Common use of Natural Gas Hedging Clause in Contracts

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***], Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] but no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’) Assets for each month, with the exception of the month of February 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements, provided further that the Natural Gas Hedge Percentage and the requirement to maintain the basis hxxxxx under clause (3) is satisfied at all time until the earlier of (i) [***] or (ii) [***].

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***], Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] but at least 85% but, at all times, including after the Natural Gas Hedge Period, no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’) Issuer Parties’ Assets for each month, with the exception of the month of February 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more NYMEX-Hxxxx Hub swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions and/or collars which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided, however, nothing shall prevent Issuer from novating hxxxxx to maintain compliance with the terms set forth herein even in cases where such novated hxxxxx may differ from prevailing market prices, provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements. Notwithstanding the foregoing, provided further that on or prior to each Quarterly Determination Date after the Natural Gas Closing Date, the Issuer shall enter into one or more Hedge Percentage and Agreements, as needed, sufficient to cover at least 85% of projected natural gas output from the requirement to maintain Issuer Parties’ Assets for each month for a period of the basis hxxxxx under clause (3) is satisfied at all time until the earlier lesser of (ia) [***] or and (iib) [***]; provided, however, that, the foregoing requirement to enter into additional Hedge Agreements shall reduce to 50% of projected natural gas output from the Issuer Parties’ Assets for [***] if the following conditions are satisfied on such Quarterly Determination Date: (a) no Principal Distribution Amount remains unpaid on any of the three (3) Payment Dates immediately preceding such Quarterly Determination Date; and (b) the LTV is less than or equal to 35%.

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***], Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] but but, at all times, including after the Natural Gas Hedge Period, no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’) Issuer Parties’ Assets for each month, with the exception of the month of February 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more NYMEX-Hxxxx Hub swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions and/or collars which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided, however, nothing shall prevent Issuer from novating hxxxxx to maintain compliance with the terms set forth herein even in cases where such novated hxxxxx may differ from prevailing market prices, provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements. Notwithstanding the foregoing, provided further that on or prior to each Quarterly Determination Date after the Natural Gas Closing Date, the Issuer shall enter into one or more Hedge Percentage and Agreements, as needed, sufficient to cover [***] of projected natural gas output from the requirement to maintain Issuer Parties’ Assets for each month for a period of the basis hxxxxx under clause (3) is satisfied at all time until the earlier lesser of (ia) [***] or and (iib) [***]; provided, however, that, the foregoing requirement to enter into additional Hedge Agreements shall reduce to 50% of projected natural gas output from the Issuer Parties’ Assets for [***] if the following conditions are satisfied on such Quarterly Determination Date: (a) no Principal Distribution Amount remains unpaid on any of the three (3) Payment Dates immediately preceding such Quarterly Determination Date; and (b) the LTV is less than or equal to 35%.

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***], Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] at least 85% but no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’) Assets for each month, with the exception of the month of February 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements, provided further that the Natural Gas Hedge Percentage and the requirement to maintain the basis hxxxxx under clause (3) is satisfied at all time until the earlier of (i) [***] or (ii) [***].

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***]] (the “Natural Gas Hedge Period”), Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] at least 85% but no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’Subsidiary’s) Assets for each month, with the exception of the month of February April 2022, May 2022 and June 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided, however, nothing shall prevent issuer from novating hxxxxx to maintain compliance with the terms set forth herein even in cases where such novated hxxxxx may differ from prevailing market prices, provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]herein; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements, provided further that the Natural Gas Hedge Percentage and the requirement to maintain the basis hxxxxx under clause (3) is satisfied at all time until the earlier of (i) [***] or (ii) [***].

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***]] (the “Natural Gas Hedge Period”), Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] but no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’Subsidiary’s) Assets for each month, with the exception of the month of February April 2022, May 2022 and June 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided, however, nothing shall prevent issuer from novating hxxxxx to maintain compliance with the terms set forth herein even in cases where such novated hxxxxx may differ from prevailing market prices, provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]herein; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements, provided further that the Natural Gas Hedge Percentage and the requirement to maintain the basis hxxxxx under clause (3) is satisfied at all time until the earlier of (i) [***] or (ii) [***].

Natural Gas Hedging. The Issuer shall enter into on or prior to the Closing Date, and thereafter maintain (x) until the earlier of (i) [***] or (ii) [***], and (y) [***] until the earlier of (i) [***] and (ii) [***], Hedge Agreements with an aggregate notional volume of (and fixing the price exposure with respect to) [***] but at least 80% but, at all times, including after the Natural Gas Hedge Period, no more than 95% of the projected natural gas output from the Issuer’s (together with its Subsidiaries’) Assets for each month, with the exception of the month of February 2022, classified as “proved, developed and producing” and as described in the Reserve Report (the “Natural Gas Hedge Percentage”), including by way of (1) with respect to the foregoing clause (x), an initial hedging strategy consisting of one or more NYMEX-Hxxxx Hub swap transactions and/or swaptions which establish a minimum price level, (2) with respect to the foregoing clause (y), a hedging strategy consisting of long put transactions or other options transactions and/or collars which establish a minimum price level and (3) mitigating basis risk of the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a [***]; provided, however, that, in all cases such hedging arrangements shall be based on a Reserve Report updated on at least a [***]; provided, however, that, in each case, the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or investment; provided, however, nothing shall prevent Issuer from novating hxxxxx to maintain compliance with the terms set forth herein even in cases where such novated hxxxxx may differ from prevailing market prices, provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the Natural Gas Hedge Percentage shall be determined without after giving effect to any offsetting or similar Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement without obtaining the prior written consent of each Rating Agency; provided that Rating Agency consent shall not be required (other than in accordance with the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order to maintain compliance with the terms set forth herein or to mitigate the risk that the applicable Hedge Counterparty elects not to extend the swap transaction at the end of [***]; or (ii) from optimizing, novating, transferring, rolling or terminating Hedge Agreements. Notwithstanding the foregoing, provided further that on or prior to each Quarterly Determination Date after the Natural Gas Closing Date, the Issuer shall enter into one or more Hedge Percentage and Agreements, as needed, sufficient to cover at least 85% of projected natural gas output from the requirement to maintain Issuer’s Assets for each month for a period of the basis hxxxxx under clause (3) is satisfied at all time until the earlier lesser of (ia) [***] or and (iib) [***]; provided, however, that, the foregoing requirement to enter into additional Hedge Agreements shall reduce to 50% of projected natural gas output from the Issuer’s Assets [***] if the following conditions are satisfied on such Quarterly Determination Date: (a) no Principal Distribution Amount remains unpaid on any of the three (3) Payment Dates immediately preceding such Quarterly Determination Date; and (b) the Aggregate LTV is less than or equal to 35%.