Common use of Minimum Hedging Clause in Contracts

Minimum Hedging. Deliver to the Administrative Agent within 30 days after the Closing Date a certificate confirming that the Borrower and its Restricted Subsidiaries, if applicable, (a) are maintaining the Existing Swap Contracts and (b) have entered into additional Swap Contracts with Approved Counterparties reasonably acceptable to the Administrative Agent consisting of (i) costless collars with a minimum floor price per barrel and for at least the minimum notional volumes of crude oil per month set forth on Schedule 6.15 for the calendar year ending December 31, 2009, and (ii) swap transactions with respect to not less than the minimum notional volumes of crude oil and natural gas at or above the minimum price and for at least the minimum notional volumes per month set forth on Schedule 6.15 through December 31, 2012, or stating what (if any) additional Swap Contracts have been entered into. Upon the CONCHO AMENDED AND RESTATED CREDIT AGREEMENT request of the Majority Lenders, and to the extent each such Swap Contract allows, take all actions necessary to cause all of its right, title and interest in each Swap Contract to which it is a party to be collaterally assigned to the Administrative Agent, for the benefit of the Secured Parties. Upon the request of the Administrative Agent, the Borrower shall, within thirty (30) days of such request, provide to the Administrative Agent and each Lender copies of all agreements, documents, confirmations and instruments evidencing any Swap Contract to which the Borrower or any Restricted Subsidiary is then a party and not previously delivered to the Administrative Agent and Lenders, and such other information regarding such Swap Contracts as the Administrative Agent and Lenders may reasonably request. Failure by the Borrower to establish and maintain the Swap Contracts required by clause (b) of this Section 6.15 shall not result in the occurrence of a Default, provided that Required Lenders may request a Special Redetermination of the Borrowing Base and the Conforming Borrowing Base notwithstanding the restrictions placed on the number of Special Redeterminations the Required Lenders may request under Section 3.03.

Minimum Hedging. Deliver to the Administrative Agent within 30 days Commencing from and after the Closing Date a certificate confirming that March 31, 2022, the Borrower and its Restricted Subsidiaries, if applicable, shall maintain Hedge Agreements (aother than three-way collars) are maintaining the Existing Swap Contracts and (b) have entered into additional Swap Contracts with one or more Approved Counterparties reasonably acceptable to the Administrative Agent consisting hedging minimum notional volumes of (i) costless collars with a minimum floor price per barrel and for at least 75% of the minimum notional volumes reasonably projected production of crude oil per month set forth on Schedule 6.15 for from Oil and Gas Properties classified as “proved developed producing” in the calendar year ending December 31, 2009, and (ii) swap transactions with respect to not less than the minimum notional volumes of crude oil and natural gas at or above the minimum price and for at least the minimum notional volumes per month set forth on Schedule 6.15 through December 31, 2012, or stating what (if any) additional Swap Contracts have been entered into. Upon the CONCHO AMENDED AND RESTATED CREDIT AGREEMENT request of the Majority Lenders, and to the extent each such Swap Contract allows, take all actions necessary to cause all of its right, title and interest in each Swap Contract to which it is a party to be collaterally assigned Reserve Report most recently delivered to the Administrative Agent, for each full calendar month during the benefit period from and including the first full calendar month following each Minimum Hedging Requirement Date (as hereinafter defined) through and including the 24th full calendar month following each such Minimum Hedging Requirement Date and (ii) at least 50% of the Secured Parties. Upon reasonably projected production of crude oil from Oil and Gas Properties classified as “proved developed producing” in the request of Reserve Report most recently delivered to the Administrative Agent, for each full calendar month during the period from and including the 25th full calendar month following each such Minimum Hedging Requirement Date through and including the 36th full calendar month following each such Minimum Hedging Requirement Date; provided, that in the case of each of the foregoing clauses (i) and (ii), the notional volumes hedged under such Hedge Agreements shall be deemed reduced by the notional volumes of any short puts or other similar derivatives having the effect of exposing the Borrower shallor any other Loan Party to commodity price risk below the “floor” created by such Hedge Agreements of the Loan Parties for each applicable calendar month. On or prior to the date each Reserve Report (other than the Initial Reserve Report) is required to be delivered by the Borrower pursuant to Section 8.11(a) (each, within thirty (30) days of such requesta “Minimum Hedging Requirement Date”), provide the Borrower shall deliver evidence in form and substance satisfactory to the Administrative Agent and each Lender copies of all agreements, documents, confirmations and instruments evidencing any Swap Contract that it has entered into Hedge Agreements to which the Borrower or any Restricted Subsidiary is then a party and not previously delivered to the Administrative Agent and Lenders, and such other information regarding such Swap Contracts as the Administrative Agent and Lenders may reasonably request. Failure by the Borrower to establish and maintain the Swap Contracts required by clause (b) of be in compliance with this Section 6.15 shall not result in the occurrence 8.17 as of a Default, provided that Required Lenders may request a Special Redetermination of the Borrowing Base and the Conforming Borrowing Base notwithstanding the restrictions placed on the number of Special Redeterminations the Required Lenders may request under Section 3.03such Minimum Hedging Requirement Date.

