The ABC’s of the JOA
presentedby
Alyce Hoge,J.D.,CPLTA,CDOASeptember19- 21,2018NALTA AnnualConference
Orlando,Florida
_________
1
I.Introduction/OverviewDefinitionPurposeHistoryCo-TenantProblem– Earpv.Midcontinent
II.ReviewingtheJOATipsCoverPageTOC
III.Articles- ArticleVI.Non-ConsentPenaltiesIV.Conclusion
Agenda
• Definition–• Contractthatgovernsthe________drilling,operationanddevelopmentof________ownedoilandgaswells.
Overview
• MethodofSharing________ andProduction• GovernstheConductofOperations• Providesforthe________ andresponsibilitiesamongthepartiesandtoroyaltyowners.
Purpose
• Pre-1956– Companyformsused• 1956– ________createdModelForm• 1977– MajorRevision• 1982– Minorformattingchanges• 1989– AdditionalProvisionsAdded• 2015– Addressesissuesrelatingtohorizontal drilling&fracking
HistoryofModelForm
n Completionn Deepenn Plug Back n Recompletionn Rework n Zone
HistoryofModelForm• 1982– MinorChanges• 1989- Newprovisions• 18definitionsvs.8in1982• Bankruptcy• RightsandDutiesofOperator• Deepeningprovision• OrderofPreferenceofOperations• PayingWellsprovision• TerminationofOperationsprovision
• 2015– Newdefinitions
2015DefinitionsAdded:
• ________Lateral– Thatportionofawellthatdeviatesfromverticaltohorizontalorientation.
• ________Rig- Adrillingrigutilizedfordrillingalloraportionoftheverticalcomponentofahorizontalwell.
• ________– Furthestpointdrilledinalateral.
• TotalMeasured________– Distanceofwellborepathfromsurfaceofthegroundtoterminus.
• ________Well– Anywelldrilledotherthanahorizontalwell
HistoryofModelForm
• 20pages________size• Linenumbers• CoverPage• Date• Operator• ________Area
• TableofContents
ReviewingtheJOA
I.II.III.IV.V.VI. VII.VIII.
IX.X.
DefinitionsExhibitsInterests of PartiesTitlesOperatorDrilling & DevelopmentExpenditures/LiabilitiesAcquisition, Maintenance, TransferIRSClaims & Lawsuits
XI.XII.XIII.XIV.XV.XVI.
Force MajeurNoticesTermCompliance with LawsOther ProvisionsMiscellaneous
TableofContents
"Undivided 1/7 Interest"
1/7
1/7
1/7
1/7
1/7
1/7
1/7DamianAnneAlyceDouglasClaireCarolineAndre
Alternatives:TheCo-TenantProblem
"Undivided 1/7 Interest"
1/7
1/7
1/7
1/7
1/7
1/7
1/7DamianAnneAlyceDouglasClaireCarolineAndre
Alternatives:TheCo-TenantProblem
NW NE
SW SE
Earpv.Mid-ContinentPetroleum,167OKL86(1933)• OwnerA- 2/33rd --àWagnerEXP:11/1926ClaudeEarp– 1/8
• OwnerB– 31/33-àMid-ContinentEXP:11/1926MaryEarp– 1/8
Alternatives:TheCo-TenantProblem
NW NE
SW SE
Earpv.Mid-ContinentPetroleum,167OKL86(1933)• July,1925– ProducingWellDrilledbyMid-Continent
• November,1926– Royaltiespaidtobothowners.
• AargueshisleaseexpiredandhisNRIshouldbe2/33insteadof1/8x2/33.
• 2/33=.060606vs2/33x.125=.020202
Alternatives:TheCo-TenantProblem
NW NE
SW SE
• A– 2/33• B– 31/33
n Contract Arean Depth Restrictionsn Interest of Parties
• Initial Well• Subsequent Wells
n Leases n Addresses for notice
ArticleII.ExhibitsExhibitA– ContractLands
• A.InitialWell• B.SubsequentWells• 1.________Operations• 2.OperationsbyLessthanAll________• Non-ConsentPenalties– p.6
ArticleVI.Drilling&Development
• Introduction/Overview• Definition• Purpose• History• Co-TenantProblem– Earpv.Midcontinent
• ReviewingtheJOA• Tips• CoverPage• TOC
• ArticleVI.Non-ConsentPenalties• Conclusion
Conclusion