Common use of Materials Furnished by Operator Clause in Contracts

Materials Furnished by Operator. Operator shall purchase Materials required for operations for direct charge to the Joint Account whenever practicable, except Operator may furnish Materials from its stock under the following conditions: 4.2.1 New Materials (Condition “A”) 4.2.2 If Operator furnishes new Materials transferred from Operator’s warehouse or other properties of Operator, the price charged shall be the net cost determined in accordance with Section 4.1 as if Operator had purchased the new Material just before its transfer, but in no event exceeding the then current market price. 4.2.3 Used Materials (Conditions “B” and “C”) 4.2.3.1 If Operator furnishes used Material, then the Material must be in sound and serviceable condition and suitable for use without repair or reconditioning. Operator shall classify such Material as Condition “B” and price the Material at no more than 75% of the new purchase net cost at the time of transfer. 4.2.3.2 Regarding Materials not meeting the requirements of Section 4.2.2.1, but which can be made suitable for use after being repaired or reconditioned, Operator shall classify such material as Condition “C” and price the Material at 50% of the new purchase net cost at the time of transfer. Operator may charge the Joint Account with the cost of reconditioning if the Condition “C” price, plus cost of reconditioning, does not exceed the Condition “B” price; and if that Material so classified meets the requirements for Condition “B” Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price Material that cannot be classified as Condition “B” or Condition “C” at a value commensurate with its use. 4.2.3.4 Operator shall grade Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, as to condition as provided in Section 4.2.2, and price same on the basis of knocked-down price of like new Material. 4.2.3.5 Operator shall grade Material including drill pipe, casing, and tubing, that is no longer useable for its original purpose but is useable for some other purpose, as to condition as provided in Section 4.2.2 and price same on the basis of the current price of items normally used for the other purpose if sold to third parties.

Materials Furnished by Operator. Operator shall purchase Materials required for operations shall be purchased for direct charge to the Joint Account whenever practicable, except the Operator may furnish such Materials from its stock under the following conditions: 4.2.1 New Materials (Condition “A”) 4.2.2 If Operator furnishes new . New Materials transferred from Operator’s the warehouse or other properties of Operator, the price charged Operator shall be the priced at net cost determined in accordance with Section 4.1 above as if Operator had purchased the such new Material just before prior to its transfer, but . Such net costs shall in no event exceeding exceed the then current market price. 4.2.3 4.2.2 Used Materials (Conditions “B” and “C”). 4.2.3.1 If Operator furnishes used Material, then the 4.2.2.1 Material must be which is in sound and serviceable condition and suitable for use without repair or reconditioning. Operator reconditioning shall classify such Material be classed as Condition “B” and price the Material priced at no more than seventy-five percent (75% %) of the such new purchase net cost at the time of transfer. 4.2.3.2 Regarding 4.2.2.2 Materials not meeting the requirements of Section 4.2.2.14.2.2.1 above, but which can be made suitable for use after being repaired or reconditioned, Operator shall classify such material be classed as Condition “C” and price the Material priced at fifty percent (50% %) of the such new purchase net cost at the time of transfer. Operator may charge The cost of reconditioning shall also be charged to the Joint Account with the cost of reconditioning if provided the Condition “C” price, plus cost of reconditioning, does not exceed the Condition “B” price; and if provided that Material so classified meets meet the requirements for Condition “B” Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price 4.2.2.3 Material that which cannot be classified as Condition “B” or Condition “C” ”, shall be priced at a value commensurate with its use. 4.2.3.4 Operator shall grade 4.2.2.4 Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, shall be graded as to condition as provided in this Section 4.2.24.2.2 of Section IV, and price same priced on the basis of knocked-down price of like new Material. 4.2.3.5 Operator shall grade 4.2.2.5 Material including drill pipe, casing, casing and tubing, that which is no longer useable for its original purpose but is useable for some other purpose, shall be graded as to condition as provided in this Section 4.2.2 and price same of Section IV. Such Material shall be priced on the basis of the current price of items normally used for the such other purpose if sold to third parties.

