Common use of Procedures to Calculate Considerations Clause in Contracts

Procedures to Calculate Considerations. 8.1 Royalties The amount of the Royalties will be determined for each type of Hydrocarbon by applying the rate corresponding to the Contractual Value of the Crude Oil, the Contractual Value of the Natural Gas and the Contractual Value of the Condensates produced during the Period. In case of Natural Gas, the amount of royalties will be determined separately whether it be Natural Gas (methane), or each one of its other components (ethane, propane and butane) considering the rate and the Contract Value for each, determined based on the Contractual Price and the volume of each one of the above mentioned products. The mechanism to determine the Royalties will be adjusted each Year in the month of January based on the first publication of the annual change observed in the month of December of the prior Year (hereinafter −1) in the Producer Price Index of the United States of America or its substitute index, using the year 2015 as the base Year, and making the first adjustment in the second half of the month of January of 2016. The process to determine the amounts payable will be the following: