Common use of Minimum Depth of Xxxxx Clause in Contracts

Minimum Depth of Xxxxx. 3.2.1 Each Exploration Well set forth above must be drilled to the minimum depth specified above or to a lesser depth if authorized by the Ministry in accordance with this Article or if discontinuing drilling is justified by one of the following reasons: (a) the economic basement is encountered at a depth less than the stipulated minimum contractual depth; (b) continued drilling is clearly dangerous because of abnormal pressure in the formation; (c) rock formations are encountered, the hardness of which makes it impracticable to continue drilling with appropriate equipment; or (d) Hydrocarbon bearing formations are encountered that require the installation of protective casings which excludes the possibility of reaching the minimum contractual depth. 3.2.2 For the purposes of Article 3.2.1, economic basement means any stratum in and below which the geological structure or physical characteristics of the rock sequence do not have the properties necessary for the accumulation of Hydrocarbons in commercial quantities and which also reflects the maximum depth at which any accumulation of this type can be reasonably expected.