OFFSET XXXXX. Xxxxxx agrees to protect the leased land from drainage by offset xxxxx located on adjoining lands not owned by Lessor, when such drainage is not compensated for by counter- drainage. It shall be presumed that the production of oil and gas from offset xxxxx results in drainage from the leased land, unless Xxxxxx demonstrates to Lessor's satisfaction, by engineering, geological, or other data, that production from such offset well does not result in such drainage, or that the drilling of a well or xxxxx on the leased land would not accomplish the purposes of protecting the deposits under the leased land. Lessor's decision as to the existence of such drainage shall be final, and Xxxxxx shall comply with Xxxxxx's order thereon or surrender this lease as to any such undeveloped acreage as designated by Lessor.
OFFSET XXXXX. The lessee shall drill such xxxxx as a reasonable and prudent operator would drill to protect the state from loss by reason of drainage resulting from production on other land. Without limiting the generality of the foregoing sentence, if oil or gas is produced in a well on other land not owned by the State of Alaska or on which the State of Alaska receives a lower rate of royalty than under this lease, and that well is within 500 feet in the case of an oil well or 1,500 feet in the case of a gas well of lands then subject to this lease, and that well produces oil or gas for a period of 30 consecutive days in quantities that would appear to a reasonable and prudent operator to be sufficient to recover ordinary costs of drilling, completing, and producing an additional well in the same geological structure at an offset location with a reasonable profit to the operator, and if, after notice to the lessee and an opportunity to be heard, the state finds that production from that well is draining lands then subject to this lease, the lessee shall within 30 days after written demand by the state begin in good faith and diligently prosecute drilling operations for an offset well on the leased area. In lieu of drilling any well required by this paragraph, the lessee may, with the state's consent, compensate the state in full each month for the estimated loss of royalty through drainage in the amount determined by the state.
OFFSET XXXXX. The lessee shall drill such xxxxx as a reasonable and prudent operator would drill to protect the lessors from loss by reason of drainage resulting from production on other land. Without limiting the generality of the foregoing sentence, if oil or gas is produced in a well on other land in which the State or ASRC owns a lesser percentage share of the oil, gas and associated substances, or on which the State or ASRC receives a lower royalty than that covered by this lease, and that well is within 500 feet in the case of an oil well or 1,500 feet in the case of a gas well of lands then subject to this lease, and that well produces oil or gas for a period of 30 consecutive days in quantities that would appear to a reasonable and prudent operator to be sufficient to recover ordinary costs of drilling, completing, and producing an additional well in the same geological structure at an offset location with a reasonable profit to the operator, and if, after notice to the lessee and an opportunity to be heard, either the State or ASRC finds that production from that well is draining lands then subject to this lease, the lessee shall within 30 days after written demand by either the State or ASRC begin in good faith and diligently prosecute drilling operations for an offset well on the leased area. In lieu of drilling any well required by this paragraph, the lessee may, with the consent of both the State and ASRC, or, if only one of lessors is suffering loss of royalty through drainage, with the consent of that one lessor, compensate each of lessors, or if only one of the lessors is suffering loss of royalty through drainage that one of the lessors, in full each month for the estimated loss of royalty through drainage in the amount determined by each of the lessors, or, if applicable, by the one lessor who is suffering loss of royalty through drainage.
OFFSET XXXXX. (a) In the event of production in paying quantities being obtained from a geological formation which is also within the demised estate from any well drilled, prior to or after the date hereof, into any spacing unit laterally or diagonally adjoining the said lands and not owned by the Lessor, or, if owned by the Lessor, not under lease to the Lessee, then, with respect to each spacing unit of the said lands laterally or diagonally adjoining the spacing unit from which production is being so obtained, unless a well has been drilled, tested and completed or is being drilled, tested or completed in the spacing unit and to the horizon in the formation in which production is being so obtained, the Lessee shall, within ninety (90) days from the date of said well being placed on production or the date of this Lease, whichever is later, either:
(i) Commence or cause to be commenced operations for the drilling of an offset well into the spacing unit and thereafter diligently and continuously drill, test and complete same to the horizon in the formation from which production is being obtained from the adjoining spacing unit; or
(ii) Surrender all those portions of the demised estate and leased substances comprising the spacing unit; or
(iii) Where production is being obtained from the spacing unit from a formation other than the formation from which production is being obtained from the spacing unit laterally or diagonally adjoining the said lands, surrender all formations which lie within the spacing unit except that formation within the spacing unit from which the Lessee is obtaining production; or
(iv) Extend the time for spudding an offset well under subclause (a)(i) or surrendering under subclause (a)(ii) or (a)(iii), of this clause 8, by paying to the Lessor a compensatory royalty, calculated and paid in accordance with the provisions of this Lease relating to the payment of royalty, equal to the royalty that would be payable to the Lessor hereunder if the leased substances produced from the adjoining producing well were being produced from a well on the said lands; provided that, in the event that there is more than one spacing unit containing a producing well adjoining a spacing unit of the said lands which are producing from the same formations, such compensatory royalty shall be paid on the basis of the production from the adjoining producing well having the highest production in each month. In the event there is a well or xxxxx in the spacing unit or units...
