Common use of Limitation on Speculative Hedging Clause in Contracts

Limitation on Speculative Hedging. 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 Hedge Contract for speculative purposes or (b) be party to or otherwise enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement, or any other Hedge Contract that (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 Proven Reserves of the Borrower and its Subsidiaries which are categorized as “proved, developed and producing” during the period such hedge arrangement is in effect as shown on its most recently delivered Engineering Report, (iii) is longer than two years in duration, or (iv) except as consented to by the Administrative Agent, is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Party or one of its Affiliates) at the time the contract is made does not have long-term obligations rated BBB or Baa2 or better, respectively, by either Standard & Poor’s Ratings Group or ▇▇▇▇▇’▇ Investors Service, Inc., or is an investment grade-rated industry participant. Notwithstanding the foregoing, the existence of the Hedge Contracts in effect on the Effective Date (“Existing Hedge Contracts”) shall not be considered a violation of this Section 6.14 (it being understood, however, that in determining compliance with the foregoing requirements (including without limitation, the percentage of volumes hedged) in connection with any Hedge Contracts proposed to be entered into after the date of this Agreement, both the Existing Hedge Contracts and all other Hedge Contracts existing after the date of this Agreement shall be considered).

Limitation on Speculative Hedging. The Other than the Hedge Contracts set forth on Schedule 4.20 hereto (which Hedge Contracts shall not be modified without the prior written consent of the Administrative Agent), no Borrower shall notshall, nor shall it any Borrower 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 Contract Agreement, Interest Hedge Agreement or similar hedge arrangement for speculative purposes or (b) be party to or otherwise enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement, or any other Hedge Contract that 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 such Borrower’s or such Subsidiary’s operations; (ii) with respect to Non-Conterra Hedge Contracts, covers notional volumes that would be in excess of (A) 80% of the production volumes anticipated by the Administrative Agent to be produced by the Borrowers during each of the Winter/Spring Months for periods that such Hedge Contract is in effect, and (B) 35% of the production volumes anticipated by the Administrative Agent to be produced by the Borrowers during the Summer/Fall Months for periods that such Hedge Contract is in effect; provided that notwithstanding anything in this subsection (ii) to the contrary, the Borrowers may purchase commodity floors or puts on up to 100% of the production volumes anticipated during the period such hedge arrangement is in effect and attributable to Proven Reserves of the Borrowers and their respective Subsidiaries that are categorized as “proved, developed and producing”; and (iii) with respect to Conterra Hedge Contracts, (iiA) covers notional volumes in excess of 80100% of the anticipated production volumes attributable to Proven Reserves of the Borrower and its Subsidiaries Conterra Entities which are categorized as “proved, developed and producing” during the period such hedge arrangement is in effect as shown on its most recently delivered Engineering Reporteffect, (iiiB) allows the applicable counterparty to have recourse to any Borrower or any Subsidiary of a Borrower (other than the Conterra Entities) or their respective assets (other than the Conterra Assets), or is otherwise guaranteed or supported by any Borrower or any Subsidiary of a Borrower (other than the Conterra Entities), (C) is longer than two three (3) years in duration, or (ivD) except as consented to by the Administrative Agent, is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Party or one of its Affiliates) at the time the contract is made does not have long-term obligations rated BBB BBB+ or Baa2 Baa1 or better, respectively, by either Standard & Poor’s Ratings Group or ▇▇▇▇▇’▇ Investors Service, Inc., Inc. (or is an investment grade-rated industry participantsuch counterparty’s obligations are guaranteed by such a Person). Notwithstanding For purposes of the foregoingforegoing Section, the existence of the Hedge Contracts in effect on the Effective Date (“Existing Hedge Contracts”) shall not be considered a violation of this Section 6.14 (it being understood, however, that in determining compliance with the foregoing requirements (including without limitation, the percentage of volumes hedged) in connection with any Hedge Contracts proposed to be entered into after the date of this Agreement, both the Existing Hedge Contracts and all other Hedge Contracts existing after the date of this Agreement Winter/Spring Months” shall be considered)December, January, February, March, April, May and June, and the “Summer/Fall Months” shall be July, August, September, October and November.

Limitation on Speculative Hedging. 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 Hedge Contract for speculative purposes purposes, or (b) be party to or otherwise enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement, Agreement or any other Hedge Contract that 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) with respect to Non-Entrada Hedge Contracts, covers notional volumes in excess of 8090% of the anticipated production volumes attributable to Proven Reserves of the Borrower and its Subsidiaries (other than the Entrada Entities) which are categorized as “proved, developed and producing” during the period such hedge arrangement is in effect as shown on its most recently delivered Engineering Reporteffect, (iii) with respect to Entrada Hedge Contracts, allows the applicable counterparty to have recourse to the Borrower and its Subsidiaries (other than the Entrada Entities) or their respective assets (other than the Entrada Assets), or is otherwise guaranteed or supported by the Borrower and its Subsidiaries (other than the Entrada Entities), (iv) covers fluctuations in interest rates for notional principal amounts in excess of 85% of the Debt for borrowed money of the Borrower and its Subsidiaries, (v) is longer than two five years in duration, (vi) requires the Borrower or any Subsidiary to put up money, assets, or other security (other than letters of credit or guaranties permitted by Section 6.02 and liens on cash and securities to the extent permitted under Section 6.01(l)) against the event of its nonperformance prior to actual default by the Borrower or such Subsidiary in performing its obligations thereunder, or (ivvii) except as consented to by the Administrative Agent, is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Party or one of its Affiliates) at the time the contract is made does not have long-term obligations rated BBB BBB- or Baa2 Baa3 or better, respectively, by either Standard & Poor’s Ratings Group or ▇▇▇▇▇’▇ Investors Service, Inc., or is an investment grade-rated industry participant. Notwithstanding the foregoing, the existence of the Hedge Contracts in effect on the Effective Date participant (“Existing Hedge Contracts”) shall not be considered or such counterparty’s obligations are guaranteed by such a violation of this Section 6.14 (it being understood, however, that in determining compliance with the foregoing requirements (including without limitation, the percentage of volumes hedged) in connection with any Hedge Contracts proposed to be entered into after the date of this Agreement, both the Existing Hedge Contracts and all other Hedge Contracts existing after the date of this Agreement shall be consideredPerson).

