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Acreage Dedication Agreement

Following verbal controversies on Tuesday in the Sabine Oil and Gas 11 case, JusticeChapman stated that she was “inclined” to allow sabine`s pickup and processing contracts to be rejected with two counterparties, which could save her a considerable amount of money, either in current payments or by avoiding a discount if her assets are sold. HOUSTON, November 3, 2020 /PRNewswire/ — H2O Midstream LLC (“H2O Midstream”) today announced the implementation of a 15-year surface allocation and produces water collection and disposal agreements with Sinclair Oil and Gas Company, a wholly-owned exploration and production subsidiary of Sinclair Oil Corporation (Sinclair).) However, some midstream companies prefer to maintain equity risk and bullish risk rather than share it with producers. At the same time, the capital producer`s needs to continue the evolution of the area devoted to this activity made participation rights less attractive. As a result, a number of agreements stated that Midstream would pay a cash incentive in exchange for a long-term dedication of all productions in a geographically defined territory. The cash payment consisted of a prepayment at the time of the dedication and, in some cases, additional payments, each time the manufacturer acquired additional shares in the specific area and/or for a specific payment due for the pudding of each well (up to a certain number of wells). From the midstream supplier`s perspective, in addition to the long-term production security resulting from the dedicastation, cash payments provide the producer with a much-needed source of capital for the development of dedicated real estate. Changes in the producer`s production position lead to production that generates the performance of the midstream supplier under the midstream agreements. With respect to point i above, the agreement could be limited to a contractual agreement between Midstream Company and Mineral Owner, which includes applicable mining lot leasing procedures. With respect to point ii above, the agreement could take the form of either a limited dedication of the relevant minerals, which would weigh on minerals with ROFR/Pref, or a limited contractual agreement, under which the owner of MineralEt-mer Midstream Company promises to include ROFR/Pref in existing leases.

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