Common use of Standards for Redetermination Clause in Contracts

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)2.2(f), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesCredit Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Credit Parties as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Credit Parties and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have receivedreceived (or the Administrative Agent shall have otherwise agreed on the timing of the delivery of), at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by valuePV10) of the Proven Reserves and as evaluated in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedmost recently delivered Engineering Report, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by valuePV10) of the Proven Reserves as evaluated in the most recently delivered Engineering Report and in at least 90% (by PV10) of the Oil and Gas Properties relating theretoPDP Reserves as evaluated in the most recently delivered Engineering Report. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination (such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders. If, however, the Administrative Agent and the Lenders or the Required Lenders, as applicable, have not approved the Borrowing Base in accordance with the preceding sentence, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to the number of Lenders sufficient to constitute the Required Lenders for purposes of this Section 2.2 and, so long as such amount does not increase the Borrowing Base then in effect, such amount shall become the new Borrowing Base.

Standards for Redetermination. The Borrowing Base will be redetermined in accordance with this Section 2.03 on a semi-annual basis on each April 1st and October 1st, commencing with April 1, 2021. Each redetermination of the Borrowing Base by the Administrative Agent and the Revolving Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Revolving Lenders (but in accordance with the other provisions of this Section 2.02(dclause (e)), (ii) in accordance with the Administrative Agent’s and the Revolving Lenders’ usual and customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Reserve Report, as applicable, or other information received by the Administrative Agent and the Revolving Lenders relating to the Proven Reserves Proved Hydrocarbon Interests of the Borrower Borrowers and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves Proved Hydrocarbon Interests owned by the Borrower Borrowers and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Revolving Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Revolving Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower Borrowers and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Revolving Lenders customarily deem appropriateappropriate as part of their oil and gas lending criteria, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges Borrowers acknowledge that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Revolving Lenders. No Proven Reserves Subject to the last sentence of Section 5.18(a), to the extent a Proved Hydrocarbon Interest is not encumbered by an Acceptable Security Interest, such Proved Hydrocarbon Interest shall not be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent an Acceptable Security Interest thereon would be necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by value) of the Proven Reserves Proved Hydrocarbon Interests and the Oil and Gas Properties relating theretothereto (i.e., the positive difference, if any, between 90% (by value) of the Proved Hydrocarbon Interests and the Oil and Gas Properties relating thereto and the percentage (by value) of such Proved Hydrocarbon Interests that are or will be substantially contemporaneously with such redetermination of the Borrowing Base encumbered by an Acceptable Security Interest). At all times after the Administrative Agent has given the Borrower Borrowers notification of a redetermination of the Borrowing Base under this Section 2.02Section, the Borrowing Base shall be equal to the redetermined amount or such lesser amount irrevocably designated by the Borrower Borrowers in their sole discretion and disclosed in writing to the Administrative Agent and the Revolving Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02Section; provided that the Borrowers shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency (without giving effect to the proviso in the definition thereof). Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Supermajority Revolving Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Revolving Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower Parent and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower Parent and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower Parent and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges Borrowers acknowledge that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s Borrowers’ expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) pursuant to the Security Instruments. If Borrower Representative has not, within 10 days of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by Borrower Representative’s receipt from the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.02 provided the Administrative Agent with written notice designating a lesser amount as the Borrowing Base, the Borrowing Base shall, effective on the 11th day after the Borrower Representative’s receipt of such notification regarding the Borrowing Base redetermination, be equal to the redetermined amount in such notice provided by the Administrative Agent, or if the Borrower Representative has provided notice to the Administrative Agent requesting a lesser amount for the Borrowing Base, the Borrowing Base shall be equal to the redetermined amount or established at such lesser amount designated by effective on the date the Borrower Representative gives such request and disclosed shall, in writing to the Administrative Agent and the Lenders either case, remain effective until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)2.2(f), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesCredit Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Credit Parties as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Credit Parties and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have receivedreceived (or the Administrative Agent shall have otherwise agreed on the timing of the delivery of), at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by valuePV10) of the Proven Reserves and as evaluated in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedmost recently delivered Engineering Report, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by valuePV10) of the Proven Reserves and as evaluated in the Oil and Gas Properties relating theretomost recently delivered Engineering Report. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination (except in the case of the automatic increases provided for in Section 2.2(d), such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders. If, however, the Administrative Agent and the Lenders or the Required Lenders, as applicable, have not approved the Borrowing Base in accordance with the preceding sentence, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to the number of Lenders sufficient to constitute the Required Lenders for purposes of this Section 2.2 and, so long as such amount does not increase the Borrowing Base then in effect, such amount shall become the new Borrowing Base.

