This form is one which grants the Operator the right to request and receive from each Non-Operator payment in advance of its respective share of (i) the dry hole cost or (at Operator’s election) the completed well cost for the Initial Well to be drilled.
Puerto Rico Advance of Well Costs refers to a financial program provided to oil and gas operators in Puerto Rico to assist with the upfront expenses associated with the drilling and development of oil and gas wells. This funding mechanism helps operators mitigate the financial burden of well development, allowing them to kick-start drilling projects more efficiently. The Puerto Rico Advance of Well Costs encompasses various types of financing options tailored to different stages of well development: 1. Exploration Financing: This type of advance provides funds to cover preliminary exploration activities such as seismic surveys, geological studies, and other research required to identify potential drilling sites. 2. Pre-Production Financing: Once a viable site has been identified, this financing option helps operators cover the costs of well planning, acquisition of permits and licenses, and other pre-production activities needed before drilling can commence. 3. Drilling Financing: This advance type focuses on funding the actual drilling operations, including the costs associated with hiring drilling contractors, equipment leasing, well bore construction, and related expenses. 4. Completion Financing: After drilling, the completion phase involves preparing the well for production. This financing option covers costs for well completion activities like casing, cementing, perforating, and installation of production equipment. 5. Production Financing: Once the well is drilled and completed, operators may require funds for initial production activities, including well testing, optimization, and setting up infrastructure for extracting and transporting oil and gas. 6. Operations Financing: Ongoing operational costs such as maintenance, well monitoring, safety measures, and routine servicing can be covered by this financing option, ensuring smooth and uninterrupted production. It is important for oil and gas operators in Puerto Rico to take advantage of the Puerto Rico Advance of Well Costs program as it provides a valuable resource for acquiring the necessary funding at each stage of well development. By utilizing these financing options, operators can efficiently bring oil and gas wells into production, bolstering the energy industry in Puerto Rico and driving economic growth.
