Common use of Production Handling Clause in Contracts

Production Handling. Newfield, subject to capacity limitations of the facilities located on Apache's Platform, shall have the option, but not the obligation, to process its Contract Area production through Apache's existing production handling facilities located on the Platform, under the terms of a mutually acceptable production handling agreement which shall incorporate, among other provisions, processing and handling rates of $.15/mcf for gas, $1.00/bbl for oil and condensate, $1.00/bbl for water, and $.05/mcf per stage of compression, if available and a monthly contract operating fee of $10,000.00 for the first well and $5,000.00 for each additional well for a manned -facility or $12,500.00 for the first well and $5,000.00 for each additional well for an unmanned facility (collectively "Fees"). In any month in which there is production from the Contract Area, if the Fees do not equal or exceed fifteen thousand dollars ($15,000.00) in any calendar month, then a minimum fee of fifteen thousand dollars ($15,000.00) shall be charged to Newfield in lieu of fees based upon throughput for such month, regardless of actual throughput. In any month in which there is no production from the Contract Area, the minimum monthly fee shall not exceed ten thousand dollars ($10,000.00). The Fees shall be adjusted on the first day of April of each year by multiplying the rate currently in use by the percentage increase in the average weekly earnings of Crude Petroleum and Gas Production Workers for the last calendar year compared to the calendar year preceding as shown by the index of average weekly earnings of Crude Petroleum and Gas Production Workers as published by the United States Department of Labor, Bureau of Labor Statistics. The increase in the Fees will be prorated to the date of initial production during the first year of operation. Notwithstanding the above, in the event Apache determines in its sole judgment that it is uneconomic to continue to process Newfield's production at Apache's production facilities, then Apache may discontinue the production handling services upon sixty (60) days written notice to Newfield and the parties will attempt to negotiate a sale or platform sublease agreement to allow continued Contract Area production.