Operator’s Lien. Operator is given a first and preferred lien on the interest of each party covered by this contract, and on each party's interest in oil and gas produced and the proceeds thereof, and upon each party's interest in material and equipment, to secure the payment of all sums due from each such party to Operator. In the event any party fails to pay any amount owing by it to Operator as its share of such costs and expenses or such advance estimate, Operator shall, as promptly as possible, report the emergency to the other parties. If all parties hereto cannot mutually agree upon the drilling, reworking, deepening or redrilling of any well or wells covered by this Agreement and jointly owned by all of the ▇▇▇▇ies, any party or parties wishing to drill, rework, redrill, or deepen such a well or wells may give the other parties written notice of the proposed ▇▇▇▇▇tions specifying the work to be performed, proposed depth, objective formation and the estimated cost of the operation. The parties receiving such a notice shall have ten (10) days after receipt of the notice within which to notify the parties wishing to do the work whether they elect to participate in the cost of the proposed operation. Failure of a party receiving such a notice to so reply to it within the period above fixed shall constitute an election by that party not to participate in the cost of the proposed operations. The entire cost and risk of conducting such operations shall be borne by the parties electing to participate in the proposed operation, such parties hereinafter referred to as "consenting parties" in the proportion that their respective interests bear to the total interest of all consenting parties. Consenting parties shall keep the leasehold estate involved in such operations free and clear of all liens and encumbrances of every kind created by or arising from the operations of the consenting parties. If such an operation results in a dry hole, the consenting parties shall plug and abandon the well at their sole cost, risk and expense. If any well drilled, reworked, deepened or redrilled under the provisions of this section results in a producer of oil and/or gas in paying quantities, the consenting parties shall complete and equip the well to produce at their sole cost and risk, and the well shall then be turned over to the Operator and shall be operated by it at the expense and for the account of the consenting parties. Upon commencement of operations for the drilling, reworking, deepening, or redrilling of any such well by consenting parties in accordance with the provisions of this section, each non-consenting party shall be deemed to have relinquished to consenting parties, and the consenting parties shall own and be entitled to receive, in proportion to their respective interest, all of such non-consenting party's interest in the well, its leasehold operating rights and share of production therefrom until the proceeds or market value thereof (after deducting production taxes, royalty, overriding royalty and other interests payable out of or measured by the production from such well accruing with respect to such interest until it reverts) shall equal the total of the following: A. 500 percent of each non-consenting party's share of newly acquired surface equipment beyond the wellhead connections (including, but not limited to, stock tanks, separators, treaters, pumping equipment and piping), plus 300 percent of each such non-consenting party's share of the B. 500 percent of that portion of the costs and expenses of drilling, reworking, deepening or redrilling, testing and completing, and 500 percent of that portion of the cost of newly acquired equipment in the well (to and including the well-head-connections) which would have been chargeable to such non-consenting party if it had participated therein. In the case of any reworking, plugging back, or deeper drilling operation, the consenting parties shall be permitted to use, free of cost, all casing, tubing and other equipment in the well; but the ownership of all such equipment shall remain unchanged and upon abandonment of a well after such reworking, plugging back or deeper drilling, the consenting parties shall account for all such equipment to the owners thereof, with each party receiving its proportionate part in kind or in value. If and when the consenting parties recover from a non-consenting party's relinquished interest the amount provided for above, the relinquished interest of such non-consenting party shall automatically revert to it, and from and after such reversion, such non-consenting party shall own the same interest in such well, the operating rights and working interest therein, the material and equipment in or pertaining thereto, and the production therefrom as such non-consenting party would have owned had it participated in the drilling, reworking, deepening or redrilling of said well. Thereafter, such non-consenting party shall be charged with and shall pay its proportionate part of the further costs of the operation of said well in accordance with the terms of this Agreement and the accounting procedure schedule, Exhibit Two, attached hereto.