Minimum Hedging. Deliver to the Administrative Agent within 30 days Commencing from and after the Closing Date a certificate confirming that March 31, 2022, the Borrower and its Restricted Subsidiaries, if applicable, shall maintain Hedge Agreements (aother than three-way collars) are maintaining the Existing Swap Contracts and (b) have entered into additional Swap Contracts with one or more Approved Counterparties reasonably acceptable to the Administrative Agent consisting hedging minimum notional volumes of (i) costless collars with a minimum floor price per barrel and for at least 75% of the minimum notional volumes reasonably projected production of crude oil per month set forth on Schedule 6.15 for from Oil and Gas Properties classified as “proved developed producing” in the calendar year ending December 31, 2009, and (ii) swap transactions with respect to not less than the minimum notional volumes of crude oil and natural gas at or above the minimum price and for at least the minimum notional volumes per month set forth on Schedule 6.15 through December 31, 2012, or stating what (if any) additional Swap Contracts have been entered into. Upon the CONCHO AMENDED AND RESTATED CREDIT AGREEMENT request of the Majority Lenders, and to the extent each such Swap Contract allows, take all actions necessary to cause all of its right, title and interest in each Swap Contract to which it is a party to be collaterally assigned Reserve Report most recently delivered to the Administrative Agent, for each full calendar month during the benefit period from and including the first full calendar month following each Minimum Hedging Requirement Date (as hereinafter defined) through and including the 24th full calendar month following each such Minimum Hedging Requirement Date and (ii) at least 50% of the Secured Parties. Upon reasonably projected production of crude oil from Oil and Gas Properties classified as “proved developed producing” in the request of Reserve Report most recently delivered to the Administrative Agent, for each full calendar month during the period from and including the 25th full calendar month following each such Minimum Hedging Requirement Date through and including the 36th full calendar month following each such Minimum Hedging Requirement Date; provided that, notwithstanding the foregoing, until the Minimum Hedging Requirement Date occurring on October 1, 2022, Borrower shall not be required to maintain any Hedge Agreements pursuant to this Section 8.17 for any full calendar month from and after January 1, 2025; provided further, that in the case of each of the foregoing clauses (i) and (ii), the notional volumes hedged under such Hedge Agreements shall be deemed reduced by the notional volumes of any short puts or other similar derivatives having the effect of exposing the Borrower shallor any other Loan Party to commodity price risk below the “floor” created by such Hedge Agreements of the Loan Parties for each applicable calendar month. On or prior to the date each Reserve Report (other than the Initial Reserve Report) is required to be delivered by the Borrower pursuant to Section 8.11(a) (each, within thirty (30) days of such requesta “Minimum Hedging Requirement Date”), provide the Borrower shall deliver evidence in form and substance satisfactory to the Administrative Agent and each Lender copies of all agreements, documents, confirmations and instruments evidencing any Swap Contract that it has entered into Hedge Agreements to which the Borrower or any Restricted Subsidiary is then a party and not previously delivered to the Administrative Agent and Lenders, and such other information regarding such Swap Contracts as the Administrative Agent and Lenders may reasonably request. Failure by the Borrower to establish and maintain the Swap Contracts required by clause (b) of be in compliance with this Section 6.15 shall not result in the occurrence 8.17 as of a Default, provided that Required Lenders may request a Special Redetermination of the Borrowing Base and the Conforming Borrowing Base notwithstanding the restrictions placed on the number of Special Redeterminations the Required Lenders may request under Section 3.03such Minimum Hedging Requirement Date.

