Production Incentive Sample Clauses

Production Incentive. For each twelve month period, the production incentive will be the greatest of the following: (i) For every Barrel of oil produced in excess of sixteen decimal four two five (16.425) million Barrels in said twelve month period, the ▇▇▇▇▇▇ Operator will pay to the Contractor the sum of [***]; or (ii) The ▇▇▇▇▇▇ Operator will pay to the Contractor a production incentive for gas. In Gas FHR Regime, the production incentive for gas will be divided into a windfall element and a performance-based element: a) The windfall element of the production incentive ("Windfall Incentive") will be payable for gas produced in excess of (100/110)% of the Functional Specification. Incentive gas will be calculated as MMscf produced in the month in excess of the (100/110)% of the Functional Specification times days in the month and will be converted to excess equivalent barrels using the average GOR for the month (e.g. if average gas produced in a 30-day month is 5 MMscf/d in excess of (100/110)% of Functional Specification, and average GOR for the month is 3000 scf/stb, then Windfall Incentive is 5,000,000 / 3000 * [***]). Whatever the actual GOR, the GOR to be used for the calculation will be capped at 5000 scf/stb. Windfall Incentive will be payable at the reduced rate of [***]. Monthly Windfall Incentive payment will not exceed [***]. b) A performance element of the production incentive ("Performance Incentive") will also be paid, calculated in part on a monthly basis, and in part on an annual basis. Monthly and annual thresholds for the Performance Incentive will be based upon Gas Production Efficiency. The threshold for payment of the performance element of the production incentive will be when Gas Production Efficiency is equal to Y%. Y shall be 92% for the monthly Performance Incentive and 91% for the annual Performance Incentive. The Performance Incentive will be payable as: Performance Incentive ($) = (Gas Production Efficiency (%)-Y%) × Z where Z is one half of the Hire Rate. A monthly calculation shall be made with Y having a value of 92%, and the Performance Incentive shall be payable for each day of the month in question for which the Target Gas Rate is greater than zero. Contractor may elect either to receive payment when submitting the billing for the relevant month or to retain entitlement to payment of the monthly Performance Incentive earned until the Annual Reconciliation. If the Contractor elects to retain the Performance Incentive for any month, the Contra...