Core Oil Company signed a lease contract on January 1, 2006. The primary term specified in the contract was a four-year term.

a. On what date is the first delay rental payment due?

b. What is the maximum number of delay rental payments that may be made?

c. By what date must drilling be commenced in order to keep the lease from terminating?

d. Assume Core Oil begins drilling a well on January 2, 2007.

1) Would the first delay rental be necessary to keep the lease from terminating?

2) If the well is still in process 14 months later, would the second delay rental be necessary?

3) If, instead, the well was completed and production begun by October 3, 2007, would the second delay rental be necessary?

4) If production ceased by December 25, 2008, would the third delay rental payment be necessary?