Production, Distribution. 14.2.1 After deducting the royalty percentage, the remaining Hydrocarbons produced in each Commercial Field belong to the parties thus: Fifty percent (50%) for ECOPETROL and fifty percent (50%) for THE ASSOCIATE until cumulative production for each Commercial Field reaches 60 million barreis of liquid Hydrocarbons or 420 giga cubic feet of gaseous Hydrocarbons at standard conditions, whichever occurs first (1 cubic giga foot = 1 x 10 9, cubic feet) 14.2.2 Notwithstanding the fact that ECOPETROL has classified the Field as being commercial, when production at each Commercial Field (after deducting the royalty percentage) exceeds the limits of 14.2. 1, distribution among the Parties will use the R factor as set out hereunder. 14.2.2.1 lf liquid Hydrocarbons first reach the limit set out in numeral 14.2.1 hereof, the following table shall apply: R FACTOR PRODUCTION DISTRIBUTION AFTER ROYALTIES (%) ASSOCIATE ECOPETROL 0.0 - 1.0 50 50 1.0 - 2.0 50/R 100-50/R 2.0 or more 25 75 14.2.2.2 lf gaseous Hydrocarbons first reach the limit set out in numeral 14.2.1 hereof, the following table shall apply- R FACTOR PRODUCTION DISTRIBUTION AFTER ROYALTIES ASSOCIATE ECOPETROL 0.0 - 1.0 50 50 1.0 - 2.0 50/R 100-50/R 2.0 or more 25 75 14.2.3 The R factor is defined as the ratio between accrued income and accrued disbursements made by THE ASSOCIATE for each Commercial Field, as follows: IA R = ------------------- ID+A-B+GO Where: 1A (The Associates Accrued lncome)- is the valuation of income accrued by THE ASSOCIATE for hydrocarbons produced, after royalties, at the reference price agreed by the Parties, excluding hydrocarbons reinjected in Contract Area Fields, and those consumed in the operation and burnt gas. The parties shall jointly establish the average reference price for hydrocarbons. Accrued lncome will be based on the Monthly lncome which, in turn, will be obtained from multiplying the average monthly reference price by the monthly production in keeping with respective form issued by the Ministry of Mines & Energy. A. Direct Exploration Costs incurred by THE ASSOCIATE according to Clause hereof and ▇▇▇▇▇▇ed as set out in the paragraph of 9. B. Accrued reimbursement of the afore-mentioned Direct Exploration Costs, in keeping with Clause 9 hereof. GO (Accrued Operating Expenses)-. accrued operating expenses approved by the Association Executive Committee, in the proportion corresponding to the ASSOCIATE plus the latter's accrued transportation costs. Transportation costs are investment and operating expenses for transporting hydrocarbons produced in the Commercial Fields within the Contract Area up to the exportation port or the place agreed for taking the price to be used in the 1A calculation. Such transportation costs will be jointly determined by the parties once the Fields that ECOPETROL has declared to be commercial initiate the exploitation stage. Operating expenses include special levies or similar items directly applied to Hydrocarbon exploitation in the Contract Area. All values included in the R factor calculation following the exploitation start-up date established by the Ministry of Mines & Energy will be taken in current dollars. To this end, expenses in pesos shall be converted to dollars at the Market Representative Rate certified by the Banking Superintendency, or entity replacing same, in force on the date the respective disbursements were made.
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Production, Distribution. 14.2.1 After deducting the royalty percentagepercentages covering royalty, the remaining Hydrocarbons hydrocarbons produced in each Commercial Field belong to is property of the parties thus: Fifty percent Parties in the proportion of fifty per cent (50%) for ECOPETROL and fifty percent AND FIFTY PER CENT (50%) for FOR THE ASSOCIATE until cumulative the accumulated production for of each Commercial Field reaches 60 million barreis barrels of liquid Hydrocarbons or the amount of 420 giga cubic feet gigafeet of gaseous Hydrocarbons at standard hydrocarbons under normal conditions, whichever occurs first (( 1 cubic giga foot gigafeet = 1 x 10 9, 9 cubic feet).
