Common use of Prudent Operator Standard Clause in Contracts

Prudent Operator Standard. (a) El Paso will conduct and carry on or cause to be conducted and carried on the exploration, development, maintenance and operation of the Subject Xxxxx with reasonable and prudent business judgment and in accordance with sound oil and gas field practices. Without limitation of the foregoing, prior to commencement of drilling operations on any Subject Well, El Paso will obtain a drilling title opinion or, in the case of a drillsite which is held by production, conduct such other title review and related due diligence as would be consistent with sound oil and gas field practices for the location and nature of such drillsite and related Subject Well. (b) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from electing to participate or not to participate in any operation which is to be conducted under the terms of any operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Subject Xxxxx (or any operation conduced on a Subject Well) or if El Paso elects not to participate (which election shall be made without taking into consideration the Net Overriding Royalty Interest) allowing consenting parties to conduct non-consent operations thereon. (c) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from drilling or participating in the drilling of other oil and gas xxxxx (which are not Subject Xxxxx) on the Subject Leases and, except as provided in Section 4.2, Ramshorn shall have no interest in such other xxxxx drilled on the Subject Leases or production therefrom. (d) Any conveyance, assignment, or Encumbrance made by El Paso or Ramshorn on the Subject Xxxxx or Subject Leases insofar as the Subject Leases cover the Subject Xxxxx shall be made expressly subject to this Agreement and Ramshorn's Net Overriding Royalty Interest or, if applicable, After Payout Overriding Royalty Interest, and any Encumbrance made by El Paso (other than a Permitted Third Party Net Profits Interest) or Ramshorn shall be made expressly subordinate to the rights of the other party. Except for such expressly subordinated conveyances, assignments and Encumbrances, and except for Permitted Encumbrances, (i) prior to the recordation of an assignment to Ramshorn of the Net Overriding Royalty Interest therein, El Paso at its own expense will keep and maintain the Subject Xxxxx and the Subject Leases insofar as the Subject Leases cover and contribute to the Subject Xxxxx free and clear of all Encumbrances, except Permitted Encumbrances, arising by, through or under El Paso or any Affiliate and (ii) after such recordation, El Paso at its own expense will keep and maintain Ramshorn's Net Overriding Royalty Interest or, if applicable, After Payout Overriding Royalty Interest free and clear of all Encumbrances, except Permitted Encumbrances, arising by, through or under El Paso or any Affiliate; provided, however, only for purposes of El Paso's special warranty of title set forth in this sentence, Permitted Third Party Net Profits Interests shall not be considered Permitted Encumbrances. Should an adverse claim be made against, or a cloud develop upon the title to any part of Ramshorn's Net Overriding Royalty Interest other than such as may arise by, through or under El Paso or Ramshorn or a Permitted Encumbrance, unless otherwise agreed by Ramshorn, El Paso will take all commercially reasonable actions to defend such claim or to remove such cloud, the expenses of which defense or removal shall be Production Costs hereunder. (e) Oil and Gas from the Subject Xxxxx shall be sold for market value.

Prudent Operator Standard. (a) El Paso will conduct and carry on or cause to be conducted and carried on the exploration, development, maintenance and operation of the Subject Xxxxx Wells with reasonable and prudent business judgment and in accordance with accordancx xxxh sound oil and gas field practices. Without limitation of the foregoing, prior to commencement of drilling operations on any Subject Well, El Paso will obtain a drilling title opinion or, in the case of a drillsite which is held by production, conduct such other title review and related due diligence as would be consistent with sound oil and gas field practices for the location and nature of such drillsite and related Subject Well. (b) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from electing to participate or not to participate in any operation which is to be conducted under the terms of any operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Subject Xxxxx Wells (or any operation conduced on a Subject Well) or if El Paso elects elxxxx not to participate (which election shall be made without taking into consideration the Net Overriding Royalty Interest) allowing consenting parties to conduct non-consent operations thereon. (c) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from drilling or participating in the drilling of other oil and gas xxxxx wells (which are not Subject XxxxxWells) on the Subject Leases and, except as excepx xx provided in Section 4.2, Ramshorn Xxxxhorn shall have no interest in such other xxxxx wells drilled on the Subject Leases or production therefrom. (d) Any conveyance, assignment, or Encumbrance made by El Paso or Ramshorn on the Subject Xxxxx Wells or Subject Leases insofar as the Subject Leases cover the Subject Xxxxx Subjxxx Xells shall be made expressly subject to this Agreement and Ramshorn's Net Ramshorn'x Xxt Overriding Royalty Interest or, if applicable, After Payout Overriding Royalty Interest, and any Encumbrance made by El Paso (other than a Permitted Third Party Net Profits Interest) or Ramshorn shall be made expressly subordinate to the rights of the other party. Except for such expressly subordinated conveyances, assignments and Encumbrances, and except for Permitted Encumbrances, (i) prior to the recordation of an assignment to Ramshorn of the Net Overriding Royalty Interest therein, El Paso at its own expense will keep and maintain the Subject Xxxxx Wells and the Subject Leases insofar as the Subject Leases cover and contribute xxxxribute to the Subject Xxxxx Wells free and clear of all Encumbrances, except Permitted EncumbrancesEncumbranxxx, arising by, through or under El Paso or any Affiliate and (ii) after such recordation, El Paso at its own expense will keep and maintain Ramshorn's Net Overriding Royalty Interest or, if applicable, After Payout Overriding Royalty Interest free and clear of all Encumbrances, except Permitted Encumbrances, arising by, through or under El Paso or any Affiliate; provided, however, only for purposes of El Paso's special warranty of title set forth in this sentence, Permitted Third Party Net Profits Interests shall not be considered Permitted Encumbrances. Should an adverse claim be made against, or a cloud develop upon the title to any part of Ramshorn's Net Overriding Royalty Interest other than such as may arise by, through or under El Paso or Ramshorn or a Permitted Encumbrance, unless otherwise agreed by Ramshorn, El Paso will take all commercially reasonable actions to defend such claim or to remove such cloud, the expenses of which defense or removal shall be Production Costs hereunder. (e) Oil and Gas from the Subject Xxxxx Wells shall be sold for market value.