Materials Furnished by Operator. Operator shall purchase Materials required for operations shall be purchased for direct charge to the Joint Account whenever practicable, except the Operator may furnish such Materials from its stock under the following conditions: 4.2.1 NEW MATERIALS (CONDITION "A"). New Materials (Condition “A”) 4.2.2 If Operator furnishes new Materials transferred from Operator’s the warehouse or other properties of Operator, the price charged Operator shall be the priced at net cost determined in accordance with Section 4.1 above as if Operator had purchased the such new Material just before prior to its transfer, but . Such net costs shall in no event exceeding exceed the then current market price. 4.2.3 Used Materials 4.2.2 USED MATERIALS (Conditions “CONDITIONS "B” and “" AND "C”"). 4.2.3.1 If Operator furnishes used Material, then the 4.2.2.1 Material must be which is in sound and serviceable condition and suitable for use without repair or reconditioning. Operator reconditioning shall classify such Material be classed as Condition “"B” " and price the Material priced at no more than seventy-five percent (75% %) of the such new purchase net cost at the time of transfer. 4.2.3.2 Regarding 4.2.2.2 Materials not meeting the requirements of Section 4.2.2.1Section 4.2.2.1 above, but which can be made suitable for use after being repaired or reconditioned, Operator shall classify such material be classed as Condition “"C” " and price the Material priced at fifty percent (50% %) of the such new purchase net cost at the time of transfer. Operator may charge The cost of reconditioning shall also be charged to the Joint Account with the cost of reconditioning if provided the Condition “"C” " price, plus cost of reconditioning, does not exceed the Condition “"B” " price; and if provided that Material so classified meets meet the requirements for Condition “"B” " Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price 4.2.2.3 Material that which cannot be classified as Condition “"B” " or Condition “"C” ", shall be priced at a value commensurate with its use. 4.2.3.4 Operator shall grade 4.2.2.4 Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, shall be graded as to condition as provided in this Section 4.2.24.2.2 of Section IV, and price same priced on the basis of knocked-down price of like new Material. 4.2.3.5 Operator shall grade 4.2.2.5 Material including drill pipe, casing, casing and tubing, that which is no longer useable for its original purpose but is useable for some other purpose, shall be graded as to condition as provided in this Section 4.2.2 and price same of Section IV. Such Material shall be priced on the basis of the current price of items normally used for the such other purpose if sold to third parties.

Materials Furnished by Operator. Operator shall purchase Materials required for operations shall be purchased for direct charge to the Joint Account whenever practicable, except the Operator may furnish such Materials from its stock under the following conditions: 4.2.1 NEW MATERIALS (CONDITION "1"). New Materials (Condition “A”) 4.2.2 If Operator furnishes new Materials transferred from Operator’s the warehouse or other properties of Operator, the price charged Operator shall be the priced at net cost determined in accordance with Section 4.1 above, as if Operator had purchased the such new Material just before prior to its transfer, but . Such net costs shall in no event exceeding exceed the then current market price. 4.2.3 Used Materials 4.2.2 USED MATERIALS (Conditions “B” and “C”CONDITIONS "2" AND "3"). 4.2.3.1 If Operator furnishes used Material, then the 4.2.2.1 Material must be which is in sound and serviceable condition and suitable for use without repair or reconditioning. Operator reconditioning shall classify such Material be classed as Condition “B” "2" and price the Material priced at no more than seventy-five percent (75% %) of the new purchase net cost at the time of transferits original issue price. 4.2.3.2 Regarding 4.2.2.2 Materials not meeting the requirements of Section 4.2.2.14. 2.2.1 above, but which can be made suitable for use after being repaired or reconditioned, Operator shall classify such material be classed as Condition “C” "3" and price the Material priced at fifty percent (50% %) of the new purchase net its original issue price. The cost at the time of transfer. Operator may charge reconditioning shall also be charged to the Joint Account with the cost of reconditioning if provided the Condition “C” "3" price, plus cost of reconditioning, does not exceed the Condition “B” "2" price; and if provided that Material so classified meets meet the requirements for Condition “B” "2" Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price 4.2.2.3 Material that which cannot be classified as Condition “B” "2" or Condition “C” "3", shall be priced at a value commensurate with its use. 4.2.3.4 Operator shall grade 4.2.2.4 Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, shall be graded as to condition as provided in this Section 4.2.24.2.2 of Section IV, and price same priced on the basis of knocked-down price of like new Material. 4.2.3.5 Operator shall grade 4.2.2.5 Material including drill pipe, casing, casing and tubing, that which is no longer useable for its original purpose but is useable for some other purpose, shall be graded as to condition as provided in this Section 4.2.2 and price same of Section IV. Such Material shall be priced on the basis of the current price of items normally used for the such other purpose if sold to third parties.

