Common use of Operations by Less Clause in Contracts

Operations by Less. Than All Parties: Notwithstanding the foregoing, Operator shall not undertake any single project reasonably estimated to require an expenditure in excess of fifteen thousand dollars ($15,000.00) in the aggregate without the express written consent of the Drilling Parties as their respective interest appear in Annex "I". In the event Operator or other Drilling Party shall elect to drill another well on the Contract Area or to rework, deepen or plug back a dry hole or a well not producing in paying quantities reasonably estimated to require an expenditure in excess of fifteen thousand dollars ($15,000.00) in the aggregate and not otherwise agreed to by the Drilling Parties by separate agreement, shall give the other parties written notice of the proposed operation, specifying the work to be performed, the location, proposed depth, objective formation and the estimated cost of the operation. The parties so notified shall have thirty (30) days after the receipt of the notice within which to notify the party wishing to do the work whether they elect to participate in the cost of the proposed operation. Failure of a party to reply within the period above fixed shall constitute an election by that party not to participate in the cost of the proposed operation. Any telephonic notice shall be confirmed in writing within seven (7) days. Operator shall perform all work for the account of the Consenting Parties; provided, however, if the Operator (or an affiliate of Operator vested with title in the Contract Area) is a Non-Consenting Party, the Consenting Parties shall either: (a) request Operator to perform the work for the Consenting Parties, or (b) designate one of the Consenting Parties as Operator for the limited purpose of performing such work. Such operations on the Contract Area shall be in compliance with all the terms and conditions of this agreement. If less than all parties approve any proposed operation, the proposing party, immediately after the expiration of the notice period, shall advise the Consenting Parties of the total interest of the parties approving such operation and its recommendations as to whether the Consenting Parties should proceed with the operation as proposed. Each Consenting Party shall advise the proposing party of its desire to limit participation to such party's interest as shown on Annex "I" (4) or to carry its proportionate share of Non- Consenting Parties interests, and failure to advise shall be deemed an election to limit participation. The proposing party, at its election, may withdraw such proposal if there is insufficient participation and shall promptly notify all parties of such decision. (See Annex "IV" for forfeiture provisions if operations are necessary to continue lease in force or to drill well.) The entire cost and risk of conducting such operations shall be borne by the Consenting Parties in the proportions they have elected to bear same under the terms of the preceding paragraph. Consenting Parties shall keep the leasehold estates involved in such operations free and clear of all liens and encumbrances of every kind created by or arising from the operations of the Consenting Parties and shall hold Non-Consenting Parties harmless from all liabilities resulting therefrom. If such an operation results in a dry hole, the Consenting Parties shall plug and abandon the well and restore the surface location at. their sole cost, risk and expense. If any well drilled, reworked, deepened or plugged back under the provisions of this article VI (C) result in a producer of oil and/or gas in paying quantities, the Consenting Parties shall complete and equip the well at their sole cost and risk and the well shall then be turned over to Operator and shall be operated by it at the expense and for the account of the Consenting Parties in accordance with this agreement, including Article VI (G) dealing with the abandonment of productive ▇▇▇▇▇. Upon commencement of operations of the subject well, each Non-Consenting Party shall be deemed to have relinquished to Consenting Parties, and the Consenting Parties shall own and be entitled to receive, in proportion to their interests, all of such Non-Consenting Party's Interest in the well and share of production therefrom. Each Non-Consenting Party shall then assign to the Consenting Party, in accordance with their respective interests therein and without warranty of any kind, as to title, or as to quantity, quality or fitness for use of the equipment and material, all of their interest in the well and its equipment, free of mortgage or lien, together with their interest in the leasehold estate as to the drilling unit of the well. There shall be no readjustment of interest in the remaining portion of the Contract Area. After the assignment, the Non-Consenting Parties shall have no further responsibility, liability or interest in the operation of or production from the well or the assigned area surrounding said well. All operations conducted under such Drillsite shall remain subject to the terms and provisions of this agreement.