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.
Title: Alabama Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth Keywords: Alabama commingling agreement, working owners, production, different formations, same well bore, leasehold ownership, depth Description: In Alabama's oil and gas industry, the Commingling Agreement Among Working Owners plays a crucial role in regulating the production from different formations extracted out of a single well bore. This agreement specifically addresses situations where leasehold ownership varies according to the depth of the well. 1. Single-Depth Commingling Agreement: The first type of Alabama Commingling Agreement applies to situations where working owners possess leasehold ownership to a specific depth within the well bore. This agreement allows these owners to pool their resources and commingle production from different formations found within their combined depth range. 2. Multi-Depth Commingling Agreement: The second type is the Multi-Depth Commingling Agreement, designed for scenarios where working owners hold leasehold ownership rights to varying depths within the same well bore. This agreement allows owners to commingle production from different formations within their respective depth ranges, ensuring efficient utilization of resources. Key Provisions within Alabama Commingling Agreements: 1. Ownership Allocation: The agreement defines the ownership percentage allocated to each working owner based on their leasehold rights. This ensures fair distribution of production proceeds in accordance with the depth range owned by each party. 2. Operator Requirements: The agreement sets out the responsibilities of the designated operator, who manages day-to-day operations, production protocols, and compliance with all applicable rules and regulations. 3. Reporting and Accountability: To maintain transparency, the agreement establishes reporting requirements, necessitating regular updates on production volumes, well performance, expenses, and revenue distribution among working owners. 4. Cost Allocation: The agreement outlines a fair mechanism for sharing the costs associated with drilling, completion, operations, and maintenance among the participating working owners. This includes expenditure on infrastructure, equipment, and any necessary repairs or upgrades. 5. Dispute Resolution: Provisions for dispute resolution are included, enabling arbitration or mediation processes in case any conflicts arise among the working owners regarding the interpretation or execution of the agreement. The Alabama Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth provides a legal framework that fosters cooperation and efficiency in oil and gas operations. By allowing multiple working owners to maximize production from different formations in a single well bore, this agreement promotes optimal resource utilization while protecting the interests of each party involved.
