Nebraska Unit Operating Agreement

• Category: Oil Gas and Minerals - Agreements
• State: Multi-State
• Control #: US-OG-761
• Format: Word; Rich Text

Description

This agreement form is used when the Parties, as Working Interest Owners, have executed an agreement which provides for a separate agreement by the Working Interest Owners to provide for Unit Operations as defined in the Unit Agreement.

Nebraska's Unit Operating Agreement (USA) is a legal document that outlines and governs the rights, obligations, and responsibilities of the co-owners or unit operators in an oil and gas exploration unit within the state of Nebraska. It serves as a contractual framework for multiple parties involved in the exploration and production activities conducted in the unit area. This comprehensive agreement determines various aspects of unit operations, including the distribution of costs, profits, and liabilities among the working interest owners. The USA establishes guidelines for the development, drilling, testing, and production of hydrocarbons within the unit area to ensure efficient and safe operations. In Nebraska, there are primarily three types of Unit Operating Agreements recognized: 1. Voluntary Unit Agreements: Voluntary unitization occurs when co-owners of oil and gas leases voluntarily agree to pool their interests and resources in order to maximize production and enhance recovery. A Voluntary Unit Agreement can be entered into before or after drilling a well. This type of agreement is commonly used when it is economically beneficial to combine individual leasehold interests into a unit for optimal operations and recovery. 2. Compulsory Unit Agreements: Compulsory unitization arises when a petition is filed with the Nebraska Oil and Gas Conservation Commission (NO GCC) to establish a unit over the objections of certain working interest owners. The NO GCC evaluates the merits of the petition based on regulatory criteria, including technical, economic, and environmental factors. If it is determined that unit operations would result in efficient and economic development, a Compulsory Unit Agreement may be enforced. 3. Unit Agreements by Order of the Commission: In some cases, the NO GCC may initiate and establish unit operations by issuing an order, usually to prevent waste, protect correlative rights, or enhance recovery. This type of agreement is known as Unit Agreements by Order of the Commission and is similar to Compulsory Unit Agreements but initiated directly by the regulatory body. It is important for all parties involved in unit operations in Nebraska to carefully review and understand the Unit Operating Agreement. The agreement typically covers provisions related to payment of expenses, allocation of production, control of operations, drilling obligations, well spacing, unit boundary, termination, and dispute resolution mechanisms. In conclusion, the Nebraska Unit Operating Agreement is a crucial legal instrument that facilitates coordinated and efficient exploration and production activities in the oil and gas industry. It establishes the guidelines and framework for co-owners to work together in an unitized area for enhanced recovery and economic benefits. Understanding the different types of agreements, whether voluntary, compulsory, or by the commission's order, is essential for effective oil and gas operations in the state of Nebraska.