Operating Agreement - Notice Of Proposed Operation-Exculpatory Provision

摘要

Matrix Production Co. v. Ricks Exploration, Inc., 136 N.M. 593,102 P.3d 1285 (N.M. Ct. App. 2004), is another of the few New Mexico cases that interpret and apply provisions of the A.A.P.L. Form 610 Model Form Operating Agreement. In this case, the New Mexico Court of Appeals followed previous New Mexico appellate decisions in holding that the A.A.P.L. form means what it says. In Matrix, Ricks, the operator under an operating agreement prepared on the A.A.P.L. form, gave the nonoperators notice of a proposal to drill a new well on the contract area. This was a "subsequent operation" under the agreement [Article VLB], Matrix, one of the nonoperators, elected not to participate in the operation, and therefore became a "non-consenting party" [Article VLB], The result was that Matrix was not entitled to participate in production from the new well until the participating parties had recovered from production 400 percent of the drilling and completion costs. The opinion does not say which version of the A.A.P.L. form was involved. However, it appears from portions of the agreement quoted by the court that it was either the 1977 version or the 1982 version, the relevant provisions of which are identical.