Original Producer. (but not any subsequent Producer or Producer Assignee) may Transfer Dedicated Properties free of the terms, conditions and obligations of this Agreement in a Transfer (a “Proposed Transaction”), subject to Original Producer’s compliance with the following:
(i) Where such Transfer is an exchange of Net Acres of undeveloped Dedicated Properties (the “Outbound Acreage”) for equivalent Net Acres of properties of a Third Party located in the Dedication Area, which such properties become subject to the Dedication under this Agreement (the “Inbound Acreage”), as determined by Original Producer in good faith taking into account (v) the number of Net Acres in the Outbound Acreage compared to the Inbound Acreage (which must be within plus or minus 10%), (w) the location and proximity to of the Inbound Acreage to an Individual System, including anticipated costs and expenses to install, build, construct or otherwise place into service infrastructure for the Outbound Acreage compared to the Inbound Acreage (x) the production reserves, development plan and timing to bring such production online of the Outbound Acreage compared to the Inbound Acreage, (y) the value of the Outbound Acreage vs. the Inbound Acreage (disregarding any benefit that is expected to accrue to Original Producer and its Affiliates, but including any value that Midstream Co could reasonably be expected to gain through the Proposed Transaction), and (z) such other operational and financial considerations as would be taken in similar transactions in accordance with generally accepted industry practice (including by way of accelerating volumes to be gathered by Midstream Co and whether Original Producer is trading non-operated acreage for operated acreage); then:
(A) Original Producer shall give Midstream Co at least 60 Days’ prior written notice of the Proposed Transaction, which notice shall be by email from an authorized officer of Producer holding an office of vice president or more senior and shall include (1) descriptions of the Inbound Acreage (including section, township and range (or similar information), an estimate of the number of gross acres in a lease multiplied by the lessor’s mineral interest (“Lease Acres”), Net Acres, Lease Acres multiplied by the applicable net revenue interest (“Net Revenue Acres”), and the portion of such Lease Acres that Original Producer anticipates it would operate, if it acquires such acreage), (2) descriptions of the Outbound Acreage (including section, towns...
Original Producer. (but not any subsequent Producer) may Transfer Dedicated Properties free of the terms, conditions and obligations of this Agreement in a Transfer:
(i) where such Transfer is an exchange of undeveloped Dedicated Properties (the “Outbound Acreage”) for properties of a Third Party located in the Dedication Area, which such properties become subject to the Dedications under this Agreement; provided that Producer shall reimburse Midstream Co in full for all actual costs and expenses incurred by Midstream Co to install, build, construct, or otherwise place into service infrastructure for the Outbound Acreage, so long as Midstream Co had informed Producer of its intention to install, build, construct or otherwise place into service the applicable infrastructure by inclusion of the same in a System Plan delivered prior to the closing of the applicable Transfer; or
(ii) where such Transfer (x) is not of the type described in Section 16.2(b)(i), (y) pertains solely to Dedicated Properties outside of the boundary shown on Annex A to Midstream Addendum 07, and (z) would not cause the number of Net Acres of Dedicated Properties Transferred pursuant to this Section 16.2(b)(ii) during the Term of this Agreement, on an aggregate basis, to exceed 3,500 Net Acres. Original Producer shall be responsible for tracking the total acreage sold under this Section 16.2(b)(ii) and the number of Net Acres Transferred beginning on the Effective Date and continuing through the end of the Term and shall, upon request of Midstream Co, provide evidence supporting Original Producer’s calculation thereof.
