O-1988-1621 - Laserfiche WebLink

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. e municipal, 'State or Federal, without Lessor's written consent, then this lease shall constitute a separate lease as to any portion in such pooled or unitized area and operations upon or production from such portion shall not maintain this lease in force as to that portion of said land not so pooled or unitized. Lessor agrees that its consent to the pooling of all or portions of the land described above will not be withheld if the proposed pool or unit conforms to the following criteria: (a) An oil unit does not exceed 40 acres in surface area, (b) A gas unit does not exceed 160 acres in surface, from surface to 8,000 feet, or 320 acres in surface area for all depths below 8,000 feet1 (c) The unit is limited to the geological stratum or strata in whi~h the well is completed and producing1 (d) The unit is reasonably compact in shape with the width not exceeding twice the length1 (e) The unit will automatically terminate at such time as no drilling or reworking operations are being conducted thereon or production is being obtained therefrom for a period exceeding sixty (60) consecutive days, and (f) At least one-half (1/2) of the acreage included in each such unit shall be acreage which is covered by this leaseJ provided, however, that if at any time the remaining acreage which is neither included in an existing unit nor allocated to a drilling unit, with respect to a well capable of producing oil or gas in commercial quantities, is insufficient to comprise one-half of a proposed unit to be created pursuant to paragraph 21 hereof, then such a unit may nevertheless be formed if it includes all of such remaining acreage then covered by this lease. Each such unit shall be deemed a well tract or unit under Section 3. above. Whenever the term "from the land described hereinR or similar language is used, it is understood that operations for drilling a new well, reworking operations (including deepening or sidetracking) on a previously drilled well or production of oil, gas and other hydrocarbons from a well located within the confines of a unit approved or consented to by Lessor shall be deemed operations on or production from the lands described herein or the premises leased herein. 22. PRODUCTION PURCHASE CONTRACTS: Notwithstanding anything herein contained to the contrary, it is understood and agreed that prior to entering into the sale of any oil, condensate, other liquid hydrocarbons, gas, casinghead gas, or other gaseous substances produced hereunder, Lessee shall furnish Lessor a true copy of the production purchase contract(s) which Lessee proposes to enter into and Lessor shall have fifteen (15) days after receipt to notify Lessee that the terms of such contract(s) are unacceptable to . Lessor. If such notice is given, Lessor shall have sixty (60) days from the date of such notice to provide Lessee a copy of a production purchase contract which is acceptable to Lessor and for which there is a willing and able purchaser. If Lessor fails to give notice or to submit an alternative production contract(s) and purchaser(s) within the sixty (60) day period, it is understood and agreed that any sale of production attributable to the leased premises under such contract furnished by Lessee will be deemed to have been made at market value and that Lessee shall have exercised due diligence as the fiduciary agent for Lessor in the marketing of all products produced under the terms of this lease and committed to such contract. 11