This form is used to promote conservation, increase the ultimate recovery of Unitized Substances of the specified lands and to protect the rights of the owners, it is deemed necessary and desirable to enter this Agreement, in conformity with (Applicable State Statute), to unitize the oil and gas rights in the Unitized Formation in order to conduct Unit operations for the conservation and utilization of Unitized Substances as provided in this Agreement.
Indiana Unitization Agreement is a legally binding contract that allows multiple parties to combine their separate oil and gas resources within a specific defined area for more efficient and economical production. This agreement is designed to optimize the recovery of hydrocarbon reserves by pooling the separate interests of various owners into cohesive units. Within the state of Indiana, there are primarily two types of Unitization Agreements commonly used: 1. Voluntary Unitization Agreement: This type of agreement is entered into voluntarily by all parties involved. It requires mutual consent between the operators or leaseholders of the separate oil and gas leases to form a unit or pool. The agreement typically outlines the rights, obligations, and responsibilities of each party, as well as the allocation of costs and production revenues. 2. Compulsory Unitization Agreement: In some cases, when voluntary unitization cannot be achieved due to disputes or non-consenting parties, a compulsory unitization agreement may be pursued. This agreement can be initiated when an operator or leaseholder applies to the Indiana Department of Natural Resources — Division of Oil and Gas for compulsory unitization. If approved, it compels all parties within a defined area to participate in the unitization process, even if they disagree initially. A hearing is usually held to determine the fairness and technical feasibility of the proposed unitization. The Indiana Unitization Agreement typically addresses various aspects, including: 1. Purpose: The agreement outlines the objective of combining resources for enhanced extraction efficiency, reduced costs, and increased production. 2. Unit Area: The specified area or tract of land where the unitization is proposed. It defines the boundaries and identifies the participating leases. 3. Working Interests: Details the percentage ownership or interest each party holds within the unit area. 4. Voting Procedure: Describes the decision-making process, including voting rights and procedures for resolving disputes. 5. Operation and Production: Establishes rules and guidelines for drilling, exploration, development, production, and other related activities within the unit. 6. Accounting and Allocation: Specifies how costs, expenses, production revenues, taxes, and royalties are accounted for and allocated among the participating parties. 7. Termination and Duration: Specifies the conditions or events upon which the unitization agreement terminates and the duration of the agreement. The specific terms and provisions of an Indiana Unitization Agreement may vary depending on the circumstances, parties involved, and the Indiana Department of Natural Resources regulations.