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Operator’s Lien. Operator is given a first and preferred lien on the interest of each party covered by this contract, and on each party's interest in oil and gas produced and the proceeds thereof, and upon each party's interest in material and equipment, to secure the payment of all sums due from each such party to Operator. In the event any party fails to pay any amount owing by it to Operator as its share of such costs and expenses or such advance estimate, Operator shall, as promptly as possible, report the emergency to the other parties. If all parties hereto cannot mutually agree upon the drilling, reworking, deepening or redrilling of any well or wells covered by this Agreement and jointly owned by all of the ▇▇▇▇ies, any party or parties wishing to drill, rework, redrill, or deepen such a well or wells may give the other parties written notice of the proposed ▇▇▇▇▇tions specifying the work to be performed, proposed depth, objective formation and the estimated cost of the operation. The parties receiving such a notice shall have ten (10) days after receipt of the notice within which to notify the parties wishing to do the work whether they elect to participate in the cost of the proposed operation. Failure of a party receiving such a notice to so reply to it within the period above fixed shall constitute an election by that party not to participate in the cost of the proposed operations. The entire cost and risk of conducting such operations shall be borne by the parties electing to participate in the proposed operation, such parties hereinafter referred to as "consenting parties" in the proportion that their respective interests bear to the total interest of all consenting parties. Consenting parties shall keep the leasehold estate involved in such operations free and clear of all liens and encumbrances of every kind created by or arising from the operations of the consenting parties. If such an operation results in a dry hole, the consenting parties shall plug and abandon the well at their sole cost, risk and expense. If any well drilled, reworked, deepened or redrilled under the provisions of this section results in a producer of oil and/or gas in paying quantities, the consenting parties shall complete and equip the well to produce at their sole cost and risk, and the well shall then be turned over to the Operator and shall be operated by it at the expense and for the account of the consenting parties. Upon commencement of operations for the drilling, reworking, deepening, or redrilling of any such well by consenting parties in accordance with the provisions of this section, each non-consenting party shall be deemed to have relinquished to consenting parties, and the consenting parties shall own and be entitled to receive, in proportion to their respective interest, all of such non-consenting party's interest in the well, its leasehold operating rights and share of production therefrom until the proceeds or market value thereof (after deducting production taxes, royalty, overriding royalty and other interests payable out of or measured by the production from such well accruing with respect to such interest until it reverts) shall equal the total of the following:
A. 500 percent of each non-consenting party's share of newly acquired surface equipment beyond the wellhead connections (including, but not limited to, stock tanks, separators, treaters, pumping equipment and piping), plus 300 percent of each such non-consenting party's share of thethe cost of operation of the well commencing with first production and continuing until each such non-consenting party's relinquished interest shall revert to it under other provisions of this section. It being agreed that each non-consenting party's share of which would have been chargeable to each non-consenting party had it participated in the well from the beginning of the operation; and
B. 500 percent of that portion of the costs and expenses of drilling, reworking, deepening or redrilling, testing and completing, and 500 percent of that portion of the cost of newly acquired equipment in the well (to and including the well-head-connections) which would have been chargeable to such non-consenting party if it had participated therein. In the case of any reworking, plugging back, or deeper drilling operation, the consenting parties shall be permitted to use, free of cost, all casing, tubing and other equipment in the well; but the ownership of all such equipment shall remain unchanged and upon abandonment of a well after such reworking, plugging back or deeper drilling, the consenting parties shall account for all such equipment to the owners thereof, with each party receiving its proportionate part in kind or in value. If and when the consenting parties recover from a non-consenting party's relinquished interest the amount provided for above, the relinquished interest of such non-consenting party shall automatically revert to it, and from and after such reversion, such non-consenting party shall own the same interest in such well, the operating rights and working interest therein, the material and equipment in or pertaining thereto, and the production therefrom as such non-consenting party would have owned had it participated in the drilling, reworking, deepening or redrilling of said well. Thereafter, such non-consenting party shall be charged with and shall pay its proportionate part of the further costs of the operation of said well in accordance with the terms of this Agreement and the accounting procedure schedule, Exhibit Two, attached hereto.
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