SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Exhibit 10.3

GAS GATHERING, COMPRESSION, PROCESSING

AND GAS LIFT AGREEMENT

BY AND AMONG

OASIS PETROLEUM NORTH AMERICA LLC,

OASIS PETROLEUM MARKETING LLC,

OASIS MIDSTREAM SERVICES LLC,

AND

OASIS MIDSTREAM PARTNERS LP

DATED AS OF

SEPTEMBER 25, 2017

WILD BASIN

 

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

TABLE OF CONTENTS

 

ARTICLE 1

  

DEFINITIONS

     1  

ARTICLE 2

  

PRODUCER AND SHIPPER COMMITMENTS

     10  

Section 2.1

  

Producer’s Dedication

     10  

Section 2.2

  

Shipper’s Commitment

     10  

Section 2.3

  

Conflicting Dedications

     11  

Section 2.4

  

Producer’s and Shipper’s Reservations

     11  

Section 2.5

  

Covenant Running with the Land

     11  

Section 2.6

  

Priority of Dedicated Gas

     12  

ARTICLE 3

  

SERVICES; GATHERING SYSTEM EXPANSION AND CONNECTION OF WELLS

     12  

Section 3.1

  

Gatherer Service Commitment

     12  

Section 3.2

  

Development Plan; Facilities Plan; Exchange and Review of Information

     13  

Section 3.3

  

Expansion of Gathering System; Connection of Wells; Delivery Points

     14  

Section 3.4

  

Gas Processing

     16  

Section 3.5

  

Compression Facilities

     17  

Section 3.6

  

High Pressure Services

     17  

Section 3.7

  

Gas Lift Gas.

     18  

Section 3.8

  

Gas Removed for Lease Operations

     19  

Section 3.9

  

Right of Way and Access

     19  

Section 3.10

  

Cooperation

     20  

Section 3.11

  

Allocation of Gatherer Obligations

     20  

ARTICLE 4

  

TERM

     21  

Section 4.1

  

Term

     21  

Section 4.2

  

Post-Termination

     21  

Section 4.3

  

Survival

     21  

ARTICLE 5

  

FEES AND CONSIDERATION

     21  

Section 5.1

  

Fees

     21  

ARTICLE 6

  

ALLOCATIONS

     22  

Section 6.1

  

Allocation of Residue Gas

     22  

Section 6.2

  

Allocation of NGLs

     23  

Section 6.3

  

Fuel, Lost and Unaccounted for Gas and NGL Shrink

     23  

Section 6.4

  

Allocation of Fuel

     24  

ARTICLE 7

  

CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

     24  

Section 7.1

  

Operational Control of Gatherer’s Facilities

     24  

Section 7.2

  

Maintenance

     24  

Section 7.3

  

Capacity Allocations for the Facilities

     24  

Section 7.4

  

Arrangements After Redelivery

     25  

Section 7.5

  

Line Fill

     25  

Section 7.6

  

Temporary Releases

     25  

 

i

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

ARTICLE 8

  

PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS

     25  

Section 8.1

  

Pressures at Receipt Points

     25  

Section 8.2

  

Pressures at Delivery Points

     27  

Section 8.3

  

Shipper Facilities

     27  

ARTICLE 9

  

NOMINATION AND BALANCING

     27  

Section 9.1

  

Gatherer Notifications

     27  

Section 9.2

  

Nominations

     28  

Section 9.3

  

Balancing

     28  

ARTICLE 10

  

QUALITY

     28  

Section 10.1

  

Receipt Point Gas Quality Specifications

     28  

Section 10.2

  

Non-Conforming Gas

     29  

Section 10.3

  

Delivery Point Gas Quality Specifications

     30  

Section 10.4

  

Delivery Point NGL Quality Specifications

     30  

Section 10.5

  

Greenhouse Gas Emissions

     30  

ARTICLE 11

  

MEASUREMENT EQUIPMENT AND PROCEDURES

     30  

Section 11.1

  

Equipment

     30  

Section 11.2

  

Measurement Standards

     31  

Section 11.3

  

Gas Measurement

     32  

Section 11.4

  

Notice of Measurement Facilities Inspection and Calibration

     33  

Section 11.5

  

Measurement Accuracy Verification

     33  

Section 11.6

  

Special Tests

     34  

Section 11.7

  

Metered Flow Rates in Error

     34  

Section 11.8

  

Record Retention

     34  

Section 11.9

  

Summary Measurement Reports

     34  

ARTICLE 12

  

NOTICES

     34  

Section 12.1

  

Notices

     34  

ARTICLE 13

  

INVOICES AND PAYMENTS

     36  

Section 13.1

  

Statements and Invoices

     36  

Section 13.2

  

Right to Suspend on Failure to Pay

     37  

Section 13.3

  

Audit Rights

     37  

Section 13.4

  

Payment Disputes

     37  

Section 13.5

  

Interest on Late Payments

     37  

Section 13.6

  

Excused Performance

     38  

ARTICLE 14

  

FORCE MAJEURE

     38  

Section 14.1

  

Suspension of Obligations

     38  

Section 14.2

  

Definition of Force Majeure

     38  

Section 14.3

  

Settlement of Strikes and Lockouts

     39  

Section 14.4

  

Payments for Services Performed

     39  

ARTICLE 15

  

INDEMNIFICATION

     39  

Section 15.1

  

Gatherer

     39  

Section 15.2

  

Producer and Shipper

     39  

 

ii

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

ARTICLE 16

  

CUSTODY AND TITLE

     39  

Section 16.1

  

Custody

     39  

Section 16.2

  

Shipper Warranty

     40  

Section 16.3

  

Title

     40  

ARTICLE 17

  

TAXES; ROYALTIES

     40  

Section 17.1

  

Taxes

     40  

Section 17.2

  

Royalties

     40  

ARTICLE 18

  

MISCELLANEOUS

     41  

Section 18.1

  

Rights

     41  

Section 18.2

  

Applicable Laws

     41  

Section 18.3

  

Governing Law; Jurisdiction; Waiver of Jury Trial

     41  

Section 18.4

  

Successors and Assigns

     41  

Section 18.5

  

Severability

     42  

Section 18.6

  

Confidentiality

     42  

Section 18.7

  

Entire Agreement, Amendments and Waiver

     44  

Section 18.8

  

Limitation of Liability

     44  

Section 18.9

  

Headings

     44  

Section 18.10

  

Rights and Remedies

     44  

Section 18.11

  

No Partnership

     44  

Section 18.12

  

Rules of Construction

     44  

Section 18.13

  

No Third Party Beneficiaries

     45  

Section 18.14

  

Further Assurances

     45  

Section 18.15

  

Counterpart Execution

     45  

Section 18.16

  

Memorandum of Agreement

     45  

EXHIBITS

 

Exhibit A        Dedicated Acreage Exhibit B    Facilities Exhibit C    Delivery
Points Exhibit D    Excluded Wells Exhibit E    Form of Right of Way Agreement
Exhibit F    Reserved Exhibit G    Form of Memorandum of Agreement Exhibit H   
Form of Monthly Statement Exhibit I    NGL Specifications Exhibit J    Standard
Meter Facilities Exhibit K    Fees Exhibit L    Gatherer Provisions

 

iii

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

GAS GATHERING, COMPRESSION, PROCESSING AND GAS LIFT AGREEMENT

This Gas Gathering, Compression, Processing and Gas Lift Agreement (this
“Agreement”), dated as of September 25, 2017 (the “Effective Date”), is by and
among OASIS PETROLEUM NORTH AMERICA LLC, a Delaware limited liability company
(“Producer”), OASIS PETROLEUM MARKETING LLC, a Delaware limited liability
company (“Shipper”), OASIS MIDSTREAM SERVICES LLC, a Delaware limited liability
company (“OMS”), and OASIS MIDSTREAM PARTNERS LP (“MLP”, and collectively with
OMS, “Gatherer”). Producer, Shipper and Gatherer may be referred to herein
individually as a “Party” or collectively as the “Parties.”

RECITALS

A. Producer owns Interests and intends to produce Gas from Wells on the
Dedicated Acreage.

B. Shipper has contracted with Producer to purchase Gas produced by Producer
from Wells on the Dedicated Acreage, which Gas will be purchased at the Receipt
Points.

C. Gatherer owns the Gathering System, which gathers Gas from certain Wells of
Producer. Gatherer anticipates the further build out and expansion of the
Gathering System to connect additional Wells of Producer.

D. Gatherer also owns the Processing Plant, which is connected to the Gathering
System.

E. Shipper desires to contract with Gatherer to provide the Services on the
Gathering System, at the Processing Plant and on the Gas Lift Gas System with
respect to Dedicated Gas, including (i) compressing Dedicated Gas at the System
Compressor Stations, (ii) processing Dedicated Gas, (iii) redelivering Residue
Gas and NGLs to Shipper and (iv) redelivering Gas Lift Gas to Shipper, and
Gatherer desires to provide the Services to Shipper, in each case in accordance
with the terms and conditions of this Agreement.

F. In consideration of Shipper’s obligations to purchase Gas from Producer and
to redeliver Gas Lift Gas to Producer, Producer has agreed (i) to dedicate and
commit Dedicated Gas under this Agreement, (ii) to provide to Gatherer the
Development Plans to permit Gatherer to plan and expand the Gathering System to
connect additional Wells of Producer, and (iii) to perform certain other
obligations under this Agreement, in each case in accordance with the terms and
conditions of this Agreement.

NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

Capitalized terms used, but not otherwise defined, in this Agreement shall have
the respective meanings given to such terms set forth below:

Additional Processing Plant. As defined in Section 3.4(b).

 

1

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Affiliate. Any Person that, directly or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
another Person. Affiliated shall have the correlative meaning. Notwithstanding
the foregoing, for purposes of this Agreement, Gatherer and its subsidiaries
shall not be Affiliates of Producer or Shipper and or their respective other
subsidiaries, and neither Shipper nor Producer nor any of their respective
subsidiaries shall be Affiliates of Gatherer and its other subsidiaries.

Agreed Formation. The Bakken/Three Forks formation and any other formation which
the Parties agree after the Effective Date will be subject to the dedication
hereunder.

Agreement. As defined in the preamble hereof.

Applicable Law. Any law (including any Environmental Law), rule, regulation,
ordinance, code, order, writ, judgment, decree or rule of common law or any
judicial or administrative interpretation thereof or other legal or regulatory
determination by a Governmental Authority of competent jurisdiction.

BTU. The amount of heat required to raise the temperature of one pound of pure
water from 58.5 degrees Fahrenheit to 59.5 degrees Fahrenheit at a constant
pressure of 14.73 psia.

Business Day. Any calendar Day on which commercial banks in Houston, Texas are
open for business.

Bypass Gas. Gas delivered by Shipper or by a third party to the Plant Receipt
Point that is bypassed around the Processing Plant and is therefore not
processed.

CDP. A central delivery point at which Producer aggregates volumes of Gas
produced from one or more Wells that will be connected to the Gathering System
in accordance with this Agreement, including the Planned CDPs.

Completion Deadline. As defined in Section 3.3(b).

Compression Fee. As defined on Exhibit K.

Condensate. Gas that condenses in the Facilities at ambient temperatures and is
recovered from the Facilities as a hydrocarbon liquid.

Confidential Information. As defined in Section 18.6(a).

Conflicting Dedication. Any gathering agreement or other commitment or
arrangement that would require Dedicated Gas to be gathered and/or compressed on
any gathering system other than the Gathering System, processed in any
processing plant other than the Processing Plant or used to perform gas lift
operations on any system other than the Gas Lift Gas System.

Connection Notice. As defined in Section 3.3(b).

 

2

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Contract Year. Each of (a) the Effective Date through December 31, 2017, (b) the
period from January 1, 2018 through December 31, 2018 and (c) each period of
twelve consecutive Months thereafter.

Control. Possessing the power to direct or cause the direction of the management
and policies of a Person, whether through ownership, by contract, or otherwise.
Notwithstanding the foregoing, any Person shall be deemed to control any
specified Person if such Person owns 50% or more of the voting securities of the
specified Person, or if the specified Person owns 50% or more of the voting
securities of such Person, or if 50% or more of the voting securities of the
specified Person and such Person are under common control. Controlled and
Controls shall have correlative meanings.

Cubic Foot. The volume of Gas in one cubic foot of space at a standard pressure
and temperature base of 14.73 psia and 60 degrees Fahrenheit, respectively.

Day. A period commencing at 9:00 a.m., Central Standard Time, on a calendar day
and ending at 9:00 a.m., Central Standard Time, on the next succeeding calendar
day. Daily shall have the correlative meaning.

Dedicated Acreage. The area identified on Exhibit A.

Dedicated Gas. All Gas produced on or after the Effective Date (except for the
Gas produced from the Excluded Wells) that Producer has the right to control and
deliver for gathering and processing and that is attributable to any Dedicated
Property and is produced through a Well from an Agreed Formation.

Dedicated Properties. All Interests now owned or hereafter acquired by Producer
and located wholly within the Dedicated Acreage.

Delivery Point. Each of the Gathering System Delivery Points and the Plant
Delivery Points.

Design Recoveries. As defined in Section 3.4(a).

DevCos. Bighorn DevCo LLC, a Delaware limited liability company, Bobcat DevCo
LLC, a Delaware limited liability company, and any other Affiliate of OMS or MLP
that directly owns assets utilized in the performance of the Services.

Development Plan. As defined in Section 3.2(a).

Downstream Pipeline. Any Gas or NGL pipeline or any facilities of any end-user
or local distribution company, in each case downstream of the Gathering System
or the Processing Plant, into which Gas or NGLs are delivered by or for the
account of Shipper from the Gathering System or the Processing Plant.

DSU. With respect to each Well or planned Well, the actual spacing unit for such
Well determined by the North Dakota Industrial Commission or, if no such
determination has been made at the relevant time, an area of 1280 acres around
such Well or planned Well within which the well bore for such Well is or is
expected to be open.

 

3

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Easement Notice. As defined in Section 3.9(b).

Effective Date. As defined in the preamble of this Agreement.

Emissions Charges. As defined in Section 10.5.

Environmental Laws. All Applicable Laws pertaining to the presence or release of
environmental contaminants (including any Hazardous Materials), or relating to
natural resources (including any protected species) or the environment
(including the air, water, surface or subsurface of the ground) as same are in
effect at any time and including the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), as amended by Superfund Amendments
and Reauthorization Act (“SARA”), 42 U.S.C. §§ 9601 et seq.; Resource
Conservation and Recovery Act (“RCRA”), as amended by the Solid Waste Disposal
Act (“SWDA”), 42 U.S.C. §§6901 et seq.; Federal Water Pollution Control Act
(“FWPCA”), as amended by the Clean Water Act (“CWA”), 33 U.S.C. §§ 1251 et seq.;
Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.; Clean Air Act (“CAA”), 42
U.S.C., §§ 7401 et seq.; and Toxic Substances Control Act (“TSCA”), 15 U.S.C.,
§§ 2601 et seq., as each are amended from time to time, and any similar state or
local enactments by Governmental Authorities.

Excluded Wells. The Wells listed on Exhibit D.

Facilities. Collectively, the Gathering System, the Gas Lift Gas System, and the
Processing Plant.

Facilities Plan. As defined in Section 3.2(b).

Fees. As defined in Section 5.1.

Firm Capacity Gas. Gas that is accorded the highest priority for the Facilities
with respect to all capacity allocations, interruptions or curtailments,
specifically including (a) Dedicated Gas produced from the Wells delivered from
the Receipt Points, (b) Gas delivered to the Gathering System or the Processing
Plant from any Person for which Gatherer is contractually obligated to provide
the highest priority and (c) Gas Lift Gas delivered on the Gas Lift Gas System.

FL&U. As defined in Section 6.3.

Force Majeure. As defined in Section 14.2.

Fuel. Gas and electric power used in the operation of the Facilities, including
fuel consumed in System Compressor Stations and dehydration facilities.

Fuel Gas Line. Gatherer’s pipeline delivering Residue Gas from the Processing
Plant to the System Compressor Stations for use as Fuel and as Residue Gas Lift
Gas.

 

4

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Gallon. One U.S. gallon, which is equal to 231 cubic inches.

Gas. Any mixture of gaseous hydrocarbons, consisting essentially of methane and
heavier hydrocarbons and inert and noncombustible gases, that is extracted from
beneath the surface of the earth.

Gas Lift Delivery Point. Each point at which Gatherer will redeliver Regional
Gas Lift Gas or Residue Gas Lift Gas (as applicable) at the point of
interconnection of a Gas Lift Lateral and Producer’s gas lift equipment at a
CDP.

Gas Lift Fee. As defined on Exhibit K.

Gas Lift Gas. Regional Gas Lift Gas and Residue Gas Lift Gas.

Gas Lift Gas System. The planned Gas Lift Gas system described on Exhibit B, as
such system is expanded after the Effective Date, including, in each case, to
the extent now in existence or constructed or installed in the future, Gas Lift
Gas lateral pipelines, interconnections between such lateral pipelines and the
Gathering System, the Processing Plant and/or Residue Gas pipelines, Gas Lift
Gas compression equipment, Gas Lift Delivery Points (including all
interconnection facilities), Gas Measurement Facilities, rights of way, fee
parcels, surface rights and permits, and all appurtenant facilities.

Gas Lift Lateral. Each lateral pipeline transporting Gas from the Gathering
System, the Processing Plant or a Residue Gas line to a Lift Delivery Point.

Gas Quality Specifications. As defined in Section 10.1.

Gatherer. As defined in the preamble of this Agreement.

Gathering Fee. As defined on Exhibit K.

Gathering System. The existing and planned gathering system described on Exhibit
B, together with any additional System Segments constructed after the Effective
Date, as such gathering system is expanded after the Effective Date, including,
in each case, to the extent now in existence or constructed or installed in the
future, Gas gathering pipelines (including High Pressure gathering pipelines),
System Compressor Stations, Receipt Points, Gathering System Delivery Points
(including all interconnection facilities), Gas Measurement Facilities,
Condensate handling facilities, pig receiving facilities, rights of way, fee
parcels, surface rights and permits, and all appurtenant facilities upstream of
the Delivery Points.

Gathering System Delivery Points. Each of the Upstream Delivery Points and Gas
Lift Delivery Points.

Gross Heating Value. The number of BTUs produced by the complete combustion in
air, at a constant pressure, of one Cubic Foot of Gas when the products of
combustion are cooled to the initial temperature of the Gas and air and all
water formed by combustion is condensed to the liquid state.

 

5

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Governmental Authority. Any federal, state, local, municipal, tribal or other
government; any governmental, regulatory or administrative agency, commission,
body or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, regulatory or taxing authority or power; and
any court or governmental tribunal, including any tribal authority having or
asserting jurisdiction.

Hazardous Materials. Collectively, (a) materials defined as “hazardous
substances” in CERCLA, or any successor statute, unless such term has been given
broader meaning by Applicable Law with respect to the Services or the Parties
(including Governmental Authorities establishing common law liability), in which
case such broader meaning shall apply; (b) materials defined as “hazardous
wastes” in RCRA, or any successor statute, unless such term has been given
broader meaning by Applicable Law with respect to the Services or the Parties
(including Governmental Authorities establishing common law liability), in which
case such broader meaning shall apply; (c) petroleum or petroleum product;
(d) any polychlorinated biphenyl and (e) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance, including
naturally occurring radioactive material, regulated under or within the meaning
of any applicable Environmental Law.

High Pressure. Pipelines gathering Gas that has been compressed at the System
Compressor Stations, including pipelines from the discharge of any System
Compressor Station to the relevant Delivery Point.

Ideal Gas Laws. The thermodynamic laws applying to perfect gases.

Imbalances. As defined in Section 9.3.

Index Price. Inside FERC Gas Market Report (NNG Ventura Natural Gas) less the
applicable transportation from the Processing Plant and the actual costs
associated with all such transportation as expressed in $/MMBTU. If such index
is not available, an index price determined by Shipper and Gatherer based on
where such Gas production is being sold, or, if no appropriate index is
available, a price based on a netback calculation determined by Shipper and
reasonably acceptable to Gatherer.

