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 Virginia Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth is a legal agreement that governs the joint development and production of oil or gas from a single well bore located in Virginia. This type of agreement becomes necessary when multiple owners of leaseholds have varying depths of ownership within the same well. The purpose of such a commingling agreement is to establish a framework for the fair and efficient extraction of resources from different formations while safeguarding the rights and economic interests of all working owners involved. It ensures that each owner receives their proportionate share of the production based on their leasehold ownership depth. Key terms and provisions typically addressed in a Virginia Commingling Agreement include: 1. Participation and Ownership: Identifying the owners involved in the agreement and their respective percentage or fractional interests in the production. This section clarifies the allocation of revenues, costs, and expenses associated with the operations. 2. Formation Specifications: Describing the different formations present in the well bore and the designated production zones. This ensures that each formation is clearly defined and accounted for in terms of extraction. 3. Commingling Procedures: Establishing guidelines and protocol for commingling production from different formations. This includes technical considerations, testing requirements, and methods to accurately measure the production from each zone. 4. Allocation Methodology: Outlining the methods used to allocate commingled production to individual working owners. This may involve proportional allocation based on leasehold ownership depth or other agreed-upon formulas. 5. Reporting and Auditing: Defining the reporting requirements for production data and related financials. The agreement may also stipulate periodic audits to ensure compliance and accuracy in the allocation process. Different variations or types of Virginia Commingling Agreements may exist based on specific circumstances, such as: 1. Commingling Agreement among Working Owners in Horizontal Wells: This type of agreement governs commingling operations in horizontally drilled wells where multiple owners have leasehold interests at different depths along the lateral section. 2. Commingling Agreement among Working Owners with Overlapping Leases: This agreement is suitable when multiple working owners possess overlapping leaseholds in different formations, allowing commingling operations to maximize resource extraction. 3. Commingling Agreement among Working Owners with Depth-Modified Leaseholds: This agreement applies when leasehold ownership varies as to depth due to depth modifications or amendments made to existing leases. In conclusion, a Virginia Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth facilitates efficient resource extraction while ensuring equitable distribution of production proceeds among multiple working owners with different depths of leasehold ownership.A Virginia Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth is a legal agreement that governs the joint development and production of oil or gas from a single well bore located in Virginia. This type of agreement becomes necessary when multiple owners of leaseholds have varying depths of ownership within the same well. The purpose of such a commingling agreement is to establish a framework for the fair and efficient extraction of resources from different formations while safeguarding the rights and economic interests of all working owners involved. It ensures that each owner receives their proportionate share of the production based on their leasehold ownership depth. Key terms and provisions typically addressed in a Virginia Commingling Agreement include: 1. Participation and Ownership: Identifying the owners involved in the agreement and their respective percentage or fractional interests in the production. This section clarifies the allocation of revenues, costs, and expenses associated with the operations. 2. Formation Specifications: Describing the different formations present in the well bore and the designated production zones. This ensures that each formation is clearly defined and accounted for in terms of extraction. 3. Commingling Procedures: Establishing guidelines and protocol for commingling production from different formations. This includes technical considerations, testing requirements, and methods to accurately measure the production from each zone. 4. Allocation Methodology: Outlining the methods used to allocate commingled production to individual working owners. This may involve proportional allocation based on leasehold ownership depth or other agreed-upon formulas. 5. Reporting and Auditing: Defining the reporting requirements for production data and related financials. The agreement may also stipulate periodic audits to ensure compliance and accuracy in the allocation process. Different variations or types of Virginia Commingling Agreements may exist based on specific circumstances, such as: 1. Commingling Agreement among Working Owners in Horizontal Wells: This type of agreement governs commingling operations in horizontally drilled wells where multiple owners have leasehold interests at different depths along the lateral section. 2. Commingling Agreement among Working Owners with Overlapping Leases: This agreement is suitable when multiple working owners possess overlapping leaseholds in different formations, allowing commingling operations to maximize resource extraction. 3. Commingling Agreement among Working Owners with Depth-Modified Leaseholds: This agreement applies when leasehold ownership varies as to depth due to depth modifications or amendments made to existing leases. In conclusion, a Virginia Commingling Agreement Among Working Owners As to Production from Different Formations Out of the Same Well Bore, Where Leasehold Ownership Varies As to Depth facilitates efficient resource extraction while ensuring equitable distribution of production proceeds among multiple working owners with different depths of leasehold ownership.
