Volumetric Production Payment Clause Samples
A Volumetric Production Payment (VPP) clause establishes an arrangement where the owner of a resource, such as oil or gas, agrees to deliver a specified quantity of production to a third party over time, typically in exchange for upfront payment. The clause details the volume to be delivered, the schedule, and the rights and obligations of both parties, often including provisions for what happens if production falls short. Its core practical function is to provide a mechanism for the resource owner to monetize future production immediately, while the purchaser assumes the risk and benefit of receiving the agreed volumes.
Volumetric Production Payment. The Borrower shall not, and shall not permit any of its Subsidiaries to, sell, grant, issue or otherwise enter into any Volumetric Production Payment, forward sale agreement or other sales of Hydrocarbons in place that would require any Borrower or Guarantor to deliver Hydrocarbons at some future time without receipt by the Borrower and the Guarantors of full payment therefor at such future time or sale of royalty interests or overriding royalty interests; provided however, without limiting the other provisions of this Article IX, this Section 9.23 shall not limit the ability of a Borrower or Guarantor to (i) enter into gas balancing arrangements, (ii) settle gas imbalances and (iii) (A) perform on take or pay contracts, (B) deliver Hydrocarbons in accordance with the terms of any Hydrocarbon Lease to a party thereto, or (C) enter into midstream or marketing contracts in the ordinary course of business for sale of Hydrocarbons, in the case of clauses (iii)(A), (iii)(B) and (iii)(C), as and when produced.
Volumetric Production Payment production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertakings and obligations in connection therewith.
Volumetric Production Payment. No Debtor will sell, grant, issue or otherwise enter into any Volumetric Production Payment, forward sale agreement or other sales of Hydrocarbons in place that would require any Debtor to deliver Hydrocarbons at some future time without receipt by the Debtor of full payment therefor at such future time or sale of royalty interests or overriding royalty interests; provided however, without limiting the other provisions of this Article IX, this Section 9.22 shall not limit the ability of a Debtor to (i) enter into gas balancing arrangements, (ii) settle gas imbalances and (iii) (A) perform on take or pay contracts, (B) deliver Hydrocarbons in accordance with the terms of any Hydrocarbon Lease to a party thereto, or (C) enter into midstream or marketing contracts in the ordinary course of business for sale of Hydrocarbons, in the case of clauses (iii)(A), (iii)(B) and (iii)(C), as and when produced.
Volumetric Production Payment production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertakings and obligations in connection therewith. Warrants: warrants issued in the name of each Lender (or such designee as any Lender may identify) entitling each Lender to purchase outstanding shares of common stock of Borrower, which warrants shall be substantially in the form attached hereto as Exhibit K.
Volumetric Production Payment production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertakings and obligations in connection therewith. Warm Trigger Event: shall be deemed to have occurred if, as of any Monthly Required Payment Date, the total deposits of Business Proceeds made by or on behalf of Borrower into the Control Account during the three-month period ending on the immediately preceding Monthly Required Payment Date are less than 125% of the aggregate amount of total distributions from the Control Account during such period which were required pursuant to Section 2.15(c).