Initial Wxxxx and Initial Recompletions Sample Clauses

Initial Wxxxx and Initial Recompletions. With respect to each of the Initial Wxxxx and each of the Initial Recompletions, the term “Payout” shall mean that point in time when Lustre’s share of the Revenue equals Lustre’s actual out-of-pocket costs paid to third parties to drill and complete the Initial Wxxxx and to recomplete the Initial Recompletions, on an individual well basis (i.e. not a project-wide basis), without including any allocation of management or overhead costs or expenses. The term Payout applies to the ten Initial Wxxxx and the ten Initial Recompletions. Notwithstanding anything to the contrary herein above, in the event the Operator completes one of the Initial Wxxxx or Initial Recompletions, the drilling or recompletion of which was consented to by Erehwon, as a dry hole, 10.0% of the cost of such dry hole shall be added to the Payout calculation for all then producing wxxxx by amortizing Erehwon’s back-in after payout share of the cost of the dry hole, in equal shares, to all then producing wxxxx. For purposes of example only, if the Operator completes one of the Initial Wxxxx as a dry hole at a cost of $500,000 and at the time of completion of such dry hole, there are five producing wxxxx, then the cost of the dry hole attributable to Erehwon’s back-in after payout for such dry hole (i.e. 10% or $50,000) shall be divided by five and $10,000 shall be added to the payout calculation for each of the five then producing wxxxx drilled by the Operator within the Contract Area.