FORM 610 - MODEL FORM OPERATING AGREEMENT - 1982 - 1 - 1 OPERATING AGREEMENT 2 3 THIS AGREEMENT, entered into by and between ***** 4 , hereinafter designated and 5 referred to as "Operator", and the signatory party or parties other than Operator, sometimes hereinafter referred to individually herein A copy will be provided to the Securities and Exchange Commission upon request. The Parties agree to use the cumulative method, as defined in Income Tax Regulation Section I.761-2(d)(4), to report revenue from gas production and sales for federal income tax purposes. The 610-1982 Form is still in wide use. Notwithstanding anything to the contrary, in the event that any party hereto elects not to participate in the drilling of a Development Well, that party shall promptly relinquish and assign, upon such well reaching its Objective Depth and being either (i) plugged and abandoned as a dry hole or (ii) completed as a well capable of production, to the parties who drilled such Development Well, one hundred percent (100%) of its right title and interest in the 640 acre section in which the Development Well is located. Operator shall prepare and furnish to any duly constituted authority having jurisdiction in the premises through its proper agency or department any and all reports, statements and information that may be requested when such reports are required to be filed by Operator. ATTN: Land Manager A Non- Acquiring Party shall make its election by giving written notice to the Acquiring Party within said twenty (20) day period. 4. shall apply only to the drilling of new wells and shall not apply to the reworking, deepening, sidetracking or plugging back of existing wells. We will deal more with the specific provisions of the JOA in future contributions. The Non-Consenting Party's proportionate part (based on the percentage of such costs it would have paid had it previously participated in such Non-Consent operation) of the costs of salvable materials and equipment shall be determined in accordance with Exhibit "C" (COPAS-Article IV.). 1.14         "Underproduced Party" shall mean any Party who has taken a lesser quantity of Gas from a Well than the Percentage interest of such Party in the cumulative quantity of all Gas taken from a Well. If sufficient acreage does not exist to form such Development Block in the general form of a square, due to lease line boundaries or other Development Block boundaries that have previously been formed, but sufficient contiguous acreage not yet dedicated does exist, then the proposing party may designate such other acreage so long as it is contiguous and as near as possible to being in the form of a square. Such Gas shall be made available initially to each Underproduced Party in the proportion that its interest in the Well bears to the total interests of all Underproduced Parties desiring to take such Gas. NO. C.            Required Wells and Operations. Losses not covered by insurance required by this Agreement to be carried for the benefit and at the expense of the parties hereto shall be charged to the joint account. B. The forfeited interest shall be free of any Excess Burden as described in Article III.D. A joint operating agreement is the means by which persons in the oil and gas industry jointly develop a prospect and share in the risks and rewards of exploration and production. The AAPL 610 model agreement is by far the most common enterprise agreement commonly used in the oil and gas industry, so any other proposed joint enterprise agreement should, in my view, be immediately suspect. Notwithstanding anything to the contrary stated herein, the non-consent provisions pertaining to the drilling of any well drilled hereunder shall not be applicable to any well or operation which is necessary in order to perpetuate an expiring or terminating lease or leases or interest therein, nor shall it be applicable to any well or operation which is necessary in order to earn an additional lease or leases or interest therein pursuant to any farmout or other agreement. A Well will be considered a separate Well with respect to, but only to, each reservoir from which the Gas production is not commingled in the wellbore. The AAPL Form 610 Model Form Operating Agreement is by far the most commonly used joint operating agreement in the oil and gas industry, to the point, in my opinion, that any other proposed joint operating agreement should immediately be suspect. Operator shall exercise the foregoing powers and authorities on behalf of Non-Operators in accordance with its good faith judgment and shall have no liability, directly or indirectly, to the undersigned for any action or inaction on behalf of Non-Operator's, save and except where any action or inaction by Operator causing injury or damage to Non-Operator's constitutes intentional bad faith or willful and wanton negligence on the part of Operator. (iv)         the total volume of Gas actually allocated by the Operator and delivered for each Party's account. This paragraph shall not apply to those items disputed in good faith. Nothing herein contained shall grant, or be construed to grant, Operator the right or authority to waive or release any rights, privileges, or obligations which Non-Operators may have under federal or state laws or under rules, regulations or orders promulgated under such laws in reference to oil, gas and minerals operations, including the location, operation, or production of wells, on tracts offsetting or adjacent to the Contract Area. Failure to timely give written notice shall be conclusively deemed an election not to acquire an interest in the Acquired Property. The AAPL Model Form JOA - Taking Production in Kind Provisions There have been four versions of the Model Form JOA: 1956, 1972, 1982 and 