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.
Delaware Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth — Detailed Description and Key Types. A Delaware Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore refers to a contractual agreement established among working interest owners in Delaware for the purpose of commingling the production from multiple formations within a single well bore. This agreement becomes necessary when the leasehold ownership varies as to depth, which means different owners hold rights to different depths within the same well. In such cases, multiple working interest owners may hold various leasehold interests in a well that penetrates through different formations at various depths. This situation requires a well-coordinated agreement to govern the production and distribution of hydrocarbons from these formations while ensuring fairness and equity among all working interest owners. The Delaware Commingling Agreement establishes guidelines and principles governing the commingling operations, including but not limited to the following key aspects: 1. Identification of Formations: The agreement should specify the formations that can be commingled within the same well bore. This could include the identification of specific layers within a single reservoir or multiple reservoirs. 2. Ownership Allocation: Given the varying leasehold ownership as to depth, the agreement outlines a mechanism to allocate ownership rights, profits, and obligations for each participating working interest owner. This ensures a fair distribution of financial benefits based on the proportionate fractional interests held within each formation. 3. Commingling Procedures: The agreement provides detailed procedures and operational guidelines for performing the commingling operations. This includes well logging, monitoring, testing, and data measurement techniques to accurately determine production composition and allocate it to the respective working owners. 4. Cost and Expense Allocation: The agreement defines the cost-sharing arrangement among the working owners for drilling, completing, operating, and maintaining the commingled well. It typically takes into consideration factors such as the depth of ownership, producing formation characteristics, and respective working interest percentages. 5. Reporting and Auditing: To maintain transparency and verify compliance, the agreement establishes reporting and auditing requirements. This ensures that all parties have access to accurate production data, financial records, and operational reports. Some variations exist in Delaware Commingling Agreements, based on factors such as the number of participating working interest owners, complexity of the formations involved, and agreement duration. Some common types include: 1. Limited Commingle Agreement: This agreement may be suitable where only two or a limited number of formations are being commingled. It simplifies ownership allocation and may involve fewer operational procedures. 2. Comprehensive Commingle Agreement: This type of agreement is typically utilized when multiple formations at different depths are commingled. It accounts for complex ownership structures, diverse production characteristics, and may entail more detailed operational guidelines. 3. Temporary Commingle Agreement: In certain scenarios, a temporary commingling agreement may be established to address specific short-term opportunities or operational needs. This type of agreement is often used when immediate or time-sensitive action is required, such as during well servicing or testing activities. In summary, a Delaware Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore helps maintain operational efficiency, avoid disputes, and ensure equitable distribution of resources among diverse leasehold owners. Properly executed agreements provide a legal framework that promotes cooperation, transparency, and compliance in commingling production from multiple formations and depths within a single well bore.Delaware Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth — Detailed Description and Key Types. A Delaware Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore refers to a contractual agreement established among working interest owners in Delaware for the purpose of commingling the production from multiple formations within a single well bore. This agreement becomes necessary when the leasehold ownership varies as to depth, which means different owners hold rights to different depths within the same well. In such cases, multiple working interest owners may hold various leasehold interests in a well that penetrates through different formations at various depths. This situation requires a well-coordinated agreement to govern the production and distribution of hydrocarbons from these formations while ensuring fairness and equity among all working interest owners. The Delaware Commingling Agreement establishes guidelines and principles governing the commingling operations, including but not limited to the following key aspects: 1. Identification of Formations: The agreement should specify the formations that can be commingled within the same well bore. This could include the identification of specific layers within a single reservoir or multiple reservoirs. 2. Ownership Allocation: Given the varying leasehold ownership as to depth, the agreement outlines a mechanism to allocate ownership rights, profits, and obligations for each participating working interest owner. This ensures a fair distribution of financial benefits based on the proportionate fractional interests held within each formation. 3. Commingling Procedures: The agreement provides detailed procedures and operational guidelines for performing the commingling operations. This includes well logging, monitoring, testing, and data measurement techniques to accurately determine production composition and allocate it to the respective working owners. 4. Cost and Expense Allocation: The agreement defines the cost-sharing arrangement among the working owners for drilling, completing, operating, and maintaining the commingled well. It typically takes into consideration factors such as the depth of ownership, producing formation characteristics, and respective working interest percentages. 5. Reporting and Auditing: To maintain transparency and verify compliance, the agreement establishes reporting and auditing requirements. This ensures that all parties have access to accurate production data, financial records, and operational reports. Some variations exist in Delaware Commingling Agreements, based on factors such as the number of participating working interest owners, complexity of the formations involved, and agreement duration. Some common types include: 1. Limited Commingle Agreement: This agreement may be suitable where only two or a limited number of formations are being commingled. It simplifies ownership allocation and may involve fewer operational procedures. 2. Comprehensive Commingle Agreement: This type of agreement is typically utilized when multiple formations at different depths are commingled. It accounts for complex ownership structures, diverse production characteristics, and may entail more detailed operational guidelines. 3. Temporary Commingle Agreement: In certain scenarios, a temporary commingling agreement may be established to address specific short-term opportunities or operational needs. This type of agreement is often used when immediate or time-sensitive action is required, such as during well servicing or testing activities. In summary, a Delaware Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore helps maintain operational efficiency, avoid disputes, and ensure equitable distribution of resources among diverse leasehold owners. Properly executed agreements provide a legal framework that promotes cooperation, transparency, and compliance in commingling production from multiple formations and depths within a single well bore.