Minimum Hedging. Deliver to the Administrative Agent within 30 days after the Closing Date a certificate confirming that the The Borrower and its Restricted Subsidiaries, if applicable, (a) are maintaining the Existing Swap Contracts and (b) have entered into additional Swap Contracts with Approved Counterparties reasonably acceptable to the Administrative Agent consisting of (i) costless collars with a minimum floor price per barrel and for at least the minimum notional volumes of crude oil per month set forth on Schedule 6.15 for the calendar year ending December 31, 2009, and (ii) swap transactions with respect to not less than the minimum notional volumes of crude oil and natural gas at or above the minimum price and for at least the minimum notional volumes per month set forth on Schedule 6.15 through December 31, 2012, or stating what (if any) additional Swap Contracts have been entered into. Upon the CONCHO AMENDED AND RESTATED CREDIT AGREEMENT request of the Majority Lenders, and to the extent each such Swap Contract allows, take all actions necessary to cause all of its right, title and interest in each Swap Contract to which it is a party to be collaterally assigned to the Administrative Agent, for the benefit of the Secured Parties. Upon the request of the Administrative Agent, the Borrower shallwill, within thirty (30) days after the Closing Date enter into, and will thereafter maintain on a rolling twenty-four (24) month basis, Hedging Transactions in the form of such requestswap agreements, provide puts, calls in connection with puts and/or collars (but not three way collars, other than three way collars in existence as of July 1, 2022 that are acquired by the Borrower pursuant to the Stronghold Transactions) at prices reasonably acceptable to the Administrative Agent and each Lender copies (and, in the case of all agreementscollars, documents, confirmations and instruments evidencing any Swap Contract to which the Borrower or any Restricted Subsidiary is then a party and not previously delivered on terms reasonably acceptable to the Administrative Agent Agent) in respect of crude oil and Lendersnatural gas, on not less than fifty percent (50%) (such percentage, as adjusted from time to time pursuant to the proviso at the end of this sentence, the “Required Hedging Percentage”) of the projected production from the Loan Parties’ proved, developed, producing Oil and Gas Properties (as reflected in the most recently delivered Reserve Report (and, for the avoidance of doubt, from the Closing Date until the date the first Reserve Report is delivered pursuant to this Agreement, the Initial Reserve Report shall be deemed to be the “most recently delivered Reserve Report”)); provided, that, (a) if on any Hedge Testing Date (i) the Borrowing Base Utilization Percentage as of such Hedge Testing Date is less than twenty-five percent (25%) and (ii) the Leverage Ratio (as reflected in the Compliance Certificate delivered on such Hedge Testing Date) is not greater than 1.25 to 1.00, the Required Hedging Percentage for months thirteen (13) through twenty-four (24) of the rolling twenty-four (24) month period provided for in this Section 5.19 shall be zero percent (0%) from such Hedge Testing Date to the next succeeding Hedge Testing Date, and (b) if on any Hedge Testing Date (i) the Borrowing Base Utilization Percentage as of such other information regarding Hedge Testing Date is equal to or greater than twenty-five percent (25%), but less than fifty percent (50%) and (ii) the Leverage Ratio (as reflected in the Compliance Certificate delivered on such Swap Contracts as Hedge Testing Date) is not greater than 1.25 to 1.0, the Required Hedging Percentage for months thirteen (13) through twenty-four (24) of the rolling twenty-four (24) month period provided for in this Section 5.19 shall be twenty-five percent (25%) from such Hedge Testing Date to the next succeeding Hedge Testing Date (the “Required Hedging Partial Suspension Right”). If the Borrower fails to timely deliver financial statements pursuant to Section 5.1(b), an accompanying Compliance Certificate pursuant to Section 5.1(c) and a certificate pursuant to Section 5.1(e) at any time the Required Hedging Partial Suspension Right is utilized, the Required Hedging Percentage shall (unless the Administrative Agent otherwise consents, which consent shall be in the Administrative Agent’s sole discretion) be set at fifty percent (50%) for the entirety of the rolling twenty-four (24) month period provided for in this Section 5.19 from the date such financial statements, Compliance Certificate and Lenders may reasonably requestcertificate were due until the next succeeding Hedge Testing Date. Failure by If the Borrower seeks to establish and maintain utilize the Swap Contracts required by clause (b) of this Section 6.15 shall not result in Required Hedging Partial Suspension Right for any Hedge Testing Date associated with a Fiscal Quarter ending December 31, the occurrence of a DefaultBorrower will, provided that Required Lenders may request a Special Redetermination of the Borrowing Base and the Conforming Borrowing Base notwithstanding the restrictions placed on parenthetical in Section 5.1(c), deliver a Compliance Certificate with the number of Special Redeterminations the Required Lenders may request under financial statements delivered pursuant to Section 3.035.1(b).