Standards for Redetermination. Each redetermination of the Borrowing Base made by the Administrative Agent and the Required Lenders or Supermajority Lenders, as applicable, pursuant to this Section 2.02 2.10 shall be made (i) in the sole discretion of the Administrative Agent and the Required Lenders or Supermajority Lenders, as applicable (but in accordance with the other provisions provision of this Section 2.02(d2.10(f)), (ii) in accordance with the Administrative Agent’s and the Required Lenders’ ' or Supermajority Lenders' customary internal standards and practices for valuing and redetermining the value of Oil oil and Gas Properties gas properties in connection with reserve based oil and gas loan transactions, (iii) in good faith, (iv) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, Reports or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, Borrowers and (ivv) based upon the estimated value of the Petroleum and Natural Gas Rights (including both Proven Producing Reserves and Proven Non-Producing Reserves) owned or to be acquired concurrently by the Borrowers; provided, however, that, in valuing Proven Reserves owned by of the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and Borrowers for purposes of redetermining the Borrowing Base, the Administrative Agent and the Required Lenders may also consider the businessor Supermajority Lenders, financial conditionas applicable, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regardagree to use customary industry pricing assumptions; provided further, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value)however, which is essential for the adequate protection of the Administrative Agent and the Lenders. No no Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless (1) such Proven Reserves are (or will become simultaneously with an Advance hereunder) Collateral; and (2) unless otherwise agreed, the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title received a reasonably satisfactory in form and substance title opinion or other evidence reasonably satisfactory to the Required Lenders that the Administrative Agent covering at least 80% (by value) of has a valid, first priority Lien on the Proven Reserves Petroleum and the Oil and Natural Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedRights FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties PAGE 32 39 relating thereto. At all times after the Administrative Agent has Borrowers have been given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02Base, the Borrowing Base shall be equal to the amount thereof as so subsequently redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.022.10.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) pursuant to the Security Instruments. If Borrower has not, within 10 days of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by Borrower's receipt from the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.02 provided the Administrative Agent with written notice designating a lesser amount as the Borrowing Base, the Borrowing Base shall, effective on the 11th day after the Borrower's receipt of such notification regarding the Borrowing Base redetermination if no request has been provided by the Borrower for a lesser Borrowing Base amount, be equal to the redetermined amount in such notice provided by the Administrative Agent, or if the Borrower has provided notice to the Administrative Agent requesting a lesser amount for the Borrowing Base, the Borrowing Base shall be equal to the redetermined amount or established at such lesser amount designated by effective on the date the Borrower gives such request and disclosed shall, in writing to the Administrative Agent and the Lenders either case, remain effective until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Technical Agent and the Majority Lenders pursuant to this Section 2.02 ARTICLE 3 shall be made (i) in the sole discretion of the Administrative Technical Agent and the Majority Lenders (but in accordance with the other provisions of this Section 2.02(d)3.4), (ii) in accordance with the Administrative Technical Agent’s and the Majority Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties Hydrocarbon Interests in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserves Report or Internal Engineering Report, Reserves Report (as applicable, ) or other information received by the Administrative Technical Agent and the Lenders or any Lender relating to the Proven Hydrocarbon Interests, the Proved Reserves of the Borrower and its Subsidiaries, production relating thereto and (iv) based upon the estimated value Present Value pursuant to the terms of the Proven Reserves owned by the Borrower and its Subsidiaries Hydrocarbon Licenses as determined by the Administrative Technical Agent and the Majority Lenders. In valuing and redetermining the Borrowing Base, the Administrative Technical Agent and the Majority Lenders may also consider the business, financial condition, and Debt obligations Indebtedness of the Borrower Borrowers and its Subsidiaries any of their Subsidiaries, any Hydrocarbon Hedge Agreements and such other factors as the Administrative Technical Agent and the Majority Lenders customarily deem appropriate, and shall be satisfied that the Present Value is at least equal to 125% of the projected future net cash flows attributable to Proved Developed Producing Reserves at such time and that such projected future net revenues will be sufficient to meet scheduled payments of principal, interest and fees under this Agreement and the other Loan Documents as and when they become due. In that regard, the Borrower acknowledges Borrowers acknowledge that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Technical Agent and the Lenders. No Proven Proved Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Technical Agent shall have received, at the Borrower’s Borrowers’ expense, (A) Security Documents, filings, legal opinions and such other appropriate documentary evidence of title reasonably satisfactory in form and substance to the Administrative Technical Agent covering at least 80% (by value) confirming the existence of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable a Security Interest in at least 80% (by value) of the Proven Reserves Hydrocarbon Licenses and the Oil and Gas Properties relating theretoHydrocarbon Interests pertaining thereto (to the fullest extent permissible under the laws of Turkey). At all times after the Administrative Technical Agent has given the Borrower Borrowers notification of a redetermination of the Borrowing Base under this Section 2.02ARTICLE 3, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently again redetermined in accordance with this Section 2.02ARTICLE 3.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders Banks pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders Banks (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s Agent and the Lenders’ Banks' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders Banks relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the LendersBanks. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders Banks may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders Banks customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the LendersBanks. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Banks shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoDocuments. At all times after the Administrative Agent Bank has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders Banks until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoaccordance with Section 5.13. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)2.2(d), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesCredit Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Credit Parties as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Credit Parties and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, Liens, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have receivedreceived (or the Administrative Agent shall have otherwise agreed on the timing of the delivery of), at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 8085% (by valueof PV10) of each of the Proven Reserves and PDP Reserves evaluated in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedmost recently delivered Engineering Report, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8085% (by value) of PV10 of each of the Proven Reserves and PDP Reserves (or 100% of PV10 of each the Oil Proven Reserves and Gas Properties relating theretoPDP Reserves if any Event of Default is continuing for more than 30 days) evaluated in the most recently delivered Engineering Report. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders. If, however, the Administrative Agent and the Lenders or the Required Lenders, as applicable, have not approved the Borrowing Base in accordance with the preceding sentence, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to the number of Lenders sufficient for purposes of this Section 2.2 and, so long as such amount does not increase the Borrowing Base then in effect, such amount shall become the new Borrowing Base.