Question on defind operations on expiration of vertical pugh clause-any one with knowledge of issue or any oil & gas attorney wish to answer?

Vertical pugh clause extention past expiration date by operations. Operations are (1) construction of drill site pad,(2) moving in rig on pad, or (3) actual spudding of well date? OR what other activity can E&P Co. do to extend the lease?

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Permalink Reply by The_Baron on September 25, 2008 at 8:08
Read the lease, operations may be defined. If not, it is open to some interpretation. Operations generally means any good faith attempts to explore for oil or gas. This could include building the site. Any work should be part of "continuing operations" take place in a timely manner. For example, building a location and leaving it for six months before moving in a rig would probally not be considered continuing operations.
Permalink Reply by adubu on September 25, 2008 at 10:54
Thanks Baron for reply. On futher review the vertical pugh clause may not be subject to the continuous operation clause.

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