OVERHEAD CHARGES. The Operator shall charge the amounts provided for below in this Section III as compensation for administrative, supervision, office services, overhead and warehousing costs, including overhead costs incurred in the construction and installation of fixed assets, the expansion of fixed assets and other projects required for the development and operation of the Joint Property. Such charges shall be in lieu of costs and expenses of all offices and salaries or wages plus applicable burdens and expenses of all personnel, except those directly chargeable under Paragraph 2A, Section II. The cost and expense of services from outside sources in connection with matters of taxation, traffic, accounting or matters before or involving governmental agencies and the salaries, wages and Personal Expenses of Technical Employees and/or the cost of professional consultant services and contract services of technical personnel shall be considered as included in such charges except those directly chargeable under Paragraphs 6 and 9, Section II. A. The Operator shall charge the Joint Account for each drilling well which is operated by the Operator on behalf of Non-Operator a rate per month equal to $3,925 (pro rated for less than a full month), and a proportionate amount of such rate for a drilling well which is owned less than 100% by Non-Operator, such proportionate amount to be based on the net working interest of Non-Operator in such well. Drilling well charges shall be determined on the following basis: (1) Charges for drilling ▇▇▇▇▇ shall begin on the date the well is spudded and terminate on the date the drilling or completion rig is released, whichever is later, except that no charge shall be made during suspension of drilling operations for 15 or more consecutive days. (2) Charge for ▇▇▇▇▇ undergoing any type of workover or recompletion for a period of five consecutive days or more shall be made at the drilling well rate. Such charges shall be applied for the period from date workover operations, with rig, commence through date of rig release, except that no charge shall be made during suspension of operations for 15 or more consecutive days. B. The Operator shall charge the Joint Account for each producing well which is operated by the Operator on behalf of Non-Operator a rate per month equal to the Agreed Overhead Charge and a proportionate amount of such rate for a producing well which is owned less than 100% by Non-Operator, such proportionate amount to be based on the net working interest of Non-Operator in such well. Producing well charges shall be determined on the following basis: (1) An active well either produced or injected into for any portion of the month shall be considered as a one-well charge for the entire month. (2) Each active completion in a multi-completed well in which production is not commingled down hole shall be considered as a one-well charge providing each completion is considered a separate well by the governing regulatory authority. (3) A one-well charge may be made for the month in which plugging and abandonment operations are completed on any well. (4) All inactive ▇▇▇▇▇ (including but not limited to inactive gas ▇▇▇▇▇ shut in because of overproduction or failure of purchaser to take the production and inactive ▇▇▇▇▇ covered by unit allowable, lease allowable, transferred allowable, etc.) shall not qualify for an overhead charge. C. The Operator shall charge the Joint Account a rate or rates (reduced proportionately for the interest of Non- Operator therein) in connection with the construction and installation of fixed assets, the expansion of fixed assets, and any other project clearly discernible as a fixed asset required for the development and operation of the Joint Property either (a) on the same terms and conditions as the Operator charges unrelated parties, or (b) a Majority of the Members, knowing the material facts of the transaction and the Operator's interest, authorize, approve, or ratify the charge. The well rates provided for in Section III. 1.A. and B. shall be adjusted as of the first day of April each year following the effective date of the Agreement. The adjustment shall be computed by multiplying the rate currently in use by the Overhead Adjustment Index published by ▇▇▇▇▇ then in effect. The adjusted rates shall be the rates currently in use, plus or minus the computed adjustment. IV. PRICING OF JOINT ACCOUNT MATERIAL PURCHASES, TRANSFERS AND DISPOSITIONS Operator is responsible for Joint Account Material and shall make proper and timely charges and credits for all material movements affecting the Joint Property. Operator shall provide all Material for use on the Joint Property. Operator shall make timely disposition of idle and/or surplus Material.
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OVERHEAD CHARGES. The Operator shall charge the amounts provided for below in this Section III as compensation for administrative, supervision, office services, overhead and warehousing costs, including overhead costs incurred in the construction and installation of fixed assets, the expansion of fixed assets and other projects required for the development and operation of the Joint Property. Such charges shall be in lieu of costs and expenses of all offices and salaries or wages plus applicable burdens and expenses of all personnel, except those directly chargeable under Paragraph 2A, Section II. The cost and expense of services from outside sources in connection with matters of taxation, traffic, accounting or matters before or involving governmental agencies and the salaries, wages and Personal Expenses of Technical Employees and/or the cost of professional consultant services and contract services of technical personnel shall be considered as included in such charges except those directly chargeable under Paragraphs 6 and 9, Section II.
