Common use of DEVELOPMENT AND OPERATING CHARGES Clause in Contracts

DEVELOPMENT AND OPERATING CHARGES. Subject to limitations hereinafter prescribed, Operator shall charge the joint account with the cost of the following items: 1. RENTALS AND ROYALTIES Rentals, when such rentals are paid by Operator for the joint account; royalties, when not paid direct to royalty owners by the purchaser of the oil, gas, casing-head gas, or other products. 2. LABOUR, TRANSPORTATION AND SERVICES Labour, transportation, and other services necessary for the development, maintenance, and operation of the joint property. Labour shall include salaries and wages of Operator's employees, other than employees compensated for under paragraphs (11), (12) and (13) of this Section II, directly engaged in operations of the joint property and (A) Operator's cost of vacation, sickness and disability benefits of employees, and expenditures or contributions imposed or assessed by Governmental authority applicable to such salaries and wages, and (B) Operator's current cost of established plans for employees' group life insurance, hospitalization, pension, retirement, stock purchase, thrift, bonus, and other benefit plans of like nature, applicable to Operator's payroll; provided that the charges under part (B) of this paragraph shall not exceed twelve percent (12%) of the total of such salaries and wages charged to the joint account.