This form is used in the event any part to this Agreement elects not to participate in a Horizontal Exploratory Well, the non-participating party shall, on commencement of operations for the well, relinquish to the participating party one hundred percent (100%) of its rights, title, and interests in and to that portion of the Contract Area included within the Drilling Unit for the well and one hundred percent (100%) of the party’s rights, title, and interests in and to that portion of the Contract Area.
Kansas Relinquishment Provision — Horizontal Well In the Kansas oil and gas industry, the Relinquishment Provision is an essential aspect of horizontal well operations. A detailed understanding of this provision is crucial for stakeholders involved in drilling, producing, and operating horizontal wells in Kansas. This article aims to provide a comprehensive description of the Kansas Relinquishment Provision — Horizontal Well, its significance, and the different types associated with it. The Kansas Relinquishment Provision — Horizontal Well refers to the set of regulations defined by the Kansas Corporation Commission (KCC), governing the relinquishment or termination of horizontal well leases. It establishes guidelines for the operator's commitment to timely and efficient development, production, and abandonment of horizontal wells, ensuring optimized utilization of the state's mineral resources. The Relinquishment Provision is designed to prevent "held by production" scenarios, where an operator retains indefinitely the right to a lease, despite minimal or no production. By enforcing the relinquishment of leases, the KCC encourages operators to actively develop and produce from their leased acreage, thereby preventing the tying up of valuable resources. There are primarily two types of Kansas Relinquishment Provision — Horizontal Well, commonly referred to as "25th month" and "60th month" provisions. 1. 25th Month Provision: — This provision requires the operator to drill and complete the initial horizontal well within 25 months from the effective date of the lease. — If the well is successfully drilled and producing in commercial quantities, the operator can retain the lease by continuing operations. — However, if the well fails to meet commercial viability, the operator must relinquish the lease, making it available for others to explore and develop. 2. 60th Month Provision: — This provision grants the operator a longer duration of 60 months to drill and complete the initial horizontal well. — Similar to the 25th month provision, the operator can retain the lease if successful production is achieved. — In cases where the well fails to meet commercial standards or remains idle, the operator must relinquish the lease, allowing other potential investors to utilize the acreage. It is important for operators to adhere to the specific relinquishment deadlines established by the KCC, ensuring both efficient well development and fair competition within the industry. Failure to comply with the Relinquishment Provision may lead to lease termination and potential loss of valuable resources. In conclusion, the Kansas Relinquishment Provision — Horizontal Well plays a vital role in promoting continuous and optimized development and production of oil and gas resources in Kansas. The 25th month and 60th month provisions serve as crucial milestones, offering operators specified timeframes to prove the feasibility of their operations. Adherence to these provisions is essential to strike a balance between encouraging efficient utilization of leased acreage and preventing resource hoarding.Kansas Relinquishment Provision — Horizontal Well In the Kansas oil and gas industry, the Relinquishment Provision is an essential aspect of horizontal well operations. A detailed understanding of this provision is crucial for stakeholders involved in drilling, producing, and operating horizontal wells in Kansas. This article aims to provide a comprehensive description of the Kansas Relinquishment Provision — Horizontal Well, its significance, and the different types associated with it. The Kansas Relinquishment Provision — Horizontal Well refers to the set of regulations defined by the Kansas Corporation Commission (KCC), governing the relinquishment or termination of horizontal well leases. It establishes guidelines for the operator's commitment to timely and efficient development, production, and abandonment of horizontal wells, ensuring optimized utilization of the state's mineral resources. The Relinquishment Provision is designed to prevent "held by production" scenarios, where an operator retains indefinitely the right to a lease, despite minimal or no production. By enforcing the relinquishment of leases, the KCC encourages operators to actively develop and produce from their leased acreage, thereby preventing the tying up of valuable resources. There are primarily two types of Kansas Relinquishment Provision — Horizontal Well, commonly referred to as "25th month" and "60th month" provisions. 1. 25th Month Provision: — This provision requires the operator to drill and complete the initial horizontal well within 25 months from the effective date of the lease. — If the well is successfully drilled and producing in commercial quantities, the operator can retain the lease by continuing operations. — However, if the well fails to meet commercial viability, the operator must relinquish the lease, making it available for others to explore and develop. 2. 60th Month Provision: — This provision grants the operator a longer duration of 60 months to drill and complete the initial horizontal well. — Similar to the 25th month provision, the operator can retain the lease if successful production is achieved. — In cases where the well fails to meet commercial standards or remains idle, the operator must relinquish the lease, allowing other potential investors to utilize the acreage. It is important for operators to adhere to the specific relinquishment deadlines established by the KCC, ensuring both efficient well development and fair competition within the industry. Failure to comply with the Relinquishment Provision may lead to lease termination and potential loss of valuable resources. In conclusion, the Kansas Relinquishment Provision — Horizontal Well plays a vital role in promoting continuous and optimized development and production of oil and gas resources in Kansas. The 25th month and 60th month provisions serve as crucial milestones, offering operators specified timeframes to prove the feasibility of their operations. Adherence to these provisions is essential to strike a balance between encouraging efficient utilization of leased acreage and preventing resource hoarding.