Inferior Liquids. Mixed crude oil, slop oil, salt water, nuisance liquids and
other liquids recovered by Gatherer in the Gathering System and/or the
Processing Plant.

Initial Plant. As defined in Section 3.4(a).

Interests. Oil and gas leasehold interests and oil and gas mineral fee
interests, including working interests, overriding royalty interests, net
profits interests, carried interests, and similar rights and interests.

Interruptible Gas. Gas that is accorded a lower priority on the Gathering System
and/or at the Processing Plant with respect to capacity allocations,
interruptions or curtailments as compared to Firm Capacity Gas.

 

6

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Lost and Unaccounted For Gas. Gas received into the Gathering System that is
released or lost through piping, equipment, operations or measurement losses or
inaccuracies or that is vented, flared or lost in connection with the operation
of the Facilities.

Maintenance. As defined in Section 7.2.

MAP. As defined in Section 8.1(b).

MAP Fee. As defined on Exhibit K.

Maximum DSU Volume. [***] MCF per Day.

MCF. 1,000 Cubic Feet.

Measurement Facilities. Facilities or equipment used to measure the volume of
Gas or NGLs, which may include meter tubes, isolation valves, recording devices,
communication equipment, buildings and barriers.

MLP. As defined in the preamble of this Agreement.

Month. A period commencing at 9:00 a.m., Central Standard Time, on the first Day
of a calendar month and extending until 9:00 a.m., Central Standard Time, on the
first Day of the next succeeding calendar month. Monthly shall have the
correlative meaning.

MMBTU. 1,000,000 BTUs.

MMCF. 1,000,000 Cubic Feet.

New Well. Any Well spud after the Effective Date.

NGL Delivery Point. Each point at which Gatherer will redeliver NGLs to or for
the account of Shipper, which shall be the point of interconnection of the
Processing Plant with the facilities of the applicable Downstream Pipeline or
NGL Truck Loading Facility, including those points more particularly described
on Exhibit C.

NGL Shrink. As defined in Section 6.3.

NGL Truck Loading Facility. The point at which Gatherer will redeliver NGLs to
or for the account of Shipper into trucks at the Processing Plant(s).

NGLs. Natural gas liquids extracted and recovered from Gas after processing in
the Processing Plant and any Condensate or Inferior Liquids recovered from Gas
in the Gathering System or the Processing Plant prior to or during processing.

OMS. As defined in the preamble of this Agreement.

Parties. As defined in the preamble of this Agreement.

Party. As defined in the preamble of this Agreement.

 

7

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Permit. Any permit, license (including seismic or geophysical licenses, where
applicable), certification, concession, approval, consent, ratification, waiver,
authorization, clearance, confirmation, exemption, franchise, designation,
variance, qualification or accreditation issued, granted, given or otherwise
made available by or under any Governmental Authority or pursuant to any
Applicable Law.

Person. An individual, a corporation, a partnership, a limited partnership, a
limited liability company, an association, a joint venture, a trust, an
unincorporated organization, or any other entity or organization, including a
Governmental Authority.

Planned CDP. As defined in Section 3.3(b).

Plant Delivery Point. Each of the Residue Delivery Points and the NGL Delivery
Points.

Plant Receipt Point. The point or points at which Gas first enters the
Processing Plant from the Gathering System.

Plant Site. The site at which the Processing Plant is located or will be
constructed (as applicable) in Section 35 of T151N R98W, McKenzie County, North
Dakota, or elsewhere in McKenzie County, North Dakota, or such other location
mutually acceptable to the Parties.

Processing Fee. As defined on Exhibit K.

Processing Plant(s). The Gas processing facilities located at the Plant Site,
together with any additional processing plants and related facilities
constructed and installed at the Plant Site after the Effective Date, in each
case owned by Gatherer through one or more DevCos, as such processing facilities
are expanded after the Effective Date, including, to the extent installed,
refrigeration and chilling equipment, absorption vessels, associated condensing,
heating, compressing, pumping, conveying, dehydration and other equipment,
instrumentation, and recompression and refrigeration compression facilities, and
all related structures; the Residue Gas pipelines to the Residue Delivery Points
and the associated interconnections; the NGL pipelines to the NGL Delivery
Points and the associated interconnections; NGL Truck Loading Facilities; and
all easements, rights of way, and other property rights on which any of the
foregoing facilities are located; in each case wherever located as shown on
Exhibit B. For the avoidance of doubt, “Processing Plant(s)” includes the
Initial Plant and the Additional Processing Plant.

Producer. As defined in the preamble of this Agreement.

psia. Pounds per square inch, absolute.

psig. Pounds per square inch, gauge.

Reasonable and Prudent Operator. A Person using reasonable efforts to perform
its obligations under this Agreement exercising the degree of skill, diligence,
prudence and foresight that would reasonably and ordinarily be expected from a
skilled and experienced operator complying with all Applicable Laws and engaged
in the same type of undertaking under the same or similar circumstances.

 

8

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Receipt Point. The inlet valve at the Measurement Facilities located at or
nearby or assigned to (a) a CDP where one or more Wells are connected to the
Gathering System or (b) the Stabilizer Interconnection.

Regional Gas Lift Gas. Unprocessed Gas redelivered at the Gas Lift Delivery
Points for use by Producer for artificial lift in the Wells.

Residue Delivery Point. Each point at which Gatherer will redeliver Residue Gas
to or for the account of Shipper, which shall be the point of interconnection of
the Residue Gas lines from the Processing Plant to the facilities of a
Downstream Pipeline, including those points more particularly described on
Exhibit C. Residue Delivery Point does not include the Gas Lift Delivery Points.

Residue Gas. The portion of the Gas delivered to the Plant Receipt Point
remaining after (a) processing at the Processing Plant (if processed) and
(b) the reduction for FL&U. Residue Gas shall include Bypass Gas.

Residue Gas Lift Gas. Residue Gas redelivered at the Gas Lift Delivery Points
for use by Producer for artificial lift in the Wells.

Services. As defined in Section 3.1.

Shipper. As defined in the preamble of this Agreement.

Shipper’s GHG Emissions. As defined in Section 10.5.

Shipper’s Net Quantities. As defined in Section 6.3.

Shipper’s Total FL&U. As defined in Section 6.3.

Stabilizer Interconnection. The point of interconnection between the Facilities
and Gatherer’s crude oil stabilizer, located at or near the Processing Plant,
where Gas removed from crude oil of Shipper and other customers of Gatherer is
delivered to the Facilities for processing.

System Compressor Stations. As defined in Section 3.5.

System High Pressure Lines. As defined in Section 3.6.

System Segment. A physically separate segment of the Gathering System that
connects one or more Wells to the Plant Receipt Point or a Gathering System
Delivery Point, including all Gas gathering pipelines (including High Pressure
gathering pipelines), System Compressor Stations, Receipt Points, Gathering
System Delivery Points, Plant Receipt Point, Gas Measurement Facilities,
Condensate handling facilities, rights of way, fee parcels, surface rights and
permits, and all appurtenant facilities.

 

9

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Target Completion Date. As defined in Section 3.3(b).

Taxes. All gross production, severance, conservation, ad valorem and similar or
other taxes measured by or based upon production, together with all taxes on the
right or privilege of ownership of Gas, or upon the Services, including
gathering, transportation, handling, transmission, compression, processing,
treating, conditioning, distribution, sale, use, receipt, delivery or redelivery
of Gas and NGLs, including gross receipts taxes, and including all of the
foregoing now existing or in the future imposed or promulgated.

Third Party Gas. Gas produced by Persons other than Producer and not considered
Dedicated Gas hereunder.

Transfer. Any sale, assignment, conveyance or other transfer, including pursuant
to an exchange or farmout. Transfers and Transferred have the correlative
meanings.

Transferee. Any Person to which a Transfer is made.

Upstream Delivery Point. The point at which Gatherer will redeliver unprocessed
Gas to or for the account of Shipper, which shall be the point of
interconnection of the Gathering System with the facilities of the applicable
Downstream Pipeline, as more particularly described on Exhibit C. Upstream
Delivery Point does not include Gas Lift Delivery Points.

Well. A well for the production of hydrocarbons in which Producer owns an
interest and that is operated by Producer that produces or is intended to
produce Dedicated Gas or otherwise is connected or is required to be connected
to the Gathering System in accordance with this Agreement.

Well Pad. The surface installation on which one or more Wells are located.

ARTICLE 2

PRODUCER AND SHIPPER COMMITMENTS

Section 2.1 Producer’s Dedication. Subject to Section 2.3 through Section 2.5,
Producer exclusively dedicates the Dedicated Properties to Gatherer for the
performance of the Services under this Agreement and commits to deliver to
Gatherer on account of Shipper, as and when produced, all Dedicated Gas into the
Facilities for the performance of the Services under this Agreement. The Parties
agree and acknowledge that the Gas produced from the Excluded Wells is not
subject to the dedication and commitment made by Producer under this Agreement.

Section 2.2 Shipper’s Commitment. Subject to Section 2.3 through Section 2.5,
Shipper exclusively dedicates and commits to deliver to Gatherer, as and when
produced and purchased from Producer, all Dedicated Gas into the Facilities for
the performance of the Services under this Agreement. The Parties agree and
acknowledge that the Gas produced from the Excluded Wells is not subject to the
dedication and commitment made by Shipper under this Agreement.

 

10

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 2.3 Conflicting Dedications. Producer and Shipper shall have the right
to comply with each of the Conflicting Dedications entered into by a
non-Affiliated predecessor-in-interest to Producer that is applicable as of the
date of acquisition thereof to any Dedicated Property acquired after the
Effective Date (but not any Conflicting Dedication entered into in connection
with such acquisition); provided, however, that Producer and Shipper shall have
the right to comply with Conflicting Dedications only until the last Day of the
Month in which the termination of such Conflicting Dedication occurs and neither
Producer nor Shipper shall affirmatively extend the term of such Conflicting
Dedication beyond the minimum term provided for in the document evidencing such
Conflicting Dedication or allow the term of such Conflicting Dedications to
extend beyond its primary or initial term pursuant to the operation of an
“evergreen” or other similar provision if Producer or Shipper has the ability to
terminate such Conflicting Dedication without incurring any costs, penalties or
expenses. To Producer’s and Shipper’s knowledge, the Dedicated Gas is not, as of
the Effective Date, subject to any Conflicting Dedication. If Dedicated Gas
produced from a Well on a Well Pad is subject to a Conflicting Dedication that
Producer and Shipper have the right to comply with under this Section 2.3,
Producer and Shipper have the right, in complying with such Conflicting
Dedication, to deliver the Dedicated Gas from such Well Pad in accordance with
the Conflicting Dedication.

Section 2.4 Producer’s and Shipper’s Reservations. Producer and Shipper reserve
the following rights with respect to Dedicated Gas for themselves and for the
operator of the relevant Dedicated Properties: (a) to operate Wells producing
Dedicated Gas as a reasonably prudent operator in its sole discretion, including
the right, but never the obligation, to drill New Wells, to repair and rework
then-existing Wells, to renew or extend, in whole or in part, any Interest
covering any of the Dedicated Properties, and to cease production from or
abandon any Well or surrender or release any such Interest, in whole or in part,
whether or not capable of producing oil and gas under normal methods of
operation; (b) to deliver or furnish to lessors and holders of other existing
similar burdens on production such Gas as is required to satisfy the terms of
the applicable leases or other applicable instruments; (c) to acquire Wells
connected to existing gathering systems and to continue to deliver to such
gathering systems Gas produced from such Wells; provided that, to the extent
that Gas from such Wells constitutes Dedicated Gas and is not previously
dedicated to a third party, then Producer or Shipper shall deliver a Connection
Notice to Gatherer with respect to any such Well not later than 30 Days after
its acquisition, and thereafter shall deliver Gas to such gathering system only
until Gatherer has connected such Well to the Gathering System in accordance
with Section 3.3; (d) to pool, communitize or unitize Producer’s Interests with
respect to Dedicated Gas; provided that the Producer’s share of Gas produced
from such pooled, communitized or unitized Interests shall be committed and
dedicated to this Agreement; (e) to deliver Dedicated Gas that has been
temporarily or permanently released from the dedication and commitment made by
Producer and Shipper under this Agreement, including pursuant to Section 3.3,
Section 3.9(c), Section 7.6, Section 8.1(d) or Section 8.1(e), to any Person
other than Gatherer; and (f) to use Dedicated Gas for operations (including
reservoir pressure maintenance and drilling or hydraulic fracturing fuel).

Section 2.5 Covenant Running with the Land. The Parties intend that the
dedication and commitment made by Producer and Shipper under this Agreement be a
covenant running with (a) the Dedicated Properties, as a burden on Producer’s
title thereto and binding on successors-in-interest in and to the Dedicated
Properties, and (b) the Facilities, as a benefit

 

11

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

accruing to Gatherer’s title thereto and inuring to the benefit of
successors-in-interest to the Facilities. Producer shall not Transfer any or all
of its interest in any Dedicated Property unless (i) Producer obtains and
delivers to Gatherer a written acknowledgment by the Transferee in favor of
Gatherer acknowledging that the Transferred Dedicated Property shall remain
subject to this Agreement in all respects and (ii) each instrument of conveyance
expressly so states. Notwithstanding the foregoing, Producer shall be permitted
to Transfer any Dedicated Property free of the dedication and commitment made by
Producer and Shipper under this Agreement and without complying with the
requirements of this Section 2.5 in a Transfer in which a number of net acres of
Dedicated Properties that, when added to the total of net acres of Dedicated
Properties theretofore and, where applicable, simultaneously Transferred free
and clear of the dedication and commitment made by Producer and Shipper under
this Agreement, does not exceed the aggregate number of net acres of Dedicated
Properties acquired by Producer after the Effective Date, including in a
transaction in which Dedicated Properties are exchanged for other properties
located in the Dedicated Acreage that would be subject to dedication hereunder;
provided, however, that any such release of Dedicated Properties from such
dedication and commitment shall not include any Dedicated Gas produced from any
Well that is located on a Well Pad if the other Wells on such Well Pad are or
have been connected to the Gathering System (whether producing, shut-in,
temporarily abandoned or which has been spud or as to which drilling,
completion, reworking or other well operations have commenced) or that is
located on a Well Pad if a Connection Notice has previously been delivered by
Producer for the CDP through which such Well Pad is produced.

Section 2.6 Priority of Dedicated Gas. Dedicated Gas tendered at the Receipt
Points on the Gathering System on any Day shall be Firm Capacity Gas. Shipper’s
Gas that is not Dedicated Gas that is tendered at the Receipt Points on any Day
shall be Interruptible Gas unless otherwise agreed to by Gatherer.

ARTICLE 3

SERVICES; GATHERING SYSTEM EXPANSION AND CONNECTION OF WELLS

Section 3.1 Gatherer Service Commitment. Subject to and in accordance with the
terms and conditions of this Agreement, Gatherer commits to providing the
following services (collectively, the “Services”) to Producer and Shipper:

(a) construct and expand the Gathering System to connect the Gathering System to
each CDP that aggregates any Well or Wells that is or are producing or will
produce Dedicated Gas and with respect to which Producer has delivered a
Connection Notice in accordance with Section 3.3;

(b) provide, maintain and operate Measurement Facilities at or downstream of the
separator and production treater at each CDP;

(c) receive, or cause to be received, into the Facilities, from or for the
account of Shipper, at each Receipt Point, all Gas tendered by or on account of
Shipper up to the Maximum DSU Volume per Day at the Receipt Points on each DSU
and subject to Section 8.1(f);

 

12

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(d) receive, or cause to be received, into the Facilities, from or for the
account of Shipper, at each Receipt Point, all Interruptible Gas, if any, to the
extent not curtailed in accordance with Section 7.3(a);

(e) compress Gas received from or on account of Shipper into the Gathering
System at the System Compressor Stations and install, maintain and operate the
System High Pressure Lines associated therewith;

(f) subject to Section 3.4, dehydrate and process such Dedicated Gas at the
Processing Plant(s);

(g) deliver to or for the account of Shipper, (i) at the Residue Delivery Point
nominated in accordance with Section 9.2, Residue Gas allocated to Shipper or
(ii) during any period when the Processing Plant does not have sufficient
capacity or is not able for any reason including Force Majeure to process all
Shipper’s Gas received into the Gathering System, Shipper’s Gas prior to
processing at the Upstream Delivery Point nominated in accordance with
Section 9.2;

(h) deliver to or for the account of Shipper, at the NGL Delivery Points
nominated in accordance with Section 9.2, all NGLs extracted at the Processing
Plant(s) allocated to Shipper; and

(i) construct the Gas Lift Gas System and redeliver Gas Lift Gas to Shipper at
the Gas Lift Delivery Points subject to and in accordance with Section 3.7.

Gatherer shall act as a Reasonable and Prudent Operator in performing the
Services and any of its other obligations under this Agreement.

Section 3.2 Development Plan; Facilities Plan; Exchange and Review of
Information.

(a) Producer has provided to Shipper and Gatherer, and shall provide to Shipper
and Gatherer prior to October 15 of each year, copies of a drilling plan for the
following calendar year (each, a “Development Plan”), which shall describe the
planned drilling and production activities relating to Producer’s Interests in
the Dedicated Acreage during such year, including good faith and reasonable
forecasts of the volume of Dedicated Gas expected to be produced through all
CDPs during such year, and including the location of all Planned CDPs expected
to be connected to the Gathering System during such year, and the projected spud
date, projected completion date and projected volumes for each New Well that is
expected to be completed and to produce through each CDP during such year. Each
time Producer materially updates the Development Plan, it shall provide a copy
of such updated Development Plan to Shipper and Gatherer, but not less
frequently than on a calendar quarter basis.

(b) Gatherer has previously provided Producer and Shipper with a copy of its
current Facilities plan describing and/or depicting the Facilities, including
all pipelines, all Receipt Points and Delivery Points, and all compression,
dehydration, processing and gas lift facilities and other major physical
facilities, together with their locations, sizes and other physical
specifications, operating parameters, capacities, and other relevant
specifications, and together with a schedule for completing the construction and
installation of the planned portions

 

13

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

thereof, in each case as currently in existence, under construction, or planned
(such plan, as updated as hereinafter provided, the “Facilities Plan”). The
Facilities Plan shall state, for each planned pipeline, the estimated volume of
line fill that will be required in order to put such pipeline into operation.
Based on the Development Plans and such other information about the expected
development of the Dedicated Properties as shall be provided to Gatherer by
Producer, as well as forecast Delivery Point nominations received from Shipper
from time to time, Gatherer shall periodically update the Facilities Plan.
Without limiting the generality of the foregoing, Gatherer shall ensure that the
Facilities Plan reflects all Planned CDPs included in each Development Plan not
later than 30 Days after such Development Plan is delivered to Gatherer.
Gatherer shall provide a copy of the Facilities Plan to Producer and Shipper and
their respective representatives from time to time and shall make
representatives of Gatherer available to discuss the Facilities Plan from time
to time with Producer and Shipper and their respective representatives. Gatherer
shall provide Producer and Shipper updates not less frequently than Monthly on
the progress of work on all facilities necessary to connect Planned CDPs to the
Gathering System, to connect the Gathering System to the Gathering System
Delivery Points, to connect the Gas Lift Gas System to the Gas Lift Gas Delivery
Points, and to provide the Services associated with such Gas, as set forth in
the then-current Facilities Plan.

(c) The Parties recognize that all information provided by Producer to Gatherer
or Shipper regarding its intentions with respect to the development of the
Dedicated Properties, is subject to change and revision at any time at the
discretion of Producer, and that such changes may impact the timing,
configuration and scope of the planned activities of Gatherer. The exchange of
such information and any changes thereto shall not give rise to any rights or
liabilities as among the Parties except as expressly set forth in this
Agreement, and Gatherer shall determine at its own risk the time at which it
begins to work on and incur costs in connection with particular Gathering System
expansion projects, including the acquisition of rights of way, equipment and
materials. Without limiting the generality of the foregoing, Producer has no
obligation to Shipper or Gatherer under this Agreement to develop or produce any
hydrocarbons from the Dedicated Properties or to pursue or complete any drilling
or development on the Dedicated Properties, other than the terms specifically
stated in this Agreement.

