Legal Definitions - turnkey drilling contract

A turnkey drilling contract is an agreement between a drilling contractor and the owner or lessor of mineral rights. The contract outlines the responsibilities and obligations of both parties. In this type of contract, the drilling contractor takes on most of the risk and liability for any damages caused by the drilling.

• Daywork drilling contract: A lease operator hires a drilling rig and oilfield workers and pays based on the time spent drilling. The lease operator has control over the drilling operations and is liable for any damages caused.
• Footage drilling contract: A drilling contractor is paid a set amount per foot drilled and has control over how the work is done. The contractor assumes most of the risk and liability for any delays or damages.
• Turnkey drilling contract: The drilling contractor promises to perform specific functions for an agreed price. The owner or lessor of mineral rights has little to no control over the drilling operations and assumes little to no liability for damages.

These examples illustrate the different levels of control and liability that can be present in drilling contracts. A turnkey drilling contract offers the least amount of control for the owner or lessor of mineral rights, but also the least amount of liability. The drilling contractor takes on most of the responsibility for the success and safety of the drilling operations.