Common use of Vertical Xxxxx Clause in Contracts

Vertical Xxxxx. At the later to occur of the expiration of the primary term of this Lease or the termination of the continuous drilling program set forth in Paragraph 5, each non-horizontal well drilled hereon capable of producing in paying quantities will hold only forty (40) acres of the leased premises for any formation from the surface to the base of the Xxxxxxx Shale formation. As to depths below the base of the Xxxxxxx Shale Formation, the retained acreage shall be the minimum size proration unit necessary to obtain the maximum production allowable or if there are no proration units, the smallest spacing unit available. If the retained acreage for a well completed below the base of the Xxxxxxx Shale Formation is larger than forty (40) acres, the well may maintain the Lease as to formations above the base of the Xxxxxxx Shale Formation as to not more than forty (40) acres. All other acreage except that included in a retained acreage tract or pooled unit as described above will cease to be covered by this Lease and will be released. To the extent possible, each such retained acreage tract will be in the shape of a square, with the bottom of the well in the center. Further, it is understood and agreed that Lessee shall earn depths as to each retained acreage unit or pooled unit only from the surface down a depth which is the stratigraphic equivalent to a depth of one hundred feet (100') below the deepest formation in such well which is producing oil and gas in paying quantities at the later to occur of the expiration of the primary term of this Lease or the termination of the continuous drilling program set forth in Paragraph 5. This Lease will terminate at such time as to all depths below such depths as to each respective retained acreage tract or pooled unit. If production should cease as to acreage included in a retained acreage tract or pooled unit, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereon, provided that if more than ninety (90) days elapse between the abandonment of such well as a dry hole and the commencement of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial production, this Lease shall terminate as to the applicable retained acreage tract or pooled unit.

Vertical Xxxxx. At the later to occur of the expiration of the primary term of this Lease or the termination of the continuous drilling program set forth in Paragraph 5, each non-horizontal well drilled hereon capable of producing in paying quantities will hold only forty (40) acres of the leased premises for any formation from the surface to the base of the Xxxxxxx Shale formation. As to depths below the base of the Xxxxxxx Shale Formation, the retained acreage shall be the minimum size proration unit necessary to obtain the maximum production allowable or if there are no proration units, the smallest spacing unit available. If the retained acreage for a well completed below the base of the Xxxxxxx Shale Formation is larger than forty (40) acres, the well may maintain the Lease as to formations above the base of the Xxxxxxx Shale Formation as to not more than forty (40) acres. All other acreage except that included in a retained acreage tract or pooled unit as described above will cease to be covered by this Lease and will be released. To the extent possible, each such retained acreage tract will be in the shape of a square, with the bottom of the well in the center. Further, it is understood and agreed that Lessee Xxxxxx shall earn depths as to each retained acreage unit or pooled unit only from the surface down a depth which is the stratigraphic equivalent to a depth of one hundred feet (100') below the deepest formation in such well which is producing oil and gas in paying quantities at the later to occur of the expiration of the primary term of this Lease or the termination of the continuous drilling program set forth in Paragraph 5. This Lease will terminate at such time as to all depths below such depths as to each respective retained acreage tract or pooled unit. If production should cease as to acreage included in a retained acreage tract or pooled unit, this Lease will terminate as to such acreage unless Lessee commences reworking or additional drilling operations on such acreage within ninety (90) days thereafter and continues such reworking or additional drilling operations until commercial production is restored thereon, provided that if more than ninety (90) days elapse between the abandonment of such well as a dry hole and the commencement of actual drilling operations for an additional well, or more than ninety (90) days pass since the commencement of reworking operations without the restoration of commercial production, this Lease shall terminate as to the applicable retained acreage tract or pooled unit.