Section 3.3 Expansion of Gathering System; Connection of Wells; Delivery Points.

(a) Gatherer shall design and develop the Facilities for the purpose of
providing the Services as and when needed to support the upstream development of
the Planned CDPs, and Gatherer shall be obligated, at its sole cost and expense,
subject to the provisions of this Agreement, to procure, construct, install, own
and operate the Facilities so as to timely connect the Planned CDPs to the
Gathering System, connect the Gathering System to the Processing Plant and the
Gathering System Delivery Points, connect the Processing Plant to the Plant
Delivery Points, connect the Gas Lift Gas System to the Gas Lift Delivery Points
and timely commence providing the full scope of the Services with respect to all
Dedicated Gas produced from all CDPs, including the Planned CDPs from and after
their completion, all in accordance with this Section 3.3; provided that the
foregoing shall not preclude Gatherer from also designing and developing the
Facilities to accommodate Third Party Gas and shall not require Gatherer to
build any Additional Processing Plants.

 

14

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(b) Producer shall from time to time give notice (a “Connection Notice”) to
Gatherer (with a copy to Shipper) of each CDP that Producer intends to construct
and install (or a CDP that is subject to a Conflicting Dedication that has
expired or will expire, or that Producer or Shipper has terminated or will
terminate, prior to the applicable Completion Deadline) through which Dedicated
Gas will be produced (each, a “Planned CDP”). Each Connection Notice shall set
forth the target completion date for drilling and completion of the initial Well
to produce through such Planned CDP (the “Target Completion Date”). Following
delivery of a Connection Notice with respect to a Planned CDP, Gatherer shall
cause the necessary facilities to be constructed to connect such CDP to the
Gathering System and to commence the Services with respect to Dedicated Gas
produced from such Planned CDP by the date that is (i) in the case of a Planned
CDP that (A) is located two miles or less from the then-existing Gathering
System at the time of such Connection Notice and (B) the Target Completion Date
for which is during the months of May through October, 90 Days after the date of
Producer’s delivery of such Connection Notice and (ii) in the case of a Planned
CDP that (A) is located greater than two miles from the then-existing Gathering
System at the time of such Connection Notice or (B) the Target Completion Date
for which is during the months of November through April, 180 Days after the
date of Producer’s delivery of such Connection Notice (such date, the
“Completion Deadline”). Gatherer shall provide Producer and Shipper notice
promptly upon Gatherer’s becoming aware of any reason to believe that it may not
be able to connect a Planned CDP to the Gathering System by the Completion
Deadline therefor or to otherwise complete all facilities necessary to provide
the full scope of the Services with respect to all Dedicated Gas produced
through such Planned CDP by the Completion Deadline therefor. If and to the
extent Gatherer is delayed in completing and making available such facilities by
a Force Majeure event or any action of Producer that is inconsistent with the
cooperation requirements of Section 3.10, then the Completion Deadline for such
connection shall be extended for a period of time equal to that during which
Gatherer’s completion and making available of such facilities was delayed by
such events or actions. If such facilities are not completed and made available
by the Completion Deadline (as may be extended in accordance with Section
3.9(b)), as Shipper’s and Producer’s sole and exclusive remedies for such delay:

(i) the Dedicated Gas produced from such CDP shall be temporarily released from
the dedication and commitment made by Producer and Shipper under this Agreement
until such time as such CDP is connected to the Gathering System and the
Gathering System is ready to receive Dedicated Gas produced through such CDP and
to commence the Services with respect thereto; and

(ii) if such facilities are not completed and made available by 60 Days after
the Completion Deadline then at Producer’s option, the Dedicated Gas produced
from the CDP and any future Wells drilled within the same DSU shall be
permanently released from the dedication and commitment made by Producer and
Shipper under this Agreement.

(c) To the extent that the CDP connection is required sooner than the Completion
Deadline determined as set forth above, the Parties shall meet and discuss the
issues and potential additional costs associated with acceleration of such
connection, and shall use reasonable efforts mutually to agree upon an
accelerated connection timing. If Producer is willing to pay for the additional
costs involved with accelerating a connection, Gatherer shall use reasonable
efforts to complete the CDP connection within such accelerated timing.

 

15

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(d) The Parties agree and acknowledge that Producer has as of the Effective Date
delivered Connection Notices to Gatherer with respect to certain Planned CDPs
set forth in the Development Plan effective as of the Effective Date. Such
Connection Notices shall be deemed to have been given for each such Planned CDP
on the Effective Date.

(e) Gatherer shall be obligated, at Gatherer’s cost, to provide connections to
the Upstream Delivery Points, Residue Delivery Points and NGL Delivery Points
set forth on Exhibit C or within the Facilities Plan. If Shipper specifies that
Dedicated Gas is or NGLs allocated to Dedicated Gas are to be delivered to an
Upstream Delivery Point, Residue Delivery Point, or NGL Delivery Point, as
applicable, not described on Exhibit C or within the Facilities Plan that is not
at such time connected to the Gathering System or the Processing Plant, Gatherer
shall, at Shipper’s sole actual cost, risk and expense, provide a connection to
such Delivery Point. Such costs shall be allocated pro rata based on volume
utilization with any third party shipper that requests utilization of such
additional Delivery Point. Gatherer shall proceed with due diligence and in good
faith to obtain the necessary governmental authorizations and to enter into the
necessary third party agreements (any such agreement to be on terms acceptable
to Gatherer) to connect the Gathering System to each such new delivery point.
All such Delivery Points shall be provided with all interconnection facilities
and other Delivery Point facilities (including any Measurement Facilities), and
with sufficient capacities, necessary to permit Dedicated Gas or NGLs allocated
to Dedicated Gas to be redelivered at such Delivery Point in accordance with
this Agreement (with all expansions of capacity at such new Delivery Points, not
including the Delivery Points described on Exhibit C or within the Facilities
Plan, being at Shipper’s sole actual cost, risk and expense). Subject to the
foregoing, Gatherer shall connect each CDP to the Gathering System such that Gas
from such CDP can be redelivered to the Upstream Delivery Points and Residue
Delivery Points described in the Facilities Plan, and such that NGLs extracted
from such Gas can be delivered to the NGL Delivery Points described in the
Facilities Plan. Upon completion of the connection of the Gathering System to
such new delivery point pursuant to this Section 3.3(e) and such connection
becoming operational, the point of interconnection between the Gathering System
and such new delivery point shall thereafter be a Delivery Point under this
Agreement. The Parties shall discuss Shipper’s plans and timing for all new
Delivery Point connections on a Monthly basis. Subject to Section 3.1(g),
Gatherer shall have the right to flow volumes to any Processing Plant(s) prior
to delivering volumes to any Upstream Delivery Point as long as such
prioritization of flow does not cause the curtailment of Shipper’s volumes.

Section 3.4 Gas Processing.

(a) Gatherer has designed, engineered, procured, constructed and installed, or
caused to be designed, engineered, procured, constructed and installed, the
initial processing plant and all related and ancillary facilities and equipment
at the Plant Site as of the Effective Date (such initial processing plant and
all such related and ancillary facilities and equipment, the “Initial Plant”).
As of Effective Date, the Initial Plant has a nameplate processing capacity of
80 MMCF per Day with design recoveries of less than [***]% ethane, greater than
[***]% propane, and greater than [***]% isobutane, normal butane and natural
gasolines (the “Design Recoveries”).

 

16

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

The Parties agree and acknowledge that Gatherer will recover minimal ethane
based on the Design Recoveries due to current ethane pricing economics. If the
Design Recoveries are modified after the Effective Date to allow for further
ethane recoveries, then Shipper shall have the sole right to determine whether
Gatherer will recover or reject ethane during any Month. Until construction and
placement into service of the Additional Processing Plant, all volumes of
Shipper’s Gas processed at the Initial Plant shall be charged the Processing Fee
and shall be processed on the terms set forth in this Agreement. The Processing
Fee collected by Gatherer for all volumes processed at the Initial Plant shall
be allocated to the DevCo that owns the Initial Plant.

(b) If at any time the then-current Development Plan indicates that additional
processing capacity is required beyond the processing capacity of the Processing
Plant as it exists at that time to continue to provide the gas processing
Services pursuant to the terms of this Agreement, then OMS may elect to provide
additional gas processing capacity following the Effective Date in order to
provide the processing services under this Agreement, which may be in the form
of one or more additional processing plants (including all facilities and
equipment constructing and installed in connection with such processing
facilities and used solely in the operation of such processing facilities, the
“Additional Processing Plant”), and shall cause such Additional Processing Plant
to be installed and made operational as soon as reasonably practicable. If OMS
elects not to build the Additional Processing Plant, then Gatherer shall provide
additional Upstream Delivery Point capacity at Gatherer’s sole cost and expense.
Notwithstanding the foregoing, the obligation of Gatherer pursuant to this
Section 3.4(b) shall not apply to the connection of additional Upstream Delivery
Points requested by Producer pursuant to Section 3.3(e). For the avoidance of
doubt, MLP shall have no obligation to build the Additional Processing Plant.

(c) If OMS elects to build the Additional Processing Plant pursuant to Section
3.4(b), from and after the date that the Additional Processing Plant is
constructed and placed into service, all volumes of Shipper’s Gas processed at
any Processing Plant shall continue to be charged the Processing Fee and shall
continue to be processed on the terms set forth in this Agreement.

Section 3.5 Compression Facilities. The Facilities Plan shall describe the
compression facilities that will be required to compress Dedicated Gas in order
for all of the Receipt Points on the Gathering System to be operated at a
pressure not to exceed [***] psig or, subject to the provisions of this
Section 3.5, such lower pressure as may be requested by Producer or Shipper and
mutually agreed to by Gatherer from time to time (“System Compressor Stations”).
Gatherer shall install, operate and maintain each System Compressor Station as a
Reasonable and Prudent Operator. For the avoidance of doubt, Gatherer shall have
the right at any time to add additional compressor stations to the Gathering
System, and to add compression capacity at any System Compressor Station in
addition to the capacity that is reflected in the Facilities Plan, as it deems
necessary or appropriate to provide the Services and such services as it is
providing in respect of Third Party Gas.

Section 3.6 High Pressure Services. The Facilities Plan shall include the High
Pressure gathering pipelines that Gatherer determines are necessary or
appropriate to connect the Gathering System to the Gathering System Delivery
Points and to the Residue Delivery Points and to redeliver the volumes of
Dedicated Gas to such Delivery Points in the most efficient

 

17

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

manner (“System High Pressure Lines”). Acting as a Reasonable and Prudent
Operator, Gatherer shall install each such System High Pressure Line, together
with the associated System Compressor Stations, and shall operate and maintain
each System High Pressure Line with the capability to redeliver the Dedicated
Gas at pressures required by the Delivery Points. For the avoidance of doubt,
Gatherer shall have the right at any time to add additional High Pressure
gathering pipelines to the Gathering System as it deems necessary or appropriate
to provide the Services and such services as it is providing in respect of Third
Party Gas.

Section 3.7 Gas Lift Gas.

(a) Gatherer shall use commercially reasonable efforts to provide Gas Lift Gas
to Shipper for redelivery at the Gas Lift Delivery Points as provided in this
Section 3.7.

(b) Subject to the provisions of this Section 3.7, Gatherer will fulfill
Producer’s requirements for Gas Lift Gas using Residue Gas Lift Gas during
periods of time when sufficient capacity exists in the Fuel Gas Line and when
the Processing Plant is not at or approaching capacity. Thereafter, Gatherer may
fulfill such requirements using Regional Gas Lift Gas. Gatherer shall install,
operate and maintain compression equipment and related liquids handling
facilities in order to provide volumes of Regional Gas Lift Gas. Regional Gas
Lift Gas shall be dehydrated by Gatherer to a water vapor content at or below
[***] pounds per MMCF, but will not be processed and thus will still contain
significant NGLs.

(c) The Connection Notice for each Planned CDP shall include Shipper’s estimate
of its Monthly volume and pressure requirements for Gas Lift Gas at such Planned
CDP. Within 45 Days of Shipper’s delivery of such notice, Gatherer shall review
such requirements and confirm whether or not Gatherer can reasonably redeliver
such Gas Lift Gas to Shipper. If Gatherer confirms that it can redeliver such
Gas Lift Gas to Shipper, Gatherer shall construct Gas Lift Gas facilities,
including compression equipment, lateral pipelines, interconnections between
such lateral pipelines and the Gathering System, the Processing Plant and/or
Residue Gas pipelines, as applicable, Measurement Facilities, and Gas Lift
Delivery Point facilities, at the sole cost and expense of Gatherer. Producer
shall be responsible for the construction, ownership and operation of facilities
to transport such Gas Lift Gas from the Gas Lift Delivery Point to the Wells
where such Gas will be injected.

(d) Gatherer will provide Gas Lift Gas at the pressure as requested by Producer
not to exceed [***] psig under normal operating conditions and Gatherer shall
use reasonable efforts with the existing Facilities to provide Gas Lift Gas at
pressures in excess of [***] psig from time to time as requested by Producer
primarily during startup of Producer’s Gas Lift Gas facilities at a Well.

(e) The volume of Gas Lift Gas delivered to Shipper at the Gas Lift Delivery
Points will not be charged the Gathering Fee, the Compression Fee or the
Processing Fee. Thus the volume of Gas Lift Gas delivered to Shipper at the Gas
Lift Delivery Points will be deducted from the Receipt Point volumes prior to
Gatherer applying the Gathering Fee, the Compression Fee or the Processing Fee
to such Receipt Point volumes. An example of such calculation is attached as
Exhibit H.

 

18

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 3.8 Gas Removed for Lease Operations. Gatherer shall use commercially
reasonable efforts to accommodate, at the actual cost and expense of Producer,
any request by Producer or Shipper to redeliver to Shipper any Gas that has been
received into the Gathering System prior to a Compressor Station that Producer
desires to use in lease operations (other than Gas Lift Gas), including for
drilling and hydraulic fracturing fuel. Producer and Shipper shall be
responsible for the construction, ownership and operation of facilities to
transport such Gas from the point of redelivery of such Gas from the Gathering
System to the lease sites where such Gas will be used. For the avoidance of
doubt, such Gas shall be charged the Gathering Fee, but not charged the
Compression Fee or the Processing Fee.

Section 3.9 Right of Way and Access.

(a) Gatherer is responsible for the acquisition of rights of way, crossing
permits, licenses, use agreements, access agreements, leases, fee parcels and
other rights in land necessary to construct, own and operate the Facilities, and
all such rights in land shall be solely for use by Gatherer and shall not be
shared with Producer, except as otherwise agreed by Gatherer; provided that
Producer agrees to grant, without warranty of title, either express or implied,
to the extent that it has the right to do so without the incurrence of expense,
an easement and right of way upon the lands covered by the Dedicated Properties,
for the sole purpose of installing, using, maintaining, servicing, inspecting,
repairing, operating, replacing, disconnecting and removing all or any portion
of the Facilities, including any pipelines, meters and other equipment necessary
for the performance of this Agreement; provided, further, that the exercise of
these rights by Gatherer shall not unreasonably interfere with Producer’s lease
operations or with the rights of owners in fee, and will be subject to
Producer’s safety and other reasonable access requirements applicable to
Producer’s personnel. Producer shall not have a duty to maintain the underlying
agreements (such as leases, easements and surface use agreements) that such
grant of easement or right of way to Gatherer is based upon, and such grants of
easement or right of way will terminate if Producer loses its rights to the
property, regardless of the reason for such loss of rights. Notwithstanding the
foregoing, (i) Producer will assist Gatherer to secure replacements for such
terminated grants of easement or right of way, in a manner consistent with the
cooperation requirements of Section 3.10, (ii) to the extent that Producer
agrees that Gatherer’s Measurement Facilities may be located on Producer’s Well
Pad sites, Producer shall be responsible for obtaining any necessary rights to
locate such Measurement Facilities on such Well Pad sites and (iii) Producer
shall use reasonable efforts to involve Gatherer in Producer’s negotiations with
the owners of lands covered by the Dedicated Properties so that Producer’s
surface use agreements and Gatherer’s rights of way with respect to such lands
can be concurrently negotiated and obtained.

(b) If Gatherer cannot obtain the rights of way (on terms and conditions
reasonably acceptable to Gatherer after diligent pursuit thereof) necessary to
connect any Planned CDP within 45 Days of delivery of a Connection Notice, then
Gatherer shall so notify Producer in writing (the “Easement Notice”) within 45
Days of delivery of the Connection Notice. Producer shall have the right (but
not the obligation) to obtain, at its sole cost and expense, such rights of way
generally in the format of Gatherer’s standard right of way agreement within 45
Days of delivery of such Easement Notice. Gatherer’s form of right of way
agreement is attached as Exhibit E. The right of way agreement utilized by
Producer can have modifications to the Exhibit E format as long as it does not
materially change or reduce the rights

 

19

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

or obligations under such right of way agreement. If Producer obtains such
rights of way in accordance with the immediately preceding sentence, Producer
shall assign such right of way to Gatherer, and Gatherer’s connection
obligations for the applicable CDP shall continue in accordance with the terms
of this Agreement; provided, however, that the time required for Gatherer to
connect the applicable CDP shall be extended by a number of Days commencing on
the date of delivery of the Easement Notice and ending on the date that Gatherer
receives from Producer the assignment of all such rights of way so obtained by
Producer (together with executed originals of all such rights of way). In such
event, Gatherer shall pay Producer for such rights of way an amount per rod
equal to the average price per rod paid by Gatherer for the purchase of rights
of way in the Dedicated Acreage during the preceding 12 Month period. If
Gatherer has not purchased right of way within the Dedicated Acreage during the
previous 12 Months, then Gatherer shall pay Producer for such rights of way an
amount per rod equal to the amount per rod paid by Gatherer under its most
recent purchase of rights of way in the Dedicated Acreage.

(c) In the event that Producer fails to obtain such rights of way during such 45
Day period, Producer shall have the option, upon written notice to Gatherer, to
permanently release the entire DSU or any portion thereof associated with the
Wells connected to such CDP from the dedication and commitment made by Producer
and Shipper under this Agreement.

Section 3.10 Cooperation. Because of the interrelated nature of the actions of
Producer and Gatherer required to obtain the necessary Permits from the
appropriate Governmental Authorities and the necessary consents, rights of way
and other authorizations from other Persons necessary to drill and complete each
Well and construct the required extensions of the Gathering System to each
Planned CDP, Producer and Gatherer agree to work together in good faith to
obtain such Permits, authorizations, consents and rights of way as expeditiously
as reasonably practicable. Producer and Gatherer further agree to cooperate with
each other and to communicate regularly regarding their efforts to obtain such
Permits, authorizations, consents and rights of way.

Section 3.11 Allocation of Gatherer Obligations.

(a) OMS and MLP shall be jointly and severally liable for obligations of
Gatherer under this Agreement; provided that (i) (A) OMS shall be severally, and
not jointly, liable for the obligations of Gatherer to expand or add additional
capacity to the Facilities, and in the case of any such expansion or addition,
OMS’s liability shall be limited to a percentage of such liability equal to its
percentage ownership interest (but not including any of OMS’s indirect ownership
interest through MLP), at the time such liability is incurred, in the DevCo that
owns or will own such expansion or addition (which percentage may be zero) and
(B) OMS shall not have any liability for the obligations of Gatherer that are
solely related to assets owned by, or Services performed by, a DevCo or DevCos
in which OMS does not hold any ownership interest (other than an indirect
ownership interest through MLP) at the time the applicable obligation arose and
(ii) (A) MLP shall be severally, and not jointly, liable for the obligations of
Gatherer to expand or add additional capacity to the Facilities, and in the case
of any such expansion or addition, MLP’s liability shall be limited to a
percentage of such liability equal to its percentage ownership interest, at the
time such liability is incurred, in the DevCo that owns or will own such
expansion or addition (which percentage may be zero) and (B) MLP shall not have
any liability

 

20

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

for the obligations of Gatherer that are solely related to assets owned by, or
Services performed by, a DevCo or DevCos in which MLP does not hold any
ownership interest at the time the applicable obligation arose. Unless OMS and
MLP otherwise agree, OMS’s percentage ownership interest in the DevCo that owns
the Additional Processing Plant constructed and installed after the Effective
Date shall initially be 100%, and OMS shall accordingly bear 100% of the
Gatherer’s liability for providing such Additional Processing Plant under
Section 3.4.

