This form is used in the event any part to this Agreement elects not to participate in a Horizontal Exploratory Well, the non-participating party shall, on commencement of operations for the well, relinquish to the participating party one hundred percent (100%) of its rights, title, and interests in and to that portion of the Contract Area included within the Drilling Unit for the well and one hundred percent (100%) of the party’s rights, title, and interests in and to that portion of the Contract Area.
The Colorado Relinquishment Provision — Horizontal Well is a specific provision within the regulations of the oil and gas industry in Colorado. It is designed to address the relinquishment of leases and areas of land related to horizontal well drilling operations. This provision is crucial for maintaining the balance between resource extraction and land preservation in the state. When it comes to different types of Colorado Relinquishment Provision — Horizontal Well, there are primarily two categories: the state-established relinquishment requirements and operator-initiated relinquishment. 1. State-established relinquishment requirements: These are rules and guidelines set by the Colorado Oil and Gas Conservation Commission (COG CC) that dictate when operators must relinquish control of lease acreage if certain conditions are not met. The specific requirements vary depending on the particular situation, but the overall intent is to prevent the unnecessary storage of undeveloped leases. — Yearly drilling requirements: In order to retain control over the lease acreage, operators must initiate drilling activities on a well within a specified period. Failure to meet these yearly drilling requirements may result in the relinquishment of the lease. — Production requirements: Operators must also demonstrate continuous production of oil or gas from a well to prevent relinquishment. If a well does not maintain a minimum level of production, the lease acreage associated with it may be subject to relinquishment. — Lease term expiration: Lastly, leases have predetermined terms that define the period of control granted to operators. If operators fail to complete the drilling and producing activities within the lease term, they may be required to relinquish the lease acreage. 2. Operator-initiated relinquishment: Apart from the state-established relinquishment requirements, operators may voluntarily choose to relinquish their lease acreage. This could be due to various reasons, such as strategic planning, economic factors, or changes in exploration priorities. When operators decide to relinquish, they must follow the appropriate regulatory process to ensure compliance with the Colorado Relinquishment Provision — Horizontal Well. In summary, the Colorado Relinquishment Provision — Horizontal Well is a critical component of the state's efforts to regulate horizontal well drilling. By setting guidelines for relinquishment, it ensures that operators maintain active operations and prevents the undue hoarding of leases. The provision also allows operators to voluntarily relinquish acreage if they deem it necessary. This balance between regulation and flexibility helps safeguard both the industry's interests and the overall environmental health and preservation of the state's land.
