Joint Operating Agreement: Preferential Right to Purchase

摘要

In 1994, predecessors in interest to El Paso Production Co. (El Paso) and GeoMet, Inc. (GeoMet) enter into a "Farmin" agreement under which GeoMet assigns to El Paso its oil and gas leases in the White Oak Creek Prospect in Alabama, and reserves an overriding royalty interest in the leases. The parties also sign a Joint Operating Agreement (JOA) containing a "preferential right to purchase" clause that provides a party desiring to sell "its rights and interests in the Contract Area" and who has a proposed purchaser must first offer the rights and interests to the other parties to the JOA on the same terms as to the proposed purchaser.