This form is an agreement that is used by the Parties that are the owners of working, royalty, or other oil and gas interests in the unit area subject to this Agreement. It is pursuant to the Mineral Leasing Act of February 25, 1920, as amended, 30 U.S.C. Sec. 181 et seq., authorizes Federal lessees and their representatives to unite with each other, or jointly or separately with others, in collectively adopting and operating under a unit plan of development or operations of all or any part of any oil and gas pool, field, or like area, for the purpose of more properly conserving the natural resources whenever determined and certified by the Secretary of the Interior to be necessary or advisable in the public interest.
Arkansas Exploratory Unit Agreement, also known as the Arkansas EUA, is a legal contract established between multiple parties involved in the exploration and production of oil and gas resources within a specific geographic area in Arkansas. This agreement outlines the terms and conditions under which the parties agree to jointly explore, develop, and operate oil and gas wells within the defined exploratory unit. The primary purpose of the Arkansas Exploratory Unit Agreement is to encourage collaboration and efficient resource utilization among various leaseholders operating in the same region. By pooling their resources and expertise, the parties can collectively target and extract oil and gas reserves more effectively, minimizing costs and maximizing overall production. The Arkansas EUA typically involves three main parties: the operating company, non-operating working interest owners, and royalty owners. The operating company, usually an oil and gas exploration and production company, is responsible for managing the activities within the exploratory unit. Non-operating working interest owners are individuals or entities that hold an ownership stake in the unit and contribute financially to exploration and production costs based on their ownership percentage. Royalty owners, on the other hand, are typically landowners who receive a certain percentage of the revenue generated from the sale of extracted oil and gas. The Arkansas EUA also specifies the duration of the agreement, typically ranging from a few years to several decades. It outlines the responsibilities and obligations of each party in terms of financial contributions, drilling operations, well spacing, and minimum work commitments. The agreement also addresses issues such as well allocation, profit distribution, and dispute resolution mechanisms. It is important to note that there can be different types of Arkansas Exploratory Unit Agreements based on various factors such as geography, geological formations, or the nature of exploration activities. Some common types include: 1. Area-Wide Unit Agreement: In this agreement, multiple leases in a specific area are pooled together, creating a larger exploratory unit. This type of agreement allows for increased efficiency and reduces the possibility of well interference between operators. 2. Formation-Specific Unit Agreement: This type of agreement is limited to a specific geological formation or reservoir. It focuses on exploring and developing resources within that particular formation, leveraging specialized knowledge and technologies. 3. Horizontal Drilling Unit Agreement: Horizontal drilling techniques have become increasingly popular in unconventional resource plays. This agreement focuses on the development of horizontal wells within the exploratory unit to maximize production rates and reservoir recovery. In summary, the Arkansas Exploratory Unit Agreement is a crucial legal framework that promotes collaboration and maximizes the efficiency of oil and gas exploration and production activities within a specific region in Arkansas. It ensures fair distribution of costs, profits, and responsibilities among the parties involved, ultimately leading to optimized resource development.