A. The Operator shall charge the Joint Account for each drilling well which is operated by the Operator on behalf of Non-Operator a rate per month equal to $3,925 generally charged by qualified third party operators in the area where a well is located (pro rated for less than a full month), except that if a drilling well is owned less than 100% by Non-Operator, such rate shall be a proportionate amount thereof (such proportionate amount to be based on the net working interest of Non-Operator in such well). Drilling well charges shall be determined on the following basis:
(1) Charges for drilling wells shall begin on the date when drilling or complet▇▇▇ ▇quipment arrives on location and terminate on the date the drilling or completion equipment moves off location or rig is released, whichever occurs first, except that no charge shall be made during suspension of drilling operations for fifteen (15) or more consecutive calendar days.
(2) Charges for wells undergoing any type of workover or recompletion ▇▇▇ ▇ period of four (4) consecutive work days or more shall be made at the drilling well rate and a proportionate amount of such rate for a drilling well which is owned less than 100% by Non-Operator, such proportionate amount to be based on the net working interest of Non-Operator in such well. Drilling well charges shall be determined on the following basis:
(1) Charges for drilling ▇▇▇▇▇ shall begin on the date the well is spudded and terminate on the date the drilling or completion rig is released, whichever is later, except that no charge shall be made during suspension of drilling operations for 15 or more consecutive days.
(2) Charge for ▇▇▇▇▇ undergoing any type of workover or recompletion for a period of five consecutive days or more shall be made at the drilling well rate. Such charges shall be applied for the period from date workover operations, with rigrig or other units used in workover, commence through date of rig or other unit release, except that no charge shall be made during suspension of operations for 15 fifteen (15) or more consecutive calendar days.
B. The Operator shall not be entitled to charge the Joint Account for each any amount under this Section III with respect to the producing well which is wells operated by the Operator on behalf of Non-Operator a rate per month equal to the Agreed Overhead Charge and a proportionate amount of such rate for a producing well which is owned less than 100% by Non-Operator, such proportionate amount to be based on the net working interest of Non-Operator in such well. Producing well charges shall be determined on the following basis:
(1) An active well either produced or injected into for any portion of the month shall be considered as a one-well charge for the entire month.
(2) Each active completion in a multi-completed well in which production is not commingled down hole shall be considered as a one-well charge providing each completion is considered a separate well by the governing regulatory authority.
(3) A one-well charge may be made for the month in which plugging and abandonment operations are completed on any well.
(4) All inactive ▇▇it be▇▇▇ (including but not limited to inactive gas ▇▇▇▇▇ shut greed that the Management Fee payable under the Agreement shall constitute full and complete reimbursement for any overhead charges of the Operator in because respect of overproduction or failure of purchaser to take the production and inactive ▇▇▇▇▇ covered by unit allowable, lease allowable, transferred allowable, etc.) shall not qualify for an overhead chargesuch producing wells.
C. The Operator shall charge the Joint Account a rate or rates ▇▇ ▇▇tes (reduced proportionately for the interest of Non- Non-Operator therein) generally charged by qualified unrelated third parties in connection with the construction and installation of fixed assets, the expansion of fixed assets, and any other project clearly discernible as a fixed asset required for the development and operation of the Joint Property either (a) on the same terms and conditions as the Operator charges unrelated parties, or (b) a Majority of the Members, knowing the material facts of the transaction and the Operator's interest, authorize, approve, or ratify the charge. The well rates provided for in Section III. 1.A. and B. shall be adjusted as of the first day of April each year following the effective date of the Agreement. The adjustment shall be computed by multiplying the rate currently in use by the Overhead Adjustment Index published by ▇▇▇▇▇ then in effect. The adjusted rates shall be the rates currently in use, plus or minus the computed adjustment. IV. PRICING OF JOINT ACCOUNT MATERIAL PURCHASES, TRANSFERS AND DISPOSITIONS Operator is responsible for Joint Account Material and shall make proper and timely charges and credits for all material movements affecting the Joint Property. Operator shall provide all Material for use on the Joint Property. Operator shall make timely disposition of idle and/or surplus Material.
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