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Simple English definitions for legal terms
continuous-operations clause
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A quick definition of continuous-operations clause:
A continuous-operations clause is a part of an oil-and-gas lease that allows the person leasing the land to keep drilling for oil or gas even after the lease has expired. This means they can continue drilling in any wells they started before the lease ended and can also start drilling new wells. It's like a permission slip that lets them keep working on the land even if the lease agreement has ended.
A more thorough explanation:
A continuous-operations clause is a provision in an oil-and-gas lease that allows the lessee to continue drilling any well that was started before the lease expired and to begin drilling more wells.
For example, if a company has a lease to drill for oil on a piece of land and they start drilling a well before the lease expires, the continuous-operations clause would allow them to continue drilling that well even after the lease has expired. It would also allow them to start drilling additional wells on the same land.
This clause is important for oil and gas companies because it allows them to continue their operations without interruption and to maximize the potential of the land they are leasing.