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.
South Dakota Advance of Well Costs refers to a financial assistance program that aids individuals or companies involved in the oil and gas industry in South Dakota. This program assists in covering the upfront expenses associated with drilling or developing oil and gas wells. The South Dakota Advance of Well Costs program aims to support the exploration and production of oil and gas resources within the state. It provides financial assistance to operators and investors by helping them offset the costs involved in drilling new wells or re-working existing ones. The funds allocated through the South Dakota Advance of Well Costs program can be utilized for various expenses incurred during the drilling process. These costs may include leasing of land, purchase of drilling equipment and machinery, labor expenses, permitting fees, geological surveys, engineering studies, and other related expenditures. This assistance not only helps in minimizing the financial burden associated with well development but also encourages the growth and development of the oil and gas industry in South Dakota. Types of South Dakota Advance of Well Costs: 1. Exploration Well Advance: This type of advance covers the expenses incurred during the initial exploration phase of a well. It includes costs associated with geological studies, seismic surveys, geophysical data acquisition, and analysis. 2. Drilling Well Advance: This advance is specifically designed to assist with the costs involved in drilling a new well. It encompasses expenditures such as drilling rig expenses, well casing, cementing, well logging, formation evaluation, and drilling fluid costs. 3. Work over Well Advance: Work over wells refer to existing wells that need repairs, maintenance, or enhancement to improve their production. This advance type assists in covering the expenses associated with well bore clean outs, replacing damaged equipment, well stimulation treatments, and other work over operations. 4. Permitting and Regulatory Compliance Advance: This advance focuses on supporting the costs related to obtaining permits and complying with the necessary regulations and environmental standards. It includes expenses associated with preparing and submitting applications, environmental impact assessments, compliance audits, annual reporting, and regulatory fees. 5. Equipment and Infrastructure Advance: This type of advance assists in funding the purchase or rental of specialized equipment required for drilling or maintaining wells, such as drill bits, casing, wellhead equipment, pumps, compression units, pipelines, or storage facilities. The South Dakota Advance of Well Costs program serves as a crucial support system for the oil and gas industry in South Dakota. By providing financial assistance for various well-related expenditures, it enhances the industry's ability to explore, develop, and produce oil and gas resources while encouraging economic growth and job creation within the state.
