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. 247 Original Sheet No. 247 : Effective

 

 

FORM OF RESERVE COMMITMENT AGREEMENT

(Continued)

 

 

transfer or assignment will be made subject to the terms of this

Agreement, it being the intent of the parties hereto subject to the

provisions of Article V and this Article II, that the Committed

Lease(s) remain dedicated for purposes of transportation under Rate

Schedule FT-2 and/or Rate Schedule IT to Company's pipeline

facilities for the economic life of the Committed Lease(s). All of

the provisions of this Agreement shall be applicable to assignees of

Shipper's interests in the Committed Lease(s), and such assignees

shall receive a proportionate assignment of the rights and

obligations hereunder with respect to the Committed Lease(s) so

assigned. Upon such assignment, Shipper shall be relieved of its

obligations under this Agreement to the extent, and only to the

extent, so assigned to a third party.

 

2.4 From the obligations in Section 2.1, Shipper expressly reserves unto itself,

its successors and assigns, the following rights and quantities of production

sufficient to satisfy such rights:

 

(a) The right to operate the Committed Lease(s) free from any control by

Company including, without limitation, the right (but never the

obligation) to drill new wells, to repair and rework old wells, to

plug and abandon any well and to renew, surrender, release or

terminate any lease (in whole or in part) covering the affected

lands;

 

(b) The right to deliver production to lessors of the Committed Leases in

quantities sufficient to fulfill lease obligations from time to time,

including the right to take royalty in kind;

 

(c) The rights to use production for development and operations of the

Committed Lease(s) or other leases in the vicinity (regardless of

ownership), including (but not limited to) the use of gas for fuel,

drilling (including gas drilling), deepening, reworking development

system installation and startup, compressing, gas lifting, pumping