Common use of Subsequent Determinations of Borrowing Base Clause in Contracts

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least semi-annually on December 1 and June 1 of each year beginning December 1, 2006, or as Unscheduled Redeterminations. The Borrower shall furnish to the Bank as soon as possible but in any event no later than May 1 and November 1 of each year, beginning November 1, 2007 with an effective date of March 31 and September 30, respectively, with an engineering report in form and substance satisfactory to the Bank prepared by an independent petroleum engineering firm acceptable to Bank and, for the May 1 report, by an in-house engineering report (a third party report is not necessary for the May 1 report) covering the Oil and Gas Properties based upon PV/9 utilizing economic and pricing parameters used by Bank as established from time to time, together with such other information concerning the value of the Oil and Gas Properties as the Bank shall deem necessary to determine the value of the Oil and Gas Properties. Within thirty (30) days after either (i) receipt of notice from Bank that the Bank require an Unscheduled Redetermination, or (ii) a Borrower gives notice to Bank of its desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Bank an engineering report in form and substance satisfactory to Bank prepared by Borrower’ in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used by the Bank as established from time to time, together with such other information, reports and data concerning the value of the Oil and Gas Properties as Bank shall deem reasonably necessary to determine the value of such Oil and Gas Properties. Bank shall by notice to the Borrower no later than August 1 and February 1 of each year, or within a reasonable time thereafter (herein called the “Determination Date”), notify the Borrower of the designation by the Bank of the new Borrowing Base for the period beginning on such Determination Date and continuing until, but not including, the next Determination Date. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base and such new Borrowing Base shall continue until the next Determination Date. If the Borrower does not furnish all such information, reports and data by any date specified in this Section 4(b), the Bank may nonetheless designate the Borrowing Base at any amounts which the Bank in its reasonable discretion determines and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which Bank in its discretion (using such methodology, assumptions and discounts rates as Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties and other Collateral of the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrower and its affiliates) as Bank customarily considers in evaluating similar oil and gas credits, but Bank in its discretion shall not be required to give any additional positive value to any Oil and Gas Property over the current economic and pricing parameters used by Bank for such Determination Date which additional value is derived directly from a hedging, forward sale or swap agreement covering such Oil and Gas Property as of the date of such determination. It is expressly understood that the Bank has no obligation to designate the Borrowing Base at any particular amounts, except in the exercise of its discretion, whether in relation to the Revolving Commitment or otherwise. Provided, however, the Bank shall not have the obligation to designate a Borrowing Base in an amount in excess of the Revolving Commitment or its legal or internal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent ------------------------------------------- determinations of the Borrowing Base shall be made by the Bank Banks on June 1, 1997, and thereafter, at least semi-annually on December April 1 and June October 1 of each year beginning December October 1, 2006, 1997 or as Unscheduled Redeterminations. In connection with, and as of, each determination of the Borrowing Base, the Banks shall also redetermine the Monthly Commitment Reduction. The Borrower Borrowers shall furnish to the Bank Banks as soon as possible but in any event no later than May 1 and November March 1 of each year, beginning November March 1, 2007 with an effective date of March 31 and September 30, respectively1997, with an engineering report Engineering Report in form and substance satisfactory to the Bank Agent prepared by an independent petroleum engineering firm acceptable to Bank and, for the May 1 report, by an in-house engineering report (a third party report is not necessary for the May 1 report) Agent covering the Oil and Gas Properties based upon PV/9 utilizing economic and pricing parameters used by Bank Agent as established from time to time, together with such other information concerning the value of the Oil and Gas Properties as the Bank Agent shall deem necessary to determine the value of the Oil and Gas Properties. Within By September 1 of each year, or within thirty (30) days after either (i) receipt of notice from Bank Agent that the Bank Banks require an Unscheduled Redetermination, or (ii) a Borrower gives the Borrowers give notice to Bank Agent of its their desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Bank an engineering report in form and substance satisfactory to Bank Agent prepared by Borrower’ 's in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used by the Bank Agent as established from time to time, together with such other information, reports and data concerning the value of the Oil and Gas Properties as Bank Agent shall deem reasonably necessary to determine the value of such Oil and Gas Properties. Bank Agent shall by notice to the Borrower Borrowers no later than August June 1, 1997, and thereafter on April 1 and February October 1 of each year, or within a reasonable time thereafter (herein called the “"Determination Date”"), notify the Borrower Borrowers of the designation by the Bank Banks of the new Borrowing Base and Monthly Commitment Reduction for the period beginning on such Determination Date and continuing until, but not including, the next Determination Date. If an Unscheduled Redetermination is made by the BankBanks, the Bank Agent shall notify the Borrower Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base and Monthly Commitment Reduction, and such new Borrowing Base and Monthly Commitment Reduction shall continue until the next Determination Date. If the Borrower does Borrowers do not furnish all such information, reports and data by any the date specified in this Section 4(b7(b), unless such failure is of no fault of the Bank Borrowers, the Banks may nonetheless designate the Borrowing Base and Monthly Commitment Reduction at any amounts which the Bank Banks determine in its reasonable their discretion determines and may redesignate the Borrowing Base and Monthly Commitment Reduction from time to time thereafter until the Bank receives Banks receive all such information, reports and data, whereupon the Bank Banks shall designate a new Borrowing Base and Monthly Commitment Reduction as described above. Each Bank shall determine the amount of the Borrowing Base and Monthly Commitment Reduction based upon the loan collateral value which such Bank in its discretion (using such methodology, assumptions and discounts rates as such Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties and other Collateral of the Borrower Borrowers at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrower Borrowers and its their affiliates) as such Bank customarily considers in evaluating similar oil and gas credits, but such Bank in its discretion shall not be required to give any additional positive value to any Oil and Gas Property over the current economic and pricing parameters used by such Bank for such Determination Date which additional value is derived directly from a hedging, forward sale or swap agreement covering such Oil and Gas Property as of the date of such determination. If the Banks cannot otherwise agree on the Borrowing Base or the Monthly Commitment Reduction, each Bank shall submit in writing to the Agent its proposed Borrowing Base and Monthly Commitment Reduction and the Borrowing Base and Monthly Commitment Reduction shall be set on the basis of the lowest Borrowing Base and the highest Monthly Commitment Reduction proposed by any Bank. Notwithstanding any other provision herein to the contrary, the amount of the Borrowing Base may not be increased at any time without the approval of all Banks. If at any time any of the Oil and Gas Properties are sold, the Borrowing Base then in effect shall automatically be reduced by a sum equal to the amount of prepayment required to be made pursuant to Section 12(r) hereof. The Borrowing Base shall be additionally reduced from time to time pursuant to the provisions of Sections 2(e) and 2(f) hereof. It is expressly understood that the Bank has Banks have no obligation to designate the Borrowing Base or the Monthly Commitment Reduction at any particular amounts, except in the exercise of its their discretion, whether in relation to the Revolving Commitment or otherwise. Provided, however, that the Bank Banks shall not have the obligation to designate a Borrowing Base in an amount in excess of the Revolving Commitment or its legal or internal lending limits.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank Banks at least semi-annually on December April 1 and June October 1 of each year year, beginning December April 1, 20061998, or as Unscheduled Redeterminations. The In connection with each such redetermination of the Borrowing Base, the Banks shall also redetermine the Monthly Commitment Reduction. Borrower shall furnish to the Bank Banks as soon as possible but in any event no later than May March 1 and November or September 1 of each year, beginning November March 1, 2007 with an effective date of March 31 and 1998 or September 301, respectively1998, as the case may be, with an engineering report in form and substance satisfactory to the Bank Agent prepared by an independent petroleum engineering firm engineer acceptable to Bank and, for the May 1 report, by an in-house engineering report (a third party report is not necessary for the May 1 report) Agent covering the Oil and Gas Properties based upon PV/9 utilizing economic and pricing parameters used by Bank Agent as established from time to