Common use of Horizontal Xxxxx Clause in Contracts

Horizontal Xxxxx. It is expressly understood and agreed that, subject to the other terms, provisions and limitations contained in this Lease, Lessee shall have the right to drill “horizontal xxxxx” under the leased premises, or lands pooled therewith. The term “horizontal well” or “horizontally drilled well” shall mean any well that is drilled with one or more horizontal drainholes having a horizontal drainhole displacement of at least five hundred eighty-five (585) feet. For the purposes of further defining the term “horizontal xxxxx” and “horizontally drilled” reference is made to the definitions contained within Statewide Rule 86, as promulgated by the Railroad Commission of Texas, which definitions are incorporated herein for all purposes. In the event of any partial termination of the Lease as provided in the first sentence of Paragraph 6A, then, with regard to a well which is a horizontal well or a horizontally drilled well, Lessee shall be entitled to retain all sands and horizons at all depths from the surface down to a depth which is the stratigraphic equivalent of a depth of one hundred (100) feet below the base of the deepest producing formation in such well which is capable of producing oil and gas in paying quantities, but only in a spacing unit the area or number of acres of which are equal to the area or number of acres determined by adding twenty (20) acres for each five-hundred eighty-five (585) feet horizontally drilled to the original forty (40) acres deemed to be a spacing unit for each vertical well. Each such tract around each horizontally drilled well shall be as nearly in the shape of a square or a rectangle as is practical with the boundaries of the tract including the entire horizontal drainhole and the lateral boundaries of such tract being approximately equal distance from such drainhole and parallel thereto. If production should cease as to acreage included in a horizontal spacing unit or pooled unit, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereon, provided that if more than ninety (90) days elapse between the abandonment of such well and the commencement of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial production, the Lease shall terminate as to the applicable horizontal spacing unit or pooled unit.

Horizontal Xxxxx. It is expressly understood and agreed that, subject to the other terms, provisions and limitations contained in this Lease, Lessee shall have the right to drill “horizontal xxxxx” under the leased premises, or lands pooled therewith. The term “horizontal well” or “horizontally drilled well” shall mean any well that is drilled with one or more horizontal drainholes having a horizontal drainhole displacement of at least five hundred eighty-five (585) feet. For the purposes of further defining the term “horizontal xxxxx” and “horizontally drilled” reference is made to the definitions contained within Statewide Rule 86, as promulgated by the Railroad Commission of Texas, which definitions are incorporated herein for all purposes. In the event of any partial termination of the Lease as provided in at the first sentence expiration of Paragraph 6Athe primary term or the termination of the continuous drilling program, whichever is the later to occur, then, with regard to a well which is a horizontal well or a horizontally drilled well, Lessee shall be entitled to retain all sands and horizons at all depths from the surface down to a depth which is the stratigraphic equivalent of a depth of one hundred (100) feet below the base of the deepest producing formation in such well which is capable of producing oil and gas in paying quantities, but only in a spacing unit the area or number of acres of which are equal to the area or number of acres determined by adding twenty (20) acres for each five-hundred eighty-five (585) feet horizontally drilled to the original forty (40) acres deemed to be a spacing unit for each vertical well. Each such tract around each horizontally drilled well shall be as nearly in the shape of a square or a rectangle as is practical with the boundaries of the tract including the entire horizontal drainhole and the lateral boundaries of such tract being approximately equal distance from such drainhole and parallel thereto. If production should cease as to acreage included in a horizontal spacing unit or pooled unit, unless this Lease is held by other provisions contained herein, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereon, provided that if more than ninety (90) days elapse between the abandonment of such well and the commencement of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial production, the Lease shall terminate as to the applicable horizontal spacing unit or pooled unit.

