Common use of ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT Clause in Contracts

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the Unit Op- erator is not the sole owner of working inter- ests, costs and expenses incurred by Unit Op- erator in conducting unit operations here- under shall be paid and apportioned among and borne by the owners of working inter- ests, all in accordance with the agreement or agreements entered into by and between the Unit Operator and the owners of working in- terests, whether one or more, separately or collectively. Any agreement or agreements entered into between the working interest owners and the Unit Operator as provided in this section, whether one or more, are herein referred to as the ‘‘unit operating agree- ment.’’ Such unit operating agreement shall also provide the manner in which the work- ing interest owners shall be entitled to re- ceive their respective proportionate and allo- cated share of the benefits accruing hereto in conformity with their underlying operating agreements, leases, or other independent contracts, and such other rights and obliga- tions as between Unit Operator and the working interest owners as may be agreed upon by Unit Operator and the working in- terest owners; however, no such unit oper- ating agreement shall be deemed either to modify any of the terms and conditions of this unit agreement or to relieve the Unit Operator of any right or obligation estab- lished under this unit agreement, and in case of any inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement and the unit operating agree- ment, this agreement shall govern. Two cop- ies of any unit operating agreement executed pursuant to this section shall be filed in the proper BLM office prior to approval of this unit agreement.

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the Unit Op- erator Operator is not the sole owner of working inter- estsinterests, costs and expenses incurred by Unit Op- erator Operator in conducting unit operations here- under hereunder shall be paid and apportioned among and borne by the owners of working inter- estsinterests, all in accordance with the agreement or agreements entered into by and between the Unit Operator and the owners of working in- terestsinterests, whether one or more, separately or collectively. Any agreement or agreements entered into between the working interest owners and the Unit Operator as provided in this section, whether one or more, are herein referred to as the ‘‘"unit operating agree- ment.’’ agreement". Such unit operating agreement shall also provide the manner in which the work- ing working interest owners shall be entitled to re- ceive receive their respective proportionate and allo- cated allocated share of the benefits accruing hereto in conformity with their underlying operating agreements, leases, or other independent contracts, and such other rights and obliga- tions obligations as between Unit Operator and the working interest owners as may be agreed upon by Unit Operator and the working in- terest interest owners; however, no such unit oper- ating operating agreement shall be deemed either to modify any of the terms and conditions of this unit agreement or to relieve the Unit Operator of any right or obligation estab- lished established under this unit agreement, and in case of any inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement and the unit operating agree- mentagreement, this agreement shall govern. Two cop- ies copies of any unit operating agreement executed pursuant to this section shall be filed in the proper BLM Bureau of Land Management office and one true copy with the Land Commissioner, and one true copy with the Division prior to approval of this unit agreement.

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the Unit Op- erator Operator is not the sole owner of working inter- estsinterests, costs and expenses incurred by Unit Op- erator Operator in conducting unit operations here- under hereunder shall be paid and apportioned among and borne by the owners of working inter- estsinterests, all in accordance with the agreement or agreements entered into by and between the Unit Operator and the owners of working in- terestsinterests, whether one or more, separately or collectively. Any agreement or agreements entered into between the working interest owners and the Unit Operator as provided in this section, whether one or more, are herein referred to as the ‘‘unit operating agree- ment.’’ “Unit Operating Agreement”. Such unit operating agreement Unit Operating Agreement shall also provide the manner in which the work- ing working interest owners shall be entitled to re- ceive receive their respective proportionate and allo- cated allocated share of the benefits accruing hereto in conformity with their underlying operating agreements, leases, or other independent contracts, and such other rights and obliga- tions obligations as between Unit Operator and the working interest owners as may be agreed upon by Unit Operator and the working in- terest interest owners; however, no such unit oper- ating agreement Unit Operating Agreement shall be deemed either to modify any of the terms and conditions of this unit agreement Unit Agreement or to relieve the Unit Operator of any right or obligation estab- lished established under this unit agreementUnit Agreement, and in case of any inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement Unit Agreement and the unit operating agree- mentUnit Operating Agreement, this agreement Unit Agreement shall govern. Two cop- ies One copy of any unit operating agreement Unit Operating Agreement executed pursuant to this section shall be filed in the proper BLM office Bureau of Land Management office, prior to approval of this unit agreementUnit Agreement.

