Prudent Operator Standard Clause Samples
The Prudent Operator Standard sets a benchmark for how a party, typically in the oil and gas or energy sector, is expected to act when managing operations under a contract. It requires the operator to perform its duties with the care, diligence, and skill that a reasonable and experienced operator would exercise under similar circumstances. For example, this standard may apply to decisions about drilling, maintenance, or safety procedures, ensuring that actions are not reckless or negligent. Its core function is to provide an objective measure for evaluating the operator’s conduct, thereby reducing disputes and clarifying expectations regarding operational performance.
POPULAR SAMPLE Copied 4 times
Prudent Operator Standard. (a) El Paso will conduct and carry on or cause to be conducted and carried on the exploration, development, maintenance and operation of the Subject ▇▇▇▇▇ with reasonable and prudent business judgment and in accordance with sound oil and gas field practices. Without limitation of the foregoing, prior to commencement of drilling operations on any Subject Well, El Paso will obtain a drilling title opinion or, in the case of a drillsite which is held by production, conduct such other title review and related due diligence as would be consistent with sound oil and gas field practices for the location and nature of such drillsite and related Subject Well.
(b) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from electing to participate or not to participate in any operation which is to be conducted under the terms of any operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Subject ▇▇▇▇▇ (or any operation conduced on a Subject Well) or if El Paso elects not to participate (which election shall be made without taking into consideration the Net Overriding Royalty Interest) allowing consenting parties to conduct non-consent operations thereon.
(c) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from drilling or participating in the drilling of other oil and gas ▇▇▇▇▇ (which are not Subject ▇▇▇▇▇) on the Subject Leases and, except as provided in Section 4.2, Ramshorn shall have no interest in such other ▇▇▇▇▇ drilled on the Subject Leases or production therefrom.
(d) Any conveyance, assignment, or Encumbrance made by El Paso or Ramshorn on the Subject ▇▇▇▇▇ or Subject Leases insofar as the Subject Leases cover the Subject ▇▇▇▇▇ shall be made expressly subject to this Agreement and Ramshorn's Net Overriding Royalty Interest or, if applicable, After Payout Overriding Royalty Interest, and any Encumbrance made by El Paso (other than a Permitted Third Party Net Profits Interest) or Ramshorn shall be made expressly subordinate to the rights of the other party. Except for such expressly subordinated conveyances, assignments and Encumbrances, and except for Permitted Encumbrances, (i) prior to the recordation of an assignment to Ramshorn of the Net Overriding Royalty Interest therein, El Paso at its own expense will keep and maintain the Subject ▇▇▇▇▇ and the Subject Leases insofar as the Subject Leases cover and contribute to the Sub...
Prudent Operator Standard. Strong shall operate and maintain the ▇▇▇▇▇ Assets as would a prudent operator under similar circumstances in accordance with good oil field practices. Strong shall promptly (and, unless the same are being contested in good faith and by appropriate proceedings, before the same are delinquent) pay all costs and expenses (including without limitation all taxes and all costs, expenses and liabilities for labor, materials and equipment incurred in connection with the ▇▇▇▇▇ Assets and all obligations to the holders of royalty interests and other interests affecting the ▇▇▇▇▇ Assets) incurred from and after the Effective Date in developing, operating and maintaining the ▇▇▇▇▇ Assets.
Prudent Operator Standard. Assignor (subject to the terms and provisions of any applicable operating agreements and subject to the other provisions of this Agreement) shall have exclusive charge, management and control of all operations to be conducted on the Subject Interests and may take any and all actions which a prudent operator would deem necessary or advisable in the management, operation and control thereof. Assignor shall promptly (and, unless the same are being contested in good faith and by appropriate proceedings before the same are delinquent) pay all costs and expenses (including without limitation all taxes and all costs, expenses and liabilities for labor, materials and equipment incurred in connection with the Subject Interests and all obligations to the holders of royalty interests and other interests affecting the Subject Interests) incurred from and after the Effective Date in exploring, developing, operating and maintaining the Subject Interests. Assignor shall be obligated to explore, develop, operate and maintain the Subject Interests as would a prudent operator under similar circumstances in accordance with good oil field practices. As to those of the Subject Interests as to which Assignor is not the operator, Assignor shall take all such action and exercise all such rights and remedies as are reasonably available to it to cause the operator to so explore, develop, maintain and operate such Subject Interests (provided that Assignor shall never be obligated to pay any costs or expenses attributable to any interest other than the Subject Interests and all royalties related thereto). It is expressly understood that the powers given to Assignor in the first sentence of this Section shall include the right of Assignor, subject to Section 1.14, to elect to participate, or not participate, in drilling, reworking, plugging back, deepening, sidetracking or completing of a well, or in other operations (including, but not limited to, operations in connection with secondary and/or tertiary recovery) proposed to be conducted on the Subject Interests.
