Common use of Surface Damages; Fees Clause in Contracts

Surface Damages; Fees. a. Operator shall pay to Company the applicable Surface Damages for the applicable Facilities constructed and/or utilized by Operator pursuant to this Agreement. For the avoidance of doubt, Operator shall not owe any Surface Damages with respect to the Initial Facilities as the same exist on the Effective Date, but shall owe any applicable Surface Damages with respect to the Initial Facilities to the extent the same arise after the Effective Date. Not later than December 31 of each year, Company shall determine, in its reasonable discretion and with reference to market-based surface damages in the approximate vicinity of the applicable Facilities, the applicable Surface Damages for all Leases and Easements that are executed in the immediately succeeding calendar year, and shall provide not to Operator thereof along with reasonable supporting documentation; provided that if Company or its applicable Affiliate has received surface damages from one or more Third Parties in the approximate vicinity of the applicable Facilities within the prior twelve (12) months, the adjusted Surface Damages shall not exceed the highest surface damages paid to Company or its applicable Affiliate by a Third Party in the approximate vicinity of the applicable Facilities within the prior twelve (12) months. If Company does not make this determination and provide notice and the required documentation to Operator thereof in accordance with this Section 2.4(a), the then-current Surface Damages shall continue in effect. Other than any Surface Damages as determined in accordance with this Section 2.4(a) and the fees set forth in Section 2.4(b), Operator will not be obligated to pay any royalties, throughputs, or other fees with respect to Operator’s use of or access to the Lands in accordance with this Agreement. b. Operator shall pay to Company (without duplication) the following fees: i. [***] for each Barrel of Produced Water that is either gathered or transported by Operator onto the Lands or initially received by Operator into its Disposal Facilities or Recycling Facilities on the Lands (“Produced Water Fee”), without duplication of any volumes; ii. [***] for each Barrel of Recycled Water that Operator sells from a Recycling Facility for use on the Lands (“Recycled Water Fee”); iii. [***] of the gross proceeds Operator receives for each Barrel of Recycled Water that Operator sells from a Recycling Facility for use off of the Lands (“Off Ranch Recycled Water Fee”), net of [***] per Barrel for Operator’s operating expenses for redelivery, recycling and treatment of such Recycled Water (“Opex Credit”); provided that in no event shall the Off Ranch Recycled Water Fee be less than [***] per Barrel of Recycled Water (“Minimum Off Ranch Recycled Water Fee”); and iv. [***] of the proceeds received by Operator from the sale of Skim Oil recovered from Operator’s Facilities on the Lands, net of royalty or other payments owed to Third Parties with respect to the sale of such Skim Oil (“Skim Oil Fee”). c. Notwithstanding anything to the contrary herein, with respect to any Produced Water volumes or Recycled Water volumes that are transported across or enter the Lands more than once, Operator shall incur the applicable Fee set forth in Section 2.4(b) with respect to the first instance that such volumes enter the Lands, and shall not incur an additional Fee with respect to subsequent crossings for such volumes. d. Notwithstanding anything to the contrary herein, with respect to any Produced Water volumes or Recycled Water volumes that are transported across or enter the Lands and subsequently enter or cross Other Lands, Operator shall incur the applicable fee with respect to the first instance that such volumes enter the Lands or Other Lands, as applicable, and shall not incur an additional fee with respect to subsequent crossings of the Lands or Other Lands, as applicable, for such volumes. e. To the extent that Operator is required to pay a fee or royalty to a Third Party with respect to Disposal Xxxxx or Recycling Facilities located on Lands leased from such Third Party by Company, the applicable Fee payable to Company with respect to any such Produced Water or Recycled Water volumes shall be reduced, on a dollar for dollar basis, by the amount of such Third Party fees or royalties.

Surface Damages; Fees. a. Operator shall pay to Company the applicable Surface Damages for the applicable Facilities constructed and/or utilized by Operator pursuant to this Agreement. For the avoidance of doubt, Operator shall not owe any Surface Damages with respect to the Initial Facilities as the same exist on the Effective Date, but shall owe any applicable Surface Damages with respect to the Initial Facilities to the extent the same arise after the Effective Date. Not later than December 31 of each year, Company shall determine, in its reasonable discretion and with reference to market-based surface damages in the approximate vicinity of the applicable Facilities, the applicable Surface Damages for all Leases and Easements that are executed in the immediately succeeding calendar year, and shall provide not to Operator thereof along with reasonable supporting documentation; provided that if Company or its applicable Affiliate has received surface damages from one or more Third Parties in the approximate vicinity of the applicable Facilities within the prior twelve (12) months, the adjusted Surface Damages shall not exceed the highest surface damages paid to Company or its applicable Affiliate by a Third Party in the approximate vicinity of the applicable Facilities within the prior twelve (12) months. If Company does not make this determination and provide notice and the required documentation to Operator thereof in accordance with this Section 2.4(a), the then-current Surface Damages shall continue in effect. Other than any Surface Damages as determined in accordance with this Section 2.4(a) and the fees set forth in Section 2.4(b), Operator will not be obligated to pay any royalties, throughputs, or other fees with respect to Operator’s use of or access to the Lands in accordance with this Agreement. b. Operator shall pay to Company (without duplication) the following fees: i. [***] for each Barrel of Produced Water that is either gathered or transported by Operator onto the Lands or initially received by Operator into its Disposal Facilities or Recycling Facilities on the Lands (“Produced Water Fee”), without duplication of any volumes; ii. [***] for each Barrel of Recycled Water that Operator sells from a Recycling Facility for use on the Lands (“Recycled Water Fee”); iii. [***] of the gross proceeds Operator receives for each Barrel of Recycled Water that Operator sells from a Recycling Facility for use off of the Lands (“Off Ranch Recycled Water Fee”), net of [***] per Barrel for Operator’s operating expenses for redelivery, recycling and treatment of such Recycled Water (“Opex Credit”); provided that in no event shall the Off Ranch Recycled Water Fee be less than [***] per Barrel of Recycled Water (“Minimum Off Ranch Recycled Water Fee”); and iv. [***] of the proceeds received by Operator from the sale of Skim Oil recovered from Operator’s Facilities on the Lands, net of royalty or other payments owed to Third Parties with respect to the sale of such Skim Oil (“Skim Oil Fee”). c. Notwithstanding anything to the contrary herein, with respect to any Produced Water volumes or Recycled Water volumes that are transported across or enter the Lands more than once, Operator shall incur the applicable Fee set forth in Section 2.4(b) with respect to the first instance that such volumes enter the Lands, and shall not incur an additional Fee with respect to subsequent crossings for such volumes. d. Notwithstanding anything to the contrary herein, with respect to any Produced Water volumes or Recycled Water volumes that are transported across or enter the Lands and subsequently enter or cross Other Lands, Operator shall incur the applicable fee with respect to the first instance that such volumes enter the Lands or Other Lands, as applicable, and shall not incur an additional fee with respect to subsequent crossings of the Lands or Other Lands, as applicable, for such volumes. e. To the extent that Operator is required to pay a fee or royalty to a Third Party with respect to Disposal Xxxxx or Recycling Facilities located on Lands leased from such Third Party by Company, the applicable Fee payable to Company with respect to any such Produced Water or Recycled Water volumes shall be reduced, on a dollar for dollar basis, by the amount of such Third Party fees or royalties.