OFFSET XXXXX. Lessee shall adequately protect the oil and gas under the Premises from drainage from adjacent lands or leases, including non-University lands and University lands leased at a lesser royalty. If oil or gas should be produced in paying quantities from a well draining the Premises, Lessee shall, within sixty (60) days after notice from the Lessor of such producing well, begin in good faith and pursue diligently operations leading to the drilling of an offset well and such offset well shall be drilled to such depth as may be necessary to prevent drainage of the Premises, and Lessee shall use all means necessary in a good faith effort to make such offset well produce oil or gas in paying quantities. Any well located within one thousand (1,000) feet of the Premises shall be presumed to be draining the Premises. Lessee may rebut this presumption only with evidence acceptable to Lessor, in Lessor’s sole discretion. Payment of the bonus, the delay rental payment, deferred drilling fees, royalties paid or to be paid, shut-in royalty, or other amounts due hereunder shall not relieve Lessee from its obligations under this Paragraph 9.
OFFSET XXXXX. For purposes of this Lease, an “offsetting well” is a well that is producing oil or gas from adjacent or nearby acreage that is not part of a pooled unit including the Land and is draining the Land. If an offsetting well is completed, Lessee must, within 90 days after the initial production from the offsetting well, commence operations for the drilling of an offset well on the Land and must diligently pursue those operations to the horizon in which the offsetting well is producing, or at the option of Lessee: (i) execute and deliver to Lessor a release in recordable form of the acreage nearest to the offsetting well; or (ii) pay Lessor a monthly royalty equal to the royalty that would be payable under this Lease if the production from the offsetting well had come from the Land. In the event acreage is released pursuant to (i) above, the release will cover a tract of a size and shape that will permit the drilling of a well to the producing formation and the creation of a proration unit surrounding the well in compliance with the field rules for the field in which the offsetting well is located, but if there are no field rules, in compliance with the statewide rules of the Railroad Commission of Texas. A producing well located within 330 feet of the Land will be conclusively presumed to be draining the Land provided the well is not located on lands included within a pooled unit including the Land and provided that the Land is not part of the pooled unit covering production from the same formation as the offsetting well.
OFFSET XXXXX. In the event any well is completed or in commercial production after the effective date of this lease on other than state land, with any part of its producing interval within 1000 feet from the exterior boundary of this lease and within the same geothermal system, or if drainage is a material risk, then the state may notify the lessee in writing to commence drilling an offset well, and within reasonable time, not to exceed 120 days, the lessee shall commence operations for drilling an offset well on the leased area or shall unitize with the well that is draining state land or pay compensatory royalty to the state. An offset well shall mean a well in which the producing interval is situated in the leased area within 1000 feet of the exterior boundary of the lease nearest to the producing interval of the well to be offset. Xxxxx drilled into an approved geothermal unit shall not create an obligation to drill an offset well as to any portion of the leased area that is included within such unit and participating in the revenue.
OFFSET XXXXX. No obligations have accrued pursuant to the Documents of Title that may be satisfied by the drilling of a well, the payment of compensatory royalty or the surrender of some or all of the interests granted, reserved or otherwise conferred pursuant to the Documents of Title, other than obligations that have been satisfied (by means other than by the payment of compensatory royalties) or have been permanently waived.
OFFSET XXXXX. (a) Notwithstanding anything contained in the Lease to the contrary, as to any well producing gas substances in paying quantities which is drilled after the date of this Assignment Consent Agreement on lands other than the leased lands with the producing interval of such well, being within fourteen hundred eighty-nine (1489) feet of the exterior boundary of the mineral estate owned by the State lying beneath those waterways that comprise the leased land, Commission Staff may notify the Lessee in writing to drill an offset well. Within the time specified in the notice, which shall be a reasonable time taking into account the availability, type and location of facilities required and which in no event shall be less than one hundred twenty (120) days from the date of the notice. The Lessee shall commence operations for the drilling of an offset well on the leased lands to the same zone as that zone from which such well is or is capable of producing gas or gas substances. An offset well for the production of only gas substances shall mean a well, the midpoint of the producing interval of which is situated at a location on the leased lands not more than fourteen hundred eighty-nine (1489) feet from the point on the boundary of the Lease nearest to the producing interval of the well to be offset.
(b) In the alternative, the Lessee shall pay a compensatory royalty to the state based on the proportion that the state acreage being drained by the thief well bears to the total area being drained by the thief well. Notwithstanding the foregoing, the requirements in this paragraph 9 can be waived by Commission Staff if Lessee can demonstrate that the offset well is not necessary based on geologic or reservoir conditions.
OFFSET XXXXX. 10.1. The Unit Operator shall drill such xxxxx as a reasonable and prudent operator would drill to protect the State from loss by reason of drainage resulting from production on other land. Without limiting the generality of the foregoing sentence, if oil or gas is produced in a well on other land not owned by the State or on which the State receives a lower rate of royalty than under any Lease in the Unit Area, and that well is within 500 feet in the case of an oil well or 1,500 feet in the case of a gas well of lands then subject to this Agreement, and that well produces oil or gas for a period of 30 consecutive days in quantities that would appear to a reasonable and prudent operator to be sufficient to recover ordinary costs of drilling, completing, and producing an additional well in the same geological structure at an offset location with a reasonable profit to the operator, and if, after notice to the Unit Operator and an opportunity to be heard, the Commissioner finds that production from that well is draining lands then subject to this Agreement, the Unit Operator shall within 30 days after written demand by the Commissioner begin in good faith and diligently prosecute drilling operations for an offset well on the Unit Area. In lieu of drilling any well required by this paragraph, the Working Interest Owners must compensate the State in full each month for the estimated loss of royalty through drainage in the amount determined by the Commissioner.
