Great Western and others enter into a letter agreement to develop the "Latigo Project." There are two obligation wells and the ability to drill additional wells. The agreement requires the parties to execute the 1989 AAPL Model Form JOA naming great Western as operator for two formations. The parties execute two separate JOAs dealing with the two target formations. The JOAs include an area of mutual interest (AMI), arbitration and confidentiality provisions that are added to the printed form JOA. Interests covered by the AMI include a leasehold interest, royalty interest, overriding royalty interest, production payment, mineral interest or other interests in oil, gas or minerals. The arbitration provision requires all disputes under the agreement to be resolved by arbitration. In 2004, Great Western acquires leases adjacent to, but outside of, the delimited AMI contract area. In 2005, Great Western drills two wells on the adajcent lands. In 2006, Great Western's other working interest owners file a demand for arbitration based on their claim that they should be participating in those adjacent wells.
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