Exhibit E to Operating Agreement Gas Balancing Agreement - Form 5
About this form
The Exhibit E to Operating Agreement Gas Balancing Agreement - Form 5 is a specialized legal document that outlines the terms and conditions of gas production balancing among owners in a specific gas formation. It governs how the ownership and distribution of produced gas are managed, including how disparities in production among owners are reconciled through either gas balancing or cash settlements. This form is essential for ensuring all parties are compensated fairly based on their percentage ownership, and it provides clear definitions of key terms associated with gas production and balancing agreements.
Main sections of this form
- Definitions of key terms such as Disposable Production, Overproduced Owner, and Underproduced Owner.
- Ownership rights for gas production and regulations on marketing and utilization of gas.
- Procedures for balancing production accounts among owners involved in the gas agreement.
- Cash settlement terms in the event of imbalances and cessation of gas production.
- Payment obligations for royalties and taxes related to gas production.
- Liabilities and responsibilities of the operator managing the gas agreements.
Common use cases
This form is used when multiple owners are involved in the production of gas from a shared formation and need to establish a clear framework for balancing their production and ownership interests. It is particularly useful during negotiations of an operating agreement when gas production has resulted in either overproduction or underproduction among the parties involved. Owners can utilize this agreement to ensure fair compensation and resolution of imbalances, thus promoting orderly management of gas resources.
Who this form is for
- Gas production owners who hold a percentage interest in a gas formation.
- Parties entering into an operating agreement related to gas production.
- Operators managing gas wells who require documentation for balancing production among owners.
- Legal and real estate professionals advising clients on gas production agreements.
How to complete this form
- Identify and list all parties involved in the operating agreement.
- Specify each owner's percentage ownership in the gas formation.
- Define the terms of production and marketing rights for gas among the owners.
- Include provisions for cash settlements and imbalance calculations as outlined in the agreement.
- Ensure all parties review, agree, and sign the form to validate the agreement.
Notarization requirements for this form
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes
- Failing to clearly define percentage ownership among the parties involved.
- Omitting vital definitions that could lead to misunderstandings regarding production rights.
- Incorrectly calculating cash settlements for imbalances, leading to disputes.
- Not updating the agreement upon changes in ownership or production levels.
Why complete this form online
- Convenient access to a professionally drafted template that saves time.
- Editable fields that allow for customization to suit specific agreements among parties.
- Instant downloads for immediate use, ensuring timely completion of necessary legal processes.
Quick recap
- The Gas Balancing Agreement helps ensure fair and equitable distribution of gas among owners.
- Understanding key terms and provisions in the form is essential for compliance and efficiency.
- Accurate documentation of ownership and production rights is critical for preventing disputes.
