Ohio Provisions That May Be Added to A Pooling Or Unit Designation

• Category: Oil Gas and Minerals - Pooling and Unitization
• State: Multi-State
• Control #: US-OG-369
• Format: Word; Rich Text

Description

This provision document contains termination, signature, and depth provisions which may be added to a pooling or unit designation. Ohio Provisions That May Be Added to A Pooling Or Unit Designation When it comes to the oil and gas industry in Ohio, pooling and unit designations play a crucial role in the effective and efficient extraction of resources. These designations allow for the consolidation of interests and proper management of operations. However, to accommodate specific circumstances, certain provisions can be added to these pooling or unit designations, ensuring fairness and optimizing production potential. There are different types of Ohio provisions that may be added to a pooling or unit designation, including: 1. Vertical Pugh Clause: The vertical Pugh clause is a provision that allows for the separation of leased or pooled lands below and above specific target formations. It ensures that only the formations of interest are included in the pooling or unit designation, while the remaining depths retain their original lease rights. 2. Horizontal Pugh Clause: The horizontal Pugh clause is similar to its vertical counterpart but pertains to the lateral extension of the production zone. It separates the leased or pooled lands within the target formation into specific tracts, allowing for individual leases, leasehold interests, and royalties. 3. Royalty Clause: A royalty clause is a provision that establishes the percentage or amount of revenue the mineral rights' owner is entitled to receive as their share of the production. This provision may be added to a pooling or unit designation to ensure fair compensation for the mineral rights owners while encouraging efficient extraction practices. 4. Minimum Royalty Provision: A minimum royalty provision is an addition to a pooling or unit designation that guarantees a minimum royalty payment to the mineral rights' owner, regardless of the actual production levels. This provision protects the owner's interests in cases of low production or challenging market conditions. 5. Cost Recovery Clause: A cost recovery clause is a provision that allows the operator to recover certain expenses incurred in the drilling and development process from the production revenue before calculating the royalty payments. This provision ensures that the operator can recoup their initial investment and encourages continued exploration and extraction activities. 6. Lease Termination Clause: A lease termination clause is a provision that specifies the conditions under which a lease or pooling agreement can be terminated. This may include cases of non-production, non-payment of royalties, or expiration of the lease term. Adding this provision to a pooling or unit designation provides clarity on the circumstances that would lead to termination and protects the interests of all parties involved. Ultimately, these provisions that can be added to Ohio pooling or unit designations aim to establish a fair and equitable framework for development while accommodating specific circumstances related to target formations, royalty calculations, cost recovery, and lease termination conditions. They ensure the efficient extraction of oil and gas resources while protecting the rights and interests of all stakeholders.

Ohio Provisions That May Be Added to A Pooling Or Unit Designation When it comes to the oil and gas industry in Ohio, pooling and unit designations play a crucial role in the effective and efficient extraction of resources. These designations allow for the consolidation of interests and proper management of operations. However, to accommodate specific circumstances, certain provisions can be added to these pooling or unit designations, ensuring fairness and optimizing production potential. There are different types of Ohio provisions that may be added to a pooling or unit designation, including: 1. Vertical Pugh Clause: The vertical Pugh clause is a provision that allows for the separation of leased or pooled lands below and above specific target formations. It ensures that only the formations of interest are included in the pooling or unit designation, while the remaining depths retain their original lease rights. 2. Horizontal Pugh Clause: The horizontal Pugh clause is similar to its vertical counterpart but pertains to the lateral extension of the production zone. It separates the leased or pooled lands within the target formation into specific tracts, allowing for individual leases, leasehold interests, and royalties. 3. Royalty Clause: A royalty clause is a provision that establishes the percentage or amount of revenue the mineral rights' owner is entitled to receive as their share of the production. This provision may be added to a pooling or unit designation to ensure fair compensation for the mineral rights owners while encouraging efficient extraction practices. 4. Minimum Royalty Provision: A minimum royalty provision is an addition to a pooling or unit designation that guarantees a minimum royalty payment to the mineral rights' owner, regardless of the actual production levels. This provision protects the owner's interests in cases of low production or challenging market conditions. 5. Cost Recovery Clause: A cost recovery clause is a provision that allows the operator to recover certain expenses incurred in the drilling and development process from the production revenue before calculating the royalty payments. This provision ensures that the operator can recoup their initial investment and encourages continued exploration and extraction activities. 6. Lease Termination Clause: A lease termination clause is a provision that specifies the conditions under which a lease or pooling agreement can be terminated. This may include cases of non-production, non-payment of royalties, or expiration of the lease term. Adding this provision to a pooling or unit designation provides clarity on the circumstances that would lead to termination and protects the interests of all parties involved. Ultimately, these provisions that can be added to Ohio pooling or unit designations aim to establish a fair and equitable framework for development while accommodating specific circumstances related to target formations, royalty calculations, cost recovery, and lease termination conditions. They ensure the efficient extraction of oil and gas resources while protecting the rights and interests of all stakeholders.