This form is used for the Designation of a Successor Operator pursuant to a specified Section of a Communitization Agreement. First Party is designated by Second Parties as Operator of the communitized area, and First Party desires to assume all the rights, duties, and obligations of Operator under the Communitization Agreement.
This Agreement is incorporated into this Designation by reference and made a part of it as fully and effectively as though the Agreement were expressly set forth in this Designation.
Oregon Designation of Successor Operator, Commoditization Agreement: A Comprehensive Guide In the state of Oregon, the Designation of Successor Operator and Commoditization Agreement are vital legal documents applied in the management and operation of oil, gas, and geothermal properties. These agreements play a significant role in ensuring the smooth transition of ownership and facilitation of joint operations, while adhering to state regulations. Let's delve into these two crucial agreements in detail: 1. Oregon Designation of Successor Operator: The Oregon Designation of Successor Operator agreement is utilized to designate a new operator for an oil, gas, or geothermal property in the state. This agreement is instrumental when the existing operator wishes to relinquish their responsibilities or when it becomes necessary due to a change in circumstances. The Designation of Successor Operator ensures a seamless transfer of operations, safeguarding the continuity of production and minimizing disruptions. Key provisions within this agreement include the identification of the new operator, their qualifications, and the effective date of the transfer. It is vital to comply with the Oregon Department of Geology and Mineral Industries (DOGMA) rules and regulations for a successful operator change. Types of Designation of Successor Operator Agreements in Oregon: a) Voluntary Transfer: When the existing operator willingly transfers its responsibilities to a designated successor operator, such as when they wish to focus on other ventures or opt for retirement. b) Involuntary Transfer: In some cases, the transfer may be involuntary, triggered by a breach of the original operator's obligations, financial insolvency, or violation of regulatory requirements. During such scenarios, the state may designate a successor operator to ensure proper management. 2. Oregon Commoditization Agreement: The Oregon Commoditization Agreement enables multiple operators or leaseholders to combine their respective oil, gas, or geothermal properties into a single cohesive unit. This agreement facilitates coordinated production from collectively owned or leased lands, optimizing extraction efficiency. This agreement is highly beneficial when individual properties are not economically feasible to develop independently but can yield significant benefits when operated together. The Commoditization Agreement defines the responsibilities, rights, and liabilities of each operator involved, ensuring fair allocation of expenses, royalties, and revenues derived from the communal operation. Types of Commoditization Agreements in Oregon: a) Field-Wide Commoditization: When operators or leaseholders in a particular field agree to jointly develop the resources underlying their holdings. This ensures efficient reservoir management and avoids redundancies in exploration and production efforts. b) Unit Commoditization: This type of agreement encompasses a specific defined portion of a field or reservoir. Here, the participating operators or leaseholders pool their resources and collectively invest in drilling, extraction, and production activities within the defined unit. To ensure compliance with Oregon's requirements, operators need to submit their Designation of Successor Operator and Commoditization Agreements to the DOGMA for review and approval. In conclusion, Oregon's Designation of Successor Operator and Commoditization Agreements are crucial legal instruments when it comes to transferring operator ship and managing joint operations in the state's oil, gas, and geothermal industry. By adhering to these agreements, operators ensure continuity, maximize production efficiency, and foster collaborative development for optimal resource extraction.
