International Drilling Services Total Contracting Agreement - English

('Note:Thismodelcontractisasuggestedguideonlyanduseofthisformoranyvariationthereofshallbeatthesolediscretionandriskoftheuserparties.Usersofthemodelcontractoranyportionthereofareencouragedtoseektheadviceofcounseltoensurethattheircontractreflectsthecompleteagreementofthepartiesandapplicablelaw.TheInternationalAssociationofDrillingContractorsdisclaimsanyliabilitywhatsoeverforlossordamageswhichmayresultfromuseoftheformcontractorportionsorvariationsthereof.RevisedApril,2003INTERNATIONALASSOCIATIONOFDRILLINGCONTRACTORSMODERLTURNKEYCONTRACTTHISCONTRACTCONTAINSPROVISIONSRELATINGTOINDEMNITY,RELEASEOFLIABILITY,ANDALLOCIATIONOFRESK,-SEEPARAGRAGHS4.7,6.2,14.2,AND18Thiscontractismadeofandenteredintoonthedatehereinaftersetforthbyandbetweenthepartieshereindesignedas“Operator”and“Contractor”.OPERATOR:Address:CONTRACTOR:Address:INCONDISERATIONofthemutualpromises,conditionsandagreementshereincontainedandthespecificationsandspecialprovisionssetforthinExhibit“A”andExhibit“B”attachedheretoandmadeaparthereof(the“Contract”),OperatorengagesContractorasanindependentcontractortodrillthehereinafterdesignedwellinsearchofoilorgasonaTurnkeyBasis.Forpurposehereoftheterm“Turnkey”or“TurnkeyBasis”meansContractorshallfurnishtheequipment,labor,andperformservicesashereinprovidedtodrillawell,asspecifiedbyOperator,totheTurnkeyDepth.Subjecttotermsandconditionshereof,paymenttoContractoratastipulatedpriceisearneduponattainingsuchTurnkeyDepthandcompletionoftheotherobligationsofContractorhereunder.WhiledrillingonaTurnkeyBasisContractorshalldirect,superviseandcontroldrillingoperationsandassumescertainliabilitiestotheextentspecificallyprovidedforherein.NotwithstandingthatthisisaTurnkeyContract,ContractorandOperatorrecognizethatcertainportionsoftheoperationsashereinafterdesignated,maybeperformedonaDayworkBasis.Forpurposehereoftheterm“Daywork”or“DayworkBasis”meansContractorshallfurnishequipment,labor,andperformservicesashereinprovided,foraspecifiedsumperdayunderthedirection,supervisionandcontrolofOperator(inclusiveofanyemployee,agent,consultant,orsubcontractorengagedbyOperatortodirectdrillingoperations).WhenoperatingonaDayworkBasis,ContractorshallbefullypaidattheapplicableratesofpaymentandassumesonlytheobligationsandliabilitiesstatedhereinasbeingapplicableduringDayworkoperations.ExceptforsuchobligationsandliabilitiesspecificallyassumedbyContractor,OperatorshallbesolelyresponsibleandassumesliabilityforallconsequencesofoperationsbybothpartieswhileonaDayworkBasis,includingresultsandallotherrisksorliabilitiesincurredinorincidenttosuchoperations.1.LOCATIONOFWELL:Wellnameandnumber:Parish/FieldCountry:State:Name:Welllocationandlanddescription:TheaboveisforwellandContractidentificationonlyandContractorassumesnoliabilitywhatsoeverforapropersurveyorlocationstakeonOperator’slease.2.COMMENCEMENTDATE:2.1Contractoragreestousereasonableeffortstocommenceoperationsforthedrillingofthewellbythedayof,20,or.2.2NotwithstandinganyprovisionsinthisContracttothecontrary,intheeventOperatorfails,foranyreason(including,butnotlimitedto,ForceMajeure),topermitContractortocommenceoperationsforthedrillingofthewellby,Contractormay,atitsoption,electtoterminatethisContract,andContractor’srighttocompensationshallbeassetforthinSubparagraph6.3(a)hereof.3.DEPTH:Subjecttotheprovisionshereof,thewellshallbedrilledtothedepthspecifiedbelow:3.1TurnkeyDepth:Thewellshallbedrilledtofeetoroftheformation,orthedepthatwhichtheinchcasingorlinerisset,whicheveristhelesserdepth,whichwillhereinbereferredtoastheTurnkeyDepth.3.2DayworkBasisDrilling:AlldrillingbelowTurkeyDepthandallworkperformedwhichisnotspecifiedhereintobeperformedbyContractoronaTurnkeyBasisshallbeperformedonaDayworkBasisasdefinedhereinandContractorshallbepaidforsuchdrillingandworkattheapplicableDayworkratespecifiedinParagraph4.3.3(a)ContractDepth:Thewellshallbedrilledtoatotaldepthoffeet,orformation,whicheverdepthisfirstreached,whichdepthishereunderreferredtoastheContractDepth.(b)MaximumDepth:ContractorshallnotberequiredtodrillsaidwellunderthetermsofthisContractbelowamaximumdepthoffeet.4.TURNKEYAMOUNT,DAYWORKRATES,BASISOFDETERMININGAMOUNTSPAYABLETOCONTRACOTR:Contractorshallbepaidasfollowsfortheworkperformedhereunder:4.1TurnkeyAmount:ForworkperformedonaTurnkeyBasisashereinprovidedtheamountwillbe$.TheTurnkeyamountwillbe$iftheTurnkeyDepthisreachedandthewellispluggedandabandoned.4.2OperatingRate:ForworkperformedonaDayworkBasistheoperatingratepertwenty-fourhourdaywithmancrewwillbe:DEPTHINTERVALSWITHOUTDRILLPIPEWITHDRILLPIPEDirectionalorUncontrolledFromToStraightHoleDeviatedHole$perday$perday$perday$perday$perday$perday$perday$perday$perdayUsingOperator’sdrillpipe$perdayDirectionaloruncontrolleddeviatedholewillbedeemedtoexistwhendeviationexceedsdegreeorwhenthechangeofangleexceedsdegreesperonehundredfeet.Drillpipeshallbeconsideredinusenotonlywheninactualuse,butalsowhileitisbeingpickeduporlaiddown.Whendrillpipeisstandinginthederrick,itshallnotbeconsideredinuse,provided,however,thatifContractorfurnishesspecialstringsofdrillpipe,drillcollars,andhandlingtoolsasprovidedinExhibit“A”,thesameshallbeconsideredinuseatalltimeswhenonlocationoruntilreleasedbyOperator.Innoeventshallfractionsofanhourbeconsideredincomputingtheamountoftimedrillpipeisinusebutsuchtimeshallbecomputedtothenearesthour,withthirtyminutesormorebeingconsideredafullhourandlessthanthirtyminutesnottobecounted.4.3RepairTime:IntheeventitisnecessarytoshutdownContractor’srigforrepairs,excludingroutinerigservicing,whileContractorisonaDayworkBasishereunder,ContractorshallbeallowedcompensationattheapplicableDayworkrateforsuchshutdowntimeuptoamaximumofhoursforanyonerigrepairjob,butnottoexceedhoursofsuchcompensationforanycalendarmonth.Routinerigservicingshallinclude,butnotbelimitedto,cuttingandslippingdrillingline,changingpumporswivelexpendables,testingBOPequipment,lubricatingrig,and.4.4StandbyTime:RatewithCrews$pertwenty-four(24)hourday.RatewithoutCrews$pertwenty-four(24)hourday.StandbytimeshallbedefinedtoincludetimewhenthefigisshutdownalthoughinreadinesstobeginorresumeoperationsbutContractoriswaitingonordersofOperatororonmaterials,servicesorotheritemstobefurnishedbyOperator.4.5WorkStoppageRate:$pertwenty-four(24)hourday.$perhour.Thisrateshallapplyunderthefollowingcircumstances:(a)DuringanycontinuousperiodthatnormaloperationsaresuspendedorcannotbecarriedonduetoconditionsofForceMajeureasdefinedinParagraph21hereof.Itisunderstood,however,thatOperatorshallhavetherighttoreleasetheriginaccordancewithOperator’srighttodirectstoppageofwork(seeParagraph6),effectivewhenconditionswillpermittherigtobemovedfromthelocation.(b)DuringanyperiodwhenContractorhasnotifiedOperatorthattherigisavailableformovementtothedrillingsiteandmovementcannotbeaccomplishedbecauseofOperator’sfailureorinabilitytofurnishand/ormaintainadequateroadwayorlocation.