Horizontal Xxxxx. It 12.1 The Lessee may, without the Lessor's prior written consent, drill a Horizontal Well anywhere wholly or partially on or within the Leased Lands; provided however, the provisions for continuation of a Spacing Unit in Clauses 2.3 and 2.4 will not apply to any Spacing Unit that does not contain a portion of the Productive Section of the horizontal leg(s) of a Horizontal Well within the on-target drilling area of that Spacing Unit as prescribed under the Regulations for production of a vertical well, in which case the Lessor's consent shall be required for continuation of any such Spacing Unit. 12.2 Upon drilling a Horizontal Well anywhere on or within the Leased Lands, in every case, the Lessee shall promptly provide the Lessor with a copy of the "as drilled" survey and the Lessee's measured determination of the entry point into the interval of the Formation from which the production is expressly understood obtained and agreed thatthe termination point. 12.3 If the Productive Section of any horizontal leg(s) of a Horizontal Well is drilled across any Spacing Units comprised, subject in part, of the Leased Lands and that are not all owned by the Lessor or, if owned by the Lessor, not leased to the other termsLessee or, provisions and limitations contained in this Lease, Lessee shall have the right to drill “horizontal xxxxx” under the if leased premises, or lands pooled therewith. The term “horizontal well” or “horizontally drilled well” shall mean any well that is drilled with one or more horizontal drainholes having a horizontal drainhole displacement of at least five hundred eighty-five (585) feet. For the purposes of further defining the term “horizontal xxxxx” and “horizontally drilled” reference is made to the definitions contained within Statewide Rule 86Lessee, as promulgated by require a different calculation of any payments to the Railroad Commission Lessee related to each lease, and unless a specific form of Texasproduction allocation agreement is required pursuant to the Regulations, which definitions are incorporated herein for all purposesthen the total production from such Horizontal Well attributable to the Leased Lands will be calculated in accordance with the HZ Allocation Procedure. In the event that a production allocation agreement is required for a Horizontal Well to be produced in accordance with the Regulations, the Lessor acknowledges that the allocation and resulting payment of the Royalty will be as determined pursuant to that production allocation agreement. 12.4 Notwithstanding the foregoing Clause 12.3, if any portion of the Productive Section of a horizontal leg is drilled parallel to, and within the area of a Spacing Unit of the Leased Lands prescribed by the Regulations as the setback distance from, the boundary of any partial termination other adjoining Spacing Unit owned by the Lessor and leased to the Lessee at the time of commencement of production from that Horizontal Well, and the Royalty payable by the Lessee to the Lessor on production from the Spacing Unit in which the horizontal leg is located differs from that royalty payable in any such other adjoining Spacing Unit, where a production allocation agreement is not required in accordance with the Regulations, the Royalty payable on the total production from that horizontal leg, under this Lease or any other lease related to such adjoining Spacing Units, will be determined and permanently adjusted at the time production is commenced. In such case, the Royalty under this Lease and any such other royalty payable by the Lessee to the Lessor for each of those diversely held Spacing Units shall be apportioned based on the percentage of the Lease area of each such diversely held Spacing Unit contained within the circumference around the Productive Section of the horizontal leg based on the inter-well distances as provided prescribed by the Regulations for that horizontal leg, as if such percentage of the total production was being obtained from a well within each such Spacing Unit (for example, if the inter-well distance between that horizontal leg and another in the first sentence of Paragraph 6Asame pool is 100m, thenthen such area would be a 50m circumference around the Productive Section). However, with regard to a well which is a horizontal well or a horizontally drilled wellfor certainty, Lessee shall be entitled to retain all sands and horizons at all depths from the surface down to a depth which is the stratigraphic equivalent of a depth of one hundred (100) feet below the base apportionment of the deepest producing formation in such well which is capable Royalty based on the inclusion of producing oil and gas in paying quantities, but only in a spacing unit the any area or number of acres of which are equal to the area or number of acres determined by adding twenty (20) acres for each five-hundred eighty-five (585) feet horizontally drilled to the original forty (40) acres deemed to be a spacing unit for each vertical well. Each such tract around each horizontally drilled well shall be as nearly in the shape of a square or a rectangle as is practical with the boundaries an adjoining Spacing Unit that does not contain any portion of the tract including the entire horizontal drainhole leg is for purposes of equity only under this clause and the lateral boundaries of does not imply that any production has been allocated or attributed from that horizontal leg to any such tract being approximately equal distance from such drainhole and parallel thereto. If production should cease as to acreage included in a horizontal spacing unit or pooled unit, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereonother Spacing Unit for lease continuation purposes, provided that if more than ninety (90) days elapse between the abandonment permanently adjusted allocation and calculation of the Royalty that was based on the inclusion of any such adjoining Spacing Unit would continue to apply for the entire life of the well and notwithstanding any termination or expiry of the commencement lease related thereto. 12.5 For purposes of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial productionClause 8.1, the Lease shall terminate as to horizontal leg of a Horizontal Well will not be considered producing from an Offset Spacing Unit if less than twenty-five percent (25%) of the applicable horizontal spacing unit or pooled unitProductive Section is contained within that Offset Spacing Unit.