(b) OMS and MLP hereby agree to the provisions set forth on Exhibit L.

ARTICLE 4

TERM

Section 4.1 Term. This Agreement shall become effective on the Effective Date
and, unless terminated earlier by mutual agreement of the Parties, shall
continue in effect until December 31, 2032 and from Contract Year to Contract
Year thereafter until such time as this Agreement is terminated, by notice from
any Party to the other Party, effective at the end of the first Contract Year
ending after the 270th Day after the delivery of such notice.

Section 4.2 Post-Termination. If any Party provides notice of termination of
this Agreement at any time for any reason pursuant to the terms and conditions
of this Agreement, Shipper shall have the option (to be exercised by providing
written notice to Gatherer prior to the termination of the Agreement) to
continue to receive the Services or a portion of the Services for all or any
portion of its volumes of Gas on a year-to-year basis on the same terms and
conditions as the most favorable terms and conditions that Gatherer continues to
provide services that are the same as or similar to the Services or any portion
of the Services for volumes of Gas on the Facilities under an agreement with any
third party unless and until terminated by Shipper; provided, however, that if
the option to extend the term of this Agreement on a year-to-year basis pursuant
to this Section 4.2 is exercised, any obligation of Gatherer to continue to
provide the Services pursuant to such option shall not extend beyond
December 31, 2042. Gatherer shall provide copies to Shipper of any such third
party agreements applicable to volumes of Gas accessing the Facilities upon any
notice of termination of this Agreement (whether such notice is delivered by
Gatherer, Producer or Shipper).

Section 4.3 Survival. Article 1, this Article 4, Section 11.8, Article 12,
Article 13, Article 15, Article 16, Article 17 and Article 18 shall survive
termination or expiration of this Agreement.

ARTICLE 5

FEES AND CONSIDERATION

Section 5.1 Fees. Subject to the other provisions of this Agreement, Shipper
shall pay Gatherer each Month in accordance with the terms of this Agreement,
for all Services provided by Gatherer during such Month, an amount equal to the
sum of the fees (collectively, the “Fees”) set forth on Exhibit K.

 

21

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

ARTICLE 6

ALLOCATIONS

Section 6.1 Allocation of Residue Gas.

(a) Gatherer will determine the quantity of Residue Gas attributable to
Shipper’s Gas delivered hereunder at each Receipt Point for each Month and any
NGLs attributable to Shipper’s Gas delivered hereunder at each Receipt Point for
each Month using the following definitions and procedures. From time to time
upon mutual agreement among the Parties, Gatherer may make changes and
adjustments in its allocation methods to improve accuracy or efficiency.

(b) The quantity of Residue Gas attributable to Shipper’s Gas delivered
hereunder at each Receipt Point in each Month will be determined by multiplying
the “Actual Total Residue Gas” for such Month by a fraction, the numerator of
which shall be the “theoretical MMBTUs of Residue Gas remaining from Shipper’s
Gas” for such Month, and the denominator of which shall be the “total of the
theoretical MMBTUs of Residue Gas remaining from all Gas delivered to Gatherer”
for such Month. For purposes of this Section 6.1(b), “Actual Total Residue Gas”
means, for any Month, the actual quantity of Residue Gas, in MMBTUs, measured at
the tailgate of the Processing Plant during such Month. The “theoretical MMBTUs
of Residue Gas remaining from Shipper’s Gas” means, for any Month and any
Receipt Point, the quantity, in MMBTUs, of methane and heavier hydrocarbons
contained in Shipper’s Gas delivered hereunder at such Receipt Point during such
Month less the sum of (i) the quantity, in MMBTUs, of methane and heavier
hydrocarbons contained in Shipper’s Regional Gas Lift Gas redelivered at the Gas
Lift Delivery Point at the same CDP in such Month, (ii) the quantity, in MMBTUs,
of methane and heavier hydrocarbons contained in Gas redelivered in such Month
to Shipper at the Upstream Delivery Points and allocated to such Receipt Point
in accordance with Section 6.1(c), and (iii) the quantity, in MMBTUs, of all NGL
components attributable to Shipper’s Gas delivered at such Receipt Point in such
Month (as determined under Section 6.2(a)). The “total of the theoretical MMBTUs
of Residue Gas remaining from all Gas delivered to Gatherer” means, for any
Month, the sum of the quantity, in MMBTUs, of methane and heavier hydrocarbons
contained in all Gas delivered to Gatherer during such Month from all sources at
all receipt points (including the Receipt Points) connected to the Gathering
System, less the sum of (1) the quantity, in MMBTUs, of methane and heavier
hydrocarbons contained in all Shipper’s Regional Gas Lift Gas redelivered at a
Gas Lift Delivery Point in such Month, (2) the quantity, in MMBTUs, of methane
and heavier hydrocarbons contained in Gas redelivered in such Month to any
shipper (including the Shipper) at any delivery point upstream of the Processing
Plant (including any Upstream Delivery Point) and (3) the aggregate quantity, in
MMBTUs, of all NGL components actually recovered at the Processing Plant
attributable to all such Gas during such Month. For all purposes under this
Agreement, the MMBTU equivalent of each Gallon of applicable NGL component shall
be determined by multiplying each such Gallon by the respective MMBTU equivalent
factors set forth in GPA Publication 2145, as amended from time to time;
provided that for Gallons of NGLs which are hexanes and heavier, the applicable
GPA Publication stating the percentage and factor for hexanes, heptane and
octane shall be used. Gatherer may apply the allocation principles of this
Section 6.1 repeatedly to subareas or separately measured systems in order to
improve accuracy. For example, Gatherer may, if applicable, allocate plant NGL
and Residue Gas volumes to field gathering System Compressor Stations, then use
the same principles to allocate those results further to Receipt Points behind
the Compressor Stations.

 

22

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(c) The quantity of Gas allocated to all shippers including Shipper at an
Upstream Delivery Point in any Month, in MMBtus, shall be allocated to all
receipt points (including the Receipt Points) pro rata based on the quantities,
in MMBTUs, of Gas received at such receipt points (including the Receipt Points)
during such Month.

Section 6.2 Allocation of NGLs.

(a) The volume of each NGL component attributable to Shipper’s Gas delivered
hereunder at each Receipt Point for each Month will be determined by multiplying
the total volume, in Gallons, of such NGL component recovered by Gatherer from
the Processing Plant during such Month by a fraction, the numerator of which
shall be the theoretical Gallons of such component contained in Shipper’s Gas
delivered hereunder at such Receipt Point during such Month and the denominator
of which shall be the total theoretical Gallons of each component contained in
all Gas delivered to Gatherer during such Month from sources connected to the
Gathering System; provided, however, that the numerator shall be reduced by the
number of Gallons of such NGL component contained in the Regional Gas Lift Gas
redelivered at the Gas Lift Delivery Point at the same CDP in such Month and the
number of Gallons of such NGL component contained in the Gas redelivered in such
Month to an Upstream Delivery Point and allocated to such Receipt Point in
accordance with Section 6.1(c), and the denominator shall be reduced by the
number of Gallons of such NGL component contained in all Shipper’s Regional Gas
Lift Gas redelivered at a Gas Lift Delivery Point in such Month and the number
of Gallons of such NGL component in all Gas redelivered in such Month to any
shipper (including the Shipper) at any other delivery point upstream of the
Processing Plant (including an Upstream Delivery Point). For the avoidance of
doubt, the NGLs produced and delivered by Gatherer from the Processing Plant(s)
shall initially primarily involve deliveries to the ONEOK Bakken Pipeline, but
may involve trucking from the NGL Truck Loading Facility or other movement of
such NGLs from the System Compressor Stations or the Processing Plant(s) to the
point of redelivery of such NGLs.

(b) Gatherer’s design of the Gathering System and the Processing Plant
contemplates that all liquids recovered through pigging operations on the
Gathering System will be recovered at the scrubbers to the System Compressor
Stations or at the Processing Plant. All such pigged liquids and other
Condensate recovered in the Gathering System and the Processing Plant will be
considered NGLs and included in the NGLs produced and delivered by Gatherer and
allocated to Shipper for all purposes of this Agreement, including this Section
6.2(b).

Section 6.3 Fuel, Lost and Unaccounted for Gas and NGL Shrink. Shipper will bear
its allocated share of Fuel and Lost and Unaccounted For Gas (collectively,
“FL&U”), and its allocated share of shrink associated with removal of NGLs from
the Gas on the Gathering System and at the Processing Plant (collectively, the
“NGL Shrink”); Gatherer shall determine the percentage of FL&U allocated to
Shipper’s Gas for each Month by: (i) taking the total quantity, in MMBTUs, of
Shipper’s Gas delivered hereunder at all Receipt Points during such Month, less
the sum of (A) the quantity, in MMBTUs, of methane and heavier hydrocarbons
contained in Shipper’s Regional Gas Lift Gas redelivered at the Gas Lift
Delivery Points at all

 

23

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

CDPs in such Month, (B) the quantity, in MMBTUs, of methane and heavier
hydrocarbons contained in Gas redelivered in such Month to Shipper at the
Upstream Delivery Points and allocated to all Receipt Points in accordance with
Section 6.1(c), and (C) the aggregate quantity, in MMBTUs, of all NGL components
attributable to Shipper’s Gas delivered at all Receipt Points in such Month (as
determined under Section 6.2(a)) (the resulting amount under this clause (i),
“Shipper’s Net Quantities”), (ii) subtracting aggregate quantity, in MMBTUs, of
Residue Gas attributable to Shipper’s Gas delivered hereunder at all Receipt
Points for such Month (as determined under Section 6.1(b)) from Shipper’s Net
Quantities (the resulting amount under this clause (ii), “Shipper’s Total
FL&U”),and (iii) dividing Shipper’s Total FL&U by the aggregate quantity, in
MMBTUs, attributable to Shipper’s Gas delivered at all Receipt Points in such
Month, with the resulting number to be expressed as a percentage.

Section 6.4 Allocation of Fuel. As a subset of the FL&U calculation, Gatherer
shall calculate and provide to Shipper a break out of the volume and percentage
of FL&U that was Fuel and that was Lost and Unaccounted For Gas.

ARTICLE 7

CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

Section 7.1 Operational Control of Gatherer’s Facilities. Gatherer shall design,
construct, own, operate and maintain the Facilities at its sole cost and risk.
Gatherer shall be entitled to full and complete operational control of its
facilities and shall be entitled to schedule deliveries and to operate and
reconfigure its facilities in a manner consistent with its obligations under
this Agreement.

Section 7.2 Maintenance. Gatherer shall be entitled, without liability, to
interrupt its Facilities performance hereunder to perform necessary or desirable
inspections, pigging, maintenance, testing, alterations, modifications,
expansions, connections, repairs or replacements to its facilities as Gatherer
deems necessary (“Maintenance”), with reasonable notice provided to Producer and
Shipper, except in cases of emergency where such notice is impracticable or in
cases where the operations of Producer and Shipper will not be affected.
Gatherer shall use reasonable efforts to schedule any Maintenance to minimize
the effect on providing the Services pursuant to this Agreement. Before the
beginning of each calendar year, Gatherer shall provide Shipper in writing with
a projected schedule of the Maintenance to be performed during the year and the
anticipated date of such Maintenance.

Section 7.3 Capacity Allocations for the Facilities. Subject to the capacity
allocations set forth in this Section 7.3, Gatherer has the right to contract
with other Persons for the delivery of Third Party Gas to the Facilities,
including the delivery of Firm Capacity Gas. If the volume of Gas available for
delivery into any System Segment exceeds the capacity of such System Segment at
any point relevant to Gatherer’s service to Shipper hereunder, then Gatherer
shall interrupt or curtail receipts of Gas in accordance with the following:

(a) First, Gatherer shall curtail all Interruptible Gas prior to curtailing Firm
Capacity Gas.

(b) Second, if additional Facilities curtailments are required beyond Section
7.3(a), Gatherer shall curtail Firm Capacity Gas. In the event Gatherer curtails
some, but not all, Firm Capacity Gas on a particular Day, Gatherer shall
allocate the capacity of the applicable point on the relevant System Segment
available to such shippers of Firm Capacity Gas, including Dedicated Gas, on a
pro rata basis based on the most recent previous Month’s Receipt Point volumes
and allowing Gatherer in its sole discretion to include estimated volume from
New Wells that are connected to a Receipt Point that were not producing during
the previous Month.

 

24

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

If Gatherer curtails Shipper for any reason other than Force Majeure or
Shipper’s failure to comply with its obligations under this Agreement such that
Shipper is not able to deliver the entire actual quantity of Gas available at
any time during any Month, Gatherer shall provide Shipper a written report
explaining in detail the reason or reasons for such curtailment and shall
diligently pursue changes in operating practice necessary to reduce such
curtailment and increase the availability of the Facilities to Shipper such that
Shipper’s actual quantities of Gas available may be delivered by Shipper (and
Gas Lift Gas redelivered to Shipper) at all times under this Agreement.

Section 7.4 Arrangements After Redelivery. It shall be Shipper’s obligation to
make any required arrangements with other parties for delivery of Dedicated Gas
to the Receipt Points and Residue Gas following delivery by Gatherer at the
Delivery Points.

Section 7.5 Line Fill. To the extent that it is necessary for Gatherer to
commence operations of new segments of the Gathering System for Gas to be used
as line fill, Shipper shall provide such line fill to Gatherer on a pro rata
basis based on the most recent previous Month’s Receipt Point volumes, but not
to exceed for any pipeline the volume of such line fill specified for such
pipeline in the Facilities Plan; provided that Gatherer must act as a Reasonable
and Prudent Operator when allocating volumes to be used as line fill.

Section 7.6 Temporary Releases. In addition to any other rights and remedies
available to Producer or Shipper under this Agreement or at law or in equity, if
Gatherer fails or is unable or unwilling for any reason (including Force
Majeure) to accept all volumes of Dedicated Gas tendered by or on account of
Shipper pursuant to this Agreement and provide the Services in accordance
therewith, then the volumes of Dedicated Gas in excess of what Gatherer is
willing and able to accept shall be temporarily released from the dedication and
commitment made by Producer and Shipper under this Agreement. Producer and
Shipper may immediately deliver such volumes to any Person other than Gatherer,
and Producer and Shipper shall have the right to enter into commitments to
deliver such volumes of Dedicated Gas to other third party gatherers and/or
processors, such commitments to be for no longer than reasonably necessary under
the circumstances, as determined by Producer and Shipper in their sole
discretion.

ARTICLE 8

PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS

Section 8.1 Pressures at Receipt Points.

(a) Subject to the provisions of this Section 8.1, Shipper shall deliver or
cause to be delivered Gas to each Receipt Point at sufficient pressure to enter
the Gathering System against its operating pressure; provided that Shipper shall
not be obligated to deliver Gas at pressures in excess of [***] psig at any such
Receipt Point.

 

25

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(b) Subject to Shipper delivering Gas meeting the Gas Quality Specifications,
Gatherer agrees to maintain the monthly average pressure (“MAP”) at each Receipt
Point at or less than [***] psig. The MAP at each Receipt Point for each Month
shall be determined by dividing the sum of daily average Receipt Point pressures
as continuously measured by the Measurement Facilities installed at such Receipt
Point by the number of Days in such Month. During periods of curtailment or shut
in of Shipper’s Gas at a Receipt Point, the calculation of MAP for such Receipt
Point shall utilize the actual first available downstream measured pressure on
the meter tube at such Receipt Point for such curtailment or shut in periods and
an artificial zero or low pressure shall not be utilized for such curtailment or
shut in periods. Exhibit J contains a diagram of Gatherer’s standard meter
facilities and the location of the point on the meter tube at which such first
available downstream pressure will be measured.

(c) If the actual operating pressure on the Gathering System at any Receipt
Point exceeds [***] psig for reasons other than Force Majeure or Shipper’s
failure to comply with the Gas Quality Specifications, then Gatherer shall
promptly use reasonable efforts to reduce such pressure to [***] psig or below
within 48 hours; provided, however, that if such higher operating pressure at
such Receipt Point is caused by Gatherer’s failure to construct or properly
construct any facilities (including the Facilities), then Gatherer shall use
reasonable efforts to proceed with a plan to modify such facilities to reduce
such pressure to at or below [***] psig and shall provide Producer and Shipper a
written explanation of such plan and of the time required to implement it.

(d) If the MAP at any Receipt Point for any Month exceeds [***] psig for reasons
other than Force Majeure or Shipper’s failure to comply with the Gas Quality
Specifications, then the Compression Fee payable to Gatherer for Shipper’s Gas
delivered at such Receipt Point shall be decreased by the MAP Fee per MCF for
each psig by which the MAP exceeds [***] psig. The price adjustments under the
previous sentence shall be applied to Shipper’s Gas delivered hereunder at such
Receipt Point beginning with the Month that the MAP exceeds [***] psig and
continue until the beginning of the first Month following the Month in which a
remedy is achieved to reduce the MAP at such Receipt Point to [***] psig or
less. It is understood by the Parties that pressures at any Receipt Point in
excess of [***] psig may cause Producer or Shipper to flare its Gas.

(e) If the MAP at any Receipt Point hereunder exceeds [***] psig for any two
consecutive Months for reasons other than Force Majeure or Shipper’s failure to
comply with the Gas Quality Specifications, then, at Shipper’s option, to be
exercised by notice to Gatherer on or before the 30th Day after the end of such
two consecutive Month period, to release from dedication and commitment under
this Agreement the entire DSU or any portion thereof associated with the Wells
connected to such Receipt Point and all Dedicated Gas produced therefrom shall
be permanently released from dedication and commitment under this Agreement;
provided, however, that if such excess pressure is caused by Gatherer’s failure
to construct or properly construct facilities, and if Gatherer has provided
Shipper with a written explanation of Gatherer’s plan to modify such facilities
to reduce the pressure at such Receipt Point to at or below [***] psig and has
commenced to implement such plan, then Shipper shall not have such option to
release such DSU (or portion thereof). Such option shall not limit Gatherer’s
obligation to use reasonable efforts to pursue reducing the pressure as stated
above.

(f) Notwithstanding the foregoing, it is recognized by the Parties that the
Gathering System has a gathering capacity by lateral based on the design
parameters shown in the Facilities Plan. Accordingly, the remedies provided for
in this Section 8.1 for excess Receipt Point pressures shall not be applicable
during any period in which the volume of Gas tendered at a Receipt Point by
Shipper, during initial CDP flowback of production or otherwise, exceeds the
gathering capacity by lateral based on the design parameters shown in the
Facilities Plan.

 

26

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 8.2 Pressures at Delivery Points. The Gathering System and the
Processing Plant shall be designed for and shall be operated at a discharge
pressure sufficient to effect delivery of Shipper’s Gas to the relevant Residue
Delivery Point and NGL Delivery Point as Firm Capacity Gas. It is understood by
the Parties that Gatherer will use reasonable efforts to maintain pressure to
allow delivery into the Upstream Delivery Points upstream of the Processing
Plant. Gatherer shall not be liable for any delivery failures into any
Downstream Pipelines caused by such Downstream Pipeline’s failure or refusal to
accept Residue Gas or NGLs, as applicable, in each case except to the extent
caused by Gatherer’s breach of its obligations under this Agreement, gross
negligence or willful misconduct.

Section 8.3 Shipper Facilities.