1989. Contract Area Outside Development Block(s). AAPL Model Form 610 Joint Operating Agreement (AAPL Form JOA): a standard form of Operating Agreement published by the AAPL and designed for use in the joint development of domestic oil and gas interests. Priority of Article XV. Workman's Compensation Insurance in accordance with the laws of the state in which the operating area is located and Employer's Liability Insurance with Bodily Injury limits of not less than $1,000,000.00 each accident; Bodily Injury by disease $1,000,000.00 each employee; Bodily injury by disease $1,000,000.00 policy limit; and. If a portion of an Overproduced Party's Gas production is taken for its own use, the price for such Gas will be the price it received for any Gas takes during such periods by such Party pursuant to an Arm's Length Agreement. If Participating Party or any such mortgagee does not pay in full all amounts then due within fifteen (15) days after their respective receipts of such foreclosure notice, then Operator shall proceed to foreclose upon Participating Party's interest in accordance with the following provisions:    If Operator should elect to proceed to foreclose the lien of Operator as against the interest of a participating party having an interest in the Contract Area, this Operating Agreement does hereby include provisions for non-judicial sale under the laws of the State of Texas, and the President of the Operator, is hereby appointed as Trustee for such purpose. 2: Coso incurred by Operator in procuring abstracts and (ees paid outside attorneys for brie examination 2 (including preliminary, supplemental, shut-in gas royalty opinions and division order title opinions! Phone: 214-987-7100 The Operating Agreement provides for and each Non-Operator does hereby grant to Operator the right to proceed to foreclose the lien of Operator as against the interest of any Non-Operator by a non-judicial sale under the laws of the State of Texas. 2.3         During any month when a party fails for any reason to take its Full Share of Current Production (as such Share may be reduced by the right of the other Parties to make up for Underproduction as provided herein) the other Parties shall be entitled to take any Gas which such Party fails to take. In the event Participating Party has mortgaged its interest in any of the Contract Area, the wells located on the Contract Area or the production therefrom, and in the further event that Participating Party has furnished to Operator in writing the name and address of such mortgagee(s) prior to the expiration of the twenty (20) day period ensuing after Participating Party's receipt of an invoice for its proportionate share of actual or estimated expenditures, then in the event Operator elects to exercise its foreclosure option, Operator shall contemporaneously, with the sending of a foreclosure notice to Participating Party, send a substantially identical foreclosure notice to such mortgagee(s), and shall give such mortgagee(s) the opportunity to cure Participating Party's default within fifteen (15) days after such mortgagee's receipt of such foreclosure notice. Although the 1977 JOA was subject to significant revisions, a new revision took place in 1982 and remains widespread throughout the sector. 610 - 1982 REVISED, Model Form Operating Agreement:         A.A.P.L. Keep an eye here, or at the AAPL for news of its publication. its first AAPL Form 610 Model Form Operating Agreement in 1956 in an attempt to streamline the process of negotiating and drafting an effective joint operating agreement by means of a standardized form.1 It was an im-mediate success and quickly became the standard for the American oil and gas industry (“Industry”). 1.11         "Party" and "Parties" shall mean those individuals or entities signatory to the Joint Operating Agreement to which this Agreement (Exhibit "E") is attached, and their respective heirs, successors, transferees and assigns. U. F.         Notwithstanding anything contained herein to the contrary, any Non-Operator may each elect to provide its own insurance or to be a self-insurer hereunder, and in the event of such election, shall neither be covered by insurance obtained by Operator nor be liable for any part of the costs thereof; provided however, Operator shall provide for Worker's Compensation and Employer's Liability coverage for the benefit of the parties hereto and the cost of such coverage shall be charged to the Joint Account. F.            Gas Marketing. Failure to so advise shall be deemed as election to participate in the payment. If any such leased or Fee Interest includes depths other than the Restricted Depths then 30% of the Acquisition Price shall be allocated to the Restricted Depths. Reference is hereby made to said Operating Agreement for all purposes and its is incorporated herein as if fully set out herein. Facsimile No. Exploratory Well means    a well proposed to any depth below the stratigraphic equivalent of the base of the Glen Rose formation being a depth if 8,171' as shown on the electric log of the Union Producing Company - E. Halsell #1 (API 42-32301126) located in Maverick County, Texas and which is not located in an existing Development Block. Such AMI shall remain in force and effect until October 1, 2007 or until the completion of the fifteenth (15th) Exploratory Well drilled under the terms of this Agreement, whichever is the earlier date. By far the most common form is the AAPL Form-610. All balancing hereunder shall be on a Well by Well basis determined on volumes of Gas produced from such Well measured in MMBtus. is derived (I) elects to abandon a well under the provisions of Article VI.B. 2.5         In the event that a Party fails to take its Full Share of Current Production required