of A-A- or better from S&P or A3 or better from Xxxxx’x; or (iii) be party to, or enter into, any Hedging Arrangement which relates to interest rates if (A) such Hedging Arrangement relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above, (B) the aggregate notional amount of all such Hedging Arrangements exceeds 75% of the anticipated outstanding principal balance of the Debt under this Agreement to be hedged by such Hedging Arrangements, or if the term of such Hedging Arrangements extends beyond the Maturity Date, (C) such Hedging Arrangement is with a Lender, an Affiliate of a Lender or such other Person who has who, at the time the Hedging Arrangement is made, has credit ratings that are lower than A- by S & P or A3 by Xxxxx’x (or such counterparty has a guarantor of its obligations who is rated lower than such levels), (D) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, such Hedging Arrangement is made by the Borrower or one of its Subsidiaries with a counterparty that is not a Lender or an Affiliate of a Lender (unless such Hedging Arrangement is unsecured), or (E) the floating rate index of such Hedging Arrangement does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement. (b) In no event shall the aggregate notional volume of all Hedging Arrangements in respect of commodities for a particular month exceed 100% of the actual production for each of crude oil, natural gas and natural gas liquids, calculated separately, in the previous calendar month. After the end of any calendar month, if the aggregate notional volumes of all Hedging Arrangements in respect of commodities exceeded 100% of the actual production for any of crude oil, natural gas or natural gas liquids, calculated separately, in such calendar month, an Event of Default shall occur and the Borrower shall immediately notify the Administrative Agent of such Event of Default. (c) For purposes of determining compliance under this Section 6.15(a)(ii)(B) and (b), basis differential Hedging Arrangements shall not be included in Hedging Arrangements so long as the volumes of such basis differential Hedging Arrangements are not in excess of the volumes of the underlying commodity Hedging Arrangements.

Limitation on Hedging. (a) No The Borrower shall not, and shall not permit any Credit Party shall, nor shall it permit any of its Subsidiaries to: (i) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (ii) enter into any Hedging Arrangement which: (A) 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 Borrowerits or another Credit Party’s or its Subsidiaries’ operations, ; or (B) covers (calculated separately for each type of Hydrocarbon): (i.) for each full calendar month during the first twenty-four calendar months of the forthcoming sixty full calendar months following the time in questionexecution of such Hedging Arrangement, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 8590% of Proven PDP Reserves (or in the case of any full calendar month during 2017, 100% of PDP Reserves) (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 7585% of Forecasted Production Proven Reserves (as described in the report required to be delivered pursuant to Section 5.2(e5.2(c)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately), attributable to Oil and Gas Properties of the Borrower and its SubsidiariesCredit Parties; or (ii.) for each full calendar month during the last thirty-six full calendar months of the forthcoming sixty full calendar months following the time in questionexecution of such Hedging Arrangement, notional volumes (in the aggregate, taking into account all other Hedging Arrangements to which any Credit Party is a party) in excess of the greater of (x) 7590% of Proven PDP Reserves (as described in the most recently delivered Engineering Report pursuant to Section 5.2(c)) and (y) 5075% of Forecasted Production Proven Reserves (as described in the report required to be delivered pursuant to Section 5.2(e5.2(c)), in either case, of crude oil, natural gas and natural gas liquids (each measured separately) attributable to Oil and Gas Properties of the Borrower and its SubsidiariesCredit Parties; providedprovided that, however, that the volume limitations in clause (B) above shall not apply to put option contracts that are not related to corresponding calls, collars or swaps, ; or (C) is longer than 60 months in duration from the effective date of such Hedging Arrangement is entered intoArrangement; or (D) is secured (unless such Hedging Arrangement is with a Swap Counterparty and is secured by the Collateral pursuant to the Credit Documents) or obligates any Credit Party to any margin call requirements or otherwise requires the Borrower or any of its Subsidiaries Credit Party to provide collateral; or (E) unless such counterparty is a Lender, an Affiliate of a Lender Swap Counterparty or such other Person who has (or who has an affiliate that guarantees such Hedging Arrangement, and such affiliate has) at the time the Hedging Arrangement is made, credit ratings of A-A- or better from S&P or A3 or better from Xxxxx’x; or (iii) be party to, or enter into, any Hedging Arrangement which relates to interest rates if: (A) such Hedging Arrangement relates to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above, (B) the aggregate notional amount of all such Hedging Arrangements exceeds 75% of the anticipated outstanding principal balance of the Debt under this Agreement to be hedged by such Hedging Arrangements, or if the term of such Hedging Arrangements extends beyond the Maturity Date, (C) such Hedging Arrangement is with a Lender, an Affiliate of a Lender Swap Counterparty or such other Person who has who, at the time the Hedging Arrangement is made, has credit ratings that are lower than A- by S & P or A3 by Xxxxx’x (or such counterparty has a guarantor of its obligations who is rated lower than such levels), (D) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, such Hedging Arrangement is made by the Borrower or one of its Subsidiaries a Credit Party with a counterparty that is not a Lender or an Affiliate of a Lender Swap Counterparty (unless such Hedging Arrangement is unsecured), or (E) the floating rate index of such Hedging Arrangement does not generally match the index used to determine the floating rates of interest on the corresponding Debt to be hedged by such Hedging Arrangement. (b) In no event shall the aggregate notional volume of all Hedging Arrangements in respect of commodities for a particular month exceed 100% of the actual production for each of crude oil, natural gas and natural gas liquids, calculated separately, in the previous calendar month. After the end of any calendar month, if the aggregate notional volumes of all Hedging Arrangements in respect of commodities exceeded 100% of the actual production for any of crude oil, natural gas or natural gas liquids, calculated separately, in such calendar month, an Event then within five (5) Business Days of Default shall occur and such month’s end, the Borrower shall immediately promptly notify the Administrative Agent of such excess. If such excess exists, the Borrower shall cause a Hedge Event or series of DefaultHedge Events in accordance with Section 6.8(e) such that, at such time and after giving effect to all such Hedge Events, future Hedging Arrangements comply with the requirements of Section 6.15(a). (c) For purposes of determining compliance under this Section 6.15(a)(ii)(B) and (b), basis differential Hedging Arrangements shall not be included in Hedging Arrangements so long as the volumes of such basis differential Hedging Arrangements are not in excess of the volumes of the underlying commodity Hedging Arrangements.