(c)DuringanyperiodafteroperationsunderthisContracthavebeencompletedandOperatorhasreleasedtherigandthesamecannotbedismantledand/ortransportedfromthelocationduetoinadequateroadwayorlocation.4.6DrillingFluidRates:ForworkperformedonaDayworkBasis,whendrillingfluidsofatypeandcharacteristicthatincreasesContractor’scostofperformancehereunder,including,butnotlimitedto,oil-basedmudorpotassiumchlorideareinuse,OperatorshallpayContractorinadditiontotheoperatingratespecifiedabove:(a)$permanperdayforContractor’srig-sitepersonnel;(b)$perdayadditionaloperatingrate;and(c)hoursoperatingratetocleanrigandrelatedequipment.4.7ReimbursableCosts:OperatorshallreimburseContractorforthecostofmaterial,equipment,workorserviceswhicharetobefurnishedbyOperatorasprovidedforhereinbutwhichforconvenienceareactuallyfurnishedbyContractoratOperator’srequests,pluspercentforsuchcostofhandling.When,atOperator’srequestandwithContractor’sagreement,theContractorfurnishesorsubcontractsforcertainitemsorserviceswhichOperatorisrequiredhereintoprovide,forpurposesoftheindemnityandreleaseprovisionsofthisContract,thesaiditemsorservicesshallbedeemedtobeOperatorfurnisheditemsorservices.AnysubcontractorssohiredshallbedeemedtobeOperator’scontractor,andOperatorshallnotberelievedofanyofitsliabilitiesinconnectiontherewith.4.8DayworkOperations:Inadditiontootherworkspecifiedherein,thefollowingworkperformedbyContractorshallbeonaDayworkBasis:(a)AlldrillingaftercompletionofTurnkeydrillingincludingthesettingofanystringofcasingbelowtheTurnkeyDepth.(b)AllworkperformedbyContractor,whetherornotpriortoreachingtheTurnkeyDepth,inanefforttorestoretheholetosuchconditionthatfurtherdrillingorotheroperationsmaybeconducted,intheeventoflossordamagetotheholeasaresultofanydelaybyOperatororthefailure,atanytime,ofmaterials,equipment,goodsorservicesfurnishedbyOperator.(c)AllotherworkperformedbyContractorattherequestofOperator,regardlessofdepth,whichisnotspecifiedhereintobeperformedontheTurnkeyBasis.(d)AlltimewhenContractor,inaccordancewiththetermshereof,hassuspendedTurnkeyoperationstoprepareforDayworkoperations,includingalltimerequiredtorestoretheholetothesamedrillingconditionwhichexistedwhenTurnkeyoperationsweresuspended.5.TIMEOFPAYMENT:PaymentisduebyOperatortoContractorasfollows:5.1TurnkeyBasis:PaymentbecomesdueforallTurnkeyserviceswhenContractorcompletesthedrillingtoTurnkeyDepthandperformstheservicesasspecifiedunderthisContract.PaymentforsuchworkshallbedueandpayableuponpresentationofinvoicetoOperatorandOperator’sacceptanceofworkperformedasspecifiedinParagraph10.5.2DayworkBasis:PaymentfordrillingandotherworkperformedatDayworkratesshallbecomedueuponacceptancebyOperatoroftheworkperformedinaccordancewiththisContractuponpresentationofinvoicethereforeuponcompletionofdemobilization,rigreleaseorattheendofthemonthinwhichsuchDayworkwasperformed,whichevershallfirstoccur.5.3LatePayment:Anysumorsumsnotpaidwithindaysafterthedatehereinabovespecifiedshallbearinterestattherateofpercentperannumorthemaximumlegalrate,whicheverisless,formsuchdateuntilpaid.6.STOPPAGEOFWORKBYOPERATORORCONTRACTOR:6.1ByOperator:NotwithstandingtheprovisionsofParagraph3withrespecttothedepthtobedrilled,OperatorshallhavetherighttodirectthestoppageofworktobeperformedbytheContractorhereunderatanytimepriortoreachingtheTurnkeyDepth,andeventhoughContractorhasmadenodefaulthereunder,insucheventOperatorshallbeundernoobligationtoContractorexceptassetforthinSubparagraph6.3hereof.6.2ByContractor:NotwithstandingtheprovisionsofParagraph3withrespecttothedepthtobedrilled,shouldOperatorfailtomakeanypaymentwhendueinaccordancewiththisContractorshouldthedrillingunitbelostordestroyedorintheeventOperatorshallbecomeinsolvent,orbeadjudicatedbankrupt,orfile,bywayofpetitionoranswer,adebtor’spetitionorotherpleadingseekingadjustmentofOperator’sdebts,underanybankruptcyordebtor’srelieflawsnoworhereafterprevailing,orifanysuchbefiledagainstOperator,orincaseareceiverbeappointedoftheOperatororOperator’sproperty,oranypartthereof,orOperator’saffairsbeplacedinthehandsofaCreditor’sCommittee,Contractormay,atitsoption,electtoterminatefurtherperformanceofanyworkunderthisContractandContractor’srighttocompensationshallbesetforthinSubparagraph6.3hereof.InadditiontoContractor’srightstoterminateperformanceunderParagraphs6and18,Operatorherebyexpresslyagreestoprotect,indemnifyandsaveContractorharmlessfromanyclaims,demandsandcausesofaction,includingallcostsofdefenseinfavorofOperator,Operator’sco-ventures,oranyotherpartiesarisingoutofanydrillingcommitmentsorobligationscontainedinanylease,farmoutagreementorotheragreement,whichmaybeaffectedbysuchterminationofperformancehereunder.6.3EarlyTerminationCompensation:(a)PriortoCommencement:IntheeventOperatorterminatesthisContractpriortocommencementofoperationshereunder,OperatorshallpayContractorasliquidateddamages,andnotasapenalty,percentofallexpensesreasonablyandnecessarilyincurredandtobeincurredbytheContractorbyreasonofthisContractandbyreasonoftheprematurestoppageofwork,plusthesumof$.(b)AfterCommencement:Ifsuchworkstoppageoccursaftercommencementofoperation,butbeforetheTurnkeyDepthisreached,theOperatorshallpayContractorasliquateddamagesandnotasapenalty:(1)anamountequaltothenumberofdaystherigwasmoving(includingtimespentriggingupanddismantlingtherig)orinoperationattheapplicablerateshowninSubparagraph4.2;plus(2)percentofthecostofallitemsfurnishedbytheContractorthatwouldhavebeenfurnishedbytheOperatoriftheContracthadbeenonaDayworkBasis;plus(3)percentofthecostofallotherexpensesreasonablyandnecessarilyincurredandtobeincurredbyContractorbyreasonofthisContractandbyreasonoftheprematurestoppageofworkexcluding,however,theexpensesofnormaldrillingcrewandsupervision;plus(4)Thesumof$.7.CASINGPROGRAM:7.1ThecasingprogramtobefollowedinthedrillingofsaidwellissetforthinExhibit“A”,Paragraph2andContractorshalldrillaholeofsizespecifiedinExhibit“A”,Paragraph2,tosetattheapproximatedepththereinindicatedthesizeofcasingsospecified.7.2ThesettingofanystringofcasingwithintheTurnkeyDepthshallbeperformedasspecifiedinExhibit“A”,Paragraph10.7.3ThesettingofanystringofcasingbelowtheTurnkeyDepthshallbeperformedonaDayworkBasis.7.4OperatororContractormaymodifysaidcasingprogramprovidedanymodificationsthereofwhichmateriallyincreaseContractor’shazardsorcostsofperformingitsobligationshereundercanonlybemadebymutualwrittenconsentofContractorandOperator.InsucheventContractoragreestoruncasing,cementandtestcementonsuchlinersandstringsofcasingandtoperformcementsqueezingjobsasrequiredbyOperator.OperatorshallfurnishallnecessarymaterialsandservicesandallsuchworkshallbeonaDayworkBasis.8.LABOR,EQUIPMENT,MATERIALS,SUPPLIES,ANDSERVICES:Thefurnishingoflabor,equipment,appliances,materials,suppliersandservicesofwhatevercharacternecessaryorproperinthedrillingandcompletionofsaidwellandnototherwisespecificallyprovidedforhereinshallbefurnishedbyContractororOperatorasspecifiedinExhibit“A”.9.DRILLINGMETHODSANDPRACTICES:9.1Contractorshallmaintainwellcontrolequipmentingoodconditionatalltimesandshalluseallreasonablemeanstopreventandcontrolfiresandblowoutsandtoprotectthehole.9.2ThedrillingmudshallbeprovidedbythepartydesignatedinExhibit“A”,Subparagraph10.38.TheContractorshallhavetherighttocontrolthemudprogramanddeterminethetypeandcharacterofdrillingfluidduringthetimethatContractorisperformingworkonaTurnkeyBasisunderthetermsofthisContractasspecifiedinExhibit“A”,Paragraph5.9.3Subjecttothetermshereof,atalltimesduringthedrillingofthewellonaDayworkBasisOperatorshallhavetherighttocontrolthemudprogram,andthedrillingfluidmustbeofatypeandhavecharacteristicsacceptabletoOperatorandbemaintainedbyContractorinaccordancewithspecificationsshowninParagraph5ofExhibit“A”.ThecostofmaintainingthedrillingfluidwhileonDayworkwillbebornebythepartydesignatedinExhibit“A”,Subparagraph10.38.NochangeormodificationofsaidspecificationwhichincreasesContractor’shazardsorcostsofperformingitsobligationshereundershallbemadebyOperatorwithoutconsultationwithandconsentofContractor.OperatorshallhavetherighttomakeanytestsofthedrillingfluidwhichmaybenecessaryatOperator’sexpense.9.4ContractorshallmeasurethetotallengthofdrillpipeinservicewithasteeltapeatthepointwheretheTurnkeyDepthhasbeenreached;andwhenrequestedbyOperator,onaDayworkBasis,beforesettingcasingorlinerandafterreachingfinaldepth.9.5Contractoragreestofurnishequipment,workmenandinstrumentsacceptabletoOperatorandtomakeslopetestsasprovidedinExhibit“A”,Paragraph4.AllsuchslopetestsshallbemadeatContractor’ssolerisk,costandexpenseuntilTurnkeyDepthisreachedwhileworkinginaTurnkeyBasis.If,intheopinionofOperator,itbecomesadvisabletoobtaintheuseofanadditionalslopetestinstrumentandaccessoryequipmentforthepurposeeitherofcheckingpreviousreadingsorofdeterminingthedirectionofthedrift,therentalchargesthereforeshallbepaidbyOperator,andtherunningofsameshallbeonaDayworkBasis.Shouldthehole,atanydepthduringthetimeContractorisperformingworkonaTurnkeyBasis,haveeitheradeviationfromverticalorachangeinoverallangleinexcessofthelimitsprescribedinExhibit“A”,Paragraph4,ContractoragreestorestoretheholetoaconditionsuitabletoOperatoreitherbyconventionalmethodsandprocedureswhiledrillingaheadorbycementingoffandredrilling.WhileoperationsarebeingperformedonaDayworkBasis,orafterTurnkeyDepthisreached,Contractoragreestoexerciseduediligenceandshallmaintainthestraightholespecifications,ifany,setforthinParagraph4ofExhibit“A”,butallriskandexpenseofmaintainingsuchspecificationsorrestoringtheholetoaconditionsuitabletoOperatorshallbeassumedbyOperator.10.TURNKEYCOMMITMENTANDLIABILITY:10.1UponcompletionofContractorofalloperationstobeperformedbyitundertheTurnkeyBasisasspecifiedinExhibit“A”,Paragraph10,ContractorshallnotifyOperatorofsuchcompletionbynotingthedateandhourofsuchcompletionuponthedailyreportfromrequiredbySubparagraph12.1hereof.Nolaterthantwenty-four(24)hoursafterOperator’sreceiptofsuchnotation,OperatorshalladviseContractorinwritingofanyobjectionsitmayhavewithrespecttoContractor’sperformancehereunder.Operator’sfailuretosoobjecttoContractor’sperformancewithinthespecifiedperiodshallbeconclusiveproofofOperator’sacceptanceofthewellandContractor’sperformancehereunder.10.2UponacceptanceoftheworkbyOperatorpursuanttoSubparagraph10.1hereinabove,allriskoflosswithrespecttothewelldrilledhereunderandgoodsandservicesprovidedbyContractorshallpasstoOperator.Contractorshallhavenoliabilityforanydefectsinsuchcompletedoperations.Notwithstandinganythingelsecontainedhereintothecontrary,Operatoracceptsallmaterial,supplies,equipmentandservicesfurnishedorperformedbyContractorasisandwhereis.CONTRACTORMAKESNOWARRANTY,EXPRESSEDORIMPLIED,ASTOTHEMERCHANTABiLITY,ORFITNESSOFANYMATERIALS,SUPPLIESOREQUIPMENTFORANYPURPOSE.NOWARRANTYOFGOODANDWORKMANLIKEPERFORMANCEISGIVENBYTHECONTRACTORBYVIRTUREOFTHISCINTRACTFORANYPERFORMANCEACCEPTEDBYOPERATOR.11.CORING,DRILLSTEMTEST,ANDWIRELINELOGGING:11.1IntheeventadditionalrigtimeshouldberequiredforservicesorpurposesotherthanthatwhichContractoragreestofurnish,asspecifiedinExhibit“A”,ContractorshallperformsuchoperationsonaDayworkBasis.11.2AsdirectedbyOperatorandutilizingthetypeofcoringequipmentspecifiedinExhibit“A”,Paragraph9,andfurnishedasshowninExhibit“A”,Subparagraph10.88andperformedonaTurnkeyorDayworkBasisasshowninExhibit“A”,Subparagraph10.92,Contractoragreesatanytimetoattempteitherrat-holeorfull-holeconventionalorwirelinecoresinthemannerrequestedbyOperator.11.3WhenrequestedbyOperator,Contractorshallsaveandidentifythecuttingandcores,freefromcontamination,andplacetheminseparatecontainerswhichshallbefurnishedbyOperator;cumulativetimeforcirculatingforsamplesforsuchcuttingsandcoresshallbelimitedtoatotalofhourswhileonaTurnkeyBasis.AlladditionaltimeconsumedincirculatingforsamplesshallbeonaDayworkBasis.11.4Operatorshallhaveaperiodoftime,nottoexceedhoursfromthetimeatwhichthelastwirelinelogrunspecifiedinExhibit“A”,Paragraph7isoutoftheholetodeterminewhetherastringofcasingorlineristoberunorthewellistobepluggedandabandoned.AlladditionaltimewhichOperatormayrequiretodecideandtosoadviseContractortoeithercommencetherunningofsuchstringofcasingorlinerortoplugandabandonthewellshallbeonaDayworkBasis.IfOperatordecidesnottorunaproductionstringofcasingthepartysodesignedinExhibit“A”Subparagraph10.100shallplugandabandonsaidwell.IfOperatordecidestorunaproductionstringofcasingthepartysodesignatedinExhibit“A”Subparagraph10.82shallfurnishthematerialandservicesrequiredtorunsuchstringofcasing.11.5IfatanytimeOperatordesirestoconductadrillstemtestorwirelineloggingoperation,itshallbeContractor’sobligationtoperformsuchoperationsubjecttotheprovisionsasspecifiedinExhibit“A”.Provided,however,iftheContractorconsiderstheholeunsafetoperformsuchoperation,ContractorshallsonotifytheOperatorandprovideanexplanation.Anysuchobjectionwillbesonotedonthedailydrillingreport.OperatorshallneverthelesshavetherighttohaveContractorattempttoconductsuchoperationbutthesameshallbeperformedonaDayworkBasis.12.REPORTSTOBEFURNISHEDBYCONTRACTOR:12.1ContractorshallkeepandfurnishtoOperatoranaccuratereportoftheworkperformedandformationsdrilledontheIADC-APIDailyDrillingReportFormorotherformacceptabletoOperator.AlegiblecopyofsaidformshallbefurnishedbyContractortoOperatorat.12.2Deliverytickets,ifrequestedbyOperator,coveringanymaterialorsuppliesfurnishedbyOperatorshallbeturnedineachdaywiththedailydrillingreport.ThequalityanddescriptionofmaterialsandsuppliessofurnishedshallbecheckedbyContractor.13.INGRESSANDEGRESSTOLOCATION:OperatorherebyassignstoContractorOperator’srightsofingressandegresswithrespecttothetractoflandwherethewellistobelocatedfortheperformancebyContractorofallworkcontemplatedbythisContract.ShouldContractorbedeniedfreeaccesstothelocationforanyreasonnotreasonablywithinContractor’scontrol,anytimelostbyContractorasaresultofsuchdenialshallbepaidforattheapplicablerateinkeepingwiththestageofoperationsatthattime.Intheeventthereareanyrestrictions,conditions,orlimitationsinOperator’sleasewhichwouldaffectthefreerightofingressandegresstobeexercisedbyContractor,itsemployeesorsubcontractorshereunder,OperatoragreestotimelyadviseContractorinwritingwithrespecttosuchrestrictions,conditions,orlimitations,andContractoragreestoobservethem.14.RESPONSIBILITYFORROADANDSOUNDLOCATION:14.1ThepartydesignedinExhibit“A”,Subparagraph10.3toprovidetheroadagreesatalltimestomaintaintheroadinsuchaconditionthatwillallowfreeaccessandmovementtoandfromthedrillingsiteinanordinaryequippedhighwaytypevehicle.Ifitisnecessarytousebulldozers,tractors,oranyotherspecializedtransportationequipmentforthemovementofnecessarypersonnel,machinery,orequipmentoveraccessroadsoronthedrillinglocation,thepartysodesignedshallfurnishthesameatitsexpense.14.2ThepartydesignedinExhibit“A”,Subparagraph10.4shallprepareandmaintainasoundlocationconformingtoalllaws,rulesandregulationsofallfederal,stateorregulatoryagencieshavingjurisdictionandadequateinsizeandcapableofproperlysupportingthedrillingrig.ItisrecognizedthatOperatorhassuperiorknowledgeofthelocationandaccessroutetothelocationandmustadviseContractorofanysubsurfaceconditionsincluding,butnotlimitedto,mines,caverns,sinkholes,streams,pipelines,powerlines,andcommunicationlineswhichContractormightencounterwhileenroutetothelocationorduringoperationhereunder.Intheeventsubsurfaceconditionscauseacrateringorshiftingofthelocation’ssurfaceandlossordamagetotherigoritsassociatedequipmentresultstherefrom,OperatorshallwithoutregardtotheotherprovisionsofthisContractreimburseContractorforallsuchlossordamageincludingremovalofdebris.IfthelocationisfurnishedbyOperator,OperatorshallreimburseContractorforanycostsincurredinlevelingtherigbecauseoflocationsetting.Thelocationshallbeconstructedinsuchamannersoastoallowforadequatedrainage.TheOperatorshallatalltimesobtainandberesponsibleforpermitsthatconformtoalllaws,rulesandregulationsofallfederal,stateorregulatoryagencieshavingjurisdictionovertheconstruction,operationandmaintenanceoftheroadandlocation.15.EQUIPMENTCAPACITY:Operatorshallnotbeattemptedunderanyconditionswhichexceedthecapacityoftheequipmentspecifiedtobeusedhereunderorwherecanalorwaterdepthsareinexcessoffeet.WithoutprejudicetotheprovisionsofParagraph18hereunder,Contractorshallhavetherighttomakethefinaldecisionastowhenanoperationorattemptedoperationwouldexceedthecapacityofspecifiedequipment.16.INSURANCE:DuringthetermofthisContract,ContractorshallatContractor’sexpensesmaintainwithaninsurancecompanyorcompaniesauthorizedtodobusinessinthestatewheretheworkistobeperformedorthroughaself-insuranceprogram,insurancecoverageofthekindandintheamountssetforthinExhibit“A”,Paragraph1,insuringtheliabilitiesspecificallyassumedbyContractorinParagraph18ofthisContract.ContractorshallprocurefromthecompanyorcompanieswritingsaidinsuranceacertificateorcertificatedsatisfactorytoOperatorthatsaidinsuranceisinfullforceandeffectandthatthesameshallnotbecanceledormateriallychangedwithoutten(10)dayspriorwrittennoticetoOperator.ForliabilitiesassumedhereunderbyContractor,itsinsuranceshallbeendorsedtoprovidethattheunderwriterswaivetheirrightofsubrogationagainstOperator.Operatorwill,aswell,causeitsinsurertowaivesubrogationagainstContractorforanyliabilityitassumesandshallmaintain,atOperator’sexpense,orshallselfinsure,insurancecoverageassetforthinExhibit“A”ofthesamekindandinsameamountasisrequiredofContractor,insuringtheliabilitiesspecificallyassumedbyOperatorinParagraph18ofthisContract.Operatorshallprocurefromthecompanyorcompanieswritingsaidinsuranceacertificateorcertificatesthatsaidinsuranceisinfullforceandeffectandthatthesameshallnotbecanceledormateriallychangedwithoutten(10)dayspriorwrittennoticetoContractor.OperatorandContractorshallcausetheirrespectiveunderwriterstonametheotheradditionallyinsuredbutonlytotheextentoftheindemnificationobligationsassumedherein.17.CLAIMSANDLIENS:Contractoragreestopayallvalidclaimsforlabor,material,services,andsuppliestobefurnishedbyContractorhereunder,andagreetoallownolienbysuchthirdpartiestobefixeduponthelease,thewell,orotherpropertyoftheOperatororthelanduponwhichsaidwellislocated.18.RESPONSIBILITYFORLOSSORDAMAGE,INDEMNITY,RELEASEOFLIABILITYANDALLOCIATIONOFRISK:18.1Contractor’sSurfaceEquipment:Contractorshallassumeliabilityatalltimes,regardlessofwhethertheworkisbeingperformedonaTurnkeyBasisoraDayworkBasis,fordamagetoordestructionofContractor’ssurfaceequipment,regardlessofwhenorhowsuchdamageordestructionoccurs,andContractorshallreleaseOperatorofanyliabilityforanysuchlossexceptforsuchlossordamageprovidedinParagraph14andSubparagraph18.5herein.18.2Contractor’sin-HoleEquipment–TurnkeyBasis:ContractorshallassumeliabilityatalltimeswhileworkisbeingperformedonaTurnkeyBasisfordamagetoordestructionofContractor’sin-holeequipmentincluding,butnotlimitedto,drillpipe,drillcollars,andtooljoints,andContractorshallreleaseOperatorofanyliabilityforanysuchlossexceptasprovidedforinParagraph14.18.3Contractor’sin-HoleEquipment–DayworkBasis:OperatorshallassumeliabilityatalltimeswhileworkisbeingperformedonaDayworkBasisfordamagetoordestructionofContractor’sin-holeequipmentincluding,butnotlimitedto,drillpipe,drillcollars,andtooljoints,andOperatorshallreimburseContractorforthevalueofanysuchlossordamage;thevaluetobedeterminedbyagreementbetweenContractorandOperatorascurrentrepaircostorpercentofcurrentnewreplacementcostofsuchequipmentdeliveredtothewellsite.18.4Contractor’sEquipment–EnvironmentLossorDamage–TurnkeyBasis:ContractorshallassumeliabilityatalltimesfordamagetoordestructionofContractor’sequipmentresultingfromthepresenceofH2S,CO2,orothercorrosiveelementsthatenterthedrillingfieldsfromsubsurfaceformationsortheuseofcorrosive,destructiveorabrasiveadditivesinthedrillingfluids.18.5Contractor’sEquipment–EnvironmentLossorDamage–DayworkBasis:NotwithstandingtheprovisionsofSubparagraph18.1above,OperatorshallassumeliabilityatalltimeswhileworkisbeingperformedonaDayworkBasisfordamagetoordestructionofContractor’sequipmentresultingfromthepresenceofH2S,CO2,orothercorrosiveelementsthatenterthedrillingfieldsfromsubsurfaceformationsortheuseofcorrosive,destructiveorabrasiveadditivesinthedrillingfluids.18.6Operator’sEquipment:OperatorshallassumeliabilityatalltimesfordamagetoordestructionofOperator’soritsco-ventures’,co-lessees’orjointowners’equipment,including,butnotlimitedto,drillingtools,casing,tubingandwellheadequipment,regardlessofwhenorhowsuchdamageordestructionoccurs,andOperatorshallreleaseContractorofanyliabilityforanysuchlossordamage.18.7TheHole–TurnkeyBasis:Subjecttotheprovisionshereof,shouldafireorblowoutoccurorshouldtheholebelostordamagedwhileContractorisengagedintheperformanceofworkhereunderonaTurnkeyBasis,allsuchlossofordamagetotheholeshallbebornebyContractor;andiftheholeisnotinconditiontobecarriedtotheTurnkeyDepthashereinprovided,Contractorshall,atContractor’soption,either:(a)commenceanewholewithoutdelayatContractor’scost;therighttodrillasubstitutewellshallberecurring,andthedrillingofthenewholeshallbeconductedonaTurnkeyBasisunderthetermsandconditionsofthisContract,or(b)abandontheholeandterminatetheContract,givingOperatornoticeofContractor’sintentand,insuchcase,ContractorshallnotbeentitledtoanyportionoftheTurnkeyamount.IfContractorelectstoabandonthehole,thecosttoplugandabandonwillbeatContractor’sexpense.Ineithercase,ContractorshallnotbeentitledtoanypaymentorcompensationforexpendituresmadeorincurredbyContractoronorinconnectionwiththeabandonedhole(s),exceptforDayworkearnedforwhichContractorwouldhavebeencompensatedhadsuchholenotbeenjunkedandabandoned.18.7.1NotwithstandingtheforegoingprovisionsofParagraph18.7,iftheholeislostordamagedasaresultofanydelaybyOperatororthefailure,atanytime,ofservice,materials,casingorequipmentfurnishedbyOperator,suchlossshallbebornebyOperatorandContractorshallneverthelessbepaid:(a)percentofallexpensesreasonablyandnecessarilyincurredandtobeincurredbyContractorbyreasonoftheContractandbyreasonoftheprematurestoppageofthework,excludinghowever,theexpenseofnormaldrillingcrewandsupervision;plus(b)asumcalculatedattheappropriateDayworkorstandbyrateforalltimefromthedateuponwhichContractorcommencedanyoperationshereundertosuchdatesubsequenttothedateofworkstoppageaswillaffordContractorreasonabletimetodismantleitsrigandequipment;plus,(c)thecostofdismantlingtherig,movingtoandriggingupContractor’sequipmentpriortostartingthedrillingofareplacementholeatanoffsetlocationdesignatedbyOperator,ifsorequested.TheworkofdrillingthereplacementholeasaresultoflossordamageduetosuchdelaysorfailuresshallbeperformedbyContractorunderthetermsandconditionsofthisContract.18.8TheHole–DayworkBasis:IntheeventtheholeshouldbelostordamagedwhileContractorisworkingonaDayworkBasis,Operatorshallbesolelyresponsibleforsuchdamagetoorlossofthehole,includingthecasingtherein,aswellasforcostofcontrolofanywildwell,aswellasthecostofremovalofanydebrisandcostofpropertyremediationandrestoration.OperatorshallreleaseContractorofanyliabilityfor,andshallprotect,defendandindemnifyContractorfromandagainstanyandallclaims,liability,andexpensesrelatingtosuchdamagetoorlossoftheholeandforthecostofcontrolofanywildwell,aswellasthecostofremovalofanydebrisandcostofpropertyremediationandrestoration.ContractorshallneverthelessbepaidassetforthinSubparagraph18.7.1.18.9Sidetracking/SubstituteWellObligation:If,beforetheTurnkeyDepthisreached,theholeislostordamagedorContractorencountersanyconditionwhichinContractor’sjudgmentmakesdrillingabnormallydifficultorhazardousincluding,butnotlimitedto,lossofcirculation,partiallossofcirculation,waterflow,domalformation,abnormalpressures,heavingshaleorothersimilarcondition,whichprecludesfurtherdrillingusingnormalprocedures,theContractor,atitssoleoption,mayelecttodiscontinueoperationsortosidetrackorcommenceoperationsforthedrillingofasubstitutewellatalocationagreeabletobothparties.Theright,butnottheobligation,tosidetrackordrillasubstitutewell(s)shallberecurring.AnysubstitutewellshallbedrilledunderthetermsandconditionsofthisContract.ItisunderstoodthatContractorreservestherighttoredesignandrevisethewellprograminkeepingwithgoodengineeringanddrillingpracticesifContractoratitssoleoptionelectstodrillasubstitutehole,andalsothatifContractordoesnotobligateitselftodrillthisholeorasubstituteholetheonlypenaltyforfailuretodososhallbethelossofcompensationtobepaidhereunder,andtheContractorshallbeundernofurtherobligationofanykindtoOperator.InadditiontoContractor’srighttoterminateperformancehereunder,OperatorshallreleaseContractorofanyliabilityfor,andshallprotect,defendandindemnifyContractorfromandagainstanyandallclaims,demandsandcausesofaction,includingallcostsofdefense,infavorofOperator,Operator’sco-ventures,co-lesseesorjointownersoranyotherpartiesarisingoutofanydrillingcommitmentsorobligationscontainedinanylease,farmoutagreementorotheragreementwhichmaybeaffectedbysuchterminationofperformancehereunder.18.10UndergroundDamage:OperatorshallreleaseContractorofanyliabilityfor,andshallprotect,defendandindemnifyContractorfromandagainstanyandallclaims,liability,andexpenseresultingfromoperationsunderthisContractonaccountofinjuryto,destructionof,lossorimpairmentofanypropertyrightinortooil,gas,orothermineralsubstanceorwater,andforanylossordamagetoanyformation,strata,orreservoirbeneaththesurfaceoftheearth.18.11InspectionofMaterialFurnishedbyOperator:ContractoragreestovisuallyinspectallmaterialsfurnishedbyOperatorbeforeusingsameandtonotifyOperatorofanyapparentdefectstherein.ContractorshallnotbeliableforanylossordamageresultingfromtheuseofmaterialsfurnishedbyOperator.Contractorwillpreassemble,disassemble,orassemblematerialstobefurnishedbyOperatoronlywhendirectedbyOperatorandwhensuchworkcanbeaccomplishedbynormalrigpersonnel.AllsuchservicesshallbeperformedonaDayworkBasis.OperatorshallreleaseContractorofanyliabilityfor,andshallprotect,defendandindemnifyContractorfromandagainstanyliabilityforsuchservice.18.12Contractor’sIndemnificationofOperator:ContractorshallreleaseOperatorfromanyliabilityfor,andshallprotect,defendandindemnifyOperatorfromandagainstallclaims,demands,andcausesofactionofeverykindandcharacter,withoutlimitandwithoutregardtothecauseorcausesthereoforthenegligenceofanypartyorparties,arisinginconnectionherewithinfavorofContractor’semployeesorContractor’ssubcontractorsofanytier(inclusiveofanyagentorconsultantengagedbyContractor)ortheiremployees,orContractor’sinvitees,onaccountofbodilyinjury,deathordamagetoproperty.Contractor’sindemnifyunderthisParagraphshallbewithoutregardtoandwithoutanyrighttocontributionfromanyinsurancemaintainedbyOperatorpursuanttoParagraph16.IfitisjudiciallydeterminedthatthemonetarylimitsofinsurancerequiredhereunderoroftheindemnitiesvoluntarilyassumedunderSubparagraph18.12(whichContractorandOperatorherebyagreewillbesupportedeitherbyavailableliabilityinsurance,underwhichtheinsurerhasnorightofsubrogationagainsttheindemnities,orvoluntarilyself-insured,inpartorwhole)exceedthemaximumlimitspermittedunderapplicablelaw,itisagreedthatsaidinsurancerequirementsorindemnitiesshallautomaticallybeamendedtoconformtothemaximummonetarylimitspermittedundersuchlaw.18.13Operator’sIndemnificationofContractor:OperatorshallreleaseContractorfromanyliabilityfor,andshallprotect,defendandindemnifyContractorfromandagainstallclaims,demands,andcausesofactionofeverykindandcharacter,withoutlimitandwithoutregardtothecauseorcausesthereoforthenegligenceofanypartyorparties,arisinginconnectionherewithinfavorofOperator’semployeesorOperator’scontractorsofanytier(inclusiveofanyagent,consultantorsubcontractorengagedbyContractor)ortheiremployees,orOperator’sinviteesotherthanthosepartiesidentifiedinSubparagraph18.12onaccountofbodilyinjury,deathordamagetoproperty.Operator’sindemnifyunderthisParagraphshallbewithoutregardtoandwithoutanyrighttocontributionfromanyinsurancemaintainedbyContractorpursuanttoParagraph16.IfitisjudiciallydeterminedthatthemonetarylimitsofinsurancerequiredhereunderoroftheindemnitiesvoluntarilyassumedunderSubparagraph18.13(whichContractorandOperatorherebyagreewillbesupportedeitherbyavailableliabilityinsurance,underwhichtheinsurerhasnorightofsubrogationagainsttheindemnities,orvoluntarilyself-insured,inpartorwhole)exceedthemaximumlimitspermittedunderapplicablelaw,itisagreedthatsaidinsurancerequirementsorindemnitiesshallautomaticallybeamendedtoconformtothemaximummonetarylimitspermittedundersuchlaw.18.14(a)Pollution,ContaminationandBlowoutControl–TurnkeyBasis:Exceptasotherwiseprovidedherein,whileoperationsarebeingconductedonaTurnkeyBasis,Contractorshallassumeallresponsibilityfor,andshallprotect,defendandindemnifyOperatorfromandagainstanyloss,expense,claim,demandorliabilityforpollutionorcontamination(includingcontrolandremovalthereof)originatingfrom:(ⅰ)spill,leaksordischargesoffuel,lubricants,motoroils,pipedope,paintsolvents,garbage,seepageoranyotherliquidorsolidwhatsoeverinthepossessionandcontrolofContractor,exceptsuchpollutionorcontaminationthatmaybecausedbyOperatororOperator’sagents,employeesorrepresentatives;(ⅱ)blowout,lossofwellcontrolorseepageofundergroundfluids.Intheeventofablowoutorwelloutofcontrol,Contractorassumesliabilityforcontrolofsuchwelland/orthedrillingofareliefwellorwells.Contractor’smaximumliabilityunderthisSubparagraph18.14(a)shallnot,howeverexceeds$peroccurrence,includinglostrigtimeandanyandallcostsassociatedwiththeredrillingorpluggingandabandonmentofthewellunderParagraph18.7.ForthepurposeofthisContract,whereaseriesofand/orseverallossesoccurwhichareattributabledirectlyorindirectlytooneaccident,event,orcause,allsuchlossesshallbeaddedtogetherandthetotalamountofsuchlossesshallbetreatedasoneoccurrenceirrespectiveoftheperiodorareaoverwhichthelossesoccur.OperatorshallassumefullresponsibilityforallcostsandexpensesarisingunderthisSubparagraph18.14inexcessofsaid$andshallreleaseContractorfromanyliabilityfor,andshallprotect,defendandindemnifyContractorfromsaidexcess.