operations clause. Oil & gas. A provision in an oil-and-gas lease specifying that the lease will not expire as long as oil-and-gas development continues on the leased property. See CONTINUOUS-OPERATIONS CLAUSE; WELL-COMPLETION CLAUSE.
continuous-operations clause. Oil & gas. A provision in an oil-and-gas lease giving the lessee the right to continue any drilling well that was begun before the lease expired and to begin drilling more wells. See OPERATIONS CLAUSE.
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drilling-delay rental clause. Oil & gas. A provision in an oil-and-gas lease giving the lessee the right to maintain the lease from period to period during the primary term by paying delay rentals instead of starting drilling operations. • Lessees use drilling-delay rental clauses because courts have said that they obviate any implied covenant to
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cessation-of-production clause. Oil & gas. A lease provision that specifies what the lessee must do to maintain the lease if production stops. • The purpose of the clause is to avoid the uncertainties of the tempo-rary-cessation-of-production doctrine. Cf. TEMPORARY-CESSATION-OF-PRODUCTION DOCTRINE . [Cases: Mines and Minerals 78.1(9). C.J.S. Mines and Minerals §§ 260–263.] “Many oil and
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Oil & gas. A provision in an oil-and-gas lease giving the lessee the right to maintain the lease from period to period during the primary term by paying delay rentals instead of starting drilling operations. • Lessees use drilling-delay rental clauses because courts have said that they obviate any implied covenant to drill a test
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unitization clause. Oil & gas. A provision in an oil-and-gas lease granting the lessee the right to unitize the leased premises, generally for enhanced-recovery operations.
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surface-damage clause. Oil & gas. A lease provision requiring the lessee to pay the lessor or the surface-interest owner for all or for a specified kind or degree of damage to the surface that results from oil-and-gas operations. — Also termed location-damage clause; damages clause.
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well-completion clause. Oil & gas. A provision in an oil-and-gas lease specifying that a lessee who starts drilling before the lease terminates has the right to complete the well and to maintain the lease if the drilling achieves production. See OPERATIONS CLAUSE.
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