Phase II Development. At any time (x) develop or improve in any material respect or at any material cost the Tower II Air Parcel, or construct any material improvements or any material building on the Tower II Air Parcel, or (y) enter into any contract or agreement for such construction, development or improvement or for any materials, supplies or labor necessary in connection with such construction, development or improvement.
Phase II Development. The Parties presently agree to a drilling, testing and completion program for twelve (12) xxxxx with the authority for expenditure (“AFE”), attached as Exhibit “D” hereto and made a part hereof for all purposes in the amount of two million seven hundred seventy-five thousand dollars ($2,775,000). It is anticipated that 10 xxxxx will be drilled on the West Mule Creek oilfield lease as infield, development xxxxx and 2 xxxxx on the adjacent BLM acreage. The 2 BLM xxxxx will require the setting of separate electric lines and tank batteries (1 set of tank batteries will accommodate both xxxxx), while the 10 infield, development xxxxx can tie into the existing electric lines and tank batteries. The AFE for the BLM xxxxx reflects tank batteries with a capacity of 1,300 barrels of storage (water tank and gun barrel or heater treater) will cost seventy-five thousand dollars ($75,000). The electric poles, electric meters and running of electric lines is estimated to cost fifty thousand dollars ($50,000). Upon the completion and equipping of each said well, all costs and expenses thereafter shall be borne and all income shall be received and shared in proportion to each Party’s working interest and net revenue interest. It is further provided, that the Parties shall meet, no later than thirty (30) days after the completion of each well to evaluate the economic merits of the program. At that time, Rangeford shall have the right to elect to keep all interests which it has paid for and earned and discontinue further drilling.
Phase II Development. Within sixty (60) days after the parties agree upon the Functional Specifications, Ad-Star will provide the "Phase II Development" as per the Functional Specifications, including but not limited to the following:
Phase II Development. The Parties presently agree to a drilling, testing and completion program for twenty (20) xxxxx with the authority for expenditure (“AFE”), attached as Exhibit “D” hereto and made a part hereof for all purposes in the amount of two million two hundred thousand dollars ($2,200,000). It is presently anticipated that a well will be drilled on five (5) different leases to hold a maximum amount of acreage, The separation of such xxxxx will require the setting of five (5) tank batteries , ( one (1) per lease and each requiring separate electric connections to each). The AFE reflects that the five (5) tank batteries, with a capacity of 990 barrels of storage (water tank and gun barrel) will cost fifty thousand dollars ($50,000) each, for a total cost of two hundred fifty thousand dollars ($250,000). The electric poles, electric meters and running of electric lines is estimated to cost ten thousand dollars ($10,000) per lease for a total of fifty thousand dollars ($50,000). Upon the completion and equipping of each said well, all costs and expenses thereafter shall be borne and all income shall be received and shared in proportion to each Party’s working interest and net revenue interest. It is further provided, that the Parties shall meet, no later than thirty (30) days after the completion of the fifth (5th) such well to evaluate the economic merits of the program. At that time, Rangeford shall be entitled to elect to keep all interests which it has paid for and earned and discontinue further drilling.
Phase II Development. As part of the development phase, available funding will be used for final site acquisition, construction, infrastructure improvements, and stabilization. This is short term debt financing required to reimburse the developer for some expenditures made in the Phase I and to complete the development to a point when it is usable and can be occupied. It sometimes requires additional equity from a developer to maintain a prescribed loan to equity ratio. The term “stabilization” generally refers to the time from when a building has been completed to when it is generating enough cash flow to cover its operating costs.
