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.
A California commingling agreement is a legal contract among working owners of oil and gas interests within the state, specifically pertaining to the production from different formations out of the same well bore. It is designed to address situations where leasehold ownership varies as to depth, ensuring efficient and fair co-production from heterogeneous formations. The main purpose of a California commingling agreement is to establish guidelines and terms for the mixing of production originating from separate geological formations within a single well bore. This agreement is essential when the well bore traverses various depths owned by different leaseholders, each entitled to a specific portion of production. Commingling allows for the simultaneous extraction of resources from multiple formations, optimizing production and ensuring cost-effectiveness. In California, there may be different types of commingling agreements among working owners as to production from different formations out of the same well bore where leasehold ownership varies as to depth. These types can include: 1. Depth-Commingling Agreement: This type of agreement focuses on the specific depths at which commingling is permitted, outlining the precise formations that can be combined. It establishes rules for calculating the proportions of production attributable to each lessee based on their leasehold depths. 2. Unitized-Commingling Agreement: In cases where multiple leasehold interests are combined into a single unit, an unitized commingling agreement is required. This agreement defines the ownership proportions within the unit and regulates the commingling of production from various formations within the unit's well bore. 3. Formation-Specific Commingling Agreement: This type of agreement concentrates on the commingling of production from specific formations only, disregarding other formations that the well bore may traverse. It defines the rights, responsibilities, and revenue distribution among working owners solely for the targeted formations. 4. Comprehensive Commingling Agreement: This all-encompassing agreement covers the commingling of production from all formations present in a well bore, regardless of leasehold ownership, depth variability, or formation specificity. It addresses a broad range of production scenarios and lease types, ensuring fair distribution and addressing potential conflicts. Each of these commingling agreements seeks to establish clear terms regarding the pooling and sharing of production from diverse formations within a well bore. These agreements are implemented to enable efficient utilization of resources, maximize production potential, and establish fair compensation for all working owners involved.A California commingling agreement is a legal contract among working owners of oil and gas interests within the state, specifically pertaining to the production from different formations out of the same well bore. It is designed to address situations where leasehold ownership varies as to depth, ensuring efficient and fair co-production from heterogeneous formations. The main purpose of a California commingling agreement is to establish guidelines and terms for the mixing of production originating from separate geological formations within a single well bore. This agreement is essential when the well bore traverses various depths owned by different leaseholders, each entitled to a specific portion of production. Commingling allows for the simultaneous extraction of resources from multiple formations, optimizing production and ensuring cost-effectiveness. In California, there may be different types of commingling agreements among working owners as to production from different formations out of the same well bore where leasehold ownership varies as to depth. These types can include: 1. Depth-Commingling Agreement: This type of agreement focuses on the specific depths at which commingling is permitted, outlining the precise formations that can be combined. It establishes rules for calculating the proportions of production attributable to each lessee based on their leasehold depths. 2. Unitized-Commingling Agreement: In cases where multiple leasehold interests are combined into a single unit, an unitized commingling agreement is required. This agreement defines the ownership proportions within the unit and regulates the commingling of production from various formations within the unit's well bore. 3. Formation-Specific Commingling Agreement: This type of agreement concentrates on the commingling of production from specific formations only, disregarding other formations that the well bore may traverse. It defines the rights, responsibilities, and revenue distribution among working owners solely for the targeted formations. 4. Comprehensive Commingling Agreement: This all-encompassing agreement covers the commingling of production from all formations present in a well bore, regardless of leasehold ownership, depth variability, or formation specificity. It addresses a broad range of production scenarios and lease types, ensuring fair distribution and addressing potential conflicts. Each of these commingling agreements seeks to establish clear terms regarding the pooling and sharing of production from diverse formations within a well bore. These agreements are implemented to enable efficient utilization of resources, maximize production potential, and establish fair compensation for all working owners involved.
