This form is used when the parties own undivided leasehold interests in the Lease as to depths from the surface of the ground to a Specific Depth. The parties acknowledge that the production from a well on the leasehold interest will be obtained from depths in which the ownership is not common. Thus, the parties find it necessary to enter into this Agreement to enable the parties to each be paid a proportionate part of the commingled production from the separate depths in which they own interests.
The Oregon Commingling Agreement among Working Owners, as related to the production from different formations out of the same well bore where leasehold ownership varies as to depth, is an important legal document that outlines how multiple parties can collaborate and share resources in the oil and gas industry. This agreement is particularly crucial when it comes to optimizing production and maximizing profitability from wells that penetrate multiple formations at varying depths. Key provisions included in the Oregon Commingling Agreement among Working Owners can encompass: 1. Identification of Parties: The agreement should clearly identify and include the names and contact details of all the working owners involved in the commingling arrangement. This ensures transparency and facilitates effective communication among the parties involved. 2. Well Designation: A clear description of the well bore in question, including the well's unique identification number, location, and the specific formations contributing to production, should be provided within the agreement. This helps prevent any ambiguities or disputes concerning the well in question. 3. Leasehold Ownership Variations: Since leasehold ownership can differ as per the depth of formations, the agreement should detail the specific depth intervals where leasehold interests of the working owners come into effect. This helps avoid any confusion or conflicts regarding drilling, extraction, and profit distributions from various depths. 4. Commingling Procedures: The document should outline the procedures and protocols to be followed when commingling production from different formations. It may include guidelines for integration, allocation, measurement, and accounting practices ensuring fairness and accuracy in production reporting and revenue distribution. 5. Cost Sharing: The agreement should establish the proportionate contributions of each working owner towards drilling, completion, and ongoing operational expenses. Clear guidelines for sharing costs associated with maintenance, repairs, and future enhancements should also be outlined. 6. Production Allocation: The method for allocating production from different formations should be specified, including factors such as reservoir drainage areas, formation characteristics, and historical production data. This ensures an equitable distribution of production volumes among the working owners. 7. Reporting and Auditing: Procedures for routine reporting, periodic auditing, and dispute resolution mechanisms should be incorporated to maintain transparency and resolve any concerns related to production measurement, accounting, or revenue allocation. It's important to note that there may be various subtypes or variations of the Oregon Commingling Agreement among Working Owners As to Production from Different Formations Out of the Same Well bore, Where Leasehold Ownership Varies As to Depth. These variations could occur due to specific regional practices, geological conditions, or individual operator preferences. The agreement may be adapted and customized to suit the specific needs and circumstances of each commingling arrangement.
