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.
Title: Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2: An In-depth Overview Description: In the realm of gas balancing agreements, the Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 assumes crucial significance. This comprehensive description aims to shed light on the various facets of this agreement, elaborating on its purpose, key components, and potential variations. Keywords: Virginia Exhibit E, Operating Agreement, Gas Balancing Agreement, Form 2, purpose, components, variations. 1. Purpose of Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2: The primary goal of the Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 is to establish a mutually beneficial contractual arrangement between multiple parties involved in the extraction, production, and distribution of natural gas resources. It aims to maintain gas supply equilibrium, ensure operational efficiency, and minimize disruptions in gas delivery. 2. Key Components of Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2: a. Gas Balancing Mechanism: This agreement outlines a comprehensive mechanism to balance gas imbalances, taking into account various factors such as gas fluctuations, transportation losses, and scheduled versus actual gas deliveries. b. Allocation Methodology: The agreement lays down the methodology to allocate gas imbalances among the involved parties, based on their respective gas usage patterns and contractual obligations. c. Measurement and Reporting: It specifies the measurement standards, metering parameters, and reporting requirements to accurately track and record gas imbalances. d. Reconciliation and Settlement: The agreement defines the process for reconciling gas imbalances periodically, ideally on a monthly basis, and settling any resulting financial obligations among the parties involved. e. Default and Remedies: In the event of non-compliance, the agreement establishes default provisions, including penalties, dispute resolution mechanisms, and remedies for breach of contractual obligations. 3. Variations of Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2: a. Type 1: Gas Balancing Agreement for Single Operator: This variation caters to scenarios where a single operator manages the gas extraction, transportation, and distribution activities. b. Type 2: Gas Balancing Agreement for Multiple Operators: This version applies when multiple operators collaborate to undertake gas-related activities within a specific region, requiring an agreement that caters to the influx and distribution of gas from diverse sources. c. Type 3: Gas Balancing Agreement for Interconnected Gas Networks: This variant deals with gas balancing agreements within interconnected gas networks, enabling seamless coordination between operators in distinct regions while maintaining overall supply-demand equilibrium. In conclusion, the Virginia Exhibit E to Operating Agreement Gas Balancing Agreement — Form 2 plays a vital role in promoting efficient gas management, transparency, and equitable allocation of gas imbalances. It serves as a template for creating robust contractual arrangements while accommodating varied scenarios through its different types.
