Fill and Sign the Texas Appellate Attorney Retained Acreage Clauses Form

CONTINUOUS DEVELOPMENT; RETAINED ACREAGE; AND DEPTH LIMITATIONS Form 1. If Lessee is engaged in drilling operations on the lease premises at the end of the primary term, this Lease shall not terminate if Lessee conducts a program of continuous drilli ng, allowing no more than ____ days to elapse between the completion of one well and the commence ment of operations for the next succeeding well. If Lessee is not actually drilling on the le ase premises at the end of the primary term, but this Lease is maintained at the end of the primary term by some other lease provision to continue to maintain the Lease in force and effect, then within _____ days after the expiration of the primary term, Lessee shall commence to conduc t a continuous drilling program allowing no more than ____ days to elapse between the completion of one we ll and the commencement of operations for the next succeeding well. For the purposes of this continuous development provision, “commencement of operations” shall be presumed to be the date Lessee commences actually drilling with rotary drilling tools of a suitable size necessary to reach the objective depth. “Completion” shall be presumed to be the date of fili ng of a completion or potential test report with the applicable governing agency, if a product ive well, or the filing date of the plugging report with the applicable government agency, if a dry hole. If no report is filed, it will be presumed the well was completed on the ______ day following the last day of actual drilling. Once commenced, each well shall be completed by Lessee within ____ days from the date of commencement. In conducting this continuous drilling program, if Lessee commences a well prior to the time that it is otherwise required to do so, it shall be entitled to accumula te and later use any time saved in the early commencement of a well, so that all or any part of the acc umulated time may be used to extend the ____ day interval between the completion of one well and the commencement of the next succeeding well. However, no more than ____ days may be accumulated. If, during the drilling or reworking of any well, Lessee loses or junks the hole or well or encounters any other mechanical or technical difficulties in drilling, a nd after diligent effort, is unable to complete its operations, Lessee may preserve its rights under this Lease by commencing, not later than ____ days after the date of the abandonment of the lost or j unked well, the drilling of a substitute well at a location selected by Lessee on the tract on which the lost or junked well was commenced but not completed, and completing the substitute well. In that event the completion of the substitute well shall be deemed a completi on of the lost or junked well in compliance with this continuous drilling obligation. On cessation of the continuous development program, this Lease shall terminate as to all lands, save a nd except ____ acres around each producing oil well, and ____ acres around each producing or shut-in gas well. The amount of acreage included in each producing or proration unit shall increase in the event field rules formulated by the appropriate governmental authority requires producing or proration units of a larger size. If at any time, after the expiration of the primary term or the conclusion of the continuous drilling program, the applicable field rules are changed or the well or we lls are reclassified as oil or gas wells so that less acreage is then allocated to a well or wells for production purposes, this Lease shall terminate as to all acreage not then alloca ted to a well or wells for production purposes after the change in field rules, or classification. Within ____ da ys after a partial termination of this Lease, Lessee shall execute and delive r to Lessor a recordable release of this Lease as to all lands, save and except the acreage allocated to each producing or proration unit. After the primary term of this Lease, the acreage assigned to a produc ing well shall be considered subject to a separate Lease for each well, with each Lease containing the same terms and provisions of this Lease. Each separate Lease may be kept in force and effect only by actual or constructive production or operations on the particular tract of land wit hout regard to production or drilling operations on other tract or tract retained by Lessee, deem ed subject to a separate lease or leases. Notwithstanding the termination of this Le ase as to a portion of the lands, Lessee shall nevertheless continue to have the right of ingress and egress from the lands still subject to this Lease for all purposes allowed under the terms of this Lease, together with easements and rights of ways for roads, pipelines, and other facilities on, over, and across all of the lands originally covered by this Lease, for access to and from the lands still subject to this Lease, for the gathering of transportation of oil, gas, and other minerals produce d from the retained lands. The sole liability or penalty for Lessee's failure to drill any well or wells required or permitted by this Lease shall be the termination of Lessee's rights under t his Lease as provided in this provision. Form 2. If during the primary term of this Lease, a well is completed which is capable of producing oil and/or gas in paying quantities, to maintain all of the lands under lease , Lessee must develop the lease premises by drilling additional wells without a lapse of more than _____ days between the end of the primary term and the commencement of actual drill ing operations of the next succeeding well. On the completion of a well at or after the primary t erm, which is capable of producing in paying quantities, Lessee must develop the lease premises by drill ing additional wells without a lapse of more than ____ days between the completion of one we ll and the commencement of operations for the drilling of the next succeeding well. For the purpose s of interpreting this provision, a well shall be deemed to be commenced when Lessee stakes the location for a well. The completion date of a well shall be deemed the ea rliest of the following dates: (i) the date on which the initial potential test is run; (ii) the dat e on which a dry hole is plugged; (iii) a date _____ days after the date on which Lessee reaches total depth in the well; or, (iv) the date certified by the applicable governing agency as the date a well has been completed as a producing well. Once commenced, drilling operations on