Capital Expenditure Offsets definition
Capital Expenditure Offsets means an amount equal to the product of (i) Borrower’s working interest share of Exploratory Costs or Development Costs pursuant to an AFE issued by the operator and (ii) such Borrower’s Fixed Percentage; provided that (y) Capital Expenditure Offsets shall not apply to any Exploratory Costs or Development Costs in excess of $1.8 million per each point of working interest (pre-offset) in the Project Properties owned by such Borrower and (z) no Capital Expenditure Offsets shall be made by Borrower unless and until the Administrative Agent and the Lenders have received from Borrower (A) a schedule describing Borrower’s proposed Capital Expenditure Offset, (B) a copy of the applicable AFE and (C) any other documentation or information reasonably requested by the Administrative Agent and the Lenders. For purposes of this definition, all Exploratory and Development Costs will be deemed to have been incurred for each Borrower on a pro-rata basis evenly for each day during the period beginning on the day on which the AFE for such costs is received by Borrowers and ending on the final day of the period of activity for such costs set forth in the AFE (or, if no period of activity is specified, the date that is ninety (90) days after receipt of such AFE). Any AFE received between June 1, 2018 and September 1, 2018 will be deemed to have been received on September 1, 2018.