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has, to the extent required hereunder, an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.2(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesCredit Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Credit Parties as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Credit Parties and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedthereto, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.2(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Reserve Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesLoan Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Loan Parties as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Loan Parties and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least (x) prior to the Post-Closing Deadline, 70% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto, and (y) thereafter 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedthereto, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders. If, however, the Administrative Agent and the Lenders or the Required Lenders, as applicable, have not approved the Borrowing Base in accordance with the preceding sentence, then the Administrative Agent shall, as soon as practicable, poll the Lenders to ascertain the highest Borrowing Base then acceptable to all of the Lenders and such amount shall become the new Borrowing Base; provided that if less than all of the Lenders agree to a proposed Borrowing Base greater than the Borrowing Base then in effect, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base (which, for clarification, may be no higher than the Borrowing Base then in effect) acceptable to the number of Lenders sufficient to constitute the Required Lenders for purposes of this Section 2.2 and such amount shall become the new Borrowing Base.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Subject to the last sentence of Section 5.08(a), to the extent a Proven Reserves Reserve is not encumbered by an Acceptable Security Interest, such Proven Reserve shall not be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent an Acceptable Security Interest thereon would be necessary to cause the Administrative Agent to have an Acceptable Security Interest in (x) at least 8090% (by value) or, to the extent requested by the Administrative Agent, 95% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto, (y) 90% (by value) or, to the extent requested by the Administrative Agent, 95% (by value) of the Loan Parties’ other Oil and Gas Properties, and (z) 100% (by value) of the Original Mortgaged Properties (other than such Original Mortgaged Properties which are Disposed of as permitted under Section 6.04(c)). At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency (without giving effect to the proviso in the definition thereof). Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Restricted Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Restricted Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Restricted Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and (or in the case of the initial Borrowing Base set on the Effective Date, at least 8070% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto thereto), and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8085% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal (i) to the redetermined amount or (ii) such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders Lenders, provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency, until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination Redetermination of the Maximum Borrowing Base by the Administrative Agent and the Lenders Banks made pursuant to this Section 2.02 Article V shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d))Banks, (ii) generally in accordance with the Administrative Agent’s and the Lenders’ each such Bank's then current practices, customary internal standards and practices procedures used by each such Bank for its petroleum industry customers for valuing and redetermining the value of Oil oil and Gas Properties gas properties in connection with reserve based on oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Reserve Report, as applicable, Reserve Update or other information received by the Administrative Agent and the Lenders each Bank and deemed reliable by Administrative Agent and each Bank (in their sole discretion) relating to the Proven Reserves of Borrower in the Borrower and its SubsidiariesMineral Interests of Borrower, which secure the Loan (to the extent required by Section 6.1 hereof), and (iv) based upon the estimated value of the Proven Reserves owned by Borrower in the Mineral Interests of Borrower and its Subsidiaries which secure the Loan (to the extent required by Section 6.1 hereof) as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing BaseRequired Banks; provided, the Administrative Agent and the Lenders may also consider the businesshowever, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No no Proven Reserves shall be included or considered for inclusion in the Maximum Borrowing Base unless (A) such Proven Reserves are (or will become simultaneously with a Borrowing hereunder) Collateral (to the extent required by Section 6.1 hereof), and (B) Administrative Agent and each Bank shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Required Banks that Administrative Agent covering at least 80% (by valuefor the ratable benefit of Banks) of the has a perfected, first priority Lien (except for Permitted Encumbrances) on such Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (required by value) of the Proven Reserves and the Oil and Gas Properties relating theretoSection 6.1. At all times after the Administrative Agent has given the Borrower notification of a redetermination Redetermination of the Maximum Borrowing Base under this Section 2.02Article V, the Maximum Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Maximum Borrowing Base is subsequently redetermined in accordance with this Article V subject, however, to reduction pursuant to Section 2.0210.10(ii).

Standards for Redetermination. Each redetermination determination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.8 shall be made (ia) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)2.8.11), (iib) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iiic) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Proved Reserves of the Borrower Borrowers and its their respective Subsidiaries, and (ivd) based upon the estimated value of the Proven Proved Reserves owned by the Borrower Borrowers and its their respective Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower Borrowers and its their respective Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the each Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven In no event shall the value of Proved Reserves shall be included or considered for inclusion in the Borrowing Base unless and as to which the Amended and Restated First Lien Credit Agreement Administrative Agent shall and the Lenders have received, at the Borrower’s expense, (A) not received evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80Agent, exceed 20% (by value) of the Proven all Proved Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and included or considered for inclusion in such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02Base.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Revolving Lenders pursuant to this Section 2.02 2.3 shall be made (i) in the sole discretion of the Administrative Agent and the Revolving Lenders (but in accordance with the other provisions of this Section 2.02(d2.3(d)), (ii) in accordance with the Administrative Agent’s and the Revolving Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Revolving Lenders relating to the Proven Reserves of the Borrower Company and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower Company and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Revolving Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Revolving Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower Company and its Subsidiaries Guarantors and such other factors as the Administrative Agent and the Revolving Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Revolving Lenders shall have received, at the BorrowerCompany’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least that the Administrative Agent has an Acceptable Security Interest in not less than 80% (by value) of the Proven Reserves and value of the Oil and Gas Properties relating thereto and at least 80% (by value) pursuant to the Security Instruments. If Company has not, within 10 days of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by Company’s receipt from the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.3 provided the Administrative Agent with written notice designating a lesser amount as the Borrowing Base, the Borrowing Base shall remain equal to the redetermined amount in such notice provided by the Administrative Agent, or, if the Company has provided notice to the Administrative Agent requesting a lesser amount for the Borrowing Base, the Borrowing Base shall be equal to the redetermined amount or established at such lesser amount designated by effective on the Borrower date the Company gives such request and disclosed shall, in writing to the Administrative Agent and the Lenders either case, remain effective until the Borrowing Base is subsequently redetermined in accordance with this Section 2.022.3.

Standards for Redetermination. (i) Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (iA) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (iiB) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iiiC) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, and (ivD) based upon the estimated discounted present value of the Proven estimated net cash flows to be realized from the production of Hydrocarbons from Proved Reserves attributable to Oil and Gas Properties owned by the Borrower and its Subsidiaries Restricted Subsidiaries, as reasonably determined by the Administrative Agent and the Lenders, and/or such other factors as the Administrative Agent and the Lenders may consider in their sole discretion. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the assets, liabilities, cash flows, business, financial conditionproperties, prospects, and Debt obligations management of the Borrower and its Restricted Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily reasonably deem appropriate. In that regard, No Proved Reserves of the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves or any Restricted Subsidiary shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title Oil and Gas Title Information reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of and evidence that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoDocuments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02. It is expressly understood and agreed that the Administrative Agent and Lenders have no obligation to designate the Borrowing Base at any particular amount, except in the exercise of their discretion, whether in relation to the Total Commitments or otherwise.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Subsidiary Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Subsidiary Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Restricted Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the PV-10 of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedthereto, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by value) of the PV-10 of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal (i) to the redetermined amount or (ii) such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders Lenders, provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency, until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. The Borrowing Base will be redetermined in accordance with this Section 2.03 on a semi-annual basis on each April 1st and October 1st, commencing with April 1, 2021. Each redetermination of the Borrowing Base by the Administrative Agent and the Revolving Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Revolving Lenders (but in accordance with the other provisions of this Section 2.02(dclause (e)), (ii) in accordance with the Administrative Agent’s and the Revolving Lenders’ usual and customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Reserve Report, as applicable, or other information received by the Administrative Agent and the Revolving Lenders relating to the Proven Reserves Proved Hydrocarbon Interests of the Borrower Borrowers and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves Proved Hydrocarbon Interests owned by the Borrower Borrowers and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Revolving Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Revolving Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower Borrowers and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Revolving Lenders customarily deem appropriateappropriate as part of their oil and gas lending criteria, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges Borrowers acknowledge that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Revolving Lenders. No Proven Reserves Subject to the last sentence of Section 5.18(a), to the extent a Proved Hydrocarbon Interest is not encumbered by an Acceptable Security Interest, such Proved Hydrocarbon Interest shall not be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent an Acceptable Security Interest thereon would be necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least eighty percent (80% %) (by value) of the Proven Reserves Proved Hydrocarbon Interests and the Oil and Gas Properties relating theretothereto (i.e., the positive difference, if any, between eighty percent (80%) (by value) of the Proved Hydrocarbon Interests and the Oil and Gas Properties relating thereto and the percentage (by value) of such Proved Hydrocarbon Interests that are or will be substantially contemporaneously with such redetermination of the Borrowing Base encumbered by an Acceptable Security Interest). At all times after the Administrative Agent has given the Borrower Borrowers notification of a redetermination of the Borrowing Base under this Section 2.02Section, the Borrowing Base shall be equal to the redetermined amount or such lesser amount irrevocably designated by the Borrower Borrowers in their sole discretion and disclosed in writing to the Administrative Agent and the Revolving Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02Section; provided that the Borrowers shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency (without giving effect to the proviso in the definition thereof). Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Supermajority Revolving Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Revolving Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Restricted Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 8090% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and (or in the case of the initial Borrowing Base set on the Effective Date, at least 8065% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto until as otherwise required under Section 5.10), and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal (i) to the redetermined amount or (ii) such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders Lenders, provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency, until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.. 33

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered HOUSTON\2067330.8 -26- for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and with the Lenders consent of the Required Banks pursuant to this Section 2.02 2.19 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders Required Banks, (but ii) generally in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ Required Banks' customary internal standards and practices for valuing and redetermining the value of Oil oil and Gas Properties gas properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesCompanies, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Companies as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing BaseRequired Banks; provided, the Administrative Agent and the Lenders may also consider the businesshowever, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No no Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless (A) on the Administrative Closing Date at least 80% of the value of such Proven Reserves are Collateral and thereafter at least 75% of the value of such Proven Reserves are (or will become simultaneously with a Loan hereunder) Collateral, provided that if at any time less than 75% of the value of such Proven Reserves are Collateral the Borrower shall grant or cause to be granted to the Agent Liens pursuant to additional mortgages so that at least 80% of the value of such Proven Reserves are Collateral, and (B) the Agent shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering that the Agent has a perfected, first priority Lien (except for Permitted Liens) on at least 80% (by value) of the Proven Reserves and attributable to the Oil and Gas Properties relating thereto and pursuant to the Security Documents. The Majority Banks may at least 80% (by value) of any time require the Proven Reserves categorized as “proved, developed and producing” and Borrower to provide Mortgages on the Companies' Oil and Gas Properties related thereto and (B) that are not then mortgaged hereunder, whereupon the Borrower shall provide such Mortgages and such other Security Instruments requested by the Administrative Agent related title opinions, all in form and substance satisfactory to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoAgent. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.19, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this on Section 2.022.19.