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.
Contra Costa California Cost Overruns for Non-Operator's Non-Consent Option is a legal provision often included in contracts and agreements pertaining to oil and gas exploration and production. This option outlines the conditions and consequences when the non-operator of a project chooses not to provide consent for a specific action, typically related to cost overruns. In the context of oil and gas operations, cost overruns refer to circumstances where the total expenses incurred during a project exceed the initial budget or estimated costs. The non-operator, usually a minority stakeholder in the project, may exercise their non-consent option when they believe the cost overruns are unreasonable or unnecessary. There are several types of Contra Costa California Cost Overruns for Non-Operator's Non-Consent Options, including: 1. Mandatory Non-Consent: Under this type, the non-operator is compelled to exercise their non-consent option if certain predetermined conditions are met. These conditions may include a significant increase in costs beyond a predefined threshold or failure to provide adequate information regarding the cost increase. 2. Discretionary Non-Consent: In this scenario, the non-operator has the freedom to choose whether to exercise their non-consent option, regardless of predefined conditions. The decision is based on the non-operator's judgment regarding the reasonableness and necessity of the cost overruns. 3. Partial Non-Consent: This option allows the non-operator to partially exercise their non-consent. In other words, they can choose to consent to a portion of the cost overruns while non-consenting the remaining excessive costs. When the non-operator exercises their non-consent option, several consequences may arise. These consequences could include: a) Loss of Ownership Percentage: The non-operator's ownership stake in the project might be diluted proportionally to the extent of their non-consent. This ensures that the consenting parties retain their proportional ownership. b) Non-Operator's Liability Limitation: If the non-operator does not provide consent, their liability for the cost overruns may be limited. This protects them from being burdened with unexpected financial obligations. c) Operator's Purchasing Option: In some cases, the operator (the party responsible for the project's day-to-day operations) may have the option to purchase the non-operator's interest at a predetermined price. This can help resolve any conflicts arising from non-consent while ensuring the project's continuity. In conclusion, Contra Costa California Cost Overruns for Non-Operator's Non-Consent Option is a crucial provision in contracts pertaining to oil and gas projects. By understanding the various types of non-consent options and their potential consequences, both operators and non-operators can navigate cost overruns with clarity and transparency.Contra Costa California Cost Overruns for Non-Operator's Non-Consent Option is a legal provision often included in contracts and agreements pertaining to oil and gas exploration and production. This option outlines the conditions and consequences when the non-operator of a project chooses not to provide consent for a specific action, typically related to cost overruns. In the context of oil and gas operations, cost overruns refer to circumstances where the total expenses incurred during a project exceed the initial budget or estimated costs. The non-operator, usually a minority stakeholder in the project, may exercise their non-consent option when they believe the cost overruns are unreasonable or unnecessary. There are several types of Contra Costa California Cost Overruns for Non-Operator's Non-Consent Options, including: 1. Mandatory Non-Consent: Under this type, the non-operator is compelled to exercise their non-consent option if certain predetermined conditions are met. These conditions may include a significant increase in costs beyond a predefined threshold or failure to provide adequate information regarding the cost increase. 2. Discretionary Non-Consent: In this scenario, the non-operator has the freedom to choose whether to exercise their non-consent option, regardless of predefined conditions. The decision is based on the non-operator's judgment regarding the reasonableness and necessity of the cost overruns. 3. Partial Non-Consent: This option allows the non-operator to partially exercise their non-consent. In other words, they can choose to consent to a portion of the cost overruns while non-consenting the remaining excessive costs. When the non-operator exercises their non-consent option, several consequences may arise. These consequences could include: a) Loss of Ownership Percentage: The non-operator's ownership stake in the project might be diluted proportionally to the extent of their non-consent. This ensures that the consenting parties retain their proportional ownership. b) Non-Operator's Liability Limitation: If the non-operator does not provide consent, their liability for the cost overruns may be limited. This protects them from being burdened with unexpected financial obligations. c) Operator's Purchasing Option: In some cases, the operator (the party responsible for the project's day-to-day operations) may have the option to purchase the non-operator's interest at a predetermined price. This can help resolve any conflicts arising from non-consent while ensuring the project's continuity. In conclusion, Contra Costa California Cost Overruns for Non-Operator's Non-Consent Option is a crucial provision in contracts pertaining to oil and gas projects. By understanding the various types of non-consent options and their potential consequences, both operators and non-operators can navigate cost overruns with clarity and transparency.
