Declaration of Commerciality and Development Plan Clause Samples

The Declaration of Commerciality and Development Plan clause requires a party, typically an operator in a resource development agreement, to formally declare when a discovery is considered commercially viable and to submit a plan for its development. In practice, this means that once a resource, such as oil or gas, is found and determined to be economically feasible to extract, the operator must notify the other parties and provide a detailed outline of how the resource will be developed, including timelines, methods, and investment requirements. This clause ensures that all parties are informed of significant milestones and that there is a clear, agreed-upon path forward for resource exploitation, thereby reducing uncertainty and facilitating coordinated project management.