Horizontal Xxxxx. Lessee shall comply with the following retained acreage provision for horizontal xxxxx only if the legal description attached herein as Exhibit “A” possesses separate individual tracts of 30 acres or more. Should an individual tract included within the Exhibit “A” contain acreage of less than 30 acres, there shall be no retained acreage requirement for such tract. It is expressly understood and agreed that, subject to the other terms, provisions and limitations contained in this Lease, Lessee shall have the right to drill “horizontal xxxxx” under the leased premises, or lands pooled therewith. The term “horizontal well” or “horizontally drilled well” shall mean any well that is drilled with one or more horizontal drainholes having a horizontal drainhole displacement of at least five hundred eighty-five (585) feet. For the purposes of further defining the term “horizontal xxxxx” and “horizontally drilled” reference is made to the definitions contained within Statewide Rule 86, as promulgated by the Railroad Commission of Texas, which definitions are incorporated herein for all purposes. In the event of any partial termination of the Lease as provided in the first sentence of Paragraph 6A, then, with regard to a well which is a horizontal well or a horizontally drilled well, Lessee shall be entitled to retain all sands and horizons at all depths from the surface down to a depth which is the stratigraphic equivalent of a depth of one hundred (100) feet below the base of the deepest producing formation in such well which is capable of producing oil and gas in paying quantities, but only in a spacing unit the area or number of acres of which are equal to the area or number of acres determined by adding twenty (20) acres for each five-hundred eighty-five (585) feet horizontally drilled to the original forty (40) acres deemed to be a spacing unit for each vertical well. Each such tract around each horizontally drilled well shall be as nearly in the shape of a square or a rectangle as is practical with the boundaries of the tract including the entire horizontal drainhole and the lateral boundaries of such tract being approximately equal distance from such drainhole and parallel thereto. If production should cease as to acreage included in a horizontal spacing unit or pooled unit, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereon, provided that if more than ninety (90) days elapse between the abandonment of such well and the commencement of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial production, the Lease shall terminate as to the applicable horizontal spacing unit or pooled unit.

Horizontal Xxxxx. It is expressly understood and agreed that, subject to the other terms, provisions and limitations contained in this Lease, Lessee shall have the right to drill “horizontal xxxxx” under the leased premises, or lands pooled therewith. The term “horizontal well” or “horizontally drilled well” shall mean any well that is drilled with one or more horizontal drainholes having a horizontal drainhole displacement of at least five hundred eighty-five (585) feet. For the purposes of further defining the term “horizontal xxxxx” and “horizontally drilled” reference is made to the definitions contained within Statewide Rule 86, as promulgated by the Railroad Commission of Texas, which definitions are incorporated herein for all purposes. In the event of any partial termination of the Lease as provided in the first sentence of Paragraph 6A, then, with regard to a well which is a horizontal well or a horizontally drilled well, Lessee shall be entitled to retain all sands and horizons at all depths from the surface down to a depth which is the stratigraphic equivalent of a depth of one hundred (100) feet below the base of the deepest producing formation in such well which is capable of producing oil and gas in paying quantities, but only in a spacing unit the area or number of acres of which are equal to the area or number of acres determined by adding twenty (20) acres for each five-hundred eighty-five (585) feet horizontally drilled to the original forty (40) acres deemed to be a spacing unit for each vertical well. Each such tract around each horizontally drilled well shall be as nearly in the shape of a square or a rectangle as is practical with the boundaries of the tract including the entire horizontal drainhole and the lateral boundaries of such tract being approximately equal distance from such drainhole and parallel thereto. If production should cease as to acreage included in a horizontal spacing unit or pooled unit, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereon, provided that if more than ninety (90) days elapse between the abandonment of such well and the commencement of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial production, the Lease shall terminate as to the applicable horizontal spacing unit or pooled unit. Notwithstanding anything herein to the contrary, any portion of the leased premises included within a validly formed unit, pursuant to Paragraph 4, shall not terminate and shall be deemed a retained tract.