Common use of Substitute Well Clause in Contracts

Substitute Well. In the event the ITW should encounter rock salt, heaving shale, excessive water flow, excessive pressure, igneous or other impenetrable formation or other conditions which would render further drilling impracticable or uneconomic and preclude the ITW from reaching the Objective Depth, then and in such event NEWFIELD shall have the exclusive option to propose within sixty (60) days following the abandonment of the ITW drilling of a substitute well (“Substitute Well”) therefore, provided same is drilled to the Objective Depth and under the same terms and conditions as the ITW. RIDGEWOOD shall have no obligation to participate in the Substitute Well; provided RIDGEWOOD shall have thirty (30) days, or forty-eight (48) hours in the event that a rig is on location, from receipt of the AFE for the Substitute Well to elect whether it shall participate in such Substitute Well. Failure to respond within the time period allowed shall be deemed to be an election not to participate in the Substitute Well. In the event NEWFIELD does not propose a Substitute Well within the time period provided for above, then RIDGEWOOD may propose the drilling of a Substitute Well pursuant to the terms of the Operating Agreement. NEWFIELD or Ridgewood shall have the continuing option to drill additional Substitute Xxxxx, provided that no more than sixty (60) days elapse between the date the drilling rig was released from the last operation on such Substitute Well and the commencement date of drilling operations for the next Substitute Well drilled therefor.