This Agreement is entered into, between the parties subscribing, ratifying, or consenting to it. The Parties are the owners of working, royalty, or other oil and gas interests in the Unit Area subject to this Agreement.
The Mineral Leasing Act of February 25, 1920, 41 Stat. 437, as amended, 30 U.S.C., Secs. 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 a cooperative or unit plan of development or operation of all or any part of any oil or gas pool, field, or like area, for the purposes of more properly conserving the natural resources whenever determined and certified by the Secretary of the Interior of the United States, to be necessary or advisable in the public interest.
The New Mexico Unit Agreement and Plan of Unitization is a comprehensive legal instrument used in the oil and gas industry to regulate the development and production of hydrocarbon resources in the state of New Mexico. This agreement is specifically designed to govern the operations within a defined geographical area, known as a unit, which consists of multiple oil and gas leases, wells, and other infrastructure. The primary objective of the New Mexico Unit Agreement and Plan of Unitization is to ensure the efficient and optimal recovery of oil and gas resources from the unit area. It is designed to establish a cooperative framework among the various leaseholders and operators within the unit, promoting the conservation and prevention of waste, while maximizing the recovery of hydrocarbons. There are several types of New Mexico Unit Agreement and Plan of Unitization, each designed to address specific circumstances and objectives: 1. Voluntary Unitization: This type of unitization occurs when leaseholders and operators voluntarily agree to form a unit to collectively develop and produce hydrocarbon resources. It is based on the agreement and consent of all the parties involved. 2. Compulsory Unitization: In certain cases, the state or regulatory authority may order the compulsory unitization of leasehold interests in a given area. This typically happens when individual leaseholders fail to agree on unitization voluntarily, and the regulatory body determines that unitization is in the best interest of resource conservation and optimal recovery. 3. Enhanced Recovery Unitization: This type of unitization is focused on implementing enhanced recovery techniques, such as water flooding, gas injection, or other secondary and tertiary recovery methods. The unit agreement and plan of unitization in this case will outline the specific rules and procedures to be followed to maximize hydrocarbon recovery. 4. Existing Field Unitization: Existing field unitization occurs when a previously producing field requires the establishment of a unit to further develop remaining reserves or optimize production. This type of unitization often involves a comprehensive evaluation of the field's characteristics and the implementation of strategies to maximize recovery. The New Mexico Unit Agreement and Plan of Unitization generally cover various important aspects, including unit boundaries, allocation of costs and production, voting rights, well locations, and other operational and financial matters. It requires the unanimous or majority consent of the working interest owners within the unit and is typically subjected to regulatory approval by the relevant authorities in New Mexico.
