Common use of General Parameters Clause in Contracts

General Parameters. The Administrative Agent’s Redetermination of the Proposed Risk Adjusted Value in accordance with the provisions of Section 7.10(b)(i) shall be calculated in accordance with general parameters (herein referred to as the “General Parameters”) set forth in this Section 7.10(d) subject to change and adjustment at any time by Required Holders in their sole discretion. The risk adjusted present value (herein referred to as the “Risk Adjusted Present Value”) shall be equivalent to the present value of the future net revenue of the Company’s proved Oil and Gas Properties (as adjusted by the Administrative Agent’s consulting petroleum engineers selected by the Administrative Agent in its sole discretion), discounted at a rate of 10% per annum and determined in accordance with standard industry practices using the price deck and cost escalation set forth below, each category of proved reserves being multiplied by the following applicable risk factors: (i) Proved Developed Producing Reserves (which shall reflect runoff to the effective date of the next Scheduled Redetermination), a risk factor of 100%; (ii) Proved Developed Non-Producing Reserves, a risk factor of 85%; and (iii) Proved Undeveloped Reserves, a risk factor of 75%; provided that, in no event shall more than 25% of the Risk Adjusted Present Value be attributable to reserves not constituting Proved Developed Producing Reserves plus h▇▇▇▇▇ (if such h▇▇▇▇▇ are with a counterparty acceptable to the Administrative Agent in its sole discretion) and, if necessary, the Risk Adjusted Present Value shall be adjusted down to achieve such maximum percentage. The price deck shall be 90% of the five year NYMEX crude oil and natural gas futures strip yearly average as of the closing trade on the fifth (5th) trading date prior to the effective date of the Administrative Agent’s Redetermination (for each month of the year or partial year) and held flat at the fifth year forward and adjusted for transportation, quality, and other differentials deemed appropriate by the Approved Petroleum Engineers or the Company’s chief engineers, as applicable, and approved by Required Holders. As applicable, full market value shall be ascribed for the Company's commodity price h▇▇▇▇▇ (if such h▇▇▇▇▇ are with a counterparty acceptable to the Administrative Agent in its sole discretion) of the proved developed producing production profile contained in the most recent Engineering Report, giving effect to runoff. Lease operating costs, development costs, and other applicable costs used by the Approved Petroleum Engineers in their evaluations shall be escalated at a rate of 3% per year for the first four (4) years after the effective date of such evaluation and held flat at the end of the fifth full calendar year forward.