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Tier I Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Tier I Lenders (but in accordance with the other provisions of this Section 2.02(d2.2(d)), (ii) in accordance with the Administrative Agent’s 's and the Tier I Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Reserve Report, as applicable, or other information received by the Administrative Agent and the Tier I Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesLoan Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Loan Parties as determined by the Administrative Agent and the Tier I Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Tier I Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Loan Parties and such other factors as the Administrative Agent and the Tier I Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Tier I Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least (x) 95% (by value) of the PDP Reserves and the Oil and Gas Properties relating thereto or (y) 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedthereto, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8095% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Tier I Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2 and Section 5.12; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Tier I Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Tier I Lenders. If, however, the Administrative Agent and the Tier I Lenders or the Required Tier I Lenders, as applicable, have not approved the Borrowing Base in accordance with the preceding sentence, then the Administrative Agent shall, as soon as practicable, poll the Tier I Lenders to ascertain the highest Borrowing Base then acceptable to all of the Tier I Lenders and such amount shall become the new Borrowing Base; provided that if less than all of the Tier I Lenders agree to a proposed Borrowing Base greater than the Borrowing Base then in effect, then the Administrative Agent shall poll the Tier I Lenders to ascertain the highest Borrowing Base (which, for clarification, may be no higher than the Borrowing Base then in effect) acceptable to the number of Tier I Lenders sufficient to constitute the Required Tier I Lenders for purposes of this Section 2.2 and such amount shall become the new Borrowing Base.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.10 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.10(d)), (ii) in accordance with the Administrative Agent’s Agent and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the any Borrower and its Subsidiariesor Guarantor, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower Borrowers and its Subsidiaries Guarantors and pledged as collateral security for the Obligations as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries Borrowers and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, each of the Borrower Borrowers acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s Borrowers' expense, (Ai) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of pursuant to the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto Security Instruments and (Bii) Mortgages and such other Security Instruments requested by title opinions meeting the Administrative Agent requirements of Section 5.5(a) (or, prior to 30 days from the extent necessary date this Agreement becomes effective, title materials sufficient to cause satisfy the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) requirements of the Proven Reserves and the Oil and Gas Properties relating theretoSection 3.1(j)). At all times after the Administrative Agent has given the Borrower Borrowers notification of a redetermination of the Borrowing Base under this Section 2.022.10, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by each of the Borrower Borrowers and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.022.10.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base each contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by evidence satisfactory to the Administrative Agent to the extent necessary to cause that the Administrative Agent to have has an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Borrowing Base Properties relating theretothereto pursuant to the Security Instruments and subject to Section 5.10 of this Agreement. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is are subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves (other than any Proven Reserves attributable to any DrillCo Excluded Property) owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 8085% (by value) (and from and after February 10, 2016 at least 95% (by value)) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative either Agent to the extent necessary to cause the Administrative Collateral Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoRequired Mortgage Percentage. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the ----------------------------- Borrowing Base Bases by the Administrative Agent Agents and the Lenders Banks pursuant to this Section 2.02 2.05 shall be made (i) in the sole discretion of the Administrative Agent Agents and the Lenders Banks (but in accordance with the other provisions of this Section 2.02(d2.05(d)), (ii) in accordance with the Administrative Agent’s Agents' and the Lenders’ Banks' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent Agents and the Lenders Banks relating to the Proven Reserves of the Borrower Borrowers and its Subsidiariesthe other Obligors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower Borrowers and its Subsidiaries the other Obligors as determined by the Administrative Agent Agents and the LendersBanks. In valuing and redetermining the Borrowing BaseBases, the Administrative Agent Agents and the Lenders Banks may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower Borrowers and its Subsidiaries the other Obligors and such other factors as the Administrative Agent Agents and the Lenders Banks customarily deem appropriate. In that regard, the Borrower acknowledges Borrowers acknowledge that the determination of the Borrowing Base Bases contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent Agents and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoBanks. At all times after the Administrative Agent has Agents have given the Borrower Borrowers notification of a redetermination of the Borrowing Base Bases under this Section 2.022.05, the Borrowing Base Bases shall be equal to the redetermined amount amounts or such lesser amount amounts designated by the Borrower Borrowers and disclosed in writing to the Administrative Agent Agents and the Lenders Banks until the Borrowing Base is Bases are subsequently redetermined in accordance with this Section 2.022.05.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower CRC (and, if Contango shall have acquired any Oil and its SubsidiariesGas Properties, Contango), and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower CRC (and, if Contango shall have acquired any Oil and its Subsidiaries Gas Properties, Contango) as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower Borrowers and its their respective Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the each Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves of CRC’s (and, if Contango acquires any Oil and Gas Properties, Contango’s) Oil and Gas Properties shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expenseexpense and only to the extent required hereunder, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower Representative notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower Representative and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.2(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating including but not limited to the Proven Proved Reserves of the Borrower and its SubsidiariesBorrower, and (iv) based upon the estimated value of the Proven Proved Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Proved Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 8090% (by value) of the Proven Proved Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by value) of the Proven Proved Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.022.2; provided that Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base deficiency. Notwithstanding anything herein to the contrary, (x) other than for the mandatory reduction provided in Section 2.2(e) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be Approved by Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be Approved by Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base, the Conforming Borrowing Base and the Monthly Borrowing Base Reduction Amount by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Conforming Borrowing Base and the Monthly Borrowing Base Reduction Amount, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base and the Conforming Borrowing Base each contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in either the Borrowing Base or the Conforming Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by evidence satisfactory to the Administrative Agent to the extent necessary to cause that the Administrative Agent to have has an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal Properties relating thereto pursuant to the redetermined amount or such lesser amount designated by the Borrower Security Instruments and disclosed in writing subject to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.5.10

