This ia a provision that states that any Party receiving a notice proposing to drill a well as provided in Operating Agreement elects not to participate in the proposed operation, then in order to be entitled to the benefits of this Article, the Party or Parties electing not to participate must give notice. Drilling by the parties who choose to participate must begin within 90 days of the notice.
New Hampshire Farm out by Non-Consenting Party is a legal concept in the field of oil and gas exploration and production. It refers to a specific arrangement where a party that is not willing to participate in the development of a certain farm out agreement in New Hampshire is forced to assign their rights to another party who wishes to undertake the project. In this context, a "farm out" is a contract between the owner of the leasehold rights (the "armor") and a third party (the "farmer") who agrees to take over the exploration and development activities. The non-consenting party, also known as a "non-consent", is typically an existing leaseholder who is uninterested in contributing capital or participating in the operations associated with the farm out. As such, they become subject to potential consequences, including the assignment of their working interest, loss of ownership rights, and potential monetary costs. The New Hampshire Farm out by Non-Consenting Party typically occurs when an oil and gas operator seeks to efficiently utilize resources and maximize the potential of an oil or gas play. By incentivizing the farmer to undertake the investment and development process, the non-consenting party relinquishes their ownership stake but may still retain a share of the revenue generated from the operations, known as a "carried interest." This allows the farmer to bear the costs and risks associated with exploration and development. The New Hampshire Farm out by Non-Consenting Party arrangement aims to strike a fair balance between the interests of both parties, providing an avenue for exploration and exploitation of valuable natural resources while ensuring the non-consenting party avoids financial obligations. It enables the farmer to access additional acreage for exploration, promotes industry collaboration, and increases the likelihood of successful commercial production. It's important to note that different types of non-consent farm outs can exist within the New Hampshire region, including voluntary non-consent farm out, compulsory non-consent farm out, and offset well provision non-consent. Each type presents unique circumstances and requirements, but they all share the common characteristic of allowing a non-consenting party to assign their interest to another party interested in developing the project. In summary, the New Hampshire Farm out by Non-Consenting Party is a legal mechanism that enables interested parties to maximize the potential of oil and gas plays by allowing non-consenting owners to assign their rights and responsibilities to other willing operators. It ensures efficient resource utilization and fosters collaboration within the industry, ultimately driving the exploration and production of valuable natural resources in the state of New Hampshire.
