Subcontract to drill well.

Whereas, the A company, a corporation duly incorporated under the laws of the state of _________, has made and entered into a contract with the B company, a corporation duly incorporated under the laws of the state of _________, and herein called "owner," by the terms of which, among other things, the A company has agreed, obligated and bound itself to drill, case, and complete for the owner a deep water well, according to the specifications and to be located as herein set out; and, whereas, the A company desires to sublet the contract for the drilling, casing, and completing of such well:

Therefore, know all by these presents that this contract this day made and entered into by and between the A company, herein called the "company," and _________, _________, and _________, a copartnership doing business under the firm of _________, of _________ county, _________, herein called the "contractor," witnesseth:

1. The contractor has this day agreed and contracted with the company to drill and case deep water well; the well to be located on a certain lot of ground situated in the city of _________, owned by the B company, and located as follows: _________, the exact location on such lot to be made by the owner.

2. The well is to be drilled and cased from _________ inches above the normal ground surface of the earth adjacent to the well down to and through all of the _________ sands; but in no event to be drilled to a greater depth than _________ feet. From the surface of the earth down to a depth of _________ feet the well shall be cased with _________ inch inside diameter _________ pound per lineal foot steel casing, which shall be welded where joined. Such casing shall be set in such manner as to case out all shaly, sand, or mud formations, and also all water above.

3. From such point, that is, from the point _________ feet below the surface of the earth and at the bottom of the _________ inch casing, the well shall be cased to the upper _________ sands with a[n] _________ inch _________ pound per lineal foot _________ wrought iron liner or packer casing, which casing shall be equipped with long oil country couplings, and shall be provided with _________ threads to the inch. The lower or _________ inch casing shall be so set as to center accurately with the _________ inch casing above it, and shall be set in such manner as to case out all shaly, mud, or sand formation and all waters above.

4. From the lower extremity of the _________ inch casing, the well is to be drilled from such point, until it is completed, with as large a bit as practicable to pass through the _________ inch _________ pound per lineal foot casing. The well shall, at the option of the company, be cased with a strainer casing from the lower extremity of the _________ inch casing to the bottom thereof with _________ inch inside diameter _________ wrought iron _________ pound per lineal foot casing. Such _________ casing to be drilled with _________ inch holes over its entire area, so that the maximum distance between the center of any adjacent holes will be _________ inch centers.

5. The first _________ feet shall be drilled and casing set before the well is drilled below that depth. It shall then be drilled to the depth that it is to be cased with the _________ inch casing, as above mentioned, and such casing set before it is drilled below that depth; and after the _________ inch casing is set, drilling shall then be completed.

6. The contractor agrees that all casing shall be set in such manner and all drilling operations conducted in such a way that if it is deemed necessary or advisable the well can be "shot" to increase the flow, without injury or damage to either the casing set or the drilling then completed.

7. The contractor agrees to furnish all labor, derrick, power, casing, materials, equipment, tools, freight, and delivery expense, and all other things, whether labor or material, without limitation, necessary to drill and equip the well and to finish the same as above set out, and to deliver the same to the company free of all material, labor, or other liens in a first class workmanlike condition, and in accordance with the conditions herein set out at $_____ per lineal foot for first _________ feet, and $_____ per lineal foot for the remaining depth, but not to exceed a total depth of _________ feet.

Such amount shall be paid as follows:

a Upon delivery at owner's property above described of well casing for use on the work herein set forth, company will pay to contractor an amount equal to the cost to contractor of such casing, plus freight charges; such amount to be evidenced by paid invoices and freight bills which shall be presented and surrendered to company;

b _________ days after the actual commencement of drilling by contractor, and at the end of each succeeding _________ days thereafter, company will pay to contractor for work completed in the preceding _________ day period an amount equivalent to $_____ per foot for each foot of _________ inch well completed as above, and $_____ per foot for each foot of _________ inch well completed as above set forth;

c Upon completion of the well, in accordance with all the provisions of this agreement, and upon acceptance of the work by company and by owner, company will pay to contractor the balance of the contract price provided for in this agreement.

