High Island Offshore System, L.L.C.
Third Revised Volume No. 1
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Effective Date: 11/01/2007, Docket: RP08- 55-000, Status: Effective
Original Sheet No. 238 Original Sheet No. 238 : Effective
FORM OF RESERVE COMMITMENT AGREEMENT
(Continued)
(b) Shipper shall be entitled to unitize any Committed Lease(s) with one or more
additional OCS leases without the consent of Transporter. 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 or be entitled to the services
provided by the associated Transportation Agreement. For purposes of this
Section 2.2 (b), "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.
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.
2.4 Temporary Release.
(a) In the event that HIOS is unable to accept Shipper's Gas for any reason
(including, without limitation, a force majeure event as set forth in
Section 13 of the General Terms and Conditions of HIOS' FERC Gas Tariff)
and such inability is not the result of any action or inaction by
Shipper ("HIOS' Inability"), Shipper shall be entitled to deliver to and
transport Shipper's Gas on another pipeline(s) during the duration of
HIOS' Inability.
(b) In the event that any occurrence of HIOS' Inability lasts for a period
exceeding ninety (90) consecutive days, Shipper shall have thirty five
(35) days from its receipt of written notice of HIOS' ability to
recommence receipts of Shipper's Gas to resume deliveries of Shipper's
Gas to HIOS.