- 16 - 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]Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011