Standards for Redetermination. Each redetermination of the Borrowing Base and the Conforming Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base and the Conforming Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base and the Conforming Borrowing Base each contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in either the Borrowing Base or the Conforming Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by evidence satisfactory to the Administrative Agent to the extent necessary to cause that the Administrative Agent to have has an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Borrowing Base Properties relating theretothereto pursuant to the Security Instruments and subject to Section 5.10 of this Agreement. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base and the Conforming Borrowing Base under this Section 2.02, the Borrowing Base and the Conforming Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is and the Conforming Borrowing Base are subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base each contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of and evidence satisfactory to the Proven Reserves and Administrative Agent that the Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of pursuant to the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent and subject to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) Sections 5.10 and 5.11 of the Proven Reserves and the Oil and Gas Properties relating theretothis Agreement. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is are subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Subject to the last sentence of Section 5.08(a), to the extent a Proven Reserves Reserve is not encumbered by an Acceptable Security Interest, such Proven Reserve shall not be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent an Acceptable Security Interest thereon would be necessary to cause the Administrative Agent to have an Acceptable Security Interest in (x) at least 8090% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto, (y) 90% (by value) of the Loan Parties’ other Oil and Gas Properties, and (z) 100% (by value) of the Original Mortgaged Properties (other than such Original Mortgaged Properties which are Disposed of as permitted under Section 6.04(c)). At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency (without giving effect to the proviso in the definition thereof). Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. The Borrowing Base will be redetermined in accordance with this Section 2.03 on a semi-annual basis on each April 1st and October 1st, commencing with April 1, 2021. Each redetermination of the Borrowing Base by the Administrative Agent and the Revolving Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Revolving Lenders (but in accordance with the other provisions of this Section 2.02(dclause (e)), (ii) in accordance with the Administrative Agent’s and the Revolving Lenders’ usual and customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Reserve Report, as applicable, or other information received by the Administrative Agent and the Revolving Lenders relating to the Proven Reserves Proved Hydrocarbon Interests of the Borrower Borrowers and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves Proved Hydrocarbon Interests owned by the Borrower Borrowers and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Revolving Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Revolving Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower Borrowers and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Revolving Lenders customarily deem appropriateappropriate as part of their oil and gas lending criteria, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges Borrowers acknowledge that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Revolving Lenders. No Proven Reserves Subject to the last sentence of Section 5.18(a), to the extent a Proved Hydrocarbon Interest is not encumbered by an Acceptable Security Interest, such Proved Hydrocarbon Interest shall not be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent an Acceptable Security Interest thereon would be necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by value) of the Proven Reserves Proved Hydrocarbon Interests and the Oil and Gas Properties relating theretothereto (i.e., the positive difference, if any, between 90% (by value) of the Proved Hydrocarbon Interests and the Oil and Gas Properties relating thereto and the percentage (by value) of such Proved Hydrocarbon Interests that are or will be substantially contemporaneously with such redetermination of the Borrowing Base encumbered by an Acceptable Security Interest). At all times after the Administrative Agent has given the Borrower Borrowers notification of a redetermination of the Borrowing Base under this Section 2.02Section, the Borrowing Base shall be equal to the redetermined amount or such lesser amount irrevocably designated by the Borrower Borrowers in their sole discretion and disclosed in writing to the Administrative Agent and the Revolving Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02Section; provided that the Borrowers shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency (without giving effect to the proviso 41 in the definition thereof). Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Supermajority Revolving Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Revolving Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesRestricted Subsidiaries (it being agreed that only such pro-rated amounts of the Proven Reserves of Orion which are attributable to the Borrower’s equity ownership therein shall be considered in calculating the Borrowing Base), and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Restricted Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Restricted Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and (or in the case of the initial Borrowing Base set on the Effective Date, at least 8070% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto thereto), and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8085% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal (i) to the redetermined amount or (ii) such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders Lenders, provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency, until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base each contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by evidence satisfactory to the Administrative Agent to the extent necessary to cause that the Administrative Agent to have has an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Borrowing Base Properties relating theretothereto pursuant to the Security Instruments and subject to Sections 5.10 and 5.11 of this Agreement. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is are subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.10 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.10(d)), (ii) in accordance with the Administrative Agent’s Agent and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesany Borrower, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower Borrowers and its Subsidiaries pledged as collateral security for the Obligations as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries Borrowers and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, each of the Borrower Borrowers acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s Borrowers' expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower Borrowers notification of a redetermination of the Borrowing Base under this Section 2.022.10, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by each of the Borrower Borrowers and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.022.10.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base and the Conforming Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the LendersLenders and which are subject to an Acceptable Security Interest. In valuing and redetermining the Borrowing Base and the Conforming Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base and the Conforming Borrowing Base each contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in either the Borrowing Base or the Conforming Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of pursuant to the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent (and, to the extent necessary required by Section 5.10, title evidence satisfactory to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoAgent). At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base and the Conforming Borrowing Base under this Section 2.02, the Borrowing Base and the Conforming Borrowing Base each shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is and the Conforming Borrowing Base are each subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Tier I Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Tier I Lenders (but in accordance with the other provisions of this Section 2.02(d2.2(d)), (ii) in accordance with the Administrative Agent’s 's and the Tier I Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Reserve Report, as applicable, or other information received by the Administrative Agent and the Tier I Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesLoan Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Loan Parties as determined by the Administrative Agent and the Tier I Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Tier I Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Loan Parties and such other factors as the Administrative Agent and the Tier I Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Tier I Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least (x) 95% (by value) of the PDP Reserves and the Oil and Gas Properties relating thereto or (y) 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedthereto, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8090% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Tier I Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Tier I Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Tier I Lenders. If, however, the Administrative Agent and the Tier I Lenders or the Required Tier I Lenders, as applicable, have not approved the Borrowing Base in accordance with the preceding sentence, then the Administrative Agent shall, as soon as practicable, poll the Tier I Lenders to ascertain the highest Borrowing Base then acceptable to all of the Tier I Lenders and such amount shall become the new Borrowing Base; provided that if less than all of the Tier I Lenders agree to a proposed Borrowing Base greater than the Borrowing Base then in effect, then the Administrative Agent shall poll the Tier I Lenders to ascertain the highest Borrowing Base (which, for clarification, may be no higher than the Borrowing Base then in effect) acceptable to the number of Tier I Lenders sufficient to constitute the Required Tier I Lenders for purposes of this Section 2.2 and such amount shall become the new Borrowing Base.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02. Notwithstanding anything else to the contrary contained herein (A) consent of all the Lenders shall be required to increase the Borrowing Base, (B) the consent of the Required Lenders shall be required to decrease or maintain the Borrowing Base, and (C) until the Lenders or Required Lenders, as required above, consent to the redetermined Borrowing Base, the existing Borrowing Base shall remain in effect.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Subject to the last sentence of Section 5.08(a), to the extent a Proven Reserves Reserve is not encumbered by an Acceptable Security Interest, such Proven Reserve shall not be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent an Acceptable Security Interest thereon would be necessary to cause the Administrative Agent to have an Acceptable Security Interest in (x) at least 8095% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto, (y) 95% (by value) of the Loan Parties’ other Oil and Gas Properties, and (z) 100% (by value) of the Original Mortgaged Properties (other than such Original Mortgaged Properties which are Disposed of as permitted under Section 6.04(c)). At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency (without giving effect to the proviso in the definition thereof). Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Maximum ----------------------------- Borrowing Base by the Administrative Agent and the Lenders Lender made pursuant to this Section 2.02 SECTION 2.2 shall be made (i) ----------- in the sole discretion of the Administrative Agent and the Lenders Lender, (but ii) generally in accordance with the other provisions of this Section 2.02(d))Lender's then current practices, (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices procedures used by Lender for its petroleum industry customers for valuing and redetermining the value of Oil oil and Gas Properties gas properties in connection with reserve based on oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Reserve Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent Lender and deemed reliable by the Lenders Lender (in its sole discretion) relating to the Proven Reserves of the Borrower Borrowers in the Oil and its SubsidiariesGas Leases of the Borrowers which secure the Loans, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower Borrowers in the Oil and its Subsidiaries Gas Leases of the Borrowers which secure the Loans as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing BaseLender; provided, the Administrative Agent and the Lenders may also consider the businesshowever, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No no Proven Reserves shall be -------- ------- included or considered for inclusion in the Maximum Borrowing Base unless (A) 100% of such Proven Reserves are (or will become simultaneously with a Tranche A Revolving Loan hereunder) Collateral or are subject to a negative pledge in favor of the Administrative Agent Lender, and (B) the Lender shall have received, at the Borrower’s Borrowers' expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering Lender that the Lender has a perfected, first priority Lien (except for Permitted Liens) on at least 80% (by value) of the value of the Proven Reserves and attributable to the Oil and Gas Properties Mineral Interests relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoDocuments. At all times after the Administrative Agent Lender has given the Borrower Borrowers notification of a redetermination of the Maximum Borrowing Base under this Section 2.02SECTION 2.2, the Maximum Borrowing Base ----------- shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Maximum Borrowing Base is subsequently redetermined in accordance with this Section 2.02.SECTION 2.2 subject, however, ----------- to reduction pursuant to SECTION 5.2(j)(ii). ------------------

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including, without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (to the extent required by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedSection 5.10, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretothereto pursuant to the Security Instruments to the extent required by Section 5.08. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 2.2 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.2(d)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its SubsidiariesRestricted Credit Parties, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries Restricted Credit Parties as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Restricted Credit Parties and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least (i) prior to the date specified in Section 5.14, 65% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto, and (ii) after the date specified in Section 5.14, 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “provedthereto, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments Documents requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8085% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.022.2, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined or reduced in accordance with this Section 2.022.2; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion discretion, acting in good faith, of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance and consistent with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactionstransactions as they exist at such time, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Subsidiaries, the types of Proven Reserves, the value and effect of Hedge Contracts then in effect, the effect of Gas Imbalances and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause Security Instruments. For the Administrative Agent to have purpose of this Section 2.02(e), an Acceptable Security Interest in at least 80% (by value) the Equity Interest of the Joint Venture pursuant to the Guarantee and Collateral Agreement is deemed to be an Acceptable Security Interest in the Proven Reserves and of the Oil and Gas Properties relating theretoJoint Venture. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of COI (and, if Contango and/or CEC shall have acquired any Oil and Gas Properties, Contango and/or CEC, as the Borrower and its Subsidiariescase may be), and (iv) based upon the estimated value of the Proven Reserves owned by COI (and, if Contango and/or CEC shall have acquired any Oil and Gas Properties, Contango and/or CEC, as the Borrower and its Subsidiaries case may be) as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower Borrowers and its their respective Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the each Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves of COI’s (and, if Contango and/or CEC acquires any Oil and Gas Properties, Contango’s and/or CEC’s, as the case may be) Oil and Gas Properties shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expenseexpense and only to the extent required hereunder, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower Representative notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower Representative and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity a value cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves of the Borrower’s and its Subsidiaries’ Oil and Gas Properties shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 8085% (by PV I O value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 8085% (by PV I 0 value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02Any changes in, or renewals of, the Borrowing Base shall (other than increases in the Borrowing Base) must be equal consented to the redetermined amount or such lesser amount designated in writing by the Borrower and disclosed Required Lenders. Any increases in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined must be consented to in accordance with this Section 2.02writing by all the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion discretion, acting in good faith, of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance and consistent with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactionstransactions as they exist at such time, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries Subsidiaries, the types of Proven Reserves, the value and effect of Hedge Contracts then in effect, the effect of Gas Imbalances and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiariesthe Guarantors, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries the Guarantors as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt Indebtedness obligations of the Borrower and its Subsidiaries the Guarantors and such other factors as the Administrative Agent and the Lenders customarily deem appropriate, including without limitation, commodity price assumptions, projections of production, operating expenses, general and administrative expenses, capital costs, working capital requirements, liquidity evaluations, dividend payments, environmental costs, and legal costs. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 8085% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative either Agent to the extent necessary to cause the Administrative Collateral Agent to have an Acceptable Security Interest in at least 8085% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02; provided that the Borrower shall not request that the Borrowing Base be reduced to a level that would result in a Borrowing Base Deficiency. Notwithstanding anything herein to the contrary, (x) to the extent the redetermined Borrowing Base is less than or equal to the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and the Required Lenders, and (y) to the extent the redetermined Borrowing Base is greater than the Borrowing Base in effect prior to such redetermination, such redetermined Borrowing Base must be approved by the Administrative Agent and all of the Lenders.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Proved Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Proved Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base and the Present Value by the Administrative Agent and and, if applicable, the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and and, if applicable, the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(e)), (ii) in accordance with the Administrative Agent’s and the Lenders’ customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the LendersLenders and which are subject to an Acceptable Security Interest to the extent required under this Agreement. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent shall have received, at the Borrower’s expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating thereto. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base or Present Value under this Section 2.02, (A) the Borrowing Base shall be equal to the redetermined amount (or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders within 5 days after receiving notification of the redetermined Borrowing Base from the Administrative Agent) until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02, and (B) the Present Value shall be equal to the redetermined amount until it is subsequently predetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base by the Administrative Agent and the Revolving Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Revolving Lenders (but in accordance with the other provisions of this Section 2.02(d)), (ii) in accordance with the Administrative Agent’s 's and the Revolving Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Revolving Lenders relating to the Proven Reserves of the Borrower and its Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its Subsidiaries as determined by the Administrative Agent and the Revolving Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Revolving Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its Subsidiaries and such other factors as the Administrative Agent and the Revolving Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (reflects a loan amount to market value in excess of loan value), percentage differential which is essential for the adequate protection of the Administrative Agent and the Revolving Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Revolving Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Revolving Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.

Standards for Redetermination. Each redetermination of the Borrowing Base and the monthly Borrowing Base reduction amount by the Administrative Agent and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole discretion of the Administrative Agent and the Lenders (but in accordance with the other provisions of this Section 2.02(d2.02(c)), (ii) in accordance with the Administrative Agent’s 's and the Lenders’ ' customary internal standards and practices for valuing and redetermining the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions, (iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering Report, as applicable, or other information received by the Administrative Agent and the Lenders relating to the Proven Reserves of the Borrower and its relevant Subsidiaries, and (iv) based upon the estimated value of the Proven Reserves owned by the Borrower and its relevant Subsidiaries as determined by the Administrative Agent and the Lenders. In valuing and redetermining the Borrowing Base, the Administrative Agent and the Lenders may also consider the business, financial condition, and Debt obligations of the Borrower and its relevant Subsidiaries and such other factors as the Administrative Agent and the Lenders customarily deem appropriate. In that regard, the Borrower acknowledges that the determination of the Borrowing Base contains an equity cushion (market value in excess of loan value), which is essential for the adequate protection of the Administrative Agent and the Lenders. No Proven Reserves shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent and the Lenders shall have received, at the Borrower’s 's expense, (A) evidence of title reasonably satisfactory in form and substance to the Administrative Agent covering at least 80% (by value) of that the Proven Reserves and Administrative Agent has an Acceptable Security Interest in the Oil and Gas Properties relating thereto and at least 80% (by value) of the Proven Reserves categorized as “proved, developed and producing” and the Oil and Gas Properties related thereto and (B) Mortgages and such other Security Instruments requested by the Administrative Agent pursuant to the extent necessary to cause the Administrative Agent to have an Acceptable Security Interest in at least 80% (by value) of the Proven Reserves and the Oil and Gas Properties relating theretoInstruments. At all times after the Administrative Agent has given the Borrower notification of a redetermination of the Borrowing Base under this Section 2.02, the Borrowing Base shall be equal to the redetermined amount or such lesser amount designated by the Borrower and disclosed in writing to the Administrative Agent and the Lenders until the Borrowing Base is subsequently redetermined in accordance with this Section 2.02.