Prudent Operator Standard. (a) El Paso will conduct and carry on or cause to be conducted and carried on the exploration, development, maintenance and operation of the Subject Xxxxx Wells with reasonable and prudent business judgment and in accordance with accordancx xxxh sound oil and gas field practices. Without limitation of the foregoing, prior to commencement of drilling operations on any Subject Well, El Paso will obtain a drilling title opinion or, in the case of a drillsite which is held by production, conduct such other title review and related due diligence as would be consistent with sound oil and gas field practices for the location and nature of such drillsite and related Subject Well. (b) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from electing to participate or not to participate in any operation which is to be conducted under the terms of any operating agreement, unit operating agreement, contract for development or similar instrument affecting or pertaining to the Subject Xxxxx Wells (or any operation conduced on a Subject Well) or if El Paso elects elxxxx not to participate (which election shall be made without taking into consideration the Net Overriding Royalty Interest) allowing consenting parties to conduct non-consent operations thereon. (c) Nothing contained in this Agreement shall be deemed to prevent or restrict El Paso from drilling or participating in the drilling of other oil and gas xxxxx wells (which are not Subject XxxxxWells) on the Subject Leases and, except as excepx xx provided in Section 4.2, Ramshorn Xxxxan shall have no interest in such other xxxxx wells drilled on the Subject Leases Subxxxx Xeases or production therefrom. (d) Any conveyance, assignment, or Encumbrance made by El Paso or Ramshorn Lehman on the Subject Xxxxx Wells or Subject Leases insofar as the Subject Leases Xxxxxs cover the Subject Xxxxx Subjxxx Xells shall be made expressly subject to this Agreement and RamshornLehman's Net Xxx Overriding Royalty Interest or, if applicable, After Payout Overriding Paxxxx Xxxrriding Royalty Interest, and any Encumbrance made by El Paso (other than a Permitted Third Party Net Profits Interest) or Ramshorn Lehman shall be made expressly subordinate to the rights of the other partyothex xxxxy. Except for such expressly subordinated conveyances, assignments and Encumbrances, and except for Permitted Encumbrances, (i) prior to the recordation of an assignment to Ramshorn Lehman of the Net Overriding Royalty Interest therein, El Paso at its own itx xxx expense will keep and maintain the Subject Xxxxx Wells and the Subject Leases insofar as the Subject Leases cover and contribute xxxxribute to the Subject Xxxxx Wells free and clear of all Encumbrances, except Permitted EncumbrancesEncumbranxxx, arising by, through or under El Paso or any Affiliate and (ii) after such recordation, El Paso at its own expense will keep and maintain RamshornLehman's Net Overriding Royalty Interest or, if applicable, After Payout Overriding Paxxxx Xxxrriding Royalty Interest free and clear of all Encumbrances, except Permitted Encumbrances, arising by, through or under El Paso or any Affiliate; provided, however, only for purposes of El Paso's special warranty of title set forth in this sentence, Permitted Third Party Net Profits Interests shall not be considered Permitted Encumbrances. Should an adverse claim be made against, or a cloud develop upon the title to any part of RamshornLehman's Net Overriding Royalty Interest other than such as may arise byarisx xx, through xxrough or under El Paso or Ramshorn Lehman or a Permitted Encumbrance, unless otherwise agreed by RamshornLehman, El Paso Xx Xaso will take all commercially reasonable actions to defend such defxxx xxch claim or to remove such cloud, the expenses of which defense or removal shall be Production Costs hereunder. (e) Oil and Gas from the Subject Xxxxx Wells shall be sold for market value.