Old Faves and New Raves: How Case Law Has Affected Form Joint Operating Agreements (Part One)

摘要

Joint ownership of oil and gas exploration and production rights-whether held through fee mineral ownership or ownership of an oil and gas lease-arise in many ways. Co-tenants of a mineral estate may each lease to different companies, or companies leasing adjacent acreage may be required to pool their leases to form a drilling unit. Individual leases may be jointly held by several lessees. Farmout agreements may give rise to co-ownership of working interest once, for example, payout is achieved. Mineral title also tends to become increasingly fragmented over time, leaving many working interest owners with undivided leasehold interests covering a production area or even a single well. Other times, joint ownership is the result of a deliberate decision to spread the cost and risk of drilling and development. For example, the holder of a lease may partially assign or farmout part of their lease to another party to share risk.