contract depth

1. n. [Drilling]
The depth in a drilling well at which the drilling contractor receives a lump-sum payment for reaching a particular milestone. The contract depth is specified in a legal agreement between the operator, who pays for the well, and the drilling contractor, who owns and operates the drilling rig. Contract depth may be the final or total depth (TD) of the well, an intermediate point in the well or another milestone, such as running well-logging tools to the bottom of the hole. In the case of an intermediate contract depth, the work to deepen the well would likely be done on a day rate basis, or a "time and materials" contract.