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recovery from the Prudhoe Bay field of natural gas, if recovery
of such natural gas someday would become profitable.
Terms of DL-1 Leases Relating to Exxon’s DRR Obligations
The particular provisions of the DL-1 Leases (under which
Exxon and the other oil companies conducted oil exploration and
recovery activities in the Prudhoe Bay field) that apply to DRR
obligations of Exxon and of the other oil companies upon
termination of oil production in the Prudhoe Bay oil field are
vague and general.
The principal language of the DL-1 Leases that describes
what is to happen--upon termination of oil production at Prudhoe
Bay--to the extensive oil production equipment and facilities
located in the Prudhoe Bay field is found in paragraph 36, which
reads oddly and ambiguously in terms of “rights” and “privileges”
of the oil companies (not in terms of DRR “duties or
obligations”) as follows:
RIGHTS ON TERMINATION. Upon the expiration or earlier
termination of this lease as to all or any portion of said
lands, * * * [Exxon] shall have the privilege at any time
within a period of six months thereafter, or such extension
thereof as may be granted * * * [by Alaska], of removing
from said land or portion thereof all machinery, equipment,
tools, and materials other than improvements needed for
producing wells. Any materials, tools, appliances,
machinery, structures, and equipment subject to removal as
above provided which are allowed to remain on said land or
portion thereof shall become the property of * * * [Alaska]
upon expiration of such period; provided, that * * * [Exxon]
shall remove any and all of such properties when so directed
by * * * [Alaska]. Subject to the foregoing, * * * [Exxon]
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