(a) Shipper, at its own expense, shall construct, equip, maintain, and operate
all facilities necessary to deliver Dedicated Gas to Gatherer at the Receipt
Points. Shipper shall install and maintain sufficient pressure regulating
equipment upstream of the Receipt Points in order to keep the pressure of the
Gas delivered to Gatherer at the Receipt Points from exceeding the maximum
allowable operating pressure at the applicable Receipt Point, as determined by
Gatherer in its sole discretion and stated in the Facilities Plan.

(b) Shipper shall have the right to install facilities and flow volumes
attributable to Shipper’s interests in operated and non-operated wells outside,
but on DSUs that are contiguous with, the Dedicated Acreage, allowing such Wells
to flow into existing Receipt Points or to new Receipt Points mutually agreed
between Shipper and Gatherer where Gatherer will provide at Gatherer’s cost a
meter and tap. Shipper shall provide a list of wells from outside, but on DSUs
that are contiguous with, the Dedicated Acreage that will be connected to
existing CDPs or to new CDPs in accordance with this Section 8.3(b).

(c) Shipper shall utilize conventional mechanical oil-gas separators installed
by Producer upstream from the Receipt Point(s) to assist in keeping the Gas
delivered hereunder entirely free of water, crude oil and/or Condensate in the
liquid phase and other objectionable substances.

ARTICLE 9

NOMINATION AND BALANCING

Section 9.1 Gatherer Notifications. On or before the 17th Day prior to the end
of each Month, Gatherer shall provide written notice to Shipper of Gatherer’s
good faith estimate of any capacity allocations or curtailments for any System
Segment, if any, that, based on then currently available information, Gatherer
anticipates will be required or necessary during the next Month, including as a
result of any Maintenance. Gatherer shall use all reasonable efforts to provide
48 hours advance notice of any actual event requiring allocation or curtailment,
including

 

27

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Maintenance. On or before the 17th Day prior to the end of each Month, Gatherer
shall notify Shipper of the estimated FL&U expected to be used in the Facilities
for the following Month, expressed as a percentage of the MMBTUs of Gas
delivered at the Receipt Points and the estimated recovery percentage by NGL
component (using the allocation methodology set forth in Section 6.1 and
Section 6.2), after taking into consideration the anticipated operational
efficiencies and operational mode of the Facilities.

Section 9.2 Nominations. On or before the 15th Day prior to the end of each
Month or such earlier Day required by the Downstream Pipelines’ nomination
schedules, Shipper shall provide to Gatherer nominations, in both MCFs and
MMBTUs, for deliveries of Shipper’s Gas to the Receipt Points and redeliveries
of Shipper’s Gas at the Upstream Delivery Points and/or the Residue Delivery
Points, the volume of Gas Lift Gas and the scheduled NGLs to be delivered at the
NGL Delivery Points during the next Month. Shipper shall have the right to
change such nominations at any time subject to the requirements of the Persons
receiving Shipper’s Gas and NGLs at or downstream of the Delivery Points and
subject to changes in wellhead volumes being delivered into the Gathering
System. Gatherer shall use reasonable efforts to accommodate any changes made to
Shipper’s Monthly nominations. Notwithstanding anything contained herein to the
contrary, the Parties agree and acknowledge that it is Shipper’s sole
responsibility to contract for capacity, nominate volumes and manage its
capacity for deliveries to be made to the Downstream Pipelines and Gatherer
shall use reasonable efforts to accommodate Shipper’s nominations. Gatherer
shall not be liable for any delivery failures into any Downstream Pipelines
caused by such Downstream Pipeline’s failure or refusal to accept Residue Gas or
NGLs, as applicable, or other failures to comply with Shipper’s nominations for
deliveries to the Downstream Pipelines, in each case except to the extent caused
by Gatherer’s breach of its obligations under this Agreement, gross negligence
or willful misconduct.

Section 9.3 Balancing. Gatherer will maintain records of any Daily and Monthly
variances (“Imbalances”) between the volume of Dedicated Gas received at the
Receipt Points and the volumes of Residue Gas delivered at the Delivery Points
(after FL&U and NGL Shrink allocated to Shipper). Shipper shall make such
changes in its nominations as Gatherer may from time to time reasonably request
to maintain Daily and Monthly balances or to correct an Imbalance. Shipper shall
reimburse Gatherer for any cost, penalty or fee arising from any Imbalance
assessed against Gatherer by any Person receiving Dedicated Gas or NGLs
downstream of the Delivery Points, except to the extent such Imbalance was
caused by Gatherer. Upon the termination of this Agreement or at such other time
as Shipper and Gatherer agree, Shipper and Gatherer shall volumetrically balance
or cash out any cumulative Imbalance using the applicable Index Price for the
prior Month.

ARTICLE 10

QUALITY

Section 10.1 Receipt Point Gas Quality Specifications. Gas delivered by or for
the account of Shipper to each Receipt Point shall meet the following
specifications (collectively, the “Gas Quality Specifications”):

(a) less than [***] mole percent of carbon dioxide;

(b) not more than [***] grain H2S per [***] Cubic Feet;

(c) not more than [***] grain of mercaptan sulphur per [***] Cubic Feet;

(d) a Gross Heating Value per Cubic Foot of not less than [***] BTU;

(e) not more than a total of [***] mole percent of total inert or
non-hydrocarbon gases (nitrogen, carbon dioxide, etc.); provided that for
purposes of the total inert specification, such [***] mole percent total inert
specification shall apply based on the aggregate volume weighted average Receipt
Point quality;

 

28

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(f) not more than [***] grains of sulfur per [***] cubic feet (including
hydrogen sulfide and mercaptan);

(g) an oxygen content not in excess of [***]% by volume; provided that the
Parties shall use every reasonable effort to keep the gas free from oxygen;

(h) a temperature not to exceed [***] degrees Fahrenheit; and

(i) free of water, crude and/or Condensate in the liquid phase, impurities and
other objectionable substances;

provided that to the extent the quality specifications required from time to
time by the Downstream Pipelines receiving Residue Gas are more restrictive than
any of the foregoing requirements (except for water vapor content, Gross Heating
Value and hydrocarbon dew point for such Downstream Pipelines), then the quality
specifications required by the Downstream Pipeline shall apply instead of the
foregoing applicable specification. Neither Gatherer nor Shipper will propose or
support any changes to the Downstream Pipeline specifications that would result
in more restrictive specifications. Notwithstanding the foregoing, if Gatherer
connects the Facilities to a Downstream Pipeline other than Northern Border or
WBI, the more restrictive specifications of such downstream pipeline shall not
apply to Shipper without Shipper’s approval.

Section 10.2 Non-Conforming Gas.

(a) Gatherer shall test and monitor the Gas tendered by or for the account of
Shipper at the Receipt Points as a Reasonable and Prudent Operator to ensure
that it meets the Gas Quality Specifications in accordance with Section
11.3(b). If Gatherer determines at any time that any Gas tendered by or for the
account of Shipper at any Receipt Point does not meet the Gas Quality
Specifications, then Gatherer shall have the right, at its sole option and
effective immediately upon notice to Shipper, to refuse to accept such Gas.

(b) If Shipper determines or otherwise becomes aware at any time prior to
delivery that any Gas that will be tendered by or for the account of Shipper at
any Receipt Point will not meet the Gas Quality Specifications, then Shipper
shall provide written notice to Gatherer. Upon receipt of such notice, if
Gatherer nevertheless accepts such Gas, then Producer and Shipper shall not be
liable for any claims or losses arising out of or related to delivery of such
Gas, including any damages or losses downstream of the applicable Receipt
Point(s).

(c) Producer and Shipper shall not be liable for any claims or losses arising
out of or related to delivery of Gas that does not meet the Gas Quality
Specifications, including any damages or losses downstream of the applicable
Receipt Point(s); provided that Shipper shall be liable for such claims or
losses if Shipper determines or otherwise becomes aware at any time prior to
delivery that any Gas that will be tendered by or for the account of Shipper at
any Receipt Point will not meet the Gas Quality Specifications and Shipper fails
to deliver written notice to Gatherer pursuant to Section 10.2(b).

 

29

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 10.3 Delivery Point Gas Quality Specifications. If Shipper delivers Gas
to Gatherer at the Receipt Points that meets the Gas Quality Specifications,
Gatherer shall redeliver Delivery Point Gas to or for the account of Shipper
that meets the Gas Quality Specifications and meets the Gas quality
specifications of the Downstream Pipeline for water vapor content, Gross Heating
Value and hydrocarbon dew point.

Section 10.4 Delivery Point NGL Quality Specifications. If Shipper delivers Gas
to Gatherer at the Receipt Points that meets the Gas Quality Specifications,
Gatherer shall redeliver Delivery Point NGLs to or for the account of Shipper
that meet the specifications of the Downstream NGL Pipeline specifications as
noted on Exhibit I and as stated in that certain Connection Agreement between
Gatherer and ONEOK Bakken Pipeline, LLC as amended. Gatherer shall ensure that
NGLs produced at the Processing Plant shall be a truckable product with Reid
Vapor Pressure no greater than [***] psig at [***]° degrees Fahrenheit.

Section 10.5 Greenhouse Gas Emissions. Notwithstanding anything contained in
this Agreement to the contrary, in the event there is an enactment of, or change
in, any Applicable Law after the Effective Date which, in Gatherer’s reasonable
determination, results in (a) a Governmental Authority requiring Gatherer to
hold or acquire emission allowances or their equivalent related to the carbon
dioxide content or emissions or the greenhouse gas content or emissions
attributable to Dedicated Gas and/or the gathering, compression, processing or
gas lift operations of such Gas or entrained gas (collectively, “Shipper’s GHG
Emissions”), or (b) Gatherer incurring any costs or expenses attributable to
Dedicated Gas, including any costs or expenses for disposal or treating of
carbon dioxide attributable to such Gas, or any other additional economic burden
being placed on Gatherer, in connection with or related to Shipper’s GHG
Emissions, including any tax, assessment, or other cost or expense
(collectively, “Emissions Charges”), then (i) Shipper and Producer will use
reasonable efforts to provide any required emissions allowances or their
equivalent to Gatherer in a timely manner (and Shipper and Producer shall
release, indemnify, defend and hold Gatherer harmless from and against all
claims and losses, including any expenses incurred by Gatherer in acquiring such
allowances in the marketplace, arising out of or related to the failure to
timely provide any such required emission allowances or their equivalent), and
(ii) Shipper and Producer shall be fully responsible for such Emissions Charges
and shall reimburse Gatherer for any Emissions Charges paid by Gatherer within
ten Days of receipt of Gatherer’s invoice.

ARTICLE 11

MEASUREMENT EQUIPMENT AND PROCEDURES

Section 11.1 Equipment.

(a) Gatherer shall install, own, operate and maintain Measurement Facilities to
measure Gas at all the Gathering System Receipt Points and Gas Lift Delivery
Points which shall consist of an electronic flow meter, which Gatherer shall
install, or caused to be installed, at the Receipt Point and Gas Lift Delivery
Points and shall ensure that the relevant Downstream Pipeline installs, owns,
operates and maintains Measurement Facilities at the Delivery Points for Gas and
NGLs. Measurement Facilities at the Receipt Points and Gas Lift Delivery Points
shall meet current industry standards for custody transfer measurement. Shipper
shall have the right to install check Measurement Facilities upstream of each
Receipt Point and downstream of each Gas Lift Delivery Point, including the
right to install check measurement equipment on Gatherer’s meter tubes and
orifice unions.

 

30

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(b) Gatherer shall provide Shipper with on-site and remote access to each
Receipt Point and Gas Lift Delivery Points meter site at which Shipper may
access volume, temperature and pressure information on a near real-time basis;
provided, however, that Gatherer shall only be obligated to provide such remote
access to Shipper for those Receipt Points and Gas Lift Delivery Points where
Gatherer has installed the necessary facilities (including all communications
infrastructure (e.g., towers, antennas, radios and repeaters) to gather such
information) for Gatherer to remotely access such information on a near
real-time basis. Gatherer shall use reasonable efforts to install such necessary
facilities to allow the Parties to remotely access such information on a near
real-time basis. For the avoidance of doubt, however, Shipper shall not
interfere with or otherwise calibrate or adjust any of Gatherer’s facilities or
equipment located at such Receipt Point and Gas Lift Delivery Point meter sites.

(c) At Shipper’s request, for each CDP, Gatherer shall provide a meter for each
Producer production separator and treater and a meter for each test separator
and treater installation at a CDP. For example, if Producer has a production
separator and production treater along with a test separator and test treater at
a CDP, Gatherer shall provide two meters at Shipper’s request.

(d) For each Receipt Point where Shipper’s Gas is being delivered from a CDP and
each Gas Lift Delivery Point where 120 volt AC power is available and being
utilized by Producer, and where Shipper is accessing real-time data through a
port on the meter provided by Gatherer), Producer shall provide, at its cost,
120 volt AC power to Gatherer for use strictly for the Measurement Facilities at
such Receipt Point and Gas Lift Delivery Point. Gatherer acknowledges that
Shipper will not have 120 volt AC power at each CDP location, and in such cases,
Gatherer shall be responsible for its own electricity.

Section 11.2 Measurement Standards. The following standards shall apply to the
measurement of Gas hereunder:

(a) the Receipt Points and Gas Lift Delivery Points shall be measured by orifice
meters with all fundamental constants, observations, records and procedures
involved in the determination and/or verification of the quantity and other
characteristics of the Gas delivered hereunder in accordance with the standards
prescribed in the latest edition of A.G.A. Report No. 3 (ANSI/API 2530) “Orifice
Metering of Natural Gas” with any revisions, amendments or supplements as may be
mutually acceptable to Shipper and Gatherer;

(b) the measurements of the volume and quality of all Gas, Residue Gas and NGLs,
as applicable, delivered at the Delivery Points will be conducted in accordance
with the regulations and procedures of the applicable Downstream Pipeline at
such Delivery Points; and

(c) Gatherer shall utilize consistent measurement practices with all shippers
connected to the Gathering System to insure a consistent allocation process.

 

31

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 11.3 Gas Measurement.

(a) The unit of volume for measurement of Gas delivered hereunder shall be one
MCF at a base temperature of 60 degrees Fahrenheit and at a pressure base of
14.73 psia without adjustment for water vapor content. It is agreed that for the
purposes of measurement and computations hereunder, (i) the absolute atmospheric
(barometric) pressure shall be assumed to be 14.73 psia regardless of the actual
elevation or location of the CDP above sea level or of a variation of barometric
pressure from time to time and (ii) all measurements and testing performed
hereunder shall all be made by Gatherer in accordance with applicable rules,
regulations and orders.

(b) Gatherer shall procure or cause to be procured a sample of Gas at each
System Receipt Point and Gas Lift Delivery Points and analyze the samples by
chromatographic analysis to determine the component content (mole percent),
specific gravity and the Gross Heating Value thereof. These determinations shall
be made utilizing the following standards: (i) Gas Processors Association
Obtaining Natural Gas Samples for Analysis by Gas, Publication No. 2166 as
amended or supplemented from time to time and (ii) Gas Processors Association
Analysis for Natural Gas and Similar Gaseous Mixtures by Gas Chromatography,
Publication No. 2161 as amended or supplemented from time to time, or (iii) any
other tests that are mutually agreed by Shipper and Gatherer. Representative
spot samples or continuous samplers shall be utilized as determined by Gatherer
in accordance with standard industry practice to reasonably assure accurate
determinations, but at least twice per year. The Gross Heating Value and
specific gravity so determined by Gatherer in accordance with this Section
11.3(b) shall be used in computations in the measurement of Gas received by
Gatherer from the start of the Month in which the sample was collected until the
next test.

(c) Gatherer shall receive Shipper’s Gas at the Receipt Points on an “As
Delivered” BTU basis at actual flowing conditions. For purposes of this Section
11.3(c), “As Delivered” shall refer to the actual water vapor content measured
at such point, to be used for calculating Gross Heating Value. For such
purposes, Gas containing seven pounds or less of water vapor per MMCF shall be
deemed to be delivered on a dry BTU basis at actual flowing conditions, and any
Gas containing more than seven pounds of water vapor per MMCF shall be deemed to
be delivered on a wet BTU basis at actual flowing conditions, where wet BTU
basis shall mean to be assumed to be fully saturated with water vapor at the
temperature and pressure at the point of measurement.

(d) The temperature of Gas shall be determined by means of a recording
thermometer recording the temperature of such Gas flowing through each
measurement meter. The average temperature to the nearest 0.01 degree
Fahrenheit, obtained while Gas is being delivered, will be the applicable
flowing Gas temperature for the period under consideration.

(e) The deviation of the Gas from Ideal Gas Laws shall be determined in
accordance with the A.G.A. Par Research Project NX-19 Report “Manual for the
Determination of Super compressibility Factors for Natural Gas”, Reprinted 1976,
if the composition of the Gas is such to render this procedure applicable.
Orifice measurement shall utilize the A.G.A. Report No. 8 gross characterization
method II compressibility calculation.

(f) Physical constants required for making calculations hereunder shall be taken
from the Gas Processors Association Table of Physical Properties for
Hydrocarbons and

 

32

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Other Compounds of Interest to the Natural Gas Industry, Publication No. 2145 as
amended or supplemented from time to time. Physical constants for the hexanes
and heavier hydrocarbons portion of hydrocarbon mixtures shall be assumed to be
the same as the physical constants for hexane.

Section 11.4 Notice of Measurement Facilities Inspection and Calibration. Each
of Shipper and Gatherer shall give two Days’ notice to the other in order that
the other may, at its option, have representatives present to observe any
reading, inspecting, testing, calibrating or adjusting of Measurement Facilities
used in measuring or checking the measurement of receipts or deliveries of Gas
and NGLs under this Agreement. The official electronic flow data from such
Measurement Facilities shall remain the property of the Measurement Facilities’
owner, but copies of such records shall, upon written request, be submitted,
together with calculations and flow computer configurations therefrom, to the
requesting Party for inspection and verification.

Section 11.5 Measurement Accuracy Verification.

(a) Orifice plate and tube inspection will be made at each meter calibration
unless a facility shut-down is required, in which case the approval of both
Parties shall be required for such inspection. The accuracy of Gatherer’s
Measurement Facilities shall be verified by meter calibrations and orifice
inspections shall be conducted, according to API 21.1 and API 14.3, once every
three Months or more often as determined by Gatherer. Measuring equipment found
to be measuring and/or reading inaccurately shall be adjusted to measure and
read accurately. Gatherer shall give Shipper at least two Days’ notice of
upcoming tests. If Shipper fails to have a representative present, the results
of the test shall nevertheless be considered accurate until the next test.
Gatherer shall, upon written request of Shipper, conduct a test of Gatherer’s
measuring equipment and/or a chromatographic analysis, provided that in no event
shall Gatherer be required to test its equipment or conduct a chromatographic
analysis more frequently than once a Month. All tests of such measuring
equipment or such chromatographic analysis shall be made at Gatherer’s expense,
except that Shipper shall bear the expense of any tests or chromatographic
analysis made at Shipper’s request.

(b) If, during any test of the Measuring Facilities, an adjustment or
calibration error is found which results in an incremental adjustment to the
calculated flow rate through each meter run in excess of two percent of the
adjusted flow rate (whether positive or negative and using the adjusted flow
rate as the percent error equation denominator), then any previous recordings of
such equipment shall be corrected to zero error for any period during which the
error existed (and which is either known definitely or agreed to by Shipper and
Gatherer) and the total flow for the period redetermined in accordance with the
provisions of Section 11.7. If the period of error condition cannot be
determined or agreed upon between Shipper and Gatherer, such correction shall be
made over a period extending over the last one half of the time elapsed since
the date of the prior test revealing the two percent error.

(c) If, during any test of any Measurement Facilities, an adjustment or
calibration error is found which results in an incremental adjustment to the
calculated hourly flow rate which does not exceed two percent of the adjusted
flow rate, all prior recordings and electronic flow computer data shall be
considered to be accurate for quantity determination purpose.

