This operating agreement exhibit provides that each party has the right to take in kind its share of gas produced from the Contract Area and market or otherwise dispose of its gas. In the event any party is not, at any time, taking or marketing its share of gas, or has contracted to sell its share of gas produced from the Contract Area to a purchaser which does not, at any time, take the full share of gas attributable to the interest of the party, then the terms of this agreement shall automatically become operative.
Delaware Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 is an essential document that outlines the terms and conditions related to gas balancing in Delaware's operating agreements. This exhibit serves as a crucial component of the overall operating agreement, specifically focusing on gas balancing provisions. Gas balancing agreements are commonly used in the energy industry to ensure the equitable distribution and accounting of natural gas production and consumption among multiple stakeholders. These agreements aim to maintain accurate measurement and allocation of gas volumes produced, purchased, or utilized by various parties involved in gas exploration, production, transportation, and distribution. The Delaware Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 typically includes the following key elements: 1. Purpose: This section lays out the primary objectives and goals of the gas balancing agreement. Its purpose is to establish a framework for measuring, reporting, and reconciling the imbalances that may occur during gas operations. 2. Definitions: To ensure clarity and consistency throughout the agreement, this section provides precise definitions of key terms and phrases used in the document, such as "balancing party," "injection," "withdrawal," "imbalances," etc. 3. Measurement and Reporting: This part outlines the procedures and standards to measure gas quantities accurately. It includes details on the measurement equipment, periodic reporting frequency, and the responsibilities of each party involved in data reporting. 4. Settling Imbalances: Here, the methods for resolving imbalances are described. It may include the appointment of a gas balancing coordinator responsible for reconciling any differences between actual gas quantities and the agreed-upon allocations. 5. Balancing Party Obligations: This section delineates the responsibilities of each balancing party, such as maintaining accurate records, ensuring timely reporting, and taking necessary actions to minimize imbalances. 6. Penalties and Remedies: In cases of non-compliance or failure to meet the obligations specified in the agreement, this segment outlines potential penalties, fines, or recourse available to the affected parties. It is important to note that while Delaware Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 serves as a general template, variations may exist based on individual circumstances and the specific needs of gas operators. Therefore, it is crucial to consult legal professionals and industry experts when tailoring the agreement to specific projects, partnerships, or entities. In summary, the Delaware Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 is a crucial document detailing the provisions related to gas balancing within Delaware's operating agreements. By defining measurement standards, reporting procedures, and obligations of the balancing parties, this exhibit helps maintain the integrity and fairness of gas operations in the region.