14.2.2 Notwithstanding Regardless of the fact that classification of the Commercial Field given by ECOPETROL has classified in the Field as being commercialdefinition of the commercial nature, when exceeding the limits set forth in paragraph 14.2.1 , the production at distribution of each Commercial Field (after ( upon deducting the royalty percentagepercentage corresponding to the royalty) exceeds the limits shall be property of 14.2. 1, distribution among the Parties will use in the proportion resulting from the application of the R factor factor, as set out hereunder.follows:
14.2.2.1 lf liquid Hydrocarbons If the Hydrocarbon reaching in the first reach place the limit set out forth in numeral paragraph 14.2.1 hereofof this Clause was liquid Hydrocarbon, the following table shall applywill be applied: SWORN TRANSLATION No.30154/Err R FACTOR PRODUCTION DISTRIBUTION DISTRIBUTIONS AFTER ROYALTIES (%) % ASSOCIATE ECOPETROL 0.0 - 1.0 50 to 1.050 50 1.0 - 2.0 50/R 100-50/R 2.0 or more 25 75 14.2.2.2 lf gaseous Hydrocarbons first reach the limit set out in numeral 14.2.1 hereof, the following table shall apply- R FACTOR PRODUCTION DISTRIBUTION AFTER ROYALTIES ASSOCIATE ECOPETROL 0.0 - 1.0 50 50 1.0 - 2.0 50to 2.050/R 100-50/R 2.0 or more 25 75
14.2.2.2 If the Hydrocarbon reaching in first place the limit stated in paragraph 14.2.1 of this Clause was the gaseous Hydrocarbon, the following table will be applied: R FACTOR PRODUCTION DISTRIBUTIONS AFTER ROYALTIES % ASSOCIATE ECOPETROL 0.0 to 2.050 50 2.0 to 3.050/(R-1) 100- [50/(R-1)] 3.0 or more 25 75
14.2.3 The For the purposes of the preceding tables, R factor is Factor shall be defined as the ratio between accrued of the income and accrued disbursements made by accumulated over the corresponding accumulated expenses corresponding to THE ASSOCIATE for each Commercial Field, as followsField under the following terms: IA R = ------------------- IA --------- ID+A-B+GO Where: 1A (The Associates Accrued lncome)- is the valuation of income accrued by THE ASSOCIATE for hydrocarbons produced, after royalties, at the reference price agreed by the Parties, excluding hydrocarbons reinjected in Contract Area Fields, and those consumed in the operation and burnt gas. The parties shall jointly establish the average reference price for hydrocarbons. Accrued lncome will be based on the Monthly lncome which, in turn, will be obtained from multiplying the average monthly reference price by the monthly production in keeping with respective form issued by the Ministry of Mines & Energy.
A. Direct Exploration Costs incurred by THE ASSOCIATE according to Clause hereof and ▇▇▇▇▇▇ed as set out in the paragraph of 9.
B. Accrued reimbursement of the afore-mentioned Direct Exploration Costs, in keeping with Clause 9 hereof. GO (Accrued Operating Expenses)-. accrued operating expenses approved by the Association Executive Committee, in the proportion corresponding to the ASSOCIATE plus the latter's accrued transportation costs. Transportation costs are investment and operating expenses for transporting hydrocarbons produced in the Commercial Fields within the Contract Area up to the exportation port or the place agreed for taking the price to be used in the 1A calculation. Such transportation costs will be jointly determined by the parties once the Fields that ECOPETROL has declared to be commercial initiate the exploitation stage. Operating expenses include special levies or similar items directly applied to Hydrocarbon exploitation in the Contract Area. All values included in the R factor calculation following the exploitation start-up date established by the Ministry of Mines & Energy will be taken in current dollars. To this end, expenses in pesos shall be converted to dollars at the Market Representative Rate certified by the Banking Superintendency, or entity replacing same, in force on the date the respective disbursements were made.:
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