time, together with such other information concerning the value of the Oil and Gas Properties Collateral as the Bank shall Banks may deem necessary to determine the value of such Collateral. By March 1 and by September 1 (being the Oil and Gas Properties. Within date other than the date on which Borrower shall have provided the engineering report prepared by the independent petroleum engineer) of each year thereafter, beginning March 1, 1998 or September 1, 1998, as the case may be, or within thirty (30) days after either (i) receipt of notice from Bank Agent that the Bank require it requires an Unscheduled Redetermination, or (ii) a Borrower gives give notice to Bank Agent of its their desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Bank Banks an engineering report in form and substance satisfactory to Bank the Banks prepared by Borrower’ 's in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used using substantially the same methodology utilized by the Bank as established from time to timeindependent petroleum engineer who prepared the most recent independent engineering report, together with such other information, reports and data concerning the value of the Oil and Gas Properties Collateral as Bank the Banks shall deem reasonably necessary to determine the value of such Oil and Gas PropertiesCollateral. Bank shall by notice to the Borrower no later than August The engineering reports furnished March 1 and February September 1 of each year, or within a reasonable time thereafter (herein called the “Determination Date”), notify the Borrower pursuant to this Section 7 shall be prepared as of the designation by the Bank preceding December 31 and June 30, respectively. Agent shall notify Borrower of the new Borrowing Base Base, Sublimits (as hereinafter defined) and Monthly Commitment Reduction for the period beginning on the date of such notice (herein called the "Determination Date Date") and continuing until, but not including, the next Determination Date. If an Unscheduled Redetermination is made by the BankBanks, the Bank Agent shall notify the Borrower within a reasonable time after receipt of all requested information of the new Borrowing Base Base, if any, and such new Borrowing Base shall continue until the next Determination Date. If the Borrower does do not furnish all such information, reports and data by any the date specified in this Section 4(b7(b), unless such failure is of no fault of Borrower, the Bank Banks may nonetheless designate the Borrowing Base Base, Sublimits and Monthly Commitment Reduction at any amounts which the Bank Banks determine in its reasonable their discretion determines and may redesignate the Borrowing Base from time to time thereafter until the Bank receives Banks receive all such information, reports and data, whereupon the Bank Banks shall designate a new Borrowing Base Base, Sublimits and Monthly Commitment Reduction as described above. Bank The Banks shall determine the amount of the Borrowing Base based upon the loan collateral value which Bank it in its discretion (using such methodology, assumptions and discounts rates as each Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties and other Collateral of the Borrower at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrower and its affiliates) as each Bank customarily considers in evaluating similar oil and gas credits. If the Banks cannot otherwise agree on the Borrowing Base, but Sublimits or Monthly Commitment Reduction, each Bank shall submit in writing to the Agent its discretion proposed Borrowing Base and Monthly Commitment Reduction and the Borrowing Base and Monthly Commitment Reduction shall not be required set on the basis of the lowest Borrowing Base and Sublimits, and highest Monthly Commitment Reduction proposed by any Bank. If at any time any of the Collateral is sold by Borrower, the Borrowing Base then in effect shall automatically be reduced by a sum equal to give any additional positive the value assigned to any Oil and Gas Property over such collateral by the current economic and pricing parameters used by Bank for such Determination Date which additional value is derived directly from a hedging, forward sale or swap agreement covering such Oil and Gas Property Banks as of the date of such determinationmost recent Borrowing Base redetermination. It is expressly understood that the each Bank has no obligation to designate the Borrowing Base Base, Sublimits or the Monthly Commitment Reduction at any particular amountsamount, except in the exercise of its discretion, whether in relation to the Revolving Commitment or otherwise, and that the Banks' commitment to advance funds hereunder is determined by reference to the Borrowing Base from time to time in effect. Provided, however, that the Bank Banks shall not never have the obligation to designate a Borrowing Base in an amount in excess of the Revolving Commitment or its legal or internal lending limits. If Borrower is ever required to purchase and redeem any of the Senior Unsecured Notes or if any portion of the Senior Unsecured Notes become due for any reason, the Borrowing Base shall immediately and automatically be reduced to $0.

Subsequent Determinations of Borrowing Base. Subsequent determinations of the Borrowing Base shall be made by the Bank at least semi-annually on the dates set forth herein below and the Bank may make additional redeterminations at any time it appears to the Bank, in the exercise of its discretion, that there has been a material change in the value of the Oil and Gas Properties ("UNSCHEDULED REDETERMINATIONS"). Effective as of September 30 of each year, Borrowers shall furnish to the Bank on or prior to December 1 each year, beginning December 1, 2001, for Panhandle and June beginning December 1, 2002 for Wood Oil and if the Bank so requests, within sixty days of April 1 of each year beginning December April 1, 20062002 for Panhandle and for Wood Oil and at such other times as Bank shall request for an Unscheduled Redetermination, or as Unscheduled Redeterminations. The Borrower shall furnish to all information, reports and data which the Bank has then requested concerning the Oil and Gas Properties, said information to include, but not be limited to, (i) revenue and lifting costs summary report for all Oil and Gas Properties, (ii) as soon as possible but in any event no later than May 1 of September 30 and November 1 of each year, beginning November 1, 2007 with an effective date of March 31 and September 3031, respectively, with of each such year, an engineering report in form and substance satisfactory to the Bank prepared by an independent petroleum engineering firm engineer as is acceptable to Bank andBank, for the May 1 report, by an in-house engineering report (a third party report is not necessary for the May 1 report) covering the Oil and Gas Properties based upon PV/9 utilizing Properties, (iii) the most recently available production curves and tabular production updates, including economic projections on any new production from acquired or drilled acreage, and pricing parameters used by Bank as established from time to time, together with (iv) such other information concerning the value of the Oil and Gas Properties as the Bank shall may reasonably deem necessary to determine the value of the Oil and Gas Properties. Within thirty (30) days after either (i) receipt of notice from Bank that the Bank require an Unscheduled Redetermination, or (ii) a Borrower gives notice to Bank of its desire to have an Unscheduled Redetermination performed, the Borrower shall furnish to the Bank an engineering report in form and substance satisfactory to Bank prepared by Borrower’ in-house engineering staff valuing the Oil and Gas Properties utilizing economic and pricing parameters used by the Bank as established from time to time, together with such other information, reports and data concerning the value of the Oil and Gas Properties as Bank shall deem reasonably necessary to determine the value of such Oil and Gas Propertiesnecessary. Bank shall by written notice to the Borrower Borrowers, no later than August 1 sixty (60) days after receipt of such information set forth above, designate the new Borrowing Base available to Borrowers hereunder during the period beginning on each December 31 and February 1 of each year, or within a reasonable time thereafter June 30 (herein called the “Determination Date”), notify "DETERMINATION DATE") and continuing until but not including the Borrower next date as of which the designation by the Bank of the new Borrowing Base for is redetermined. Notwithstanding the period beginning on foregoing, the first such Determination Date and continuing untilwill be January 1, but not including, the next Determination Date2002. If an Unscheduled Redetermination is made by the Bank, the Bank shall notify the Borrower Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base Base, if any, and such new Borrowing Base shall continue until redetermined pursuant to the next Determination Dateprovisions hereof. If the Borrower does Borrowers do not furnish all such information, reports and data by any the date specified in the first sentence of this Section 4(b5(b), unless such failure is of no fault of Borrowers, the Bank may nonetheless designate the Borrowing Base at any amounts amount which the Bank determines in its reasonable discretion determines and may redesignate the Borrowing Base from time to time thereafter until the Bank receives all such information, reports and data, whereupon the Bank shall designate a new Borrowing Base as described above. The Bank shall determine the amount of the Borrowing Base based upon the loan collateral value which Bank it in its reasonable discretion (using such methodology, assumptions and discounts rates as Bank customarily uses in assigning collateral value to oil and gas properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Oil and Gas Properties and other Collateral of the Borrower Borrowers at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Borrower Borrowers and its affiliates) as the Bank customarily considers in evaluating similar oil and gas credits, but Bank in its discretion shall not be required to give any additional positive value to any Oil and Gas Property over the current economic and pricing parameters used by Bank for such Determination Date which additional value is derived directly from a hedging, forward sale or swap agreement covering such Oil and Gas Property as of the date of such determination. It is expressly understood that the Bank has no obligation to designate the Borrowing Base at any particular amountsamount, except in the exercise of its good faith discretion, whether in relation to the Revolving Loan Commitment made herein or otherwise. Provided, however, and that the Bank shall not have Bank's commitment to advance funds hereunder is determined by reference to the obligation to designate a Borrowing Base from time to time in an amount in excess of the Revolving Commitment or its legal or internal lending limitseffect.