a well shall be conducte d with no cessation of more than ____ days. Upon cessation of this continuous development program, this Lease and all Lessee's rights shall automatically terminate as to all lands covered by this Lease , save and except, as to each well then capable of producing oil or gas in paying quantities, the producing or proration unit surrounding the well, as established by the applicable governmental agency, and shall also terminate as to all depths ____ feet below the total depth drilled in the well located on each unit, or as to all depths below the base of the deepest producing formation in each well, whi chever is greater. Within _____ days after a partial termination of this Lease, Lessee shal l execute and deliver to Lessor a recordable release of this Lease as to all lands and dept hs, save and except the acreage and depths allocated to each producing or proration unit. On cessation of the conti nuous development program, any acreage assigned to a producing well shall be considered subject to a separate Lease containing the same terms and provisions as this Lease. Each sepa rate lease may be kept in force and effect only by actual or constructive production from or operations on t he lands subject to that Lease, without regard to production or drilling operations on other lands retained by Lessee under a separate lease or leases. Form 3. At the expiration of the primary term, this Lease shall terminate as to al l lands, save and except the following: a. For each well situated on the lease premises producing oil in paying quantities and classified as an oil well and property spaced on the lease premises under the rules and regulations of the applicable governing agency, the minimum acreage around each oil we ll permitted under those rules and regulations from ____ feet above the top producing depth to ____ feet below the base of the deepest producing depth; or, b. For each well producing gas in paying quantities or capable of producing gas in paying quantities (with all shut-in gas royalty payments having been properly and time ly paid in compliance with other terms of this Lease) and classified as a gas well, properly spaced on the lease premises under the rules and regulations of the applicable governing agency, the m inimum acreage around each gas well is permitted under those rules and regulations from ____ fe et above the top of the shallowest producing depth and to ____ feet below the base of the deepest producing depth. Each tract of land around an oil or gas well, if practicable, shall be in a square or rectangular shape, having a length no greater than twice its width. If a square or rec tangular shape is not practicable, all acreage within a tract must be contiguous. Within _____ days after the partial termination of this Lease, Lessee shall execut e and file of record (and deliver Lessor an executed or certified copy) a recordable instrument designating and describing all of the lands included within tracts surrounding commercially productive oil or gas wells. Lessee shall also execute and deliver to Lessor a rele ase of all the lands not included in the tracts surrounding commercially productive oil or gas wells. If Lessee fails to execute and file of record this release or the instrument designating the lands surrounding producing oil or gas wells, Lessor shall have the right to file such instruments which will have the same force and effect as if executed and filed by Lessee. Form 4. On the latter of (i) _____ days following the end of the primary term of this Lease, or (ii ) the conclusion of the “Continuous Development Program,” described below, this Lease shall terminate as to all lands covered by this Lease not included within a “Wel l Tract.” A “Well Tract” is defined as and shall consist of an area surrounding each well capable of produc ing oil and/or gas not to exceed _____ acres for each oil well, plus a tolerance of 10%, or _____ acre s for each gas well, plus a tolerance of 10%, with the Well Tract for each well being as nearly as practicable in the shape of a square or rectangle surrounding each well. Should the government al authority having jurisdiction prescribe the creation of a drilling, production, or proration unit with a larger area than the area for a Well Tract, then the size of a W ell Tract shall substantially conform in size with the drilling, production, or proration unit prescribed or permitted by governmental regulations. If all or any portion of the lands covered by this Lease are pooled or unitized under the provisions of the pooling clause of this Lease, the land that is poole d or unitized shall be considered within the Well Tract of the pooled unit. A “Continuous Development Program” shall consist of a period during which Lessee conducts operations from the drilling of a well on the lease premises, or on land pooled with the lease premises, with no lapse of more than ____ days between the completion or plugging and abandonment of one well and the commencement of operations on the next succeeding well , with operations for drilling on each well being conducted with no cessation of more tha n ____ consecutive days. For purposes of this provision, completion of a well shall be deemed the da te on which the applicable report on a producing well or dry hole is filed with the governmenta l agency having jurisdiction. Commencement of operations shall be deemed to occur when a well is staked. Notwithstanding the termination of this Lease as to a portion of the lands, Lessee shal l continue to have the right of ingress and egress from the lands still subject to this Le ase for all purposes provided in this Lease, together with easements and rights of way for roads, pipelines and other facilities on, over and across all the lands originally covered by this Lease , for access to and from the lands still subject to this Lease, and for the gathering of transportati on of oil and/or gas produced from the retained lands. This provision affects the secondary term of this Lease, but it shall not alter the effect of any other provisions of this Lease whic h relate to lease maintenance before or after the application of this provision, including, without limit ation, the shut-in provisions, the savings clause, and the force majeure clause. Form 5. After the expiration of the primary term of this Lease, to maintain it i n full force and effect, Lessee must continuously develop all of the lands covered by this Lease without allowing more than ____ days to elapse between the completion of one well and the commence ment of actual drilling on the next succeeding well. The first continuous development well m ust be commenced within ____ days after the end of the primary term of the Lease if a we ll was completed as a producer or a dry hole within the primary term of the Lease, or within ____ days after the completion of any well which is being drilled at the end of the primary term, whichever is the later date. Completion of a producing well shall be deemed the date of t he potential test of the well or the expiration of a period of ____ days after all good faith operations for drilling, testing or completing the well have ceased, whichever is the earlier time. C ompletion of a dry hole shall be the date when a well is plugged and abandoned, or the expiration of a pe riod of ____ days during which good faith operations for drilling, testing, or plugging and abandoning the well have ceased, whichever is the earlier time. For the purposes of this provi sion, “actual drilling” shall be the date on which Lessee stakes the location of a well. Aft er the end of the primary term of this Lease, regardless of the number of wells which have been drilled and whether any more wells can be drilled on the lease premises in any formation from which production has been obtained, if Lessee fails to commence the actual of another well within the required _____ day period, this Lease shall terminate as to all of the lands covere d by the Lease except for the minimum amount of acreage necessary to be allocated to each producing well for full allowable production under the then applicable rules and regulations (regardless of what allocation Lessee shall actually have made to the well) and as to all de pths down to a depth of 100 feet below the total depth drilled in each producing well. After the partial termination, the Lease on the lands held by a producing well shal l, for the purposes of determining this Lease's maintenance by production or operations, be treate d as if it were a separate lease from the Lease covering the lands allocable t o each other well so that this Lease shall, as to each well, remain in force only so long as oil or gas i s produced from the lands surrounding the well or the Lease is otherwise maintained in force and effect under some other provision of this Lease as to each tract of land on which a well is located. At any time after the Lease partially terminates under this continuous developm ent provision, if the applicable rules of the governmental agency having jurisdiction over the le ase premises are changed so that an additional well or wells can be drilled for producti on from the formation from which a well is producing at the time of the partial terminati on on the acreage which was held by a well at that time, Lessee shall commence the drill ing of an additional well on any of the land then covered by this Lease (considering all of the land which is still covered by this Lease as being subject to one lease, notwithstanding the fact it has be en treated as separate leases by virtue of other parts of this provision) within ____ days after such rules and regulations are changed, and shall continue to drill additional wells on lands covered by this Lease (treating all lands being subject to one lease) without more than ____ days ela psing between the completion of one well and the commencement of actual drilling on the next succeeding well. Each well shall be drilled with due diligence and to a de pth sufficient to fully test the formation from which the existing well is producing. Regardless of how many wells have been drilled or whether or not any more wells can be drilled on the land, into tha t formation, if Lessee fails to commence actual drilling of an additional well within _____ days after the completion of a previous well, this Lease shall terminate as to al l lands except the lands allocated to each then producing well under applicable regulations of the government al agency having jurisdiction over the lease premises. Only the minimum amount of land to be a llocated to a well for a full allowable under the then applicable rules and regulations shall be held by a well. If a gas well is completed on this Lease and is ever reclassified as an oil well, or if a gas well is completed and one or more oil wells is also drilled on land which is hel d by the gas well, after the time for partial termination of this Lease, and the gas well then c eases to produce gas or is reclassified as an oil well, Lessee shall, within _____ days after the gas well is reclassified as an oil well or is plugged and abandoned, as the case may be, commence the act ual drilling of an additional well on the lands formerly held by the gas well, continue to drill additiona l wells without cessation of more than ____ days between the completion of one well and the commencement of actual drilling of the next well, each of which well shall be drilled with due diligence to a depth sufficient to fully test any formation from which oil is being produce d, or if no oil is being produced, to the depth of the gas well or to the depth of actual production of oil or gas in paying quantities. Regardless of how many wells have been drilled on the lands or whether or not any other wells can be drilled into the objective formation under appli cable regulations, if Lessee fails to commence actual drilling of an additional well within the _____ day period on the land formerly held by the gas well, this Lease shall terminate insofar as it covers all lands previously held by the gas well except that which is then allocat ed to a producing well (for either oil or gas), but shall remain in force as to all depths as to which it was previously in force at the time when the gas well was plugged and abandoned or reclassifie d. Only the minimum amount of acreage necessary to be allocated to a well for a full allowable under then applicable field rules and regulations shall be held by a well. In the event of a partial termination of this Lease, Lessee shall execute and deliver to Lessor a partial release of this Lease as to all of the lands and depths which ha ve expired, under this provision. Form 6. At the end of ____ years after the primary term of this Lease, it shall terminate : (i) as to all depths ___ feet below the stratigraphic equivalent of the deepest producing depth in any well commenced on or before the expiration of the primary term on the lease premises or on any land pooled with the lease premises; and, (ii) as to all of the lease premises outsi de producing/proration units which are prescribed by the governing governmental agency.