A dry-hole clause is a provision in an oil or Natural gaslease specifying what a lessee must do to maintain the lease for the remainder of a primary term after drilling a "dry hole." Usually, the lessee will just have to pay delay rentals.
A dry-hole clause is a provision in a contract that is used to allocate the risks and costs associated with drilling for oil or natural gas in the event that the drilling does not result in the discovery of a viable resource.
In the oil and gas industry, exploration and production activities can be extremely expensive, and there is always the risk that a well will not produce the expected results.
A dry-hole clause is used to specify how the costs of drilling a dry hole (a well that does not produce a viable resource) will be shared between the parties involved in the project.
The specific terms of a dry-hole clause will depend on the specific circumstances of the project and the agreements that have been made between the parties involved.
Leading casesedit
Superior Oil Co. v. Stanolind Oil & Gas Co., 150 Tex. 317, 240 S.W.2d 281 (1951)
Murphy v. Garfield Oil Co., 98 Okla. 273, 225 P. 676 (1923)
This economics-related article is a stub. You can help Wikipedia by expanding it.
hole, clause, this, article, does, cite, sources, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, january, 2023, learn, when, remove, . This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Dry hole clause news newspapers books scholar JSTOR January 2023 Learn how and when to remove this message A dry hole clause is a provision in an oil or Natural gas lease specifying what a lessee must do to maintain the lease for the remainder of a primary term after drilling a dry hole Usually the lessee will just have to pay delay rentals A dry hole clause is a provision in a contract that is used to allocate the risks and costs associated with drilling for oil or natural gas in the event that the drilling does not result in the discovery of a viable resource In the oil and gas industry exploration and production activities can be extremely expensive and there is always the risk that a well will not produce the expected results A dry hole clause is used to specify how the costs of drilling a dry hole a well that does not produce a viable resource will be shared between the parties involved in the project The specific terms of a dry hole clause will depend on the specific circumstances of the project and the agreements that have been made between the parties involved Leading cases editSuperior Oil Co v Stanolind Oil amp Gas Co 150 Tex 317 240 S W 2d 281 1951 Murphy v Garfield Oil Co 98 Okla 273 225 P 676 1923 nbsp This economics related article is a stub You can help Wikipedia by expanding it vte Retrieved from https en wikipedia org w index php title Dry hole clause amp oldid 1131774038, wikipedia, wiki, book, books, library,
