Reasonably-Prudent-Operator Standard Law and Legal Definition

In the context of Oil & Gas, this is the test generally applied to determine a lessee's compliance with implied lease covenants by considering what a reasonable, competent operator in the oil-and-gas industry would do under the circumstances. It also determines acting in good faith and with economic motivation, and takes into account both the lessor's interests as well as the operator’s interest. This test is also known as reasonable-prudent-operator standard and prudent-operator standard.