Limitation on Speculative Hedging. 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 Hedge Contract for speculative purposes or (b) be party to or otherwise enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement, or any other Hedge Contract that (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 the greater of (A) 80% of the anticipated production volumes attributable to Proven Reserves of the Borrower and its Subsidiaries which are categorized as “proved, developed and producing” during the period such hedge arrangement is in effect or (B) 50% of the anticipated production volumes attributable to total Proven Reserves during the period such hedge arrangement is in effect, each as shown on its most recently delivered Engineering Report, (iii) is longer than two three years in duration, or (iv) except as consented to by the Administrative Agent, is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Party or one of its Affiliates) at the time the contract is made does not have long-term obligations rated BBB or Baa2 or better, respectively, by either Standard & Poor’s Ratings Group or ▇▇▇▇▇’▇ Investors Service, Inc., or is an investment grade-rated industry participant. Notwithstanding the foregoing, the existence of the Hedge Contracts in effect on the Amendment No. 1 Effective Date (“Existing Hedge Contracts”) shall not be considered a violation of this Section 6.14 (it being understood, however, that in determining compliance with the foregoing requirements (including without limitation, the percentage of volumes hedged) in connection with any Hedge Contracts proposed to be entered into after the date of this Agreement, both the Existing Hedge Contracts and all other Hedge Contracts existing after the date of this Agreement shall be considered).

Limitation on Speculative Hedging. The Borrower shall not, nor shall it the Borrower 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 Hedge Contract for speculative purposes purposes, or (b) be party to or otherwise enter into any Hydrocarbon Hedge Agreement, Interest Hedge Agreement, Agreement or any other Hedge Contract that 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) when aggregated with other Hedge Contracts of the Borrower and each Subsidiary then in effect, covers notional volumes in excess of 80the Applicable Hedge Percentage (as defined below) of the lesser of, for each month occurring during the tenor of the Hedge Contract, (1) the Current Production and (2) the Forecasted Production, (iii) covers fluctuations in interest rates for notional principal amounts in excess of 75% of the anticipated production volumes attributable to Proven Reserves Debt for borrowed money of the Borrower and its Subsidiaries which are categorized as “proved, developed and producing” during the period such hedge arrangement is in effect as shown on its most recently delivered Engineering ReportSubsidiaries, (iiiiv) is 5 years or longer than two years in duration, (v) requires the Borrower or any Subsidiary to put up money, assets, or other security (other than letters of credit or guaranties permitted by Section 6.02 and liens on cash and securities to the extent permitted under Section 6.01(m)) against the event of its nonperformance prior to actual default by the Borrower or such Subsidiary in performing its obligations thereunder, or (ivvi) except as consented to by the Administrative Agent, is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender Party or one of its Affiliates) at the time the contract is made does not have long-term obligations rated BBB BBB- or Baa2 Baa3 or better, respectively, by either Standard & Poor’s Ratings Group or ▇▇▇▇▇’▇ Investors Service, Inc., or is an investment grade-rated industry participantparticipant (or such counterparty’s obligations are guaranteed by such a Person). Notwithstanding the foregoingAs used in this Section 6.14, “Current Production” means, for any month, the existence actual amount of production of crude oil, natural gas or natural gas liquids, calculated separately, for the month immediately prior to the month in which the applicable Hedge Contract is entered into. As used in this Section 6.14, “Forecasted Production” means, for any month, the forecasted production of crude oil, natural gas or natural gas liquids, calculated separately, anticipated to be produced during such month as set forth in the most recently delivered report pursuant to Section 5.06(d)(iv) of the Credit Agreement. “Applicable Hedge Contracts in effect on the Effective Date (“Existing Percentage” means, with respect to any Hedge Contracts”) shall not be considered a violation of this Section 6.14 (it being understood, however, that in determining compliance with the foregoing requirements (including without limitationContract, the applicable percentage set forth below for the particular types of volumes hedged) in connection with any Hedge Contracts proposed to be entered into after Hydrocarbons described below, which percentage is a function of the number of months that have elapsed since the date of this Agreement, both the Existing such Hedge Contracts and all other Hedge Contracts existing after the date of this Agreement shall be considered).Contract was entered into: