Definition of Plug and Abandonment Accrual

Plug and Abandonment Accrual means an amount accrued in respect of Assignor's liability for the total estimated cost to plug, dismantle and abandon wells, platforms, facilities and pipelines associated with the Subject Interests, which liability shall be calculated and be consistent with guidelines provided by the BOEM for determining the plug and abandonment bond amount and shall also include the annual cost of providing such bond. For purposes of this Agreement, such amount shall be determined by multiplying the calendar month production net to the Subject Interests by the accrual rate of $.31 per Mcf as provided in Section 27.1.2 of the JOA as such rate may be redetermined from time to time by the Operator.
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