Materials Furnished by Operator. Operator shall purchase Materials required for operations shall be purchased for direct charge to the Joint Account whenever practicable, except the Operator may furnish such Materials from its stock under the following conditions: 4.2.1 NEW MATERIALS (CONDITION "I"). New Materials (Condition “A”) 4.2.2 If Operator furnishes new Materials transferred from Operator’s warehouse the Waterhouse or other properties of Operator, the price charged Operator shall be the priced at net cost determined in accordance with Section 4.1 above, as if Operator had purchased the such new Material material just before prior to its transfer, but . Such net costs shall in no event exceeding exceed the then current market price.. Alliance Operating Agreement - 20F 4.2.3 4.2.2 Used Materials (Conditions “B” "2" and “C”"3"). 4.2.3.1 If Operator furnishes used Material, then the 4.2.2.1 Material must be which is in sound and serviceable condition and suitable for use without repair or reconditioning. Operator reconditioning shall classify such Material be classed as Condition “B” "2" and price the Material priced at no more than seventy-five percent (75% %) of the such new purchase net cost at the time of transfer. 4.2.3.2 Regarding 4.2.2.2 Materials not meeting the requirements of Section 4.2.2.1Section 4.2.2.1 above, but which can be made suitable for use after being repaired or reconditioned, Operator reconditioned shall classify such material be classed as Condition “C” "3" and price the Material priced at fifty percent (50% %) of the such new purchase net cost at the time of transfer. Operator may charge The cost of reconditioning shall also be charged to the Joint Account with the cost of reconditioning if provided the Condition “C” "3" price, plus cost of reconditioning, does not exceed the Condition “B” "2" price; and if provided that Material so classified meets meet the requirements for Condition “B” "2" Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price 4.2.2.3 Material that which cannot be classified as Condition “B” "2" or Condition “C” "3", shall be priced at a value commensurate with its use. 4.2.3.4 Operator shall grade 4.2.2.4 Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, shall be graded as to condition as provided in this Section 4.2.24.2.2 of Section IV, and price same priced on the basis of knocked-down price of like new Material. 4.2.3.5 Operator shall grade 4.2.2.5 Material including drill pipe, casing, casing and tubing, that which is no longer useable for its original purpose but is useable for some other purpose, shall be graded as to condition as provided in this Section 4.2.2 and price same of Section IV. Such material shall be priced on the basis of the current price of items normally used for the such other purpose purposes if sold to third parties.