Prudent Operator Standard. Grantor agrees, to the extent it has the legal right to do so under the Prudhoe Bay Unit Agreement, the Prudhoe Bay Unit Operating Agreement, the Leases and applicable law affecting or pertaining to the Subject Interests, that it will conduct and carry on the development, exploration, production, maintenance and operation of the Subject Interests with reasonable and prudent business judgment, in accordance with the provisions of this Article Seven and good oil and gas field practices, as a reasonable and prudent operator, and without regard to the existence of the Royalty Interest or any other royalty, overriding royalty, or other interest created subsequent to the Effective Date (the “Prudent Standard”). However, nothing contained in this Section 7.1 shall be deemed to prevent or restrict Grantor from electing not to participate in any operation which is to be conducted under the terms of either the Prudhoe Bay Unit Agreement or the Prudhoe Bay Unit Operating Agreement if such election is made by Grantor in accordance with the Prudent Standard. Grantor shall not be obligated to continue to produce Oil from the Subject Interests in the Prudhoe Bay Unit or to maintain such production at any particular level so long as Grantor acts in accordance with Prudent Standard. Notwithstanding anything elsewhere herein to the contrary, Grantor shall never be liable to Grantee for the manner in which Grantor performs its duties hereunder as long as ▇▇▇▇▇▇▇ has acted in accordance with the Prudent Standard. Grantee shall have no right to operate or direct operations of the Subject Interests.
Prudent Operator Standard. To the extent Operating Partnership controls such matters, Operating Partnership agrees that it will conduct and carry on or cause to be conducted and carried on the development, maintenance and operation of the Leases with reasonable and prudent business judgment and in accordance with sound oil and gas field practices, and that it will drill or cause to be drilled such ▇▇▇▇▇ as a prudent operator would drill from time to time in order to develop the Overriding Royalty Depth and the Overriding Royalty Surface Acreage and to protect them from drainage. However, nothing contained in this Section 8.01 shall be deemed to prevent or restrict Operating Partnership from electing not to participate in any operation which is to be conducted under the terms of any operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Leases (or any portion thereof) and allowing consenting parties to conduct nonconsent operations thereon, if such election is made by Operating Partnership in good faith and in conformity with sound field practices, unless the operator under such operating agreement, unit operating agreement, contract for development or similar instrument is an Affiliate of Operating Partnership.
Prudent Operator Standard. Harken Colombia (subject to the terms and provisions of the Association Contract and any applicable operating agreements) shall have exclusive charge, management and control of all operations to be conducted on the Subject Interests and may take any and all actions which a reasonably prudent operator would deem necessary or advisable in the management, operation and control thereof. Owner shall cause Harken Colombia to operate and maintain the Subject Interests as would a prudent operator under similar circumstances in accordance with good oil field practices. Owner shall cause Harken Colombia to promptly (and, unless the same are being contested in good faith and by appropriate proceedings before the same are delinquent) pay or cause to be paid all costs and expenses (including without limitation all taxes and all costs, expenses and liabilities for labor, materials and equipment incurred in connection with the Subject Interests and all obligations to the holders of interests affecting the Subject Interests) incurred from and after the Effective Date in developing, operating and maintaining the Subject Interests. As to those of the Subject Interests as to which Harken Colombia hereafter may not be the operator, Owner shall cause Harken Colombia to take all such action and exercise all such rights and remedies as are reasonably available to Harken Colombia to cause the operator to so maintain and operate such Subject Interests (provided that Harken Colombia shall never be obligated to pay any costs or expenses attributable to any interest other than the Subject Interests and all royalties related thereto).
Prudent Operator Standard. IOGW will conduct and carry on or cause to -------------------------- be conducted and carried on the exploration, development, maintenance and operation of the Project Wells in compliance with ▇▇▇▇icable federal, state, and local laws, rules, and regulations and in accordance with the standards of reasonable and prudent business judgment and sound oil and gas field practices customarily employed by oil and gas operators in the Contract Area.
Prudent Operator Standard. Assignor agrees, to the extent it has the legal right to do so under the terms of any lease, operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Subject Interests (or any portion thereof), that it will conduct and carry on the maintenance and operation of the Subject Interests with reasonable and prudent business judgment and in accordance with good oil an gas field practices, and that it will drill such wells as a reasonably prudent oper▇▇▇▇ would drill from time to time in order to protect them from drainage. However, nothing contained in this Section 6.01 shall be deemed to prevent or restrict Assignor from electing not to participate in any operation which is to be conducted under the terms of any operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Subject Interests (or any portion thereof) and allowing consenting parties to conduct nonconsent operations thereon, if such election is made by Assignor in good faith. Notwithstanding anything elsewhere herein to the contrary, Assignor shall never be liable to Assignee for the manner in which Assignor performs its duties hereunder as long as Assignor has acted in good faith.
Prudent Operator Standard. Some (but not all) obligations under this Section are qualified by reference to a Prudent Operator. Monterey shall not be liable to Santa Fe for failure to perform any such obligation (a) if, or to the extent that, a Prudent Operator would not have performed it, and (b) if Monterey promptly notifies Santa Fe in writing of Monterey's nonperformance or limited performance. In a dispute about any such action, however, the burden shall be on Monterey to show that it acted as Prudent Operator.
Prudent Operator Standard. Pannonian will cond▇▇▇ ▇nd carry on or cause to be conducted and carried on the exploration, development, maintenance and operation of the Project Wells in compliance with applicable federal, state, a▇▇ ▇▇cal laws, rules, and regulations and in accordance with the standards of reasonable and prudent business judgment and sound oil and gas field practices customarily employed by oil and gas operators in the Contract Area.