Common use of TEST OF WELL ECONOMY Clause in Contracts

TEST OF WELL ECONOMY. 32.01 For purposes of this lease, if a gas well does not produce more than an average of one (1) Mcf/day of natural gas in a calendar year (calculated by dividing its annual production in Mcf by 365 days), it shall be considered uneconomic (i.e., not in paying quantities) to maintain and operate; and if during the following calendar year gas production from the well also fails to exceed a one (1) Mcf/day average, Lessee shall plug and abandon the well as per Section 33 (Plugging), and restore the wellsite and access road to the satisfaction of District Forester, all no later than six (6) months after the end of the following calendar year. This provision shall apply to all xxxxx drilled or operated by Lessee on the leased premises, whether the xxxxx are shut-in or producing, unless the Department has informed the Lessee that a well or xxxxx falls under the provisions of Section 30 (Gas Storage Rights). Department may, at its sole option and in writing, waive all or part of the requirements of this provision to Lessee, if in Department’s judgment such a waiver is warranted by economic conditions or other circumstances, and is deemed to be in the best interest of the Commonwealth.

TEST OF WELL ECONOMY. 32.01 For purposes of this lease, if a gas well does not produce more than an average of one (1) Mcf/day of natural gas in a calendar year (calculated by dividing its annual production in Mcf by 365 days), it shall be considered uneconomic (i.e., not in paying quantities) to maintain and operate; and if during the following calendar year gas production from the well also fails to exceed a one (1) Mcf/day average, Lessee shall plug and abandon the well as per Section 33 (Plugging), and restore the wellsite and access road to the satisfaction of District Forester, all no later than six (6) months after the end of the said following calendar year. This provision shall apply to all xxxxx drilled or operated by Lessee on the leased premises, whether the xxxxx are shut-in or producing, unless the Department has informed the Lessee that a well or xxxxx falls under the provisions of Section 30 (Gas Storage Rights). Department may, at its sole option and in writing, waive all or part of the requirements of this provision to Lessee, if in Department’s judgment such a waiver is warranted by economic conditions or other circumstances, and is deemed to be in the best interest of the Commonwealth.