Company may, at its option, in lieu of all or any part of any cash payment required by the provisions of subdivisions a, b, and c, deliver to contractor an equivalent amount of owner's _____% cumulative preferred stock at par value; provided, however, that in no event shall the total amount of such stock so delivered exceed _____% of the total contract price above specified.

8. The contractor agrees to be informed of and to comply with all laws, regulations, rules, and requirements of the state of _________ regarding the drilling of water wells, and of such laws, regulations, rules, and requirements of any other governmental authority having jurisdiction in the premises, and will assume all liability for damages or penalties arising out of the violation of or failure to observe such laws, regulations, rules, and requirements.

9. It is further agreed that the contractor will carry liability insurance for the protection of the A company, and the owner, as their interest may appear, against any and all claims of damages of whatever nature arising out of injuries to contractor's or their employees, or any of them, or to the general public, resulting either directly or indirectly from contractor's operations.

10. The contractor agrees with the company that, in the event it becomes necessary to shoot the well, the company shall pay only the actual cost thereof, but that cost will not exceed, under any circumstances, $_____(which shall be in addition to the above specified contract price), which amount shall include any changes or rearrangements made necessary by the result of the shooting of the well.

11. The contractor agrees to test the well, as the same is being drilled, after the _________ sands have been encountered, whenever and as requested by the company, and in making such test company shall furnish, at its expense, all apparatus for making such test, and the contractor shall, bear the expense of making such test and furnish all labor necessary in making same. The company may have the drilling of the well stopped, at its option, at any time after the _________ sands have been encountered, and payment shall be made in such case for the actual number of feet drilled.

12. Work shall commence on the well within _________ days from the date of signing this contract, and well shall be completed and fully equipped within _________ workdays from the date of starting. The contractor hereby acknowledges that the time for the completion of the work is of the essence of this contract, and that, in the event of a failure to complete the work within the time specified, the owner will be greatly damaged, and its damages will be difficult of ascertainment. It is therefore agreed, and the contractor binds h—self, to pay the owner $_____ per day for every day's delay in the completion of the work beyond the date specified, which sum it is hereby agreed shall be construed as liquidated damages and not as a penalty.

13. The contractor agrees and binds h—self to furnish with the contract a bond in the sum of $_____, guaranteeing the full and satisfactory performance of this contract, and further guaranteeing the payment of all labor and work done and material and fixtures furnished and used in the carrying out and in the performance of this contract.

14. The contractor further agrees that where there is a conflict, if there is a conflict, between the former proposals of _________, _________, and _________, _________, and this contract, the stipulations of this contract shall be the agreement between the parties and shall be controlling, and that this contract supersedes all previous agreements or representations, either written or verbal, between the parties hereto.

15. If, at any time before the well is completed, the company shall desire that another well shall be drilled on the same lot as the well herein contracted for is drilled, the contractor agrees to drill such second well in accordance with each and every of the conditions, provisions, and terms of this contract, save and except that it agrees that the contract price of the second well shall be $_____ less than the total contract price of the well herein contracted for, for the same depth. If the second well is drilled to a greater depth than the first well, the excess shall be paid for at $_____ per lineal foot for such excess. In the event the company exercises its option of having second well drilled, it shall give the contractor written notice of its exercise of such option at least _________ full days before the completion of the well herein contracted for.

16. It is agreed that this contract is executed with the full and complete knowledge of its contents and of all its conditions and provisions, and with the further knowledge of the kind, quantity, and quality of the articles, materials, and work required, and of the guaranties and representations herein stated, made, and set out.

17. It is further specifically agreed that this contract is executed subject to all the laws and governmental regulations of the city of _________, and to the provisions of the franchise from the city of _________ to _________ company, and that this contract is not binding upon the company unless and until signed by one of its executive officers.

In witness whereof, etc.



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