Author: bomuo

A clause in some long term contracts that allow a buyer that takes more than Take or Pay or ACQ (depending on what was agreed) amount in a single Contract Year to get a credit to set against future Take or Pay contract year obligations. Quantities are frequently restricted.

In a Gas Sales Agreement (GSA) if the buyer takes more than his TOP or ACQ amount of gas in any year (depending on what was agreed), he will then receive a credit for the overtake. This is aggregated with all overtake credits from previous years as a carry forward balance.

Thereafter, if the buyer takes less than the ToP amount, he can then reduce his ToP liability by the amount of the carry forward balance. The buyer will want to negotiate as long a period as possible and certainly longer than 1 year. If the ToP is high, then the carry forward period should be longer as there is smaller chance that the buyer will be able to enjoy the carry forward as he will be meeting his ToP obligations more frequently

A carried interest is an agreement under which one party (the carrying party) agrees to pay for a portion or all of the pre-production costs of another party (the carried party) on a license in which both own a portion of the working interest. This arises when the carried party is either unwilling to bear the risk of exploration or is unable to fund the cost of exploration or development directly. Sometimes the government is even the carried party by an oil and gas company