(b)Pollution,ContaminationandBlowoutControl–DayworkBasis:Notwithstandinganythingtothecontrarycontainedherein,excepttheprovisionsofParagraph10andSubparagraph18.13,itisunderstoodandagreedbyandbetweenContractorandOperatorthattheresponsibilityforpollutionandcontaminationwhichoccurswhileoperationsarebeingconductedonaDayworkBasisshallbeasfollows:(ⅰ)Contractorshallassumesallresponsibilityfor,includingcontrolandremovalof,andprotect,defendandindemnifyOperatorfromandagainstallclaims,demandsandcausesofactionofeverykindandcharacterarisingfrompollutionorcontamination,whichoriginatesabovethesurfaceofthelandfromspills,leaksoffuel,lubricants,motoroils,pipedope,paints,solvents,andgarbage,exceptunavoidablepollutionfromreservepit,whollyinContractor’spossessionandcontrolanddirectlyassociatedwithContractor’sequipmentandfacilities.(ⅱ)Operatorshallassumesallresponsibilityfor,includingcontrolandremovalof,protect,defendandindemnifyContractorfromandagainstallclaims,demandsandcausesofactionofeverykindandcharacterarisingdirectlyorindirectlyfromallotherpollutionorcontaminationwhichmayoccurduringtheconductofoperationshereunder,including,butnotlimitedto,thatwhichmayresultfromfire,blowout,cratering,seepageoranyotheruncontrolledflowofoil,gas,waterorothersubstance,aswellastheuseordispositionofalldrillingfluids,including,butnotlimitedto,oilemulsion,oilbaseorchemicallytreateddrillingfluids,contaminatedcuttingorcavings,lostcirculationandfishrecoverymaterialsandfluids.Operator’sliabilityandindemnificationofContractorhereundershallincludethecostofcontrollingablowoutorwelloutofcontrol,andthedrillingofanyreliefwellorwells,ifnecessary.(ⅲ)IntheeventathirdpartycommitsanactoromissionwhichresultsinpollutionorcontaminationforwhicheitherContractororOperator,forwhomsuchpartyisperformingwork,isheldtobelegallyliable,theresponsibilitythereforeshallbeconsidered,asbetweenContractorandOperator,tobethesameasifthepartyforwhomtheworkwasperformedhadperformedthesameandalltheobligationsrespectingprotection,defense,indemnify,andlimitationofresponsibilityandliability,assetforthin(ⅰ)and(ⅱ)above,shallbespecificallyapplied.18.15TerminationofLocationLiability:WhenContractorhasconcludedoperationatthewelllocation,Operatorshallthereafterbeliablefordamagetoproperty,personalinjuryordeathofanypersonwhichoccursasaresultoftheconditionofthelocationandContractorshallberelievedofsuchliability;provided,however,ifContractorshallbesubsequentlyreenteruponthelocationforanyreason,includingremovaloftherig,anytermoftheContractrelatingtosuchreentryactivityshallbecomeapplicableduringsuchperiod.18.16ConsequentialDamages:SubjecttoandwithoutaffectingtheprovisionsofthisContractregardingthepaymentrightsandobligationsofthepartiesortheriskofloss,releaseandindemnifyrightsandobligationsoftheparties,eachpartyshallatalltimesberesponsibleforandholdharmlessandindemnifytheotherpartyfromandagainstitsownspecial,indirectorconsequentialdamages,andthepartiesagreesthatspecial,indirectorconsequentialdamagesshallbedeemedtoinclude,withoutlimitation,thefollowing:lossofprofitorrevenue;costandexpensesresultingfrombusinessinterruptions;lossofordelayinproduction;lossofordamagetotheleasehold;lossofordelayindrillingoroperationrights;costsoforlossofuseofproperty,equipment,materialsandservices,includingwithoutlimitationthoseprovidedbycontractorsorsubcontractorsofeverytierorbythirdparties.OperatorshallatalltimesberesponsibleforandholdharmlessandindemnifyContractorfromandagainstallclaim,demandsandcausesofactionofeverykindandcharacterinconnectionwithsuchspecial,indirectorconsequentialdamagessufferedbyOperator’sco-owners,co-ventures,co-lessees,farmors,farmees,partnersandjointowners.18.17IndemnityObligation:ExceptasotherwiseexpresslylimitedinthisContract,itistheintentofpartiesheretothatallreleases,indemnifyobligationsand/orliabilitiesassumedbysuchpartiesunderthetermsofthisContract,including,withoutlimitation,Subparagraphs4.7,6.2,14.2and18.1through18.6hereof,bewithoutlimitandwithoutregardtothecauseorcausesthereof,includingbutnotlimitedtopre-existingconditions,defectorruinofpremisesorequipment,strictliability,regulatoryorstatutoryliability,productsliability,breachofrepresentationorwarranty(expressorimplied),breachofduty(whetherstatutory,contractualorotherwise),anytheoryoftort,breachofcontract,fault,thenegligenceofanydegreeorcharacter(regardlessofwhethersuchnegligenceissole,jointorconcurrent,active,passiveorgross)ofanypartyorparties,includingthepartyseekingthebenefitoftherelease,indemnityorassumptionofliability,oranyothertheoryoflegalliability.Theindemnities,andreleasesandassumptionsofliabilityextendedbythepartiesheretoundertheprovisionsofSubparagraph4.7,6.2and14.2andParagraph18shallextendtotheparties,theirsuppliers,contractorsandsubcontractorsofanytier,theirco-ventures,co-lessees,jointowners,theirparent,holdingandaffiliatedcompaniesandtheofficers,directors,stockholders,partners,managers,representatives,employees,consultants,agents,servantsandinsurersofeach.Exceptasotherwiseprovidedherein,suchindemnificationandassumptionofliabilityshallnotbedeemedtocreateanyrightstoindemnificationonanypersonorentitynotapartytothisContract,eitherasathirdpartybeneficiaryorbyreasonofanyagreementofindemnitybetweenoneofthepartiesheretoandanotherpersonorentitynotapartytothisContract.18.18GoverningLaw:(a)ThetermsandprovisionsofthisContractandassociatedexhibitsshallbeconstrued,governed,interpreted,enforcedandlitigated,andtherelationsbetweenthepartiesdeterminedinaccordancewiththelawsof.(b)IntheeventanyprovisionhereincontainedorcontainedinanassociatedExhibitshouldbedeemedinconsistentwithorcontrarytoanyFederal,StateorMunicipallaw,ruleorregulation,saidprovisionshallbedeemedtobemodifiedtotheextentrequiredtocomplywithsaidlaw,ruleorregulationandassomodifiedsaidprovisionandthisContractshallcontinueinfullforceandeffectwithoutaffectingtheenforceabilityoftheremainingprovisionsduties,andliabilitiessetforthhereinandintheassociatedExhibit.(c)ContractorandOperatoragreetocomplywithalllaws,rules,andregulationsofanyFederal,State,andLocalgovernmentauthoritywhicharenow,ormayinthefuturebecameapplicabletotheoperationscoveredbythisContractoraccruingoutoftheperformanceofsuchoperations;provided,however,asbetweenOperatorandContractorspecifiedprovisionshereincontainedrespectingtheriskandresponsibilityfirsuchcompliancesshallbecontrolling.Whenrequiredbylaw,thetermsofExhibit“B”,attachedhereto,shallapplytothisContract.19.INDEPENDENTCONTRACTORRELATIONSHIPANDOPERATOR’SREPRESENTATIVE:19.1Intheperformanceoftheworkhereincontemplated,ContractorisanindependentContractor,withtheauthoritytocontrolanddirecttheperformanceofthedetailsofthework,Operatorbeingonlyinterestedinthefinalresultsobtained.TheworkshallmeettheapprovalofOperatorandbesubjecttotherightofinspectionandsupervisionhereinprovided.Operatorshallnotunreasonablywithholdapprovalofallsuchwork,whenperformedbyContractorinaccordancewiththegenerallyacceptedpracticesandmethodscustomaryintheindustry.19.2OperatorshallbeprivilegedtodesignatearepresentativeorrepresentativeswhoshallatalltimeshaveaccesstothepremisesforthepurposeofobservingtestsorinspectingtheworkofContractor.SuchrepresentativeorrepresentativesshallbeempoweredtoactforOperatorinallmattersrelatingtotheworkhereinundertakenandContractorshallbeentitledtorelyontheordersanddirectionsissuedbysuchrepresentativeorrepresentativesasbeingthoseofOperator.20.NOWAIVEREXCEPTINWAITING:ItisfullyunderstoodandagreedthatnoneoftherequirementsofthisContractshallbeconsideredaswaivedbyeitherpartyunlessthesameisdoneinwriting.21.FORCEMAJEURE:ExceptasprovidedinthisParagraph21andwithoutprejudicetotheriskofloss,releaseandindemnifyobligationsunderthisContract,eachpartytothisContractshallbeexcusedfromcomplyingwiththetermsofthisContract,exceptforthepaymentofmonieswhendue,ifandforsolongassuchcomplianceishinderedorpreventedbyaForceMajeureEvent.AsusedinthisContract,“ForceMajeureEvent”includes:actsofGod,actionoftheelements,wars(declaredorundeclared),insurrection,revolution,rebellionsorcivilstrife,piracy,civilwarorhostileaction,terroristsacts,riots,strikes,differenceswithworkmen,actsofpublicenemies,federalorstatelaws,rules,regulations,dispositionsorordersofanygovernmentalauthoritieshavingjurisdictioninthepremisesorofanyothergroup,organizationorinformalassociation(whetherornotformallyrecognizedasagovernment),inabilitytoprocurematerial,equipment,fuelornecessarylaborintheopenmarket,acuteandunusuallaborormaterial,equipmentorfuelshortages,oranyothercauses(exceptfinancial)beyondthecontrolofeitherparty.NeitherOperatornorContractorshallberequiredagainstitswilltoadjustanylabororsimilardisputesexceptinaccordancewithapplicablelaw.Intheeventthateitherpartyheretoisrenderedunable,whollyorinpart,byanyofthesecausestocarryoutitsobligationunderthisContract,itisagreedthatsuchpartyshallgivenoticeanddetailsofForceMajeureinwritingtotheotherpartyaspromptlyaspossibleafteritsoccurrence.AftersuchperiodofdelaywhichcontinuesformorethanconsecutivedaysandpriortotheexpirationorterminationofthisContract,OperatorshallpayContractortheworkstoppageratespecifiedinSubparagraph4.5.Eachpartyshallexercisereasonablediligencetoremoveanysuchcauseofdelaytothework.Notwithstandingtheforegoing,theworkstoppagerateassetforthinSubparagraph4.5shallbeapplicableforalldelayscausedbywhetherwhenDrillingUnitisnototherwisepreventedfromoperating.AftersuchForceMajeuredelayshascontinuedforaperiodofdays,eitherpartymayelecttoterminatethisContract.22.INFORMATIONCONFIDENTIAL:UponwrittenrequestbyOperator,informationobtainedbyContractorintheconductofdrillingoperationsonthiswell,including,butnotlimitedto,depth,formationspenetrated,theresultsofcoring,testing,andsurveying,shallbeconsideredconfidentialandshallnotbedivulgedbyeitherpartyoritsemployees,toanyotherperson,firmorcorporation.23.ATTORNEY’SFEES:IfthisContractisplacedinthehandsofanattorneyforcollectionofanysumsduehereunder,orsuitisbroughtonsame,orsumsduehereunderarecollectedthroughbankruptcyorarbitrationproceedings,thentheprevailingpartyshallbeentitledtorecoverreasonableattorney’sfeesandcosts.24.ASSIGNMENT:NeitherpartymayassignthisContractwithoutthepriorwrittenconsentoftheotherandpromptnoticeofanysuchintenttoassignshallbegiventotheotherparty.Intheeventofsuchassignment,theassigningpartyshallremainliabletotheotherpartyasaguarantoroftheperformancebytheassigneeofthetermofthisContract.IfanyassignmentismadethatmateriallyaltersContractor’sfinancialburden,Contractor’scompensationshallbeadjustedtogiveeffecttoanyincreaseordecreaseinContractor’soperatingcosts.25.NOTICEANDPLACEOFPAYMENT:NoticeisnotrequiredforanychangefromTurnkeyBasistoDayworkBasis,orviceverse,pursuanttothetermsofthisContract.Notice,reports,andothercommunicationsrequiredorpermittedbythisContracttobegivenorsentbyonepartytotheothershallbedeliveredbyhand,mailed,digitallytransmittedortelecopiedtotheaddresshereinaboveshown.AllsumspayablehereundertotheContractorshallbepayableatitsaddresshereinaboveshownunlessotherwisespecifiedherein.26.CONFLICTS:IntheeventofanyconflictbetweentheprovisionsofthisContractandExhibit“A”or“B”attachedheretoandmadeaparthereof,thelattershallbecontrolling.27.AUDIT:InanypaymentprovidedforhereunderismadeonthebasisofContractor’scost,OperatorshallhavetherighttoauditContractor’sbooksandrecordsrelatingtosuchcosts.Contractoragreestomaintainsuchbooksandrecordsforaperiodoftwo(2)yearsfromthedatesuchcostswereincurredandtomakesuchbooksandrecordsavailabletoOperatoratanyreasonabletimeortimeswithintheperiod.28.CONTINUINGOBLIGATIONS:NotwithstandingtheterminationofthisContract,thepartiesshallcontinuetobeboundbytheprovisionsofthisContractthatreasonablyrequiressomeactionorforbearanceaftersuchtermination.29.ENTIREAGREEMENT:ThisContractconstitutesthefullunderstandingoftheparties,andacompleteandexclusivestatementofthetermsoftheiragreement,andshallexclusivelycontrolandgovernallworkperformedhereunder.Allrepresentations,offers,andundertakingsofthepartiesmadepriortotheeffectivedatehereof,whetheroralorinwriting,aremergedherein,andnoothercontracts,agreementsorworkorders,executedpriortotheexecutionofthisContract,shallinanywaymodify,amend,alterorchangeanyofthetermsorconditionssetoutherein.30.ACCEPTANCEOFCONTRACT:TheforegoingContract,includingtheprovisionsrelatingtoindemnify,releaseofliabilityandallocationofriskofSubparagraph4.7,6.2,14.2,and18.1through18.16,isacknowledged,agreedtoandacceptedbyOperatorthisdayof,20.OPERATOR:By:Title:TheforegoingContract,includingtheprovisionsrelatingtoindemnify,releaseofliabilityandallocationofriskofSubparagraph4.7,6.2,14.2,and18.1through18.16,isacknowledged,agreedtoandacceptedbyundersignedasContractorthisdayof,20whichistheeffectivedateofthisContract,subjecttofigavailability,andsubjecttoallofitstermsandprovisions,withtheunderstandingthatitwillnotbebindinguponOperatoruntilOperatorhasnoteditsacceptance,andwiththefurtherunderstandingthatunlesssaidContractisthusexecutedbyOperatorwithindaysoftheabovedateContractshallbeinnomannerboundbyitssignaturethereto.Contractor:By:Title:EXIBIT“A”ToTurnkeyDrillingContractdated,20.Operator:Contractor:WellName&Number1.INSURANCE(SeeParagraph16)1.1AdequateWorker’CompensationInsurancecomplyingwithStateLawsapplicableorEmployer’LiabilityInsurancewithlimitsof$coveringallofContractor’semployeesworkingunderthisContract.1.2Commercial(orComprehensive)GeneralLiabilityInsurance,includingcontractualobligationsasrespectsthisContractandpropercoverageforallotherobligationsassumedinthisContract.Thelimitsshallbe$combinedsinglelimitperoccurrenceforBodilyInjuryandPropertyDamage.1.3AutomobilePublicLiabilityInsurancewithlimitsof$forthedeathorinjuryofeachpersonand$foreachaccident;andAutomobilePublicLiabilityPropertyDamageInsurancewithlimitsof$foreachaccident.1.4“Operator’sExtraExpense”or“EnergyExplorationandDevelopment”InsuranceprovidedbyContractorwhichincludewellcontrol,redrilling,pollutionandcontaminationwithalimitof$intheaggregateforonewell,suchcoveragetobeendorsedtoincludecoverageforthesubjectwellandapplicablesolelywithrespecttoContractor’sliabilitiesandobligationsundertheContractforoperationsperformedonaTurnkeyBasis.