Common use of Prior to Spudding Clause in Contracts

Prior to Spudding. In the event Operator terminates this Contract prior to spudding the well, Operator shall pay Contractor as liquidated damages, and not as a penalty, the percentage of all expenses reasonably and necessarily incurred and to be incurred by Contractor by reason of this Contract as specified in Appendix A and by reason of the premature stoppage of work, plus the sum specified in Appendix A.