Common use of Cost of Drilling and Completion Clause in Contracts

Cost of Drilling and Completion. The Partnership shall bear its proportionate share of the cost of drilling and completing or drilling and abandoning each Partnership well, where the Managing General Partner serves as operator as follows: 1. The Cost of the Prospect, as defined; 2. The intangible costs of drilling and completing the well, including the Managing General Partner's compensation for acting as operator, equal to 12.6% of the total direct well cost if the investor partners' interest in the well is 63%, and proportionally reduced if the tangible costs exceed 37% of the direct well costs on average for the Partnership's wxxxx, so that the Managing General Partner's contribution to and interest in the Partnership is increased above 37%; and 3. The tangible Costs of drilling and completing the Partnership wxxxx and of gathering pipelines necessary to connect the well to the nearest appropriate sales point or delivery point. If the Partnership acquires less than 100% of a Prospect, its Drilling and Completion Costs of that Prospect will proportionately decrease. Intangible drilling costs will include a monthly drilling well fixed overhead based on the most recently published Ernst & Young fixed rate overhead survey. The rate will be determined by state and well depth. In addition, the Managing General Partner may also provide direct services in the drilling and completion of the wxxxx, including land and legal services, roustabout and construction services, supervision of drilling and completion operations, engineering and geological services, and other services. Such services will be provided at the Managing General Partner's cost determined in accordance with generally accepted accounting principles and subject to written agreements. If the foregoing rates for direct services exceed competitive rates available from other non-affiliated persons in the area engaged in the business of rendering or providing comparable services or equipment, the foregoing rates will adjust to an amount equal to that competitive rate.

Cost of Drilling and Completion. The Partnership shall bear its proportionate share of the cost of drilling and completing or drilling and abandoning each Partnership well, where the Managing General Partner serves as operator as follows: 1. The Cost of the Prospect, as defined; 2. The intangible costs of drilling and completing the well, including the Managing General Partner's managing general partner’s compensation for acting as operator, equal to 12.614% of the total direct well cost if the investor partners' ’ interest in the well is 6370%, and proportionally reduced if the tangible costs exceed 3730% of the direct well costs on average for the Partnership's wxxxx’s xxxxx, so that the Managing General Partner's managing general partner’s contribution to and interest in the Partnership is increased above 3730%; and 3. The tangible Costs of drilling and completing the Partnership wxxxx xxxxx and of gathering pipelines necessary to connect the well to the nearest appropriate sales point or delivery point. If To the extent that the Partnership acquires less than 100% of a Prospect, its Drilling and Completion Costs of that Prospect will proportionately decrease. Intangible drilling costs will include a monthly drilling well fixed overhead based on the most recently published Ernst & Young fixed rate overhead survey. The rate will be determined by state and well depth. In addition, the Managing General Partner managing general partner may also provide direct services in the drilling and completion of the wxxxxxxxxx, including land and legal services, roustabout and construction services, supervision of drilling and completion operations, engineering and geological services, and other services. Such services will be provided at the Managing General Partner's managing general partner’s cost determined in accordance with generally accepted accounting principles and subject to written agreements. If In the event the foregoing rates for direct services exceed competitive rates available from other non-affiliated persons in the area engaged in the business of rendering or providing comparable services or equipment, the foregoing rates will adjust to an amount equal to that competitive rate.