Materials Furnished by Operator. Operator shall purchase Materials required for operations shall be purchased for direct charge to the Joint Account whenever practicable, except the Operator may furnish such Materials from its stock under the following conditions: 4.2.1 (A) New Materials (Condition “A”) 4.2.2 If Operator furnishes new Materials transferred from Operator’s warehouse or other properties of Operator, the price charged shall be the net cost determined in accordance with Section 4.1 as if Operator had purchased the new Material just before its transfer, but in no event exceeding the then current market price. 4.2.3 (B) Used Materials (Conditions “B” and “C”). 4.2.3.1 If Operator furnishes used Material, then the (1) Material must be which is in sound and serviceable condition and suitable for use without repair or reconditioning. Operator reconditioning shall classify such Material be classed as Condition “B” and price the Material priced at no more than 75% of the such new purchase net cost at the time of transfer. 4.2.3.2 Regarding (2) Materials not meeting the requirements of Section 4.2.2.1, but which can be made suitable for use after being repaired or reconditioned, Operator shall classify such material be classed as Condition “C” and price the Material priced at 50% of the such new purchase net cost at the time of transfer. Operator may charge The cost of reconditioning shall also be charged to the Joint Account with the cost of reconditioning if provided the Condition “C” price, plus cost of reconditioning, does not exceed the Condition “B” price; and if provided that Material so classified meets meet the requirements for Condition “B” Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price Material that (3) Material, which cannot be classified as Condition “B” or Condition “C” ”, shall be priced at a value commensurate with its use. 4.2.3.4 Operator shall grade (4) Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, shall be graded as to condition as provided in Section 4.2.2, and price same priced on the basis of knocked-down price of like new Material. 4.2.3.5 Operator shall grade (5) Material including drill pipe, casing, casing and tubing, that which is no longer useable for its original purpose but is useable for some other purpose, shall be graded as to condition as provided in Section 4.2.2 and price same 4.2.2. Such Material shall be priced on the basis of the current price of items normally used for the such other purpose if sold to third parties.

Materials Furnished by Operator. Operator shall purchase Materials required for operations shall be purchased for direct charge to the Joint Account whenever practicable, except the Operator may furnish such Materials from its stock under the following conditions: 4.2.1 New Materials (Condition “A”) 4.2.2 If Operator furnishes new . New Materials transferred from Operator’s the warehouse or other properties of Operator, the price charged Operator shall be the priced at net cost determined in accordance with Section 4.1 above as if Operator had purchased the such new Material just before prior to its transfer, but . Such net costs shall in no event exceeding exceed the then current market price. 4.2.3 4.2.2 Used Materials (Conditions “B” and “C”). 4.2.3.1 If Operator furnishes used Material, then the 4.2.2.1 Material must be which is in sound and serviceable condition and suitable for use without repair or reconditioning. Operator reconditioning shall classify such Material be classified as Condition “B” and price the Material priced at no more than seventy-five percent (75% %) of the such new purchase net cost at the time of transfer. 4.2.3.2 Regarding 4.2.2.2 Materials not meeting the requirements of Section 4.2.2.14.2.2.1 above, but which can be made suitable for use after being repaired or reconditioned, Operator shall classify such material be classified as Condition “C” and price the Material priced at fifty percent (50% %) of the such new purchase net cost at the time of transfer. Operator may charge The cost of reconditioning shall also be charged to the Joint Account with the cost of reconditioning if provided the Condition “C” price, plus cost of reconditioning, does not exceed the Condition “B” price; and if provided that Material so classified meets the requirements for Condition “B” Material upon being repaired or reconditioned. 4.2.3.3 Operator shall price 4.2.2.3 Material that which cannot be classified as Condition “B” or Condition “C” ”, shall be priced at a value commensurate with its use. 4.2.3.4 Operator shall grade 4.2.2.4 Tanks, derricks, buildings, and other items of Material involving erection costs, if transferred in knocked-down condition, shall be graded as to condition as provided in this Section 4.2.24.2.2 of Section IV, and price same priced on the basis of a knocked-down price of like new Material. 4.2.3.5 Operator shall grade 4.2.2.5 Material including drill pipe, casing, casing and tubing, that which is no longer useable for its original purpose but is useable for some other purpose, shall be graded as to condition as provided in this Section 4.2.2 and price same of Section IV. Such Material shall be priced on the basis of the current price of items normally used for the such other purpose if sold to third parties.