Obligation Wellx. Xxe Farmout Agreement sets forth eight (8) Major Operations to be conducted on Obligation Wellx. Xxe parties have agreed to timely perform such Major Operations in such a manner as to cause the parties hereto to earn interests under such Farmout Agreement. EPL, as Operator, shall propose an AFE for each such Major Operation to HRL and Farmoutor according to the terms of the Farmout Agreement. HRL shall have the same time periods provided for Farmoutor in the Farmout Agreement to approve such AFE. Should Farmoutor approve such AFE and HRL disapprove, EPL shall notify HRL and HRL shall have three days to reconsider such AFE as approved by Farmoutor. Should HRL not approve such AFE as approved by Farmoutor (provided such operations are conducted), HRL shall be deemed to have relinquished its rights to earn any additional interest under the terms of the Farmout Agreement. Should HRL and Farmoutor both disapprove of such AFE, EPL shall, within ten days thereafter, resubmit a revised AFE to HRL and Farmoutor incorporating revisions reasonably reflecting any comments of Farmoutor to the first AFE. Should HRL not approve such revised AFE (provided such operations are conducted), HRL shall be deemed to have relinquished its rights to earn any additional interest under the terms of the Farmout Agreement. In such event, at its sole option, EPL may demand that, at no additional cost, that HRL convey in favor of EPL all of their rights in the Farmout Agreement, reserving those rights or interests they have already earned in operations or wellx xxxpleted before disapproval or operations being performed at the time of disapproval; however, the exercise of this option shall in no way relieve HRL from liability for damages, including liquidated damages, if any, as provided in the Farmout Agreement. In the event that EPL should elect to decline to participate in the drilling of one of the Major Operations to be conducted on the eight Obligation Wellx, XXL shall be deemed to have relinquished its right to earn any additional interest under the terms of the Farmout Agreement. In such event, at its sole option, HRL may demand that, at no additional cost, that EPL convey in favor of HRL all of its rights in the Farmout Agreement, reserving those rights or interests it has already earned in operations or wellx completed before the disapproval or operations being performed at the time of disapproval; however, the exercise of this option shall in no way relieve EPL from liability ...
Obligation Wellx. Eight (8) Major Operations to evaluate the Farmout Area under the Geological and Well Informational Requirements attached hereto. Subject to Section 4.2, said eight (8) Major Operations shall consist of the following:
2.24.1. That certain OCS 0370 Well # N-5 ST to be sidetracked and drilled to the 7900' Sand at the approximate location of X = 2,373,673, Y = 139,685 and expected depth of 4,944' subsea, and on down to the lesser of 6,200' subsea, cap rock, salt or impenetrables at the approximate location of X = 2,373,480, Y = 139,513.
2.24.2. One (1) new well or sidetrack of Farmoutee's choice in Farmout Area 1 excluding depths below the 9800' Sand, excluding all of Lease OCS 0166, excluding all of any "participating area" (as per the Operating Agreement) which includes any portion of Lease OCS 0166, and excluding all of the Conditional Area,
2.24.3. Three
Obligation Wellx. Farmoutee hereby obligates itself to (i) diligently perform (within a period of one (1) year after the Effective Date, in a workxxx xxxe manner as a reasonably prudent operator and whether through successful completion of an Obligation Well hooked-up for production in paying quantities or by termination of Farmoutee's diligent, but unsuccessful, attempt to complete an Obligation Well through hook-up for production in paying quantities) all eight (8) of the Major Operations set forth in the definition of the Obligation Wellx xxxject to the further requirements of this Section 4.2.
4.2.1. On or before September 1,1998, Farmoutee (or Farmoutor on behalf of Farmoutee pursuant to Section 4.6) shall commence the Major Operation for the Obligation Well specified in Section 2.24.1, and Farmoutee shall thereafter continuously perform the Major Operations for the Obligation Wellx xxxtinuously one (1) after another in the order of Farmoutee's choosing with no more than thirty (30) days delay for drilling rig and/or equipment moves between each such Major Operation for the Obligation Wellx; xxovided, however, Farmoutee shall commence, on or before September 1, 1998, simultaneously performance of two (2) Major Operations at a time for the Obligation Wellx, xxd further provided that Farmoutee shall thereafter simultaneously and continuously perform said Major Operations two (2) at a time until all of the Major Operations have been performed for the Obligation Wellx.
4.2.2. Farmoutee shall be allowed no more than thirty (30) days delay for drilling rig and/or equipment moves between each Major Operation for the Obligation Wellx xxxer the single continuous Well Operations requirement pursuant to Section 4.2.1 and the simultaneous dual continuous Well Operations requirement pursuant to Section 4.2.1.
4.2.3. The foregoing time requirements of Section 4.2 for commencing, continuously performing and completing, the Major Operations for Obligation Wellx xxx subject to drilling rig and/or equipment availability at market rates and permitting, both of which Farmoutee shall pursue with all reasonable diligence.
4.2.4. The foregoing time requirements of Section 4.2 for commencing, continuously performing and completing, the Major Operations for Obligation Wellx xxxll be temporarily suspended during any periods of force majeure (including but not limited any delays caused by Farmoutor's co-owners in Lease OCS 0166 or any actual or attempted removal of Farmoutor as operator under th...
Obligation Wellx
