Producing in paying quantities definition
Producing in paying quantities means that the Tenant is deriving at least $2,400.00 per biennium, commencing on the date a well first produces, from the oil and gas over and above operating expenses.
Producing in paying quantities means that Lessee is deriving at least Three Hundred Dollars ($300.00) per quarter from the oil, gas, condensate and/or hydrocarbons over and above operating expenses. “Quarter” means every three months and no one month of a specific year can be included in more than one quarter. If at the end of the primary term, a part but not all of the land covered by this Lease, on a surface acreage basis, is not included within a unit or units on which a well has been drilled in accordance with the other provisions of this Lease, this Lease shall terminate as to such part or parts of the land lying outside such unit or units. For purposes of the preceding sentence, a “unit” is defined as the minimum acreage required by state law for the drilling of a well.