Exhibit E to Operating Agreement Gas Balancing Agreement - Form 3
About this form
The Exhibit E to Operating Agreement Gas Balancing Agreement - Form 3 is a legal document that outlines the rights and responsibilities of parties involved in natural gas production. This agreement specifically governs how each party can take their share of gas produced within a defined contract area. Unlike other agreements, this form focuses on balancing the production and accounts between parties based on their individual contributions and consumption of gas.
Key components of this form
- Ownership of gas production, detailing rights to take and sell respective shares.
- Balancing of production accounts, outlining procedures for underproduced and overproduced parties.
- In-kind or cash balancing upon depletion of gas production.
- Payment responsibilities regarding taxes and operating expenses related to gas production.
- Audit rights, allowing parties to review accounts and ensure equitable settlements.
Situations where this form applies
This form should be used when multiple parties are jointly operating gas wells and need to establish clear rules for gas distribution and production accounting. It is particularly useful during instances of imbalance in gas takes between parties, ensuring each party receives fair compensation for their share while also detailing operational responsibilities.
Intended users of this form
- Operators of gas wells involved in joint ventures.
- Non-operators who share a stake in gas production.
- Parties needing to resolve issues related to gas overproduction or underproduction.
- Legal professionals advising clients in energy or mineral rights sectors.
Instructions for completing this form
- Identify and enter the names of the Operator and Non-Operators involved in the agreement.
- Specify the date on which the Joint Operating Agreement was made.
- Outline the ownership percentages and gas production details for each party.
- Document any elected options regarding payment of excess or deficit gas takes.
- Each party must sign and date the agreement to make it valid.
Does this form need to be notarized?
Notarization is not commonly needed for this form. However, certain documents or local rules may make it necessary. Our notarization service, powered by Notarize, allows you to finalize it securely online anytime, day or night.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes
- Failing to accurately disclose ownership percentages, which can lead to disputes.
- Not including the date of the operating agreement, resulting in potential legal ambiguities.
- Ignoring state-specific requirements that may alter how the form is applied.
Benefits of using this form online
- Instant access to legally vetted documents, ensuring compliance with current laws.
- Editability allows users to tailor the agreement according to specific needs.
- Convenient downloadable format provides flexibility to complete the form on your schedule.
Legal use & context
- This agreement is enforceable under contractual law in the context of energy and mineral rights.
- It mitigates disputes by clearly stating each party's rights and obligations.
- Non-compliance with the terms can lead to legal action for breach of contract.
Main things to remember
- The form governs the distribution of gas production among joint operators.
- It provides a framework to address overproduction and underproduction issues.
- Clear terms increase accountability and facilitate more efficient gas operations.
