Common use of DRILLING TO DISCOVERY Clause in Contracts

DRILLING TO DISCOVERY. Within 6 months after the effective date hereof, the Unit Operator shall commence to drill an adequate test well at a location approved by the AO, unless on such effective date a well is being drilled in conformity with the terms hereof, and thereafter continue such drilling diligently until the lll formation has been tested or until at a lesser depth unit- ized substances shall be discovered which can be produced in paying quantities (to wit: quantities sufficient to repay the costs of drilling, completing, and producing oper- ations, with a reasonable profit) or the Unit Operator shall at any time establish to the satisfaction of the AO that further drilling of said well would be unwarranted or impracti- cable, provided, however, that Unit Operator shall not in any event be required to drill said well to a depth in excess of ll feet. Until the discovery of unitized substances capable of being produced in paying quan- tities, the Unit Operator shall continue drill- ing one well at a time, allowing not more than 6 months between the completion of one well and the commencement of drilling operations for the next well, until a well ca- pable of producing unitized substances in paying quantities is completed to the satis- faction of the AO or until it is reasonably proved that the unitized land is incapable of producing unitized substances in paying quantities in the formations drilled here- under. Nothing in this section shall be deemed to limit the right of the Unit Oper- ator to resign as provided in Section 5, here- fective in order to comply with the require- ments of this section. The AO may modify any of the drilling re- quirements of this section by granting rea- sonable extensions of time when, in his opin- ion, such action is warranted.

DRILLING TO DISCOVERY. Within 6 six (6) months after the effective date hereof, the Unit Operator shall commence to drill an adequate test well at a location approved by the AO, if on Federal land, or by the Land Commissioner, if on State land, and by the Division if on Fee land, unless on such effective date a well is being drilled in conformity with the terms hereof, and thereafter continue such drilling diligently until the lll formation has been tested or until at a lesser depth unit- ized unitized substances shall be discovered which can be produced in paying quantities (to to-wit: quantities sufficient to repay the costs of drilling, completing, and producing oper- ationsoperations, with a reasonable profit) or the Unit Operator shall at any time establish to the satisfaction of the AO if on Federal land, or the Land Commissioner if on State land, or the Division if located on Fee land, that further drilling of said well would be unwarranted or impracti- cableimpracticable, provided, however, that Unit Operator shall not in any event be required to drill said well to a depth in excess of ll feet. Until the discovery of unitized substances capable of being produced in paying quan- titiesquantities, the Unit Operator shall continue drill- ing drilling one well at a time, allowing not more than 6 six (6) months between the completion of one well and the commencement of drilling operations for the next well, until a well ca- pable capable of producing unitized substances in paying quantities is completed to the satis- faction satisfaction of the AO if it be on Federal land or of the Land Commissioner if on State land, or the Division if on Fee land, or until it is reasonably proved that the unitized land is incapable of producing unitized substances in paying quantities in the formations drilled here- underhereunder. Nothing in this section shall be deemed to limit the right of the Unit Oper- ator Operator to resign as provided in Section 55 hereof, here- fective or as requiring Unit Operator to commence or continue any drilling during the period pending such resignation becoming effective in order to comply with the require- ments requirements of this section. The AO and Land Commissioner may modify any of the drilling re- quirements requirements of this section by granting rea- sonable reasonable extensions of time when, in his opin- iontheir opinion, such action is warranted. Upon failure to commence any well as provided for in this section within the time allowed, prior to the establishment of a participating area, including any extension of time granted by the AO and the Land Commissioner, this agreement will automatically terminate. Upon failure to continue drilling diligently any well commenced hereunder, the AO and the Land Commissioner may, after fifteen (15) days notice to the Unit Operator, declare this unit agreement terminated. The parties to this agreement may not initiate a request to voluntarily terminate this agreement during the first six (6) months of its term unless at least one obligation well has been drilled in accordance with the provisions of this section. Until the establishment of a participating area, the failure to commence a well subsequent to the drilling of the initial obligation well, or in the case of multiple well requirements, if specified, subsequent to the drilling of those multiple xxxxx, as provided for in this (these) section(s), within the time allowed including any extension of time granted by the AO and Land Commissioner, shall cause this agreement to terminate automatically. Upon failure to continue drilling diligently any well other than the obligation well(s) commenced hereunder, the AO and Land Commissioner may, after 15 days notice to the Unit Operator, declare this unit agreement terminated. Failure to commence drilling the initial obligation well, or the first of multiple obligation xxxxx, on time and to drill it diligently shall result in the unit agreement approval being declared invalid ab initio by the AO and Land Commissioner. In the case of multiple well requirements, failure to commence drilling the required multiple xxxxx beyond the first well, and to drill them diligently, may result in the unit agreement approval being declared invalid ab initio by the AO and Land Commissioner.

DRILLING TO DISCOVERY. Within 6 months after the effective date hereof, the Unit Operator shall commence to drill an adequate test well at a location approved by the AO, unless on such effective date a well is being drilled in conformity with the terms hereof, and thereafter continue such drilling diligently until the lll ___ formation has been tested or until at a lesser depth unit- ized unitized substances shall be discovered which can be produced in paying quantities (to wit: quantities sufficient to repay the costs of drilling, completing, and producing oper- ationsoperations, with a reasonable profit) or the Unit Operator shall at any time establish to the satisfaction of the AO that further drilling of said well would be unwarranted or impracti- cableimpracticable, provided, however, that Unit Operator shall not in any event be required to drill said well to a depth in excess of ll __ feet. Until the discovery of unitized substances capable of being produced in paying quan- titiesquantities, the Unit Operator shall continue drill- ing drilling one well at a time, allowing not more than 6 months between the completion of one well and the commencement of drilling operations for the next well, until a well ca- pable capable of producing unitized substances in paying quantities is completed to the satis- faction satisfaction of the AO or until it is reasonably proved that the unitized land is incapable of producing unitized substances in paying quantities in the formations drilled here- underhereunder. Nothing in this section shall be deemed to limit the right of the Unit Oper- ator Operator to resign as provided in Section 5, here- fective hereof, or as requiring Unit Operator to commence or continue any drilling during the period pending such resignation becoming effective in order to comply with the require- ments requirements of this section. The AO may modify any of the drilling re- quirements requirements of this section by granting rea- sonable reasonable extensions of time when, in his opin- ionopinion, such action is warranted.. 2