 

33

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 11.6 Special Tests. If Shipper or Gatherer desires a test of any
Measurement Facilities not scheduled by a Party under the provisions of
Section 11.5, two Days’ advance notice shall be given to the other and both
Shipper and Gatherer shall cooperate to secure a prompt test of the accuracy of
such equipment. If the Measurement Facilities tested are found to be within the
range of accuracy set forth in Section 11.5(b), then the Party that requested
the test shall pay the costs of such test including any labor and transportation
costs pertaining thereto. If the Measurement Facilities tested are found to be
outside the range of accuracy set forth in Section 11.5(b), then the Party that
owns such Measurement Facilities shall pay such costs and perform the
corrections according to Section 11.7.

Section 11.7 Metered Flow Rates in Error. If, for any reason, any Measurement
Facilities are (a) out of adjustment, (b) out of service or (c) out of repair
and the total calculated flow rate through each meter run is found to be in
error by an amount of the magnitude described in Section 11.5, the total
quantity of Gas delivered shall be determined in accordance with the first of
the following methods which is feasible:

(a) by using the registration of any mutually agreeable check metering facility,
if installed and accurately registering (subject to testing as provided for in
Section 11.5);

(b) where multiple meter runs exist in series, by calculation using the
registration of such meter run equipment; provided that they are measuring Gas
from upstream and downstream headers in common with the faulty metering
equipment, are not controlled by separate regulators, and are accurately
registering;

(c) by correcting the error by re-reading of the official charts, or by
straightforward application of a correcting factor to the quantities recorded
for the period (if the net percentage of error is ascertainable by calibration,
tests or mathematical calculation); or

(d) by estimating the quantity, based upon deliveries made during periods of
similar conditions when the meter was registering accurately.

Section 11.8 Record Retention. The Party owning the Measurement Facilities shall
retain and preserve all test data, charts, and similar records for any calendar
year for a period of at least 24 Months following the end of such calendar year
unless Applicable Law requires a longer time period or the Party has received
written notification of a dispute involving such records, in which case records
shall be retained until the related issue is resolved.

Section 11.9 Summary Measurement Reports. If Gatherer develops summary
measurement reports for the Wells or the Facilities, Gatherer shall provide
Shipper copies of such reports to Shipper upon Shipper’s request.

ARTICLE 12

NOTICES

Section 12.1 Notices. Unless otherwise provided herein, any notice, request,
invoice, statement or demand which any Party desires to serve upon any other
regarding this Agreement shall be made in writing and shall be considered as
delivered (a) when hand delivered, (b) when delivery is confirmed by pre-paid
delivery service (such as FedEx, UPS, DHL or a similar

 

34

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

delivery service), (c) if mailed by United States certified mail, postage
prepaid, three Business Days after mailing, (d) if sent by facsimile
transmission, when receipt is confirmed by the equipment of the transmitting
Party or (e) when sent via email; provided that if sent by email after normal
business hours or if receipt of a facsimile transmission is confirmed after
normal business hours, receipt shall be deemed to be the next Business Day.
Notwithstanding the foregoing, if a Party desires to serve upon another a notice
of default under this Agreement, the delivery of such notice shall be considered
effective under this Section 12.1 only if delivered by any method set forth in
the foregoing clauses (a) through (b). Any notice shall be given to the other
Party or Parties at the following address(es), or to such other address as any
Party shall designate by written notice to the others:

 

Producer:    Oasis Petroleum North America LLC    1001 Fannin, Suite 1500   
Houston, Texas 77002    Attn: Robin Hesketh    Phone: (281) 404-9484    Fax:
(281) 404-9501    Email: rhesketh@oasispetroleum.com Shipper:    Oasis Petroleum
Marketing LLC    1001 Fannin, Suite 1500    Houston, Texas 77002    Attn: Marian
Hargis    Phone: (281) 404-9627    Fax: (281) 404-9501    Email:
mhargis@oasispetroleum.com Gatherer:    Oasis Midstream Services LLC    1001
Fannin, Suite 1500    Houston, Texas 77002    Attn: Jim Doss    Phone: (713)
770-6445    Fax: (281) 404-9501    Email: jdoss@oasispetroleum.com    And   
Oasis Midstream Partners LP    1001 Fannin, Suite 1500    Houston, Texas 77002
   Attn: Richard Robuck    Phone: (281) 404-9602    Fax: (281) 404-9501   
Email: rrobuck@oasispetroleum.com

 

35

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

ARTICLE 13

INVOICES AND PAYMENTS

Section 13.1 Statements and Invoices. Not later than the 20th Business Day
following the end of each Month, Gatherer shall provide Shipper with a detailed
statement in the form set forth on Exhibit H setting forth the following
information for which payment for the Services is due hereunder for the
preceding Month, to the extent applicable and all relevant supporting
documentation, to the extent available on such 20th Business Day (with Gatherer
being obligated to deliver any such supporting documentation that is not
available on such 20th Business Day as soon as it becomes available):

(a) the gross quantity of all metered Gas received by Gatherer at the Receipt
Points (in MCF and MMBTUs);

(b) the gross total of all metered volume (in MCF and MMBTUs) delivered from all
receipt points on the Gathering System including Shipper’s Receipt Points;

(c) the net delivered volume of all Gas delivered to the inlet of the Processing
Plant included in the Gathering System (in MCF and MMBTUs);

(d) the total shrinkage (in MCF and MMBTUs) resulting from the recovery of NGLs
from Gas in the Gathering System;

(e) Gas analysis for each Receipt Point;

(f) the MMBTUs of Residue Gas attributable to Shipper’s Gas delivered hereunder
at each Receipt Point (as determined under Section 6.1(b));

(g) the quantity of each NGL component attributable to Shipper’s Gas delivered
hereunder at each Receipt Point (as determined under Section 6.2);

(h) the total theoretical Gallons of NGLs for all Gas delivered at the inlet of
the Processing Plant included in the Gathering System;

(i) the total Gallons of NGLs delivered from the Processing Plant to the NGL
Delivery Point by component;

(j) the total Gallons of Condensate and Inferior Liquids delivered to a Delivery
Point;

(k) the total MMBTUs of Residue Gas delivered to the Delivery Points;

(l) the total amount of Gas delivered to Delivery Points upstream of the
Processing Plant;

 

36

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(m) all Fees and adjustments or other amounts (e.g., electric costs under
Exhibit K);

(n) any Imbalance amounts under Section 9.3;

(o) the FL&U as determined under Section 6.3;

(p) the gross quantity of all metered Gas delivered by Gatherer at the Gas Lift
Delivery Points (in MCF and MMBTUs); and

(q) the total net amount for which payment is due to Gatherer, in accordance
with the terms of this Agreement.

Shipper shall make payment to Gatherer by the later of: (a) the last Business
Day of the Month in which such invoice is received or (b) 30 Days after receipt
of the invoice. Such payment shall be made by wire transfer pursuant to wire
transfer instructions delivered by Gatherer to Shipper in writing from time to
time or other means as mutually agreeable by the Parties. If any overcharge or
undercharge in any form whatsoever shall at any time be found and the invoice
therefor has been paid, Gatherer shall refund any amount of overcharge, and
Shipper shall pay any amount of undercharge, within 30 Days after final
determination thereof; provided, however, that no retroactive adjustment will be
made beyond a period of 24 Months from the date of a statement hereunder.

Section 13.2 Right to Suspend on Failure to Pay. If any undisputed amount due
hereunder remains unpaid for 60 Days after the due date, Gatherer shall have the
right to suspend or discontinue the Services hereunder until any such past due
amount is paid.

Section 13.3 Audit Rights. Each Party, on not less than 30 Days’ prior written
notice to the other, shall have the right, at its expense, at reasonable times
during normal business hours, but in no event more than twice in any period of
12 consecutive Months, to audit the books and records of the other to the extent
necessary to verify the accuracy of any statement, allocation, measurement,
computation, charge, payment made under, or obligation or right pursuant to this
Agreement. The scope of any audit shall be limited to transactions affecting Gas
tendered by or on account of Shipper hereunder or the Services performed
hereunder and shall be limited to the 24 Month period immediately prior to the
Month in which the notice requesting an audit was given. All statements,
allocations, measurements, computations, charges or payments made in any period
prior to the 24 Month period immediately prior to the Month in which the audit
is requested shall be conclusively deemed true and correct and shall be final
for all purposes.

Section 13.4 Payment Disputes. In the event of any dispute with respect to any
payment hereunder, Shipper shall make timely payment of all undisputed amounts,
and the Parties will use good faith efforts to resolve the disputed amounts
within 60 Days following the original due date. Any amounts subsequently
resolved shall be due and payable within ten Days of such resolution.

Section 13.5 Interest on Late Payments. In the event that Shipper shall fail to
make timely payment of any sums, except those contested in good faith or those
in a good faith dispute, when due under this Agreement, interest will accrue
from the date payment is due until the date payment is made at an annual rate
equal to the lesser of (a) ten percent or (b) the maximum percentage permitted
by Applicable Law.

 

37

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 13.6 Excused Performance. Gatherer will not be required to perform or
continue to perform the Services, and Producer and Shipper shall not be
obligated to deliver Dedicated Gas to the Facilities in the event:

(a) a Party has voluntarily filed for bankruptcy protection under any chapter of
the United States Bankruptcy Code;

(b) a Party is the subject of an involuntary petition of bankruptcy under any
chapter of the United States Bankruptcy Code, and such involuntary petition has
not been settled or otherwise dismissed within 90 Days of such filing; or

(c) a Party otherwise becomes insolvent, whether by an inability to meet its
debts as they come due in the ordinary course of business or because its
liabilities exceed its assets on a balance sheet test; and/or however such
insolvency may otherwise be evidenced.

ARTICLE 14

FORCE MAJEURE

Section 14.1 Suspension of Obligations. In the event a Party is rendered unable,
wholly or in part, by Force Majeure to carry out its obligations under this
Agreement, other than the obligation to make payments then or thereafter due
hereunder, and such Party promptly gives notice and reasonably full particulars
of such Force Majeure in writing to the other Parties promptly after the
occurrence of the cause relied on, then the obligations of the Party giving such
notice, so far as and to the extent that they are affected by such Force
Majeure, shall be suspended during the continuance of any inability so caused,
but for no longer period, and such cause shall so far as reasonably possible be
remedied with all reasonable dispatch by the Party claiming Force Majeure.

Section 14.2 Definition of Force Majeure. The term “Force Majeure” as used in
this Agreement shall mean any cause or causes not reasonably within the control
of the Party claiming relief and which, by the exercise of reasonable diligence,
such Party is unable to prevent or overcome, including acts of God; strikes,
lockouts or other industrial disturbances; acts of the public enemy, acts of
terror, sabotage, wars, blockades, military action, insurrections or riots;
epidemics; landslides, subsidence, lightning, earthquakes, fires, storms or
storm warnings; crevasses, floods or washouts; civil disturbances; explosions,
breakage or accident to wells, machinery, equipment or lines of pipe; the
necessity for testing or making repairs or alterations to wells, machinery,
equipment or lines of pipe; freezing of wells, equipment or lines of pipe;
inability of any Party hereto to obtain, after the exercise of reasonable
diligence, necessary materials, supplies, rights of way or Permits; or any
action or restraint by any Governmental Authority (so long as the Party claiming
relief has not applied for or assisted in the application for, and has opposed
where and to the extent reasonable, such action or restraint, and as long as
such action or restraint is not the result of a failure by the claiming Party to
comply with Applicable Law).

 

38

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 14.3 Settlement of Strikes and Lockouts. It is understood and agreed
that the settlement of strikes or lockouts shall be entirely within the
discretion of the Party affected thereby, and that the above requirement that
any Force Majeure shall be remedied with all reasonable dispatch shall not
require the settlement of strikes or lockouts by acceding to the demands of the
opposing party when such course is inadvisable in the sole discretion of the
Party affected thereby.

Section 14.4 Payments for Services Performed. Notwithstanding the foregoing, it
is specifically understood and agreed by the Parties that an event of Force
Majeure will in no way affect or terminate Shipper’s obligation to make payment
for the Services performed prior to such event of Force Majeure.

ARTICLE 15

INDEMNIFICATION

Section 15.1 Gatherer. Subject to the terms of this Agreement, including Article
16 and Section 18.8, Gatherer shall release, indemnify, defend and hold harmless
Producer, Shipper and their Affiliates, directors, officers, employees, agents,
consultants, representatives and invitees from and against all claims and losses
arising out of or relating to (a) the operations of Gatherer or (b) any breach
of this Agreement by Gatherer.

Section 15.2 Producer and Shipper. Subject to the terms of this Agreement,
including Article 16 and Section 18.8, each of Producer and Shipper shall
release, indemnify, defend and hold harmless Gatherer and its Affiliates,
directors, officers, employees, agents, consultants, representatives and
invitees from and against all claims and losses arising out of or relating to
(a) the operations of Producer or Shipper (as applicable) (b) any breach of this
Agreement by Producer or Shipper (as applicable).

ARTICLE 16

CUSTODY AND TITLE

Section 16.1 Custody. As among the Parties, (a) Producer shall be in custody,
control and possession of Producer’s Gas hereunder until such Gas is delivered
to the Receipt Points, (b) Shipper shall be in custody, control and possession
of Shipper’s Gas and NGLs allocated to Shipper after it is delivered to Shipper
at the Gathering System Delivery Points or the Residue Delivery Points and
(c) Producer shall be in custody, control and possession of Gas after such Gas
is delivered to the Gas Lift Delivery Points. As among the Parties, Gatherer
shall be in custody, control and possession of all Gas and NGLs in the
Facilities at all other times. The Party having custody and control of Gas and
NGLs under the terms of this Agreement shall be responsible for, and shall
defend, indemnify, release and hold the other Parties and their respective
Affiliates, and its and their directors, officers, employees, agents,
consultants, representatives, invitees and contractors harmless from and
against, all claims and losses of whatever kind and nature for anything that may
happen or arise with respect to such Gas and NGLs when such Gas and/or NGLs are
in its custody and control, including claims and losses resulting from any
negligent acts or omissions of any indemnified party, but excluding any losses
to the extent caused by or arising out of the negligence, gross negligence or
willful misconduct of the party claiming indemnity.

 

39

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 16.2 Shipper Warranty. Shipper represents and warrants that it owns, or
has the right to deliver to the Gathering System and the Processing Plant, all
Gas delivered under this Agreement. If the title to Gas delivered by Producer
hereunder is disputed or is involved in any legal action, Gatherer shall have
the right to cease receiving such Gas, to the extent of the interest disputed or
involved in legal action, during the pendency of the action or until title is
freed from the dispute, or until Producer furnishes, or causes to be furnished,
defense and indemnification to save Gatherer harmless from all claims arising
out of the dispute or action, with surety acceptable to Gatherer. Shipper shall
release, indemnify, defend and hold harmless Gatherer from and against all
claims and losses arising out of or related to any liens, encumbrances or
adverse claims on any of Shipper’s Gas delivered to the Receipt Points.

Section 16.3 Title. Title to all Gas delivered under this Agreement, including
all constituents thereof, shall remain with and in Shipper or its customers at
all times; provided, however, that title to Gas used as FL&U shall pass from
Shipper or the relevant third party to Gatherer immediately downstream of the
Receipt Point. Title to all NGLs that are recovered from Shipper’s Gas in the
Facilities shall remain with Shipper. Title to water that is removed from
Shipper’s Gas in the Facilities shall pass to Gatherer immediately downstream of
the point of recovery, and title to water that condenses from Shipper’s Gas in
the Facilities shall pass to Gatherer immediately downstream of the Receipt
Point.

ARTICLE 17

TAXES; ROYALTIES

Section 17.1 Taxes. Shipper shall pay or cause to be paid and agrees to hold
Gatherer harmless as to the payment of all excise, gross production, severance,
sales, occupation and all other Taxes, charges or impositions of every kind and
character required by statute or by order of Governmental Authorities and levied
against or with respect to any Gas delivered by or on account of Shipper under
this Agreement. Gatherer shall not become liable for such Taxes, unless
designated to remit those Taxes on behalf of Shipper by any duly constituted
jurisdictional agency having authority to impose such obligations on Gatherer,
in which event the amount of such Taxes remitted on Shipper’s behalf shall be
(a) reimbursed by Shipper upon receipt of invoice, with corresponding
documentation from Gatherer setting forth such payments, or (b) deducted from
amounts otherwise due to Gatherer under this Agreement. Gatherer shall pay or
cause to be paid all Taxes, charges and assessments of every kind and character
required by statute or by order of Governmental Authorities with respect to the
Facilities or provision of the Services. No Party shall be responsible nor
liable for any Taxes or other statutory charges levied or assessed against the
facilities of any other Party, including ad valorem tax (however assessed), used
for the purpose of carrying out the provisions of this Agreement or against the
net worth or capital stock of such Party.

Section 17.2 Royalties. As among the Parties, Producer shall have the sole and
exclusive obligation and liability for the payment of all Persons due any
proceeds derived from Shipper’s Gas and NGLs allocated to Shipper hereunder
(including all constituents and products thereof) delivered under this
Agreement, including royalties, overriding royalties and similar interests, in
accordance with the provisions of the leases or agreements creating those rights
to proceeds. In no event will Gatherer have any obligation to those Persons due
any of those proceeds of production attributable to any such Gas (including all
constituents and products

 

40

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

thereof) delivered under this Agreement. Although Shipper shall retain title to
Gas as provided in this Section 17.2, Gatherer shall have the right to commingle
Gas delivered by Shipper with Third Party Gas.

ARTICLE 18

MISCELLANEOUS

Section 18.1 Rights. The failure of any Party to exercise any right granted
hereunder shall not impair nor be deemed a waiver of that Party’s privilege of
exercising that right at any subsequent time or times.

Section 18.2 Applicable Laws. This Agreement is subject to all valid present and
future laws, regulations, rules and orders of Governmental Authorities now or
hereafter having jurisdiction over the Parties, this Agreement, or the services
performed or the facilities utilized under this Agreement.

Section 18.3 Governing Law; Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be governed by, construed and enforced in accordance
with the laws of the State of Texas, without regard to choice of law principles
that would result in the application of the laws of a different jurisdiction.

(b) The Parties agree that the appropriate, exclusive and convenient forum for
any disputes between the Parties arising out of this Agreement or the
transactions contemplated hereby shall be in any state or federal court in
Harris County, Texas, and each of the Parties irrevocably submits to the
jurisdiction of such courts solely in respect of any proceeding arising out of
or related to this Agreement. The Parties further agree that the Parties shall
not bring suit with respect to any disputes arising out of this Agreement or the
transactions contemplated hereby in any court or jurisdiction other than the
above specified courts.

(c) EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

Section 18.4 Successors and Assigns.

(a) This Agreement shall extend to and inure to the benefit of and be binding
upon the Parties and their respective successors and permitted assigns. Except
as set forth in Section 17.4(b), no Party shall have the right to assign its
respective rights and obligations in whole or in part under this Agreement
without the prior written consent of the other Parties (such consent shall not
be unreasonably withheld, conditioned or delayed) and any assignment or
attempted assignment made otherwise than in accordance with this Section 18.4
shall be null and void ab initio.

 

41

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(b) Notwithstanding Section 18.4 (a):

(i) Gatherer shall have the right to assign its rights under this Agreement, in
whole or in part, as applicable, without the consent of Producer and Shipper, if
such assignment is made to any Person to which the Facilities or any part
thereof has been or will be Transferred that assumes in writing all of
Gatherer’s obligations hereunder (if applicable, to the extent that part of the
Facilities being Transferred to such Person) and is an Affiliate of Gatherer;

(ii) Gatherer shall have the right to grant a security interest in this
Agreement to a lender or other debt provider (or trustee or agent on behalf of
such lender) of Gatherer; and

(iii) Producer and Shipper shall have the right to assign their rights under
this Agreement, in whole or in part, as applicable, without the consent of
Gatherer, to any Person to which Producer sells, assigns or otherwise Transfers
all or any portion of the Dedicated Properties and who assumes in writing all of
Producer’s and Shipper’s obligations hereunder (if applicable, to the extent of
the Dedicated Properties being Transferred to such Person) and each of Producer
and Shipper shall be released from its obligations under this Agreement to the
extent of such assignment.