“Operator’sExtraExpense”or“EnergyExplorationandDevelopment”InsuranceprovidedbyOperatorwhichincludewellcontrol,redrilling,pollutionandcontaminationwithalimitof$intheaggregateforonewell,suchcoveragetobeendorsedtoincludecoverageforthesubjectwellandapplicablesolelywithrespecttoOperator’sliabilitiesandobligationsundertheContract.1.5Otherinsurance2.CASINGPROGRAM(SeeParagraph7)HoleSizeCasingSizeWeightGradeApproximateSettingDepthWaitonCementTimeConductorin.in.lbs/ft.ft.hrs.Surfacein.in.lbs/ft.ft.hrs.Protectionin.in.lbs/ft.ft.hrs.in.in.lbs/ft.ft.hrs.Productionin.in.lbs/ft.ft.hrs.Linerin.in.lbs/ft.ft.hrs.in.in.lbs/ft.ft.hrs.3.CEMENTINGSPECIFICATIONSTypeCementVolumeConductorsacksSurfacesackssacksProtectionsackssacksProductionsackssacksLinersacks4.STRAIGHTHOLESPECIFICATIONS(SeeSubparagraph9.5)FromToMaximumDistanceBetweenSurveys,FeetMaximumDeviationFromVertical,DegreesMaximumChangeofInclinationper100’(a)Locationofwellboreatfeetshallbe(a)Iftheselimitsareexceededandthedistancebetweensurveysismorethan100feet,Contractorshalltakeintermediatesurveysnomorethan100feetapart.Ifsuchintermediatesurveysshowthattheabovelimitsforanyintervalhavebeenexceeded,Contractorshallcorrectholedeviationtowithinthelimitsoftheabovespecifications.5.MUDCONTROLPROGRAM(SeeParagraph9)DepthInterval(ft.)FromToTypeMudWeight(lbs/gal.)Viscosity(secs.)WaterLoss(cc)Itisunderstoodthatintheeventitbecomesnecessarytosuddenlyraisethemudweightlbs.pergallonabovetheweightcurrentlybeingusedortoraisethemudweightatanytimeabovethemaximumweightsspecifiedabove,operationswillgoforwardonaDayworkBasisuntilsuchconditionhasbeenovercomeandthemudsystemstabilizedattheapplicableweightspecifiedabove.Othermudspecifications:6.DRILLINGRIG□SpecifiedBelow□RigInventoryAttachedRigNo.DepthRatingft.DateAvailableDrawworks:MakeModelRatedHpCompound:MakeModelRatedHpEnginesNo.MakeModelRatedHpRotary:MakeModelRatingAuxiliaryBrakesMakeModelA.C.Generators:EngineHPGeneratorKWMainPump:MakeModelRatedHpMainPumpPower:MakeModelRatedHpAuxiliaryPump:MakeModelRatedHpAux.PumpPower:MakeModelRatedHpMast:MakeHookloadlbs.WithlinesSubstructure:Heightft.Csg.Cap.lbs.SetbackCaplbs.ActiveMudTanks:No.SizeCapacitybbls.DrillPipeAmountSizeWeightGradeDrillCollars:Number&SizeBlowoutPreventers:SizeWorkingPressureMake&ModelSingleorDoubleNumberChokeMainfold:Valve&ChokeDescriptionB.O.P.ClisingUnit:StationsB.O.P.Accoumulator:GallonsDuringDayworkoperations,Contractoragreestooperateequipmentatpercentofmanufacturer’smaximumratedcapacityandpressure.7.WIRELINELOGGINGSERVICESTypeLogCompanyDepthtobeRun8.DRILLSTEMTESTPROGRAMDepthTypeDSTServiceDSTCompanyRemarks9.CORINGPROGRAMDepthDescriptionofEquipmentandServices10.EQUIPMENT,MATERIALS,ANDSERVICESTOBEPROVIDEDASDESIGNATED:TobeprovidedbyandattheExpenseofTurnkeyDaywork1.Drillingpermit2.Stakelocation,obtainallnecessaryrights-of-way,andsettlesurfacedamages3.Furnishandmaintainroadtolocation4.Constructandmaintainlocation5.Specialfoundationforrig6.Bondsforpublicroads7.Constructandmaintainreservepit8.Reservepitliner9.Disposeofdrillingfluid,refillandlevelreservepit10.Cellar11.Ditchedandsumps12.Ratandmouseholes13.Fillandplugratandmouseholes14.Earthenmudpits15.Removedebrisfromlocation16.Restoreroadandlocation17.Watersourceincludingrequiredpermits18.Waterlinesincludingrequiredpermits19.Waterpump:20.Fuelforwaterpump21.Maintenanceofwaterwell,ifrequired22.Labortooperatewaterwellorwaterpump23.Waterstoragetankscapacity24.Potablewaterforcrews25.Sitesepticsystems26.Saltwaterandstorage27.Rigfuel,type28.Highlineelectricpowerforrig,installationandremoval29.ElectricpowerforOperator’sequipment30.TransportationofContractor’sequipmentincludingrequiredpermits31.Bulldozersorwatchingserviceifrequiresinlieuofallweatherroad32.Forklift,duringdrillingoperationsOper.Cont.Oper.Cont.33.TransportationofOperator’sequipmentincludingrequiredpermits34.InstallationandremovalofOperator’sequipment35.Boilerorhotairheater36.Fuelforboilerorhotairheater,type37.Telephoneorradio38.Drillingmudandadditives39.Diesel/oilfordrillingmud40.Mudengineeringservice41.PVTequipment:42.Corrosioninhibitorforprotectingdrillstring43.Shaleshaker:44.Shaleshakerscreens:45.Desander:46.Desilter:47.Centrifuge:48.MudCleaner:49.Degasser:50.Hydraulicchoke51.Gasseparatorwithplumbing52.Triptank53.Rotatinghead54.Rotatingheadrubbers55.Storageformudandchemicals,mudhouse56.Specialoraddedstorageformudandchemicals57.Mudpitcovers58.ChemicaltreatmentofmudifH2SorCO2isencountered59.Drillingbits,stabilizers,reamersandotherdrillingtools60.Drillingtimerecorder,pens61.Conventionaldriftindicator,degrees62.Fishing(forContractorprovidedequipment):a.Toolandservicesb.Rigtime63.Fishing(forOperatorprovidedequipment):a.Toolandservicesb.Rigtime64.D.P.protectorsforuseonnormalstringsofD.P.insidecasing65.Inspectionofdrillcollarsandsubs66.Specialstringsd=ofdrillpipeanddrilldollarsasfollows:67.Kellyjoints,subs,elevators,tongs,slipsandBOP68.ramsforusewithspecialdrillpipe69.BOPtestingserviceandpackoff70.MudLogging:71.H2Sequipment,ifnecessary,forContractor,Operatorandnormalservicepersonnel72.UpperKellycock73.LowerKellycock74.Floorsafetyvalve75.Extracrewlabor,ifrequiredbyOperator76.Campfacilities77.Catering78.Circulatingtimeforsamples,breaksorDST’s(subjecttoSubparagraph11.3)79.Conductor:a.Holeb.Casingandthreadprotectorsc.Scratchers,centralizers&floatequipmentd.Casingcrewandtoolsandcasinglubricante.Pick-upandlaydownmachinef.Rigtimetoruncasingg.Cementandcementingserviceh.Rigtimetocementi.WOCtimej.Weldingserviceinconnectionwiththeabove80.Surfacestring:a.Casingandthreadprotectorsb.Scratchers,centralizersandfloatequipmentc.Casingcrewandtoolsandcasinglubricantd.Pick-upandlaydownmachinee.Rigtimetoruncasingf.Cementandcementingserviceg.Rigtimetocementh.WOCtimei.Weldingserviceinconnectionwiththeabovej.Casingrams81.Protectionstring(in.):a.Casingandthreadprotectorsb.Scratchers,centralizersandfloatequipmentc.Casingcrewandtoolsandcasinglubricantd.Pick-upandlaydownmachinee.Rigtimetoruncasingf.Cementandcementingserviceg.Rigtimetocementh.WOCtimei.Weldingserviceinconnectionwiththeabovej.Casingramsk.Rigtimetolaydowndrillstring82.Protectionstring(in.):a.Casingandthreadprotectorsb.Scratchers,centralizersandfloatequipmentc.Casingcrewandtoolsandcasinglubricantd.Pick-upandlaydownmachinee.Rigtimetoruncasingf.Cementandcementingserviceg.Rigtimetocementh.WOCtimei.Weldingserviceinconnectionwiththeabovej.Casingramsk.Rigtimetolaydowndrillstring83.Protectionstringa.Casingandthreadprotectorsb.Scratchers,centralizersandfloatequipmentc.Casingcrewandtoolsandcasinglubricantd.Pick-upandlaydownmachinee.Rigtimetoruncasingf.Cementandcementingserviceg.Rigtimetocementh.WOCtimei.Weldingserviceinconnectionwiththeabovej.Casingramsk.Rigtimetolaydowndrillstring84.Liner:a.Casingandthreadprotectorsb.Scratchers,centralizersandfloatequipmentc.Casingcrewandtoolsandcasinglubricantd.Pick-upandlaydownmachinee.Rigtimetoruncasingf.Cementandcementingserviceg.Rigtimetocementh.WOCtimei.Weldingserviceinconnectionwiththeabovej.Casingramsk.Linerhangerandtoolsl.Rigtimetolaydowndrillstring85.Cleanoutandtestliner86.Cement,cementingserviceandtoolsforremedialcementingoperations87.Temperaturesurvey88.Bondlog89.Coringservice,asspecifiedinExhibit“A”,Paragraph990.DSTservice,asspecifiedinExhibit“A”,Paragraph891.Wirelineloggingservice,asspecifiedinExhibit“A”,Paragraph792.Rigtimerequiredtogetlogstobottom93.Rigtime:a.DSTb.Coring&reamingcoreholec.Loggingd.Plug&abandon94.Directionalservices95.Caliperservices96.Completiontoolsandservices97.Wellheadequipment:98.Spacers,spools,oradapterstomatchBOPequipmenttocasinghead99.Wellheadwearbushingandrunningtool100.Costofalllabor,materialsandservicestocleanrigafteruseofoil-basemud101.Plugandabandon:Setcementplugs,perforate,squeeze,andcut-offinaccordancewithregulatoryrequirements102.103.104.11.SPECIALPROVISIONS1.MaximumlimitstobepaidbyContractor:ItemAmountAllcostsabovetheselimitsshallbepaidbytheOperatoruponpresentationofinvoicethereforeuponcompletionofthewell.EXIBIT“B”(SeeSubparagraph18.18)Thefollowingclauses,whenrequiredbylaw,areincorporatedintheContractbyreferenceasiffullysetout:(1)TheEqualOpportunityClauseprescribedin41CFR60-1.4.(2)TheAffirmativeActionClauseprescribedin41CFR60-250.4regardingveteransandveteransoftheVietnamera.(3)TheAffirmativeActionClauseforhandicappedworkersprescribedin41CFR60-741.4.(4)TheCertificationofCompliancewithEnvironmentLawsprescribedin40CFR15.20.',)