in each case calculated in accordance with Commission guidelines (utilizing the prices
utilized in such
year-end
or quarterly reserve report, as applicable), and decreased by, as of the date of determination, the discounted future net revenue attributable to
(iii) estimated proved crude oil and natural gas reserves of the Company and its Restricted Subsidiaries reflected in such
year-end
or quarterly reserve report, as applicable, produced or disposed of since the date of such
year-end
or quarterly reserve report, as applicable, and
(iv) reductions in the estimated proved crude oil and natural gas reserves of the Company and its Restricted Subsidiaries reflected in such
year-end
or quarterly reserve report, as applicable, since the date of such
year-end
or quarterly reserve report, as applicable, attributable to downward determinations of
estimates of proved crude oil and natural gas reserves due to exploration, development or exploitation, production or other activities conducted or otherwise occurring since the date of such
year-end
or
quarterly reserve report, as applicable,
in each case calculated in accordance with Commission guidelines (utilizing the prices utilized
in such
year-end
or quarterly reserve report, as applicable);
provided
,
however
, that, in the case of each of the determinations made pursuant to clauses (i) through (iv), such increases and
decreases shall be as estimated by the Companys engineers, except that if as a result of such acquisitions, dispositions, discoveries, extensions or revisions, there is a Material Change, then such increases and decreases in the discounted
future net revenue shall be confirmed in writing by an independent petroleum engineer;
(b) the capitalized costs that are attributable to
crude oil and natural gas properties of the Company and its Restricted Subsidiaries to which no proved crude oil and natural gas reserves are attributed, based on the Companys books and records as of a date no earlier than the date of the
Companys latest annual or quarterly financial statements;
(c) the Net Working Capital on a date no earlier than the date of the
Companys latest annual or quarterly financial statements; and
(d) the greater of (I) the net book value on a date no earlier
than the date of the Companys latest annual or quarterly financial statements and (II) the appraised value, as estimated by independent appraisers, of other tangible assets of the Company and its Restricted Subsidiaries as of a date no
earlier than the date of the Companys latest annual or quarterly financial statements, as applicable;
|
(2)
|
minus, to the extent not otherwise taken into account in the immediately preceding clause (1), the sum of:
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(a) noncontrolling interests;
(b) any net gas balancing liabilities of the Company and its Restricted Subsidiaries reflected in the Companys latest annual or quarterly
financial statements, as applicable;
(c) the discounted future net revenue, calculated in accordance with Commission guidelines (utilizing
the same prices utilized in the Companys
year-end
or quarterly reserve report, as applicable), attributable to reserves subject to participation interests, overriding royalty interests or other interests
of third parties, pursuant to participation, partnership, vendor financing or other agreements then in effect, or which otherwise are required to be delivered to third parties;
(d) the discounted future net revenue, calculated in accordance with Commission guidelines (utilizing the same prices utilized in the
Companys
year-end
or quarterly reserve report, as applicable), attributable to reserves that are required to be delivered to third parties to fully satisfy the obligations of the Company and its
Restricted Subsidiaries with respect to Volumetric Production Payments on the schedules specified with respect thereto; and
(e) the
discounted future net revenue, calculated in accordance with Commission guidelines, attributable to reserves subject to Dollar-Denominated Production Payments that, based on the estimates of production included in determining the discounted future
net revenue specified in the
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