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the Unit Op- erator Operator is not the sole owner of working inter- estsinterests, costs and expenses incurred by Unit Op- erator Operator in conducting unit operations here- under hereunder shall be paid and apportioned among and borne by the owners of working inter- estsinterests, all in accordance with the agreement or agreements to be entered into by and between the Unit Operator and the owners of working in- terestsinterests, whether one or more, separately or collectivelycollectively . Any agreement or agreements entered into between the working interest owners and the Unit Operator as provided in this section, whether one or more, are herein referred to as the ‘‘"unit operating agree- ment.’’ agreement" . Such unit operating agreement shall also provide the manner in which the work- ing working interest owners shall be entitled to re- ceive receive their respective proportionate and allo- cated allocated share of the benefits accruing hereto in conformity with their underlying operating agreements, leases, or other independent contracts, the risk premiums charged to working interest owners who do not participate in an operation, and such other rights and obliga- tions obligations as between Unit Operator and the working interest owners as may be agreed upon by Unit Operator and the working in- terest ownersinterest owners ; however, no such unit oper- ating operating agreement shall be deemed either to modify any of the terms and conditions of this unit agreement or to relieve the Unit Operator of any right or obligation estab- lished established under this unit agreement, and in case of any inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement and the unit operating agree- mentagreement, this agreement shall governgovern . Two cop- ies copies of any unit operating agreement executed in effect pursuant to this section shall be filed in the proper BLM Bureau of Land Management office prior to and one true copy with the Land Commissioner within 90 days after the approval of this unit agreement . Until the working interest owners and the Unit Operator execute a final unit operating agreement, the unit operations of such Parties shall be governed by the draft unit operating agreement dated March 30 , 2009 and titled "Unit Operating Agreement, St . John's Gas Unit, Apache County, Arizona" distributed to such Parties and, until such execution date, all references to the "unit operating agreement'' within this agreement shall be references to such draft unit operating agreement . If a working interest owner fails to pay the costs and expenses of unit operations apportioned to such working interest owner in accordance with this agreement and the unit operating agreement (including without limitation those initial payments required under Section 3 and Section 21 ), then : (i) the default provisions of the unit operating agreement shall apply and (ii) except as may otherwise be expressly provided herein, such shortfall shall be borne by the other participating working interest owners in the applicable Participating Area (or, if none, in the unit area), pro rate according to their working interests, and subject to their right to seek to recover such amounts from the non - paying working interest owner, its working interest or its share of production, as described in the unit operating agreement All such unpaid amounts shall bear interest at a rate equivalent to the lesser of twelve percent ( 12 % ) per annum or the highest rate permitted by State law .

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the Unit Op- erator Operator is not the sole owner of working inter- estsinterests, costs and expenses incurred by Unit Op- erator Operator in conducting unit operations here- under hereunder shall be paid and apportioned among and borne bomc by the owners of working inter- estsinterests, all in accordance with the agreement or agreements entered into by and between the Unit Operator and the owners of working in- terestsinterests, whether one or more, separately or collectively. Any agreement or agreements entered into between the working interest owners and the Unit Operator as provided in this section, whether one or more, are herein referred to as the ‘‘"unit operating agree- ment.’’ agreement". Such unit operating agreement shall also provide the manner in which the work- ing working interest owners shall be entitled to re- ceive receive their respective proportionate and allo- cated allocated share of the ofthe benefits accruing hereto in conformity with their underlying operating agreements, leases, or other independent contracts, and such other rights and obliga- tions obligations as between Unit Operator and the working interest owners as may be agreed upon by Unit Operator and the working in- terest interest owners; however, no such unit oper- ating operating agreement shall be deemed either to modify any of the ofthe terms and conditions of this ofthis unit agreement or to relieve the Unit Operator of any ofany right or obligation estab- lished established under this unit agreement, and in case of any ofany inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement and the unit operating agree- mentagreement, this agreement shall govern. Two cop- ies of any copies ofany unit operating agreement executed pursuant to this section shall be filed in the proper BLM Bureau of I.and Management office and one true copy with the Land Commissioner, and one true copy with the Division prior to approval of this ofthis unit agreement. If any Party to this Unit Agreement currently owns either no interest, or only an overriding royalty- interest in, the unitized area, or said formation, or those lands covered by leases described on Exhibit *‘B", then such Party shall have no obligations whatsoever, whether monetary or otherwise, to the other Parlies or to the Operator, at any time or in the future.