to be produced in order to (i) maintain leases in effect, or (ii) to protect the producing capacity of a Well or reservoir, or (iii) to preserve correlative rights, the Operator may sell any part of such Party's Full Share of Current Production that such Party fails to take for its own account, and render to such Party the proceeds derived from the sale of such Full Share of Current Production based on the actual or constructive price received for such Gas, less applicable taxes and Royalty. In addition, upon the conclusion of the selection of the various Blocks, this Operating Agreement shall terminate except as to those 640 acre sections upon which the parties have jointly drilled an Exploratory Well or a "Development" well within an establish Development Block which the parties shall jointly own and the parties agree to amend the Contract Area in Exhibit "A" to reflect those lands jointly owned by the parties at such time. In the absence of an updated joint enterprise agreement containing definitions and clarifications, landowners, operators and landowners could create unequal competitive conditions that do not take into account current practices. The Parties hereby agree to handle such Gas imbalances in accordance with the terms of this agreement. The Parties will meet to conduct a partition pf the Contract Area as follows: 1. All parties who shall have agreed to participate in such payments shall reimburse Operator for their proportionate shares thereof. Any Makeup Gas allocated to such Party's account by the Operator during the month of production shall be determined by multiplying fifty percent (50%) of the Full Shares of Current Production of all Overproduced Parties by a fraction, the numerator of which is the Percentage Interest of such Underproduced Party and the denominator of which is the total of the Percentage Interests of all Underproduced Parties desiring to take Makeup Gas. There is no need for unnecessary knowledge. In the event any governmental authority properly prescribes that Royalty payments be made on any other basis than that described above, each Party to this Agreement shall make Royalty payments accordingly, commencing on the effective date authorized by such governmental authority but the obligation of each party to hold the other parties harmless for Royalty claims shall in all cases continue. form for onshorc operations, AAPL Form 610, last revised in 1989, will be used as the contract of reference. With respect to all operations conducted hereunder on the contract Area for the joint account of the parties hereto, Operator shall maintain in effect the following insurance coverage: A. It is stipulated and agreed that in case of any sale hereunder by the Trustee or his successor, all prerequisites of said sale shall be presumed to have been performed and in any conveyance given hereunder, all statements of fact or recitals therein made as to the nonpayment of money secured or as to any default under the terms hereof or as to the request of the Trustee to enforce this trust or as to the proper and due appointment of any successor or substitute Trustee or as to the advertisement of sale or the time, place and terms of sale or as to any other preliminary act or thing shall be taken all courts of law and equity as prima facie evidence that the facts so stated are true. The parties to joint transactions had to enter into their own agreements to regulate the way an oil property was managed, which must have caused confusion and, in many cases, legal action. You can add additional forms to your library if necessary. 2 Revising the 1989 Form did not complete the horizontal portion of the project. shall apply only to the drilling of new wells and shall not apply to the reworking, deepening, sidetracking or plugging back of existing wells. Operator shall diligently attempt to make proper payments but shall not be liable in damages for the loss of any lease or interest therein if through mistake or oversight any rental or payment is not paid or is erroneously paid. Ejerforeningen Æblehaven > 2020 > november > 27 > Aapl Model 610 Operating Agreement, Morten Larsen The Parties recognize that imbalances may occur from time to time between them in their separate disposition of Gas. FORM 610 - 1989 - MODEL FORM OPERATING AGREEMENT. A.A.P.L. Each Party shall have the right to make a separate election as to each proposed completion attempt in each interval in that portion of the well in which it has not otherwise relinquished its interest, and an election to become a Non-Consenting Party as to one completion attempt shall not prevent a party from becoming a Consenting Party in subsequent completion attempts, regardless whether the Consenting Parties have recouped the costs of earlier completions pursuant to Article VI.B.2. a non-judicial sale in the same manner as that set forth in Article IV. The inherent inefficiency of reinventing the wheel for every drilling venture led to the development of the first American Association of Professional Landmen (AAPL) Form 610 Model Form Operating Agreement in 1956 (AAPL Form 610-1956). Any inconsistency in the Operator's monthly statement shall be reported to the Operator within sixty (60) days and the Operator shall make a proper adjustment thereto within thirty (30) days after final determination of the correct quantities involved. If a claim is made against any party or if any party is sued on account of any matter arising from operations hereunder over … Sixty days prior to the due date of any lease maintenance obligation payment, Non-Operator shall give Operator written notice of its payment recommendation adequately identifying the lease and the payment amount in the form of an invoice. 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