Gross Production Clause Samples
The Gross Production clause defines how the total output or yield from a particular operation, such as oil, gas, or mineral extraction, is measured before any deductions or expenses are applied. In practice, this clause specifies that all production quantities are calculated at the source, without subtracting costs for processing, transportation, or other post-production activities. Its core function is to establish a clear and consistent basis for calculating royalties, payments, or revenue shares, thereby preventing disputes over what constitutes the amount subject to such financial obligations.
Gross Production of Crude Oil from each Development and Production Area shall (subject to a Calendar Year adjustment developed under the provisions of Article 10.7) be distributed amongst the Parties in the following sequence and proportions:
a) Five per cent (5%) of the Gross Production of Crude Oil shall be delivered to the State as ROYALTY, pursuant to the provisions of the Petroleum Law. Royalty for any Crude Oil having an API gravity of less than eighteen degrees (18°) shall be four per cent (4%). The rate of royalty on the Gross Production of Natural Gas shall be three per cent (3%). Upon notice to Contractor, the State shall have the right to elect to receive cash in lieu of its royalty share of such Petroleum. The State’s notice shall be given to Contractor at least ninety (90) days in advance of each lifting period, such periods to be established pursuant to the provisions of Article 10.
Gross Production of Crude Oil from each Development and Production Area shall be distributed in the following sequence and proportions:
a) The rate of Royalty for Oil Production shall be 10% and shall be delivered to the State as ROYALTY pursuant to the provisions of the Extractive Industry Revenue Act, 2018. Upon Notice to Licensee, the State shall have right to elect to receive its Royalty payment in kind in crude oil or gas. The State’s Notice shall be given to the Licensee at least 90 days in advance of each lifting period.
b) After distribution of such amounts of Crude Oil as are required pursuant to (a) above, the remaining Crude Oil produced from each Development and Production area shall be the Licensee’s and, the State on the basis of their respective partici- pating Interests pursuant to Article 2.11 and 2.12.
Gross Production. Bid (100.000%).........................................................................................................................................................
Gross Production of Crude Oil from each Development and Production Area shall be distributed in the following sequence and proportions:
a) The rate of Royalty for Oil Production shall be 10% and for Gas Production shall be 5% and shall be delivered to the State as ROYALTY pursuant to the provisions of the Extractive Industry Revenue Act, 2018. Upon Notice to the Licensee, the State shall have the right to elect to receive its Royalty payment in kind in crude oil or gas. The State’s Notice shall be given to the Licensee at least 90 days in advance of each lifting period.
b) After the provision for Royalty is deducted, XX% of production shall be allocated to the Licensee for the recovery of all its Operating Costs until Payout. Thereafter, sufficient production will be allocated to the Licensee for the recovery of its production costs.
c) After the distribution of such amounts of Crude Oil as are required pursuant to (a) and (b) above, the remaining Crude Oil produced from each Development and Production area shall be the Licensee’s and, the State on the basis of their respective participating Interests pursuant to Articles 2.11 and 2.12.
Gross Production. The amount of actual gross production (before ---------------- culls) of the Project, computed according to standard industry practices on a 3/4 inch basis, expressed in thousands of square feet.
Gross Production of Crude Oil from each Development and Production Area shall (subject to a Calendar Year adjustment developed under the provisions of Article 10.7) be distributed amongst the Parties in the following sequence and proportions:
(a) Ten percent (10%) of the Gross Production of Crude Oil shall be delivered to the State as ROYALTY, pursuant to the provisions of the Petroleum Law. Upon notice to Contractor, the State shall have the right to elect to receive cash in lieu of its Royalty share of such Crude Oil. The State’s notice shall be given to Contractor at least ninety (90) days in advance of each lifting period, such periods to be established pursuant to the provisions of Article 10.