REDRILLING/EXTRA EXPENSE INSURANCE
1. COVERAGE
The Insurers
agree, subject to the Combined
Single Limits of
Liability, terms and conditions applicable
to Section Two, to reimburse the Insured for actual costs
and/or expenses reasonably incurred to restore or
redrill a well insured hereunder, or any part thereof,
which has been lost or otherwise damaged as a result of
an Occurrence giving rise to a claim which would be
recoverable under Sub-Section A of Section Two if the
Insured's
Retention applicable to
Sub-Section A were
nil, subject to
the following conditions:
A. The
Insurers shall reimburse the Insured only for such costs and expenses as would
have been
incurred to restore or redrill a well had the most prudent and
economical methods been employed.
B. There
shall be no coverage under this Sub-Section B for restoration or redrilling of
any well whose
flow
can be safely diverted into production, including by completing through drill
stem left in the well insured hereunder, or which can be completed through a
relief well(s) drilled for the purpose of
controlling a well.
C. In no event shall the Insurers be liable for
costs and/or expenses incurred
(1) with respect to drilling wells, to drill below
the depth reached when the well became out of
control as defined in Clause 2. of Sub-Section A of Section Two and
(2) with respect to producing or shut-in wells, to
drill below the geologic zone or zones from which
said well(s) was (were) producing or capable of producing.
D. In
respect of drilling wells, the Insurers' liability hereunder shall in no event
exceed 130% of the
cost
incurred to drill the original well to the depth reached at the time when the
well became out of control or fire occurred.
E. In
respect of producing,
shut-in or workover
wells, The Insurers'
liability hereunder shall in
no event
exceed …..% of
the cost incurred
to drill the original
well, plus 10%
per annum compound thereof from
the date of spudding
of the original drilling of the well until
the date of the
occurrence giving rise to the aforesaid claim which would have been recoverable under Sub-Section A of
this Section Two
if the Insured's
Retention applicable to Sub-
Section A were nil, subject to a maximum of ……% of the
original cost.
F. In any circumstances, the Insurers' liability
under this Sub-Section B for costs and expenses shall
cease
(1) if actual restoration or redrilling has not
commenced within ….. days after
a. the date of the accident or occurrence giving rise
to coverage under this Sub-Section B,
or
occur; and
(2) in any event when the depths set forth in
Paragraph 1.C. of this Sub- Section B have been
reached
and the well restored to a condition comparable to that existing prior to the
occurrence
giving
rise to the claim, or so far as possible utilising generally available
equipment and
technology.
2. EXCLUSIONS
There shall be no indemnity or liability under this Sub-Section B for:
A. any loss of or damage to any drilling or
production equipment;
B. any loss, damage or expense caused by or arising
out of delay (including delayed and/or
deferred production) and/or loss of use
and/or loss of or damage to production (including that due
to loss of reservoir pressure) and/or loss of
or damage to any reservoir or reservoir pressure;
C. costs and/or expenses incurred to restore or
redrill any relief well, or any part thereof;
D. any claim recoverable under this Section Two
solely by reason of the addition or attachment to
Sub-Section A of this Policy of the Making Wells Safe Endorsement;
E. redrilling and/or recompletion or for in-hole
equipment in respect of any well that was plugged
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