High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 04/01/2000, Docket: RP99-227-004, Status: Effective

Original Sheet No. 203 Original Sheet No. 203 : Effective

 

 

FORM OF RESERVE COMMITMENT AGREEMENT

(Continued)

 

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.

 

2.3 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 Transporter 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,

to shut in wells and to renew, surrender, release or

terminate any lease (in whole or in part) included in the

Committed Lease(s);

 

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

Leases in quantities sufficient to fulfill Shipper's lease

obligations from time to time, including the right to

deliver royalty in kind; and

 

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

operation of the Committed Lease(s), 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,

processing, treating, cycling, repressuring or other

supplemental recovery operations, provided, however, that

any gas so used but not consumed by such uses shall remain

committed under this Agreement.

 

(d) The right to process gas from the Committed Lease(s), prior

to delivery to Transporter, by the use of mechanical

separators for the recovery of any component from the gas

other than methane, except such methane incidentally removed

through such separation.