Destin Pipeline Company, L.L.C.

Original Volume No. 1

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Effective Date: 09/01/1998, Docket: CP96-655-003, Status: Effective

Original Sheet No. 246 Original Sheet No. 246 : Effective

 

 

FORM OF RESERVE COMMITMENT AGREEMENT

(Continued)

 

 

match (in a manner that keeps Shipper or its affiliate, as

applicable, economically indifferent with respect to such connection

and transportation) any offer to transport gas attributable to the

interest of Shipper or its affiliate;

 

(c) Leases from which the gas produced does not conform to the quality

specifications set forth in Section 3 of the General Terms and

Conditions of Company's FERC Gas Tariff and for which Company has not

agreed to waive such specifications; and

 

(d) Leases which have been relinquished or forfeited shall be deemed

released on prompt notice from Shipper.

 

2.3 (a) Subject to Section 2.3(b) and the other provisions of this Agreement,

Shipper shall be entitled to transfer, assign, sell, exchange,

farmout, or otherwise dispose of any of the Committed Lease(s)

without the consent of Company. Shipper shall also be entitled to

unitize any Committed Lease with one or more additional OCS leases

without the consent of Company. In the event of such unitization,

then (i) such unitization shall not be deemed a transfer or

assignment of Shipper's interest for the purpose of this Agreement

and (ii) only the gas production attributable to Shipper's interest

in the unit shall be subject to the provisions of this Agreement.

For purposes of this Section 2.3(a), "unitize" or "unitization" shall

mean the combination of all or parts of the leases in a prospect,

reservoir, or field such that development and operation of the unit

are provided for without regard to separate property interests and

with unit production and costs allocated among the various parties,

whether pursuant to formal or informal joint operating agreements.

 

(b) In the event Shipper should transfer or assign any or all of its

rights, title and/or interest in the Committed Lease(s), Shipper

agrees that (i) it shall notify Company in writing of such assignment

as soon as practicable after such assignment, and (ii) any such