Legal Definitions - well-completion clause

A well-completion clause is a provision in an oil-and-gas lease that allows the lessee to complete a well and maintain the lease if the drilling achieves production before the lease terminates. This clause is important because it gives the lessee the right to finish drilling even if the lease is about to expire.

For example, let's say a company leases a piece of land for oil and gas exploration. The lease has a well-completion clause that allows the company to finish drilling a well even if the lease is about to expire. If the company successfully completes the well and it starts producing oil or gas, the lease will be extended, and the company can continue to operate on the land.

Another example is if a company starts drilling a well but encounters unexpected problems that delay the completion of the well. If the lease is about to expire, the well-completion clause allows the company to finish drilling and maintain the lease if the well is successful.

These examples illustrate how a well-completion clause can benefit the lessee by allowing them to finish drilling and maintain the lease if the well is successful.