(c) If this Agreement is assigned (in whole or in part) by Gatherer to any
Person that is not an Affiliate of OMS or MLP, or if there is a change of
Control of MLP or any DevCo such that an Affiliate of Oasis Petroleum Inc. no
longer Controls MLP or such DevCo (as applicable), then Producer and Shipper can
seek to renegotiate the terms and conditions of this Agreement with Gatherer. If
the Parties are unable to agree on mutually agreeable amendments (if any) to
this Agreement, then Producer and Shipper shall have the collective right to
terminate this Agreement, effective upon the assignment or change of Control, as
applicable.

Section 18.5 Severability. If any provision of this Agreement is determined to
be void or unenforceable, in whole or in part, then (a) such provision shall be
deemed inoperative to the extent it is deemed void or unenforceable, (b) the
Parties agree to enter into such amendments to this Agreement in order to give
effect, to the greatest extent legally possible, to the provision that is
determined to be void or unenforceable and (c) the other provisions of this
Agreement in all other respects shall remain in full force and effect and
binding and enforceable to the maximum extent permitted by law; provided,
however, that in the event that a material term under this Agreement is so
modified, the Parties will, timely and in good faith, negotiate to revise and
amend this Agreement in a manner which preserves, as closely as possible, each
Party’s business and economic objectives as expressed by the Agreement prior to
such modification.

Section 18.6 Confidentiality.

(a) Confidentiality. Except as otherwise provided in this Section 18.6, each
Party agrees that it shall maintain all terms and conditions of this Agreement,
and all information disclosed to it by another Party or obtained by it in the
performance of this Agreement and relating to another Party’s business
(including Development Plans, Facilities Plans and all data relating to the
production of Producer, including well data, production volumes, volumes

 

42

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

gathered, compressed, processed and delivered to the Delivery Points, and gas
quality) (collectively, “Confidential Information”) in strictest confidence, and
that it shall not cause or permit disclosure of this Agreement or its existence
or any provisions contained herein without the express written consent of the
disclosing Party.

(b) Permitted Disclosures. Notwithstanding Section 18.6(a) disclosures of any
Confidential Information may be made by any Party (i) to the extent necessary
for such Party to enforce its rights hereunder against another Party; (ii) to
the extent to which a Party is required to disclose all or part of this
Agreement by a statute or by the order or rule of a Governmental Authority
exercising jurisdiction over the subject matter hereof, by order, by regulations
or by other compulsory process (including deposition, subpoena, interrogatory or
request for production of documents); (iii) to the extent required by the
applicable regulations of a securities or commodities exchange; (iv) to a third
person in connection with a proposed sale or other transfer of a Party’s
interest in this Agreement (provided such third person agrees in writing to be
bound by the terms of this Section 18.6); (v) to its own directors, officers,
employees, agents and representatives; (vi) to an Affiliate; (vii) to financial
advisors, attorneys and banks (provided that such Persons are subject to a
confidentiality undertaking consistent with this Section 18.6(b)) or
(viii) except for information disclosed pursuant to Article 3, to a royalty,
overriding royalty, net profits or similar owner burdening Dedicated Gas
(provided such royalty, overriding royalty, net profits or similar owner agrees
in writing to be bound by the terms of this Section 18.6).

(c) Notification. If a Party is or becomes aware of a fact, obligation or
circumstance that has resulted or may result in a disclosure of any of the terms
and conditions of this Agreement authorized by Section 18.6(b)(ii) or (iii), it
shall so notify in writing the disclosing Party promptly and shall provide
documentation or an explanation of such disclosure as soon as it is available.

(d) Party Responsibility. Each Party shall be deemed solely responsible and
liable for the actions of its directors, officers, employees, agents,
representatives and Affiliates for maintaining the confidentiality commitments
of this Section 18.6.

(e) Public Announcements. The Parties agree that prior to making any public
announcement or statement with respect to this Agreement or the transaction
represented herein permitted under this Section 18.6, the Party desiring to make
such public announcement or statement shall provide the other Parties with a
copy of the proposed announcement or statement prior to the intended release
date of such announcement. The other Parties shall thereafter consult with the
Party desiring to make the release, and the Parties shall exercise their
reasonable efforts to (i) agree upon the text of a joint public announcement or
statement to be made by all Parties or (ii) in the case of a statement to be
made solely by one Party, obtain approval of the other Parties to the text of a
public announcement or statement. Nothing contained in this Section 18.6 shall
be construed to require any Party to obtain approval of any other Party to
disclose information with respect to this Agreement or the transaction
represented herein to any Governmental Authority to the extent required by
Applicable Law or necessary to comply with disclosure requirements of the
Securities and Exchange Commission, the New York Stock Exchange or any other
regulated stock exchange.

(f) Survival. The provisions of this Section 18.6 shall survive any expiration
or termination of this Agreement for a period of one year.

 

43

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Section 18.7 Entire Agreement, Amendments and Waiver. The exhibits to this
Agreement are hereby incorporated by reference into this Agreement. This
Agreement, including all exhibits hereto, integrates the entire understanding
among the Parties with respect to the subject matter covered and supersedes all
prior understandings, drafts, discussions or statements, whether oral or in
writing, expressed or implied, dealing with the same subject matter. This
Agreement may not be amended or modified in any manner except by a written
document signed by the Parties that expressly amends this Agreement. No waiver
by a Party of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless expressly provided. No
waiver shall be effective unless made in writing and signed by the Party to be
charged with such waiver.

Section 18.8 Limitation of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY
RESULTING FROM OR ARISING OUT OF THIS AGREEMENT OR THE BREACH THEREOF OR UNDER
ANY OTHER THEORY OF LIABILITY, WHETHER TORT, NEGLIGENCE, STRICT LIABILITY,
BREACH OF CONTRACT, WARRANTY, INDEMNITY OR OTHERWISE, INCLUDING LOSS OF USE,
INCREASED COST OF OPERATIONS, LOSS OF PROFIT OR REVENUE, OR BUSINESS
INTERRUPTIONS; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT APPLY
TO ANY DAMAGE CLAIM ASSERTED BY OR AWARDED TO A THIRD PARTY FOR WHICH A PARTY
WOULD OTHERWISE BE LIABLE UNDER ANY INDEMNIFICATION PROVISION SET FORTH HEREIN.

Section 18.9 Headings. The headings and captions in this Agreement have been
inserted for convenience of reference only and shall not define or limit any of
the terms and provisions hereof.

Section 18.10 Rights and Remedies. Except as otherwise provided in this
Agreement, each Party reserves to itself all rights, counterclaims, other
remedies and defenses that such Party is or may be entitled to arising from or
out of this Agreement or as otherwise provided by law.

Section 18.11 No Partnership. Nothing contained in this Agreement shall be
construed to create an association, trust, partnership, or joint venture or
impose a trust, fiduciary or partnership duty, obligation or liability on or
with regard to any Party.

Section 18.12 Rules of Construction. In construing this Agreement, the following
principles shall be followed:

(a) no consideration shall be given to the fact or presumption that one Party
had a greater or lesser hand in drafting this Agreement;

(b) examples shall not be construed to limit, expressly or by implication, the
matter they illustrate;

 

44

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(c) the word “includes” and its syntactical variants mean “includes, but is not
limited to,” “includes without limitation” and corresponding syntactical variant
expressions;

(d) the plural shall be deemed to include the singular and vice versa, as
applicable;

(e) references to any Person (including any Governmental Authority) shall
include such Person’s permitted successors and assigns;

(f) reference to any agreement, document or instrument shall mean such
agreement, document or instrument as amended, replaced, restated or modified and
in effect from time to time in accordance with the terms thereof;

(g) references to any Applicable Law (including any statute referenced in this
Agreement) means such Applicable Law as amended, modified, codified, replaced or
re-enacted, in whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder, and references to any section or
other provision of any Applicable Law means that provision of such Applicable
Law from time to time in effect and constituting the substantive amendment,
modification, codification, replacement or re-enactment of such section or other
provision;

(h) references to any Exhibit, Article, Section or other sub-section shall be
references to an Exhibit, Article, Section or other sub-section of this
Agreement; and

(i) references to currency shall be references to the lawful money of the United
States, unless otherwise indicated, and any payments and transfers of funds
shall be made in immediately available funds.

Section 18.13 No Third Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their respective successors and permitted assigns,
and shall not inure to the benefit of any other Person whomsoever or whatsoever,
it being the intention of the Parties that no third Person shall be deemed a
third party beneficiary of this Agreement.

Section 18.14 Further Assurances. Each Party shall take such acts and execute
and deliver such documents as may be reasonably required to effectuate the
purposes of this Agreement.

Section 18.15 Counterpart Execution. This Agreement may be executed in any
number of counterparts, each of which shall be considered an original, and all
of which shall be considered one and the same instrument. A signed copy of this
Agreement delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Agreement.

Section 18.16 Memorandum of Agreement. Contemporaneously with the execution of
this Agreement, the Parties shall execute, acknowledge, deliver and record a
“short form” memorandum of this Agreement in the form of Exhibit G attached
hereto (as modified, including by the addition of any required property
descriptions, required by local law and practice to put such memorandum of
record and put third parties on notice of this Agreement), which shall be

 

45

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

placed of record in each state and county in which the currently-existing
Dedicated Properties are located. The Parties further agree that such memoranda
shall be executed and delivered by the Parties from time to time at any Party’s
reasonable request to evidence any additions or additional areas or Interests
to, or permanent releases from, the dedication and commitment made by Producer
and Shipper under this Agreement.

[Signature Page(s) Follows]

 

46

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be
effective for all purposes on the Effective Date.

 

OASIS PETROLEUM NORTH AMERICA LLC By:  

/s/ Taylor L. Reid

Name:  

Taylor L. Reid

Title:  

President and Chief Operating Officer

OASIS PETROLEUM MARKETING LLC By:  

/s/ Michael H. Lou

Name:  

Michael H. Lou

Title:  

Executive Vice President and

Chief Financial Officer

OASIS MIDSTREAM SERVICES LLC By:  

/s/ Greg Hills

Name:  

Greg Hills

Title:  

Senior Vice President Marketing and Midstream

OASIS MIDSTREAM PARTNERS LP By:  

/s/ Richard Robuck

Name:  

Richard Robuck

Title:  

Senior Vice President and Chief Financial Officer

 

Gas Gathering, Compression and Processing and Gas Lift Agreement

Signature Page

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT A

DEDICATED ACREAGE

The outlined area noted in black below shall be the Dedicated Acreage.

 

LOGO [g451626g17f07.jpg]

 

Exhibit A – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT B

FACILITIES

 

LOGO [g451626g16m06.jpg]

 

Exhibit B – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT C

DELIVERY POINTS

 

Residue Delivery Point:    WBI Energy Transmission, Inc.    Section 35, 151N 98W
NGLs Delivery Point:    ONEOK Bakken Pipeline, LLC    Section 35, 151N 98W
Upstream Delivery Point:    Kinder / Hiland Gathering System    Section 1, 151N
99W Upstream Delivery Point:    ONEOK Rocky Mountain Gathering    Section 3,
151N 98W

 

* Other Delivery Points as mutually agreed to by the Parties.

 

Exhibit C – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT D

EXCLUDED WELLS

 

A. Johnson #12-1H (PU) Aagvik #1-35H (PU)(S.A.M.) Berquist #33-28H (S.A.M.-D)
Berquist #34-27H (S.A.M.-D) Forland #28-33H (PU) Johnsrud #19-18H (PU)
(S.A.M.-D) Lundeen #4-26H (PU) (S.A.M.-D) Nelson #11-2H (PU) Nelson #14-23H (PU)
Patsy #5-8HTF Pederson #10-3H (PU)(S.A.M.-D) Rolfson #20-17H (PU) (S.A.M.-D)
Rolfson #29-32H (PU) (S.A.M.-D) Rolfsrud #18-19H (PU) (S.A.M.-D) Rolfsrud #7-6H
(PU) (S.A.M.-D) Ceynar #29-32H (PU) (S.A.M.-D) Lawlar #23-14H (PU) (S.A.M.-D)
Lawlar #26-35H (PU) (S.A.M.-D) Mildred Nelson #4-25H (PU) (S.A.M.-D) Nordeng
#24-13H (PU) (S.A.M.-D) Theodore #1-9H (PU) (S.A.M.) Wold #34-27H (PU)
(S.A.M.-D) Wold #15-3H

 

Exhibit D – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT E

FORM OF RIGHT OF WAY AGREEMENT

RIGHT OF WAY AND EASEMENT AGREEMENT

KNOW ALL PERSONS BY THESE PRESENTS,                                         ,
whose address is                                          (“Owner”, whether one
or more), for and in consideration of Twenty-Five Dollars ($25.00) and other
good and valuable consideration in hand paid, the receipt and sufficiency of
which are hereby acknowledged, does hereby GRANT, BARGAIN, SELL, CONVEY and
WARRANT unto Oasis Midstream Services LLC, whose address is 1001 Fannin Street,
Suite 1500, Houston, Texas 77002, its successors and assigns (“OMS”), and Oasis
Midstream Partners LP, whose address is 1001 Fannin Street, Suite 1500, Houston,
Texas 77002, its successors and assigns (“MLP”, and collectively with OMS,
“Grantee”) a perpetual and permanent right-of-way and easement (the “ROW”) of
Fifty feet (50’) in width for the placement of up to four (4) Pipelines (as
defined herein). The ROW is granted for the purpose of laying, constructing,
maintaining, operating, inspecting, repairing, replacing, protecting, changing
the size of and removing pipelines and appurtenances thereto for the
transportation of oil, gas, fresh water, production water, kindred substances
and vapors or the products thereof (the “Pipelines”) upon and along a route to
be selected by Grantee in consultation with Owner on, under and across lands of
Owner, situated in the County of                     , State of
                    , described as follows:

Township                          , Range                          

Section     :                     

More particularly shown on Plat marked Exhibit “A”, and by this reference made a
part hereof.

In addition to the ROW described above, during any period of time that Grantee
is installing or maintaining the Pipelines, Owner does HEREBY GRANT, BARGAIN,
SELL, CONVEY AND WARRANT unto Grantee a temporary easement of Seventy-Five feet
(75’) in width, except that such easement shall be to a width of One Hundred
feet (100’) at all road, ditch, and waterway crossings and any areas of severely
uneven ground.

The aforesaid rights and the ROW are granted as and from the date hereof, and
shall be perpetual, on the following terms and conditions, which are hereby
mutually agreed to by and between Owner and Grantee.

1. Together with an easement for restricted rights of ingress and egress to,
from and along said pipeline(s) and facilities of Grantee on, over and across
said lands and adjacent lands of Owner, and Grantee shall have all privileges
necessary or convenient for the full use and enjoyment of the rights herein
granted.

2. Grantee may record this Right of Way Agreement attaching a plat as Exhibit
“A” (incorporated herein by reference) of the actual route of the facilities
constructed hereunder and/or of the ingress/egress easement to further identify
the locations thereof.

3. Grantee shall bury the top of its pipelines at or below Four feet (4’) in
depth. Grantee shall restore the land as soon as practicable after the pipelines
are completed. Restoration shall be made as near as practicable to the condition
when Grantee first entered onto the land. Grantee’s agreement to bury all
pipelines shall in no way restrict Grantee from installing above ground
appurtenant facilities (markers, risers, headers, block valves, monitors,
cathodic protection equipment, electrical power lines, etc.) necessary for the
operations of said pipelines; however Grantee agrees to reasonably attempt to
locate said appurtenant facilities so as to minimize the impact of same to
Owner’s use of the land covered herein.

 

Exhibit E – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

4. Owner and its successors and assigns reserves all oil, gas and minerals, if
owned, on and under said lands and the right to farm, graze and otherwise fully
use and enjoy said lands; provided that Owner agrees not to construct or create
any obstruction, structure, or engineering work on the herein granted right of
way that will interfere with rights and interests of Grantee herein granted, and
provided further that Grantee shall have the right hereafter to keep clear
obstructions from the herein granted right of way and ingress/egress easement.
Grantee agrees to pay Owner or any tenant, as their interest may appear, for
actual damages to crops, pasture, timber, livestock, fences and other
improvements on said premises which may arise from exercise of the rights herein
granted, provided Grantee shall not be liable for damages for future clearing of
the right of way and ingress/egress easement in exercise of the rights herein
granted.

5. Grantee shall be liable for reclamation and damages resulting from a breach
or spill.

6. Grantee agrees to comply with all applicable state and local regulations.

7. This Agreement may be executed in several counterparts, each of which shall
be an original of this Agreement but all of which, taken together, shall
constitute one and the same Agreement and be binding upon the parties who
executed any counterpart, regardless of whether it is executed by all parties
named herein.

8. Owner agrees to grant additional lateral right of ways and perpetual
easements that Grantee may need to connect to any well or wells, production
facilities and/or compressor stations. This additional grant includes the
pipelines needed to transport oil, gas, fresh water, production water, kindred
substances and vapors. Owner will be paid for the additional lateral right of
ways and perpetual easements based on the same terms agreed upon in the Payment
Agreement of even date herewith. Grantee will have the right to amend this Right
of Way and Easement Agreement by filing an amendment, executed solely by
Grantee, with new plats showing the location of the additional lateral right of
ways and perpetual easements.

9. This instrument together with the Payment Agreement for Right of Way and
Easement dated                      constitutes the entire agreement and
understanding of the parties and supersedes all prior understandings,
negotiations and agreements of the parties related to the subject matter hereof.
Each party agrees to give the other a 30 day right to cure after notice of any
default before seeking termination or exercising any other remedy.

TO HAVE AND TO HOLD said right of way and easement unto said Grantee, its
successors and assigns for so long as same are used for the purposes herein
granted. All provisions hereof are appurtenant to, run with and burden the above
described land, and are binding upon and inure to the benefit of the successors,
assigns, heirs, executors, administrators and other legal representatives of
each of the parties.

 

Exhibit E – Page 2

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Executed this      day of             , 20    .

 

Owner:     Grantee:     Oasis Midstream Services LLC

 

   

 

    Name:       Title:       Oasis Midstream Partners LP    

 

    Name:       Title:  

 

Exhibit E – Page 3

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

ACKNOWLEDGEMENTS

STATE OF                     

COUNTY OF                 

On this      day of             , in the year         , before me personally
appeared                                         , known to me (or proved to me
on the oath of                     ) to be the person who is described in and
who executed the within and foregoing instrument, and acknowledged to me that
(he/she/they) executed the same.

 

(Seal)

 

Notary Public in and for the State of  

 

Printed Name:  

 

Commission Expires:  

 

 

 

STATE OF                     

COUNTY OF                     

On this      day of             , in the year         , before me personally
appeared                                         , known to me (or proved to me
on the oath of                     ) to be the attorney-in-fact of the limited
liability company described in and that executed the within instrument, and
acknowledged to me that such corporation executed the same.

 

(Seal)

 

Notary Public in and for the State of  

 

Printed Name:  

 

Commission Expires:  

 

 

 

STATE OF                     

COUNTY OF                     

On this      day of             , in the year         , before me personally
appeared                                         , known to me (or proved to me
on the oath of                     ) to be the                      of the
limited partnership described in and that executed the within instrument, and
acknowledged to me that such corporation executed the same.

 

(Seal)

 

Notary Public in and for the State of  

 

Printed Name:  

 

Commission Expires:  

 

 

 

Exhibit E – Page 4

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

PAYMENT AGREEMENT FOR RIGHT OF WAY AND EASEMENT AGREEMENT

This agreement entered into this      day of             , 2017 between
                                        , husband and wife whose address is
                                         (“Owner”), Oasis Midstream Services
LLC, whose address is 1001 Fannin, Suite 1500, Houston, Texas 77002, its
successors or assigns (“OMS”), and Oasis Midstream Partners LP, whose address is
1001 Fannin, Suite 1500, Houston, Texas 77002, its successors or assigns (“MLP”,
and collectively with OMS, “Grantee”). In consideration of Twenty Five Dollars
($25.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Owner hereby consents and agrees to the payment
arrangement set out below regarding that certain Right of Way and Easement
Agreement from Owner to Grantee (“ROW Agreement”) covering the following
described lands located in                      County, North
Dakota:                

Township North, Range West, 5th P.M.

