Common use of Required Hedging Clause in Contracts

Required Hedging. On or before each date (x) that is thirty (30) days after the Closing Date (or such later date as may be agreed by the Administrative Agent), (y) that each Reserve Report is delivered under Section 9.13(a), and (z) on which any Credit Event occurs during any time period described in clause (a) below that would result in an increased Required Hedging Percentage (each such date, a “Hedging Test Date”), Borrower or other Credit Parties shall enter into Hedge Agreements with a Secured Hedge Counterparty the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) are at least, as of each Hedging Test Date: (a) during any time period when the Consolidated Total Debt to EBITDAX Ratio for the most recent Test Period before such Hedging Test Date is less than 2.00 to 1:00, the Required Hedging Percentage of the reasonably anticipated crude oil production and of the reasonably anticipated natural gas production from the Credit Parties’ total Proved Developed Producing Reserves (as forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date, and (b) at all times other than those described in the preceding clause (a), 75% of the reasonably anticipated crude oil production and 50% of the reasonably anticipated natural gas production from the Credit Parties’ total Proved Developed Producing Reserves (as forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date. Notwithstanding the foregoing, the Borrower or other Credit Parties are not required to enter into Hedge Agreements under this Section 9.18 for any month after the Maturity Date. 101

Required Hedging. On or before each date (xI) that is thirty (30) days after the Closing Date (or such later date as may be agreed by the Administrative Agent), ) (yII) that each Reserve Report is delivered under Section 9.13(a), and (zIII) on which any Credit Event occurs during any time period described in clause (aSection 9.18(a) below that would result in an increased Required Hedging Percentage (each such date, a “Hedging Test Date”), Borrower or other Credit Parties shall enter into Hedge Agreements with a Secured Hedge Counterparty the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) are at least, as of each Hedging Test Date: (a) during any time period when both (i) the Consolidated Total Debt to EBITDAX Ratio for the most recent Test Period before such Hedging Test Date is less than 2.00 to 1:001.00, and (ii) the Collateral Coverage Ratio as of such Hedging Test Date is greater than 2:00 to 1.00, the Required Hedging Percentage of the reasonably anticipated crude oil production and of the reasonably anticipated natural gas production from the Credit Parties’ total Proved Developed Producing Reserves (as forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date, and (b) at all times other than those described in the preceding clause (aSection 9.18(a), 75% of the reasonably anticipated crude oil production and 50% of the reasonably anticipated natural gas production from the Credit Parties’ total Proved Developed Producing Reserves (as forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date. Notwithstanding the foregoing, the Borrower or other Credit Parties are not required to enter into Hedge Agreements under this Section 9.18 for any month after the Maturity Date. 101.

Required Hedging. On or before each date (x) The Administrative Agent shall have received evidence satisfactory to it that is thirty (30) days after the Closing Date (or such later date as may be agreed by the Administrative Agent), (y) that each Reserve Report is delivered under Section 9.13(a), and (z) on which any Credit Event occurs during any time period described in clause (a) below that would result in an increased Required Hedging Percentage (each such date, a “Hedging Test Date”), Borrower or other Credit Parties shall enter into Hedge Agreements have established hedge positions with a Secured Hedge Counterparty the net notional volumes for which (when aggregated minimum weighted average commodity price protection equal to $65.00/bbl and $7.00/mmbtu on a BTU equivalent basis, with other commodity Hedge Agreements then in effectrespect to price but not to volume, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) are at least, as of each Hedging Test Date: (a) during any time period when the Consolidated Total Debt to EBITDAX Ratio for the most recent Test Period before such Hedging Test Date is less than 2.00 to 1:00, the Required Hedging Percentage covering 100% of the reasonably anticipated estimated projected crude oil production and of the reasonably anticipated natural gas production from the Credit Parties’ total Borrower’s Proved Developed Producing Reserves (as forecasted by for the Borrower Fiscal Year 2006 and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date, and (b) at all times other than those described in the preceding clause (a), 7580% of the reasonably anticipated estimated projected BTU equivalent of crude oil production and 50% of the reasonably anticipated natural gas production from the Credit Parties’ total Borrower’s Proved Developed Producing Reserves (as forecasted by for the Fiscal Years 2007 and 2008. The Arrangers shall have received evidence that the Borrower and has entered into one or more commodity Hedging Agreements with one or more Approved Counterparties (in the case of Hedging Agreements that are puts that are not executed in conjunction with any other Hedging Agreements) or Lenders (in the case of any other Hedging Agreements). All such Hedging Agreements will have a fixed price or floor prices acceptable to the Administrative Agent based upon Arrangers and aggregate notional volumes acceptable to the Initial Arrangers. Without limiting the foregoing sentence, (a) as at any date volumes corresponding to swaps or collars (for the absence of doubt, volumes related to puts that are not executed in conjunction with any other Hedging Agreements are excluded) shall not exceed the percentages set forth in Schedule 5.1.21 for crude oil and natural gas, as the case may be, during the then twelve calendar months following such date, and 80% thereafter, in each case in respect of the reasonably estimated projected crude oil and natural gas production from the Borrower’s Proved Developed Producing Reserves; (b) as at any date volumes corresponding to basis swaps shall not exceed 80% in respect of the reasonably estimated projected BTU equivalent of crude oil and natural gas production from the Borrower’s Proved Developed Producing Reserves; and (c) as at any date volumes for all such Hedging Agreements (including swaps, collars and puts), shall not be less than 50% on a rolling two year period basis of the reasonably estimated projected BTU equivalent of crude oil and natural gas production from its Proved Developed Producing Reserves as determined by reference to the then current Reserve Reports or delivered pursuant to the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date. Notwithstanding the foregoing, the Borrower or other Credit Parties are not required to enter into Hedge Agreements under terms of this Section 9.18 for any month after the Maturity Date. 101Agreement.

Required Hedging. On or before each date (x) that is thirty (30) days after the Closing Date (or such later date as may be agreed by the Administrative Agent), (y) that each Reserve Report is delivered under Section 9.13(a), and (z) on which any Credit Event occurs during any time period described in clause (a) below that would result in an increased Required Hedging Percentage (each such date, a “Hedging Test Date”), Borrower or other Credit Parties shall enter into Hedge Agreements with a Secured Hedge Counterparty the net notional volumes for which (when aggregated with other commodity Hedge Agreements then in effect, other than puts, floors and basis differential swaps on volumes already hedged pursuant to other Hedge Agreements) are at least, as of each Hedging Test Date: (a) during any time period when the Consolidated Total Debt to EBITDAX Ratio for the most recent Test Period before such Hedging Test Date is less than 2.00 to 1:001.00, the Required Hedging Percentage of the reasonably anticipated crude oil production and of the reasonably anticipated natural gas production from the Credit Parties’ total Proved Developed Producing Reserves (as forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date, and (b) at all times other than those described in the preceding clause (a), 75% of the reasonably anticipated crude oil production and 50% of the reasonably anticipated natural gas production from the Credit Parties’ total Proved Developed Producing Reserves (as forecasted by the Borrower and acceptable to the Administrative Agent based upon the Initial Reserve Reports or the most recent Reserve Report delivered under Section 9.13(a), as applicable) for any month during the 24-month period from the applicable Hedging Test Date. Notwithstanding the foregoing, the Borrower or other Credit Parties are not required to enter into Hedge Agreements under this Section 9.18 for any month after the Maturity Date. 101.