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the die Unit Op- erator Operator is not the die sole owner of working inter- estsofwotking interests, costs and expenses incurred by Unit Op- erator Operator in conducting unit operations here- under hereunder shall be paid and apportioned appoitioned among and borne by the owners of working inter- estsinterests, all in accordance with the agreement or agreements entered into by and between the Unit Operator and the owners of working in- terestsofworking interests, whether one or more, separately or collectively. Any agreement or agreements entered into between the working wotking interest owners and the die Unit Operator as provided in this section, whether one or more, are herein areherein referred to as the ‘‘"unit operating agree- ment.’’ agreement". Such unit operating agreement shall also provide the manner in which the work- ing working interest owners shall be entitled to re- ceive receive their respective proportionate and allo- cated allocated share of the benefits accruing hereto in conformity with their underlying operating agreements, leases, or other independent contracts, and such other rights and obliga- tions obligations as between Unit Uuit Operator and the working die workiug interest owners as may be agreed upon by Unit Operator and the working in- terest intoest owners; however, no uo such unit oper- ating operating agreement shall be deemed either to modify any of the die terms and conditions of this unit agreement or to relieve the Unit Operator of any ofany right or obligation estab- lished established under this unit agreement, and in case of any ofany inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement and the unit operating agree- mentagreement, this agreement shall govern. Two cop- ies of any copies ofany unit operating agreement executed pursuant to this section sectiou shall be filed in the proper BLM Bureau of laud Management office and one true copy with die Land Commissioner, aud one true copy with the Division prior to approval of this unit agreement.

ACCOUNTING PROVISIONS AND UNIT OPERATING AGREEMENT. If the tire Unit Op- erator Ojwrator is not the sole owner of working inter- estsofworking interests, costs and expenses incurred inclined by Unit Op- erator Uuit Operator in conducting unit operations here- under hereunder shall be paid and apportioned among and borne by the owners of working inter- estsofworking interests, all in accordance iu aceoidtmec with the die agreement or agreements entered into by and mid between the Unit Operator and the owners of working in- terestsinterests, whether one or more, separately or collectively. Any agreement or agreements entered into between the die working interest owners and the Unit Operator as us provided in this section, whether whether- one or more, are herein referred to as ns the ‘‘"unit operating agree- ment.’’ ojmating agreement". Such unit (out operating agreement shall also provide the manner in which the work- ing woiking interest owners shall sliall be entitled to re- ceive receive their respective proportionate and allo- cated nud allocated share of the benefits accruing hereto in conformity confonuity with their underlying theirunderlying operating agreements, leases, or other independent contracts, and such other rights and obliga- tions obligations as between betweeu Unit Operator and the working woiking interest owners as may be agreed upon by Unit Operator and the working in- terest interest owners; : however, no such unit oper- ating operating agreement shall be deemed either to modify any of the ofthe terms and conditions of this ofthis unit agreement or to relieve the Unit Operator of any ofany right or obligation estab- lished under established raider this unit agreement, and in case of any inconsistency or conflict between this Bureau of Land Management, Interior § 3186.1 agreement and the unit operating agree- mentagreement, this agreement shall sliall govern. Two cop- ies of any copies ofany unit operating agreement executed pursuant to this section tills sectiou shall be filed in the proper BLM office prior to approval Bureau of this unit agreementLand Management office.