Section     :                     

Grantor acknowledges receipt of $500.00 as a down payment. The pipeline payment
of $         per rod is to be paid per pipeline for up to four (4) pipelines.
The down payment will be deducted from the calculation of the total payment. The
balance of the consideration due, if any, will be paid within thirty (30) days
of the completion of a final survey of the pipelines as installed. In the event
it is necessary to place an additional line or lines, not to exceed four
(4) lines, in a new lateral Right of Way, then Grantee agrees to pay Owner
$         per rod for the placement of each additional pipeline that is placed
in the lateral Right of Way.

Grantee agrees to pay, in addition to the aforementioned payment, either (i) One
Thousand Dollars and no/100 ($1,000.00) per mile, or (ii) the established yield
as determined by the Farm Service Agency office per mile of growing or planted
crops, or hay land, where applicable, within the right of way under the ROW
Agreement which were destroyed as a direct result of the initial construction
and installation of the Facilities.

If said Grantor owns less interest in the above described land than the entire
and undivided fee simple estate therein, then the payments herein provided for
shall be paid the said Grantor only in the proportion which Grantor’s interest
bears to the whole and undivided fee.

It is expressly understood and agreed that the above specified payment for the
ROW Agreement is contingent upon construction.

 

Exhibit E – Page 5

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Owner:     Grantee:     Oasis Midstream Services LLC

 

   

 

    Name:       Title:       Oasis Midstream Partners LP    

 

    Name:       Title:  

 

Exhibit E – Page 6

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT F

RESERVED

 

Exhibit F – Page 1

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT G

FORM OF MEMORANDUM OF AGREEMENT

MEMORANDUM OF AGREEMENT

This MEMORANDUM OF GAS GATHERING, COMPRESSION AND PROCESSING AND GAS LIFT
AGREEMENT (this “Memorandum”) is entered into effective [            ], 2017
(the “Effective Date”), by and among OASIS PETROLEUM NORTH AMERICA LLC
(“Producer”), with an address of 1001 Fannin, Suite 1500 Houston TX 77002, OASIS
PETROLEUM MARKETING LLC (“Shipper”), with an address of 1001 Fannin, Suite 1500
Houston TX 77002, OASIS MIDSTREAM SERVICES LLC (“OMS”) with an address of 1001
Fannin, Suite 1500 Houston TX 77002, and OASIS MIDSTREAM PARTNERS LP (“MLP”, and
collectively with OMS, “Gatherer”), with an address of 1001 Fannin, Suite 1500
Houston TX 77002.

WHEREAS, Producer, Shipper, and Gatherer entered into that certain Gas
Gathering, Compression and Processing and Gas Lift Agreement effective
September 25, 2017 (the “Agreement”), pursuant to which Gatherer will provide
certain gathering, compression, processing, gas lift and other services as
therein set forth;

WHEREAS, any capitalized term used, but not defined, in this Memorandum shall
have the meaning ascribed to such term in the Agreement; and

WHEREAS, the Parties desire to file this Memorandum of record in the real
property records of McKenzie County, North Dakota, described on Attachment 1
hereto (the “Dedicated Acreage”), to give notice of the existence of the
Agreement and certain provisions contained therein;

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

1. Notice. Notice is hereby given of the existence of the Agreement and all of
its terms, covenants and conditions to the same extent as if the Agreement was
fully set forth herein. Certain provisions of the Agreement are summarized in
Sections 2 through 3 below.

2. Dedication and Commitment.

 

  (i) Subject to the exceptions, exclusions and reservations set forth in the
Agreement and the other terms and conditions of the Agreement, Producer has
exclusively dedicated the Dedicated Properties to Gatherer for the performance
of the Services under the Agreement and commits to deliver to Gatherer on
account of Shipper, as and when produced, all Dedicated Gas into the Facilities
for the performance of the Services under the Agreement.

 

  (ii)

Subject to the exceptions, exclusions and reservations set forth in the
Agreement and the other terms and conditions of the Agreement, Shipper has
exclusively

 

Exhibit G – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

  dedicated and commits to deliver to Gatherer, as and when produced and
purchased from Producer, all Dedicated Gas into the Facilities for the
performance of the Services under the Agreement.

3. Covenant Running with the Land. Subject to the exceptions, exclusions and
reservations set forth in the Agreement and the other terms and conditions of
the Agreement, the Parties intend that the dedication and commitment made by
Producer and Shipper under the Agreement be a covenant running with (a) the
Dedicated Properties, as a burden on Producer’s title thereto and binding on
successors-in-interest in and to the Dedicated Properties, and (b) the
Facilities, as a benefit accruing to Gatherer’s title thereto and inuring to the
benefit of successors-in-interest to the Facilities. Producer shall not Transfer
any or all of its interest in any Dedicated Property unless (i) Producer obtains
and delivers to Gatherer a written acknowledgment by the Transferee in favor of
Gatherer acknowledging that the Transferred Dedicated Property shall remain
subject to the Agreement in all respects and (ii) each instrument of conveyance
expressly so states.

4. No Amendment to Agreement. This Memorandum is executed and recorded solely
for the purpose of giving notice and shall not amend or modify the Agreement in
any way.

 

Exhibit G – Page 2

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

IN WITNESS WHEREOF, this Memorandum has been signed by or on behalf of each of
the Parties as of the Effective Date.

 

OASIS PETROLEUM NORTH AMERICA LLC By:  

 

Name:  

 

Title:  

 

OASIS PETROLEUM MARKETING LLC By:  

 

Name:  

 

Title:  

 

OASIS MIDSTREAM SERVICES LLC By:  

 

Name:  

 

Title:  

 

OASIS MIDSTREAM PARTNERS LP By:  

 

Name:  

 

Title:  

 

 

Exhibit G – Page 3

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

ACKNOWLEDGEMENTS

 

STATE OF [                                        ]    §    § COUNTY OF
[                            ]    §    §

The foregoing instrument was acknowledged before me on the      day of
            , 2017, by [                    ], [                    ] of Oasis
Petroleum North America LLC, a Delaware limited liability company, on behalf of
said entity.

 

 

Notary Public in and for  

 

 

Printed or Typed Name of Notary

 

STATE OF [                                        ]    §    § COUNTY OF
[                            ]    §    §

The foregoing instrument was acknowledged before me on the      day of
            , 2017, by [                    ], [                    ] of Oasis
Petroleum Marketing LLC, a Delaware limited liability company, on behalf of said
entity.

 

 

Notary Public in and for  

 

 

Printed or Typed Name of Notary

 

STATE OF [                                        ]    §    § COUNTY OF
[                            ]    §    §

The foregoing instrument was acknowledged before me on the      day of
            , 2017, by [                    ], [                    ] of Oasis
Midstream Services LLC, a Delaware limited liability company, on behalf of said
entity.

 

 

Notary Public in and for  

 

 

Printed or Typed Name of Notary

 

Exhibit G – Page 4

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

STATE OF [                                        ]    §    § COUNTY OF
[                            ]    §    §

The foregoing instrument was acknowledged before me on the      day of
            , 2017, by [                    ], [                    ] of Oasis
Midstream Partners LP, a Delaware limited partnership, on behalf of said entity.

 

 

Notary Public in and for  

 

 

Printed or Typed Name of Notary

 

Exhibit G – Page 5

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Attachment 1

DEDICATED ACREAGE

[Description to be included.]

 

Exhibit G – Page 6

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS
BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS
HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS
[***]

 

EXHIBIT H

FORM OF MONTHLY STATEMENT

 

Oasis Midstream Services, LLC.    Meter Allocation Statement    Wild Basin
Gathering System

Meter and Contract Information

 

 

Contract party  

Contract

Number

   

Meter

Name

 

Meter

Number

   

Accounting

Date

   

Production

Date

   

Statement

Date

  Mcf  

BTU

Factor

    MMBtu       

Settlement

Summary

 

Oasis Petroleum Marketing

    99999     Johnsrud 5198 11-18 3BX     12345       June-17       May-17    
06/20/17                       CTB Gross   [***]     [ ***]    [***]   NGL Value
  $ —                 Regional Gas Lift   —       —   Residue Value   $ —      
          Upstream Deliveries   [***]     [***]   Fees   $ [***]                

 

   

 

   

 

 

              Net Plant Inlet   [***]     [***]   Net Amount Due   $ [***]      
         

 

   

 

   

 

 

 

 

Plant Totals

 

 

Product         

Theoretical

Gallons

     Actual
Gallons  

H2S

      

CO2

      

N2

      

Methane

      

Ethane

      [***]        [***]  

Propane

      [***]        [***]  

Iso-Butane

      [***]        [***]  

Normal Butane

 

    [***]        [***]  

Iso-Gasoline

      [***]        [***]  

Normal Gasoline

 

    [***]        [***]  

C6+

      [***]        [***]         

 

 

        [***]        [***]  

Residue

  Units         

Theoretical

Residue

     Actual
Residue  

MCF

      [***]        [***]  

MMBTU

      [***]        [***]  

Residue BTU Factor

    [***]       

 

CTB Fees

 

Gathering

  $   [***]       [***]      $ [***]  

Compression

  $ [***]       [***]      $ [***]  

Processing

  $ [***]       [***]      $ [***]  

Gas Lift

  $ [***]       [***]      $ [***]  

Total Fees

       $ [***]  

 

Johnsrud 5198 11-18 3BX

 

 

Mole %     GPM   Theoretical
Gallons     Plant
Recoveries     Actual
Gallons     Shrink
MMBtu     Shrink
Mcf     Contract
%     Settled
Gallons     Net Price   Liquid
Value     [***]                         [***]                         [***]    
                    [***]                         [***]     [***]     [***]    
  [***] %      [***]       [***]       [***]       [***] %      [***]       $
—       [***]     [***]     [***]       [***] %      [***]       [***]      
[***]       [***] %      [***]       $ —       [***]     [***]     [***]      
[***] %      [***]       [***]       [***]       [***] %      [***]       $ —  
    [***]     [***]     [***]       [***] %      [***]       [***]       [***]  
    [***] %      [***]       $ —       [***]     [***]     [***]       [***] % 
    [***]       [***]       [***]       [***] %      [***]       $ —       [***]
    [***]     [***]       [***] %      [***]       [***]       [***]       [***]
%      [***]       $ —       [***]     [***]     [***]       [***] %      [***]
      [***]       [***]       [***] %      [***]       $ —    

 

 

     

 

 

     

 

 

   

 

 

   

 

 

     

 

 

     

 

 

    [***]     [***]     [***]         [***]       [***]       [***]        
[***]       $ —    

 

Residue

 

Theoretical

Residue

   

Actual

Residue

  Fuel    

Lost &

Unaccounted

For

   

Residue to

WBI

    Gas Lift     Offload -
Hiland     Offload -
Oneok     Settled
Residue     Net Price   Residue
Value     [***]     [***]         [***]                 [***]     [***]    
[***]       [***]       [***]       [***]           [***]       $ —          
[***] %      [***] %               

 

 

Contacts

 

 

Name

   [***]

Phone#        

   [***]

Email

   [***]   

 

 

 

Exhibit H – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT I

DOWNSTREAM NGL SPECIFICATIONS

BAKKEN NGL PIPELINE

Product Specification Sheet

 

Product: Demethanized Mix – Y-Grade    Date Originally Issued: 11/20/2012
Specification Number: BKNNGL-RF    Revision Date:    Revision Number: 0

 

Specification Points

  

Test Method

(Latest Issue)

 

Maximum

 

Minimum

Composition       

Carbon Dioxide, Maximum

   GPA 2177   [***]   [***]

Methane, Maximum

   GPA 2177   [***]   [***]

Aromatics, Maximum

   GPA 2186   [***]LV%  

Olefins, Maximum

   GPA 2186   [***]   [***]

COS, by wt of C3 component

   ASTM D5623 or GPA 2199   [***] ppmw   Vapor Pressure – psig @ 100° F       

psig @ 100° F, Maximum

   GPA 2177, Appendix B   [***]   Corrosiveness       

Copper Strip @ 100 F

   ASTM D 1838   [***]   Volatile Sulfur, by weight       

PPM by Weight, Maximum

   ASTM D 6667   [***] ppm   Hydrogen Sulfide    ASTM D 2420   [***]  
Distillation       

End Point @ 14.7 psia, °F,

   ASTM D 86   [***]° F  

Maximum

     [***]  

 

Exhibit I – Page 1

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

Color       

Saybolt Number, Minimum

   ASTM D 156  

[***]

 

[***]

  Dryness        Free Water    Inspection  

[***] @

[***]° F

  Product Temperature    

Product containing 65 mole % or more Ethane, °F, Maximum

  [***]°F  

Product containing less than 65 mole % Ethane, °F, Maximum

  [***]°F  

Notes:

 

1. [***]

2. [***]

3. [***]

4. [***]

5. [***]

 

Exhibit I – Page 2

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT J

STANDARD METER FACILITIES

 

LOGO [g451626stamppg72.jpg]

 

Exhibit J – Page 1

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT K

FEES

(a) Shipper shall pay Gatherer each Month the following Fees:

(i) The product of (A) the aggregate volume of Gas (in MCF) received by Gatherer
from Shipper or for Shipper’s account at each Receipt Point (but excluding Gas
received at the Receipt Point at the Stabilizer Interconnection), less the
volume of Gas Lift Gas (in MCF) redelivered to Shipper at the Gas Lift Delivery
Points during such Month, multiplied by (B) $[***] (as may be increased in
accordance with clause (d) of this Exhibit K, the “Gathering Fee”);

(ii) The product of (A) the aggregate volume of Gas (in MCF) received by
Gatherer from Shipper or for Shipper’s account at each Receipt Point and
compressed at each System Compressor Station, less the volume of Gas Lift Gas
(in MCF) redelivered to Shipper at the Gas Lift Delivery Points during such
Month, multiplied by (B) $[***] (as may be increased in accordance with clause
(d) of this Exhibit K, the “Compression Fee”);

(iii) The product of (A) the aggregate volume of Gas (in MCF) received by
Gatherer from Shipper or for Shipper’s account at each Receipt Point, less the
volume of Gas Lift Gas (in MCF) redelivered to Shipper at the Gas Lift Delivery
Points during such Month and the volume of Gas (in Mcf) redelivered to or for
Shipper’s account at an Upstream Delivery Point during such Month, multiplied by
(B) $[***] (as may be increased in accordance with clause (d) of this Exhibit K,
the “Processing Fee”); and

(iv) The product of (A) the aggregate volume of Gas (in MCF) delivered by
Gatherer to Shipper or for Shipper’s account at each Gas Lift Delivery Point
during such Month multiplied by (B) $[***] (as may be increased in accordance
with clause (d) of this Exhibit K, the “Gas Lift Fee”).

(b) The Parties agree and acknowledge that the initial design of the Facilities
provides for the System Compressor Stations to utilize Gas-fueled compression
equipment, rather than electric compression equipment, and that Shipper will be
allocated its pro rata share of Fuel for the System Compressor Stations as
provided in Section 6.3 and Section 6.4 of the Agreement. As a result, Shipper
will not be initially responsible for payment or allocation of any electricity
charges incurred by Gatherer. If Gatherer elects to utilize electric compression
equipment to replace Gas-fueled compression equipment at the System Compressor
Stations, Shipper shall be responsible for its pro rata share of the electricity
used at System Compressor Stations based on the total quantity of Shipper’s Gas
(in MCF) delivered at the Receipt Points during such Month utilizing such
electric compression during such Month as a percentage of the total quantity of
all Gas (in MCF) delivered into the Gathering System during such Month and
utilizing such electric compression during such Month. The Parties acknowledge
that Gatherer shall utilize some electric driven gas compression (i.e., process
refrigeration and/or overhead tower compression, motors) in the operation of the
Processing Plant and Shipper shall not be responsible for such costs.

 

Exhibit K – Page 1

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(c) The “MAP Fee” shall mean $[***] per MCF.

(d) The Fees shall escalate at a fixed annual percentage of [***]% beginning
January 1st, [***]. Such adjustment shall be made effective upon the first Day
of each Contract Year commencing in the Contract Year beginning in [***].

 

Exhibit K – Page 2

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

EXHIBIT L

GATHERER PROVISIONS

(a) For purposes of this Exhibit L, “Available Operational Capacity” shall mean
the available operational processing capacity at the applicable Processing Plant
(calculated in MMCF per Day), taking into account any reductions to such
capacity for reasons of Force Majeure, maintenance, other equipment failures,
curtailment by any Downstream Pipeline, or any other operational reason limiting
capacity of the applicable Processing Plant. For purposes of this definition and
the calculations set forth on this Exhibit L, the Available Operational Capacity
of the Initial Plant shall never be more than 80 MMCF per Day.

(b) For purposes of determining the allocation of the Processing Fee collected
by Gatherer under the Agreement, volumes of Gas processed at the Initial Plant
and the Additional Processing Plant shall be allocated on a quarterly basis as
follows:

(i) If the volumes of Gas on any Day physically processed at the Initial Plant
are less than or equal to 80 MMCF per Day, then all volumes processed under the
Agreement up to the Available Operational Capacity of the Initial Plant for such
Day shall be allocated to the DevCo that owns the Initial Plant, and all volumes
processed under the Agreement above the Available Operational Capacity of the
Initial Plant for such Day shall be allocated to the DevCo that owns the
Additional Processing Plant.

(ii) If the volumes of Gas on any Day physically processed at the Initial Plant
exceed 80 MMCF per Day (such Day, an “Excess Day”), then all volumes physically
processed at the Initial Plant on such Day shall be allocated to the DevCo that
owns the Initial Plant, and all volumes physically processed at the Additional
Processing Plant for such Day shall be allocated to the DevCo that owns the
Additional Processing Plant; provided, however, that if during the applicable
quarter, there were any Day(s) on which the volumes processed at the Initial
Plant were less than the Available Operational Capacity of the Initial Plant
such that the Available Operational Capacity of the Initial Plant on such Day(s)
was not fully utilized for the volumes of Gas available on such Day(s) (the
“Diverted Volumes”), then for purposes of the quarterly allocation, any volumes
of Gas physically processed at the Initial Plant in excess of 80 MMCF per Day on
any Excess Day in the applicable quarter will be credited as if such volumes
were physically processed at the Additional Processing Plant up to an amount not
to exceed the sum of the Diverted Volumes for the applicable quarter.

(c) OMS and MLP hereby agree that for purposes of allocating the operating and
maintenance costs (including operating capital maintenance expenses) applicable
to the Initial Plant and the Additional Processing Plant, all such costs shall
be allocated on a quarterly basis among the DevCos owning the Initial Plant and
the Additional Processing Plant on the same percentage basis as the volumes of
Gas allocated to the DevCos for such quarter pursuant to clause (b) of this
Exhibit L.

 

Exhibit L – Page 1

--------------------------------------------------------------------------------

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT
FOR THOSE TERMS HAS BEEN

EITHER REQUESTED OR GRANTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT
THE APPROPRIATE PLACE WITH BRACKETS AND THREE ASTERISKS [***]

 

(d) OMS and MLP hereby agree that the Fees received pursuant to the Agreement
(other than the Processing Fee, the allocation of which is set forth above in
this Exhibit L) shall be allocated on a quarterly basis to the applicable DevCo
or DevCos whose assets were utilized in the performance of the Services.

(e) OMS and MLP hereby further agree that, except with respect to the operating
and maintenance costs (including operating capital maintenance expenses)
applicable to the Initial Plant and the Additional Processing Plant as set forth
in clause (c) of this Exhibit L, each DevCo whose assets were utilized in the
performance of the Services shall be allocated on a quarterly basis the actual
costs incurred to operate and maintain, or reasonably allocable to the operation
and maintenance of, (in each case, including capital maintenance expenses) the
assets owned by such DevCo.

 

Exhibit L – Page 2