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Nature of the oil and gas lease (view source)
Revision as of 16:08, 20 August 2014
, 16:08, 20 August 2014→Dry hole clause and cessation of production clause
===Dry hole clause and cessation of production clause===
===Dry hole clause and cessation of production clause===
These clauses generally set out three conditions. First, in the absence of production or after drilling a dry hole, they establish what type of activity (drilling, reworking, or rental payment resumption) by the lessee must occur to maintain a lease in force during and after the end of the primary term of the lease. Second, they state when and how rental payments may be resumed during the primary term. Third, they set out the obligations of the lessee to protect the lease from drainage by offset wells.
These clauses generally set out three conditions. First, in the absence of production or after drilling a [[dry hole]], they establish what type of activity (drilling, reworking, or rental payment resumption) by the lessee must occur to maintain a lease in force during and after the end of the primary term of the lease. Second, they state when and how rental payments may be resumed during the primary term. Third, they set out the obligations of the lessee to protect the lease from drainage by offset wells.
===Environmental and property obligation clause===
===Environmental and property obligation clause===