This form provides that when Operator, in good faith, believes or determines that the actual costs for any Drilling, Reworking, Sidetracking, Deepening, or Plugging Back operation conducted under this Agreement will exceed a designated of the costs estimated for the operation on the approved AFE, the Operator will give prompt notice by telephone to the other Parties participating in the operation, as well as delivering a supplemental AFE estimating the costs necessary to complete the operation. Each Party receiving the supplemental AFE shall have forty-eight from receipt of the notice to elect to approve Operators recommendation or propose an alternative operation.
The Nevada Cost Overruns for Non-Operator's Non-Consent Option is a crucial aspect in the oil and gas industry, specifically in the state of Nevada. This provision allows non-operators to have the option of not participating financially in cost overruns associated with drilling operations. Instead, non-operators can choose to be exempt from these additional expenses and maintain their ownership interest without incurring further financial obligations. In Nevada, there are different types of cost overruns for non-operator's non-consent options, which include: 1. Drilling Cost Overrun: This type of cost overrun occurs when the actual drilling expenses exceed the initial budgeted amount. Non-operators who exercise the non-consent option for drilling operations are protected from bearing the financial burden of the additional costs incurred during this phase. 2. Completion Cost Overrun: Completion cost overruns happen when the expenses associated with finishing the well, such as well logging, casing, perforating, and testing, exceed the anticipated amount. Non-operators who choose the non-consent option during this stage are shielded from being responsible for these extra expenditures. 3. Operating Cost Overrun: This type of cost overrun arises when the operating expenses, like maintenance, repair, and overhead costs, surpass the projected budget for the well. Non-operators utilizing the non-consent option for the ongoing operations are not required to contribute towards exceeding costs related to operating the well. By offering the non-operator's non-consent option for cost overruns in Nevada, it provides flexibility for non-operators, ensuring they have a streamlined investment approach without the potential risk of unexpected financial burdens. This provision encourages more participation from non-operators in oil and gas projects, as it mitigates financial uncertainties and promotes a fair distribution of costs among the involved parties.The Nevada Cost Overruns for Non-Operator's Non-Consent Option is a crucial aspect in the oil and gas industry, specifically in the state of Nevada. This provision allows non-operators to have the option of not participating financially in cost overruns associated with drilling operations. Instead, non-operators can choose to be exempt from these additional expenses and maintain their ownership interest without incurring further financial obligations. In Nevada, there are different types of cost overruns for non-operator's non-consent options, which include: 1. Drilling Cost Overrun: This type of cost overrun occurs when the actual drilling expenses exceed the initial budgeted amount. Non-operators who exercise the non-consent option for drilling operations are protected from bearing the financial burden of the additional costs incurred during this phase. 2. Completion Cost Overrun: Completion cost overruns happen when the expenses associated with finishing the well, such as well logging, casing, perforating, and testing, exceed the anticipated amount. Non-operators who choose the non-consent option during this stage are shielded from being responsible for these extra expenditures. 3. Operating Cost Overrun: This type of cost overrun arises when the operating expenses, like maintenance, repair, and overhead costs, surpass the projected budget for the well. Non-operators utilizing the non-consent option for the ongoing operations are not required to contribute towards exceeding costs related to operating the well. By offering the non-operator's non-consent option for cost overruns in Nevada, it provides flexibility for non-operators, ensuring they have a streamlined investment approach without the potential risk of unexpected financial burdens. This provision encourages more participation from non-operators in oil and gas projects, as it mitigates financial uncertainties and promotes a fair distribution of costs among the involved parties.
