Common use of Hedging Program Clause in Contracts

Hedging Program. (a) At all times when the Percentage Outstanding exceeds seventy-five (75%) percent, the Borrower shall enter into and maintain in effect a hedging program (the “Hedging Program”) consisting of Permitted Hedge Agreements that are mutually satisfactory to the Agent, the Required Lenders and the Borrower. (b) The Borrower’s commodity Hedge Agreements (i) shall in no contract fix a price for a term of more than three (3) years, and (ii) in the aggregate shall not cover Obligated Volumes that exceed eighty five (85%) percent of the Borrower’s projected oil and gas PDP production set forth in the most recent engineering report (third party or internal, as applicable) used in the Borrowing Base re-determination, all as further provided in the definition of Permitted Commodity ▇▇▇▇▇▇. (c) If any Hedge Agreement of the Borrower or any Subsidiaries is used in the calculation of the Borrowing Base, then such Hedge Agreement shall not be cancelled, liquidated or unwound (including by obtaining an opposite position) if such action, when aggregated with all other such actions and with all sales and dispositions under clause (v) of Subsection 6.8(b) made during the time period between any two successive scheduled Borrowing Base redetermination dates, would cause the Material Value Change Amount to exceed in the aggregate five (5%) percent of the then effective Borrowing Base, without the prior written consent of the Agent and the Required Lenders.