Drilling Contract Agreement

Drilling Contract Agreement

This Drilling Contract Agreement (the "Agreement") is made as of between Client Name: , a organized under the laws of , with principal place of business at (hereinafter "Owner"), and Contractor Name: , a organized under the laws of , with principal place of business at (hereinafter "Contractor"). Owner and Contractor are sometimes referred to collectively as the "Parties" and individually as a "Party."

Recitals

WHEREAS, Owner holds rights to explore, develop and produce hydrocarbons on the property identified as located at (the "Property"); and

WHEREAS, Owner desires to engage Contractor to perform drilling and related services for the well designated as (the "Well") in accordance with the terms and conditions set forth herein; and

WHEREAS, Contractor represents that it has the equipment, personnel, and expertise necessary to perform the drilling operations described below in a safe and workmanlike manner.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

1. Definitions

The following terms shall have the meanings set forth below when used in this Agreement: "Work" means all drilling, completion, testing, and related services specified in Section 2; "Subcontractor" means any entity engaged by Contractor to perform part of the Work; and "Applicable Law" means all federal, state and local laws, regulations and governmental orders applicable to the performance of the Work.

2. Scope of Work

Contractor shall furnish all labor, supervision, tools, equipment, transportation, materials (except as expressly provided by Owner), fuel, and consumables and shall perform all operations necessary to drill, case, and test the Well to a measured depth of , including mobilization and demobilization, in accordance with the procedures and technical specifications described in the Scope of Work below.

3. Term; Commencement; Schedule

The Work shall commence on or about (Estimated Spud Date) and shall be substantially completed within calendar days thereafter, subject to adjustments for Change Orders and excusable delays as provided in this Agreement.

Mobilization shall occur no later than . Contractor shall notify Owner at least days prior to mobilization of personnel and major equipment.

4. Compensation and Payment

Owner shall pay Contractor for the Work in accordance with the pricing schedule attached hereto as Exhibit A and incorporated herein by reference. The primary contract price shall be USD, subject to adjustments for Change Orders, additional services, and overruns as set forth below.

Unless otherwise agreed, Owner shall pay undisputed amounts within days after receipt of Contractor's invoice and supporting documentation. Disputed amounts shall be resolved promptly and not delay payment of undisputed amounts.

5. Equipment, Materials, and Site Access

Contractor shall provide and maintain all drilling equipment, materials and tools necessary to perform the Work in a safe and workmanlike manner, except as expressly supplied by Owner in Exhibit A. Contractor shall ensure that all equipment is inspected and maintained in accordance with manufacturer recommendations and industry standards.

6. Environmental, Health, Safety and Security (HSSE)

Contractor shall perform the Work in compliance with all Applicable Law and industry HSSE standards. Contractor shall maintain written HSSE procedures, provide safety training to its personnel, and immediately notify Owner of any incident, release, spill or accident affecting the Work or the Property.

7. Change Orders

Any change in the scope, price, schedule, or manner of performance shall be authorized only by a written Change Order signed by both Parties. A Change Order shall describe the change, any adjustment to the contract price or schedule, and any other applicable terms.

8. Insurance and Bonding

Contractor shall maintain, at its expense, insurance customary for drilling operations, including commercial general liability, automobile liability, workers' compensation, employer's liability, and where applicable, pollution liability and contractor's equipment insurance, each with limits sufficient to protect Owner and Contractor from claims that may arise out of the performance of the Work. Contractor shall provide certificates evidencing such coverage upon request.

9. Indemnity

Contractor shall indemnify, defend and hold harmless Owner, its affiliates and their respective officers, directors and agents from and against any claims, losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of or resulting from Contractor's performance of the Work, except to the extent caused by Owner's gross negligence or willful misconduct.

10. Limitation of Liability

Except for claims arising from Contractor's gross negligence, willful misconduct, or breach of its indemnity obligations, neither Party shall be liable to the other for consequential, incidental, special or punitive damages, including loss of profit or production.

11. Force Majeure

Neither Party shall be liable for delays or failures to perform caused by events beyond its reasonable control, including acts of God, storms, floods, epidemics, labor disputes, civil unrest, governmental actions, or other force majeure events. The affected Party shall provide prompt written notice and shall use commercially reasonable efforts to mitigate the impact of the event.

12. Confidentiality

Each Party shall keep confidential and not disclose to third parties any non-public technical, commercial or financial information received from the other Party in connection with the Work, except as required by Applicable Law or as necessary to perform its obligations under this Agreement. Confidential information shall not include information that is publicly known or rightfully received from a third party without obligations of confidentiality.

13. Notices

Notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below (or such other address as either Party may designate by written notice). Notice shall be effective on personal delivery, delivery by nationally recognized overnight courier, or three (3) days after deposit in the mail with postage prepaid.

14. Governing Law; Entire Agreement; Severability; Amendments; Waiver; Counterparts

This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to its conflicts of law principles. This Agreement, including all Exhibits and Change Orders, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, proposals and agreements. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties. The failure of either Party to enforce any right shall not constitute a waiver of that right. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

15. Miscellaneous Provisions

Contractor represents and warrants that it is duly organized, validly existing and in good standing; has the authority to enter into this Agreement; and will perform the Work in a competent and professional manner consistent with industry standards. All personnel supplied by Contractor shall be employees or authorized agents of Contractor, and Contractor shall be responsible for payment of wages, taxes and benefits.

If Contractor employs Subcontractors, Contractor shall remain fully responsible for the performance of the Work and compliance with this Agreement.

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