Common use of Production Reversion Penalties Clause in Contracts

Production Reversion Penalties. Except as to such operations conducted pursuant to Section 12.7 or for the initial EXPLORATORY WELL, or subsequent EXPLORATORY WELL referred to in Section 10.3, such interest, rights and title shall revert to each NON-PARTICIPATING PARTY when the PARTICIPATING PARTIES have recouped out of the proceeds of production from such NON-CONSENT OPERATIONS an amount equal to the sum of the following: (a) Six hundred percent (600%) of the cost of drilling, completing, recompleting, sidetracking, deepening, deviating or plugging back each NON-CONSENT WELL and equipping it through the wellhead connections, reduced by any contribution received under Section 21.1; plus, (b) Three hundred percent (300%) of the cost of FACILITIES necessary to carry out the operation; plus, (c) One hundred percent (100%) of the cost of using any FACILITIES already installed determined pursuant to Section 12.6 below; plus, (d) One hundred percent (100%) of the cost of operating expenses, royalties and severance, gathering, production and windfall profit taxes. Recoupment of costs shall be in the order listed above. Upon the recoupment of such costs, a NON-PARTICIPATING PARTY shall become a PARTICIPATING PARTY in such operations.

Production Reversion Penalties. Except as to such operations conducted pursuant to Section 12.7 or for the initial EXPLORATORY WELL, or subsequent EXPLORATORY WELL referred to in Section 10.3, such interest, rights and title shall revert to each NON-PARTICIPATING PARTY when the PARTICIPATING PARTIES have recouped out of the proceeds of production from such NON-CONSENT OPERATIONS an amount equal to the sum of the following: (a) Six hundred percent (600%) of the cost of drilling, completing, recompletingrecomputing, sidetracking, deepening, deviating or plugging back each NON-CONSENT WELL and equipping it through the wellhead connections, reduced by any contribution received under Section 21.1; plus, (b) Three hundred percent (300%) of the cost of FACILITIES necessary to carry out the operation; plus, (c) One hundred percent (100%) of the cost of using any FACILITIES already installed determined pursuant to Section 12.6 below; plus, (d) One hundred percent (100%) of the cost of operating expenses, royalties and severance, gathering, production and windfall profit taxes. Recoupment of costs shall be in the order listed above. Upon the recoupment of such costs, a NON-PARTICIPATING PARTY shall become a PARTICIPATING PARTY in such operations.