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NEW ORLEANS | LAFAYETTE | BATON ROUGE | HOUSTON
The New AAPL FORM 610-2015
We swear it’s not an ugly duckling
Sam Masur & Paul Simon
Duck Lunch 2018
10/30/2018
Paul B. Simon
Oil & Gas lawyers
Principals in the Firm’s Lafayette office
Who are we?
Samuel E. Masur
• Introduction
• Generally – how new?
• Key changes – improvements
• Others: imperfect progress -> future issues?
• Unresolved issues – (lack of) fit with Louisiana law
Agenda
Agenda
• Introduction
• Generally – how new?
• Key changes – improvements
• Others: imperfect progress -> future issues?
• Unresolved issues – (lack of) fit with Louisiana law
• AAPL has created a new form 610 JOA
• Previous version from 1989—almost 20 years
Introduction – We have a new form JOA!
• Recent court
decisions – mainly in
Texas
• Industry changes
……..……………
• Better reflect
industry practice
• Technology changes
• Progress is good
Why do we have a new form JOA?
Factors Examples
• Reeder – gross neg for all activities
• Seagull v. Eland – WI assignor liability
for future costs
• Horizontal drilling; no separate
completion election
• Operator can handle suits; Non-
owning operator
• Email for notice
• Art. XVI prevails; parties who refuse
to sign
• If no, not abnormal – same happened with 1989 Form
–1990-92, rarely used
–1993-94, became common
• By that schedule:
– 2019, next year – will begin to be used
– 2020 – will become common
Is anyone here using it?
Our message
• It’s not an ugly duckling
• Can use – most changes good
Agenda
• Introduction
• Generally – how new?
• Key changes – improvements
• Others: imperfect progress -> future issues?
• Unresolved issues – (lack of) fit with Louisiana law
Similar to 1989 form Changes?
Newish (1/2): Minor changes from 1989
• Same structure
• Table of contents virtually
identical
• Mainly improvement –
modest but real
• Some improvements, but
could create future issues
• Not panacea:
–some issues unresolved
–Especially for Louisiana
• Do you use the 1989 form?
• If yes, you’ll recognize and
be comfortable with this
• Committee:
– Formed & first meeting November 2011
– Nine (9) members, national, lawyers and landmen
• Used 1989 Form as template:
– not broke, don’t fix
– Changes only where “absolutely necessary”
• Consensus – Only changed if national consensus
• Proposal – Generated proposed revision,
– reviewed extensively with peers before finalizing
Newish (2/2): Reflects conservative and
deliberative process of committee
Agenda
• Introduction
• Generally – how new?
• Key changes – improvements
• Others: imperfect progress -> future issues?
• Unresolved issues – (lack of) fit with Louisiana law
Key Improvements (1/7): Horizontal drilling
The Biggest & most important change
• Main impetus for new JOA Form
• New horizontal techniques of shale
plays not accommodated by ‘89 Form
– New: not in 1989 -> not in 1989 Form
 Shale, its unique drilling techniques
 Tech: long laterals, fracking
• Legal, land & regulatory, has changed:
– huge drilling blocks, rig contracts
– changes in leasing & pooling.
• Industry
changed
• Law, legal
practice with
• JOA Form not
– getting
outdated
Displacement shall have the same meaning as
defined by the state regulatory agency having
jurisdiction over the Contract Area, in the absence of
which, the term shall otherwise mean the length of a
Lateral.
Displacement
When used in connection with a Horizontal Well,
Drillsite shall mean (i) the surface hole location, and
(ii) the Oil and Gas Leases or Oil and Gas Interests
within the Drilling Unit on or under which the
wellbore, including the Lateral, is located.
Drillsite
Extension or Extend shall mean an operation related to a
Horizontal Well whereby a Lateral is drilled in the same
Zone to a Displacement greater than (i) the Displacement
contained in the proposal for such operation approved by
the Consenting Parties, or (ii) the Displacement to which
the Lateral was drilled pursuant to a previous proposal.
If an Operator desires to Extend the Lateral beyond the
original proposal, upon approval of the designated
percent of parties, the Extension Operation may be
conducted and is binding on all Consenting Parties – in
other words those who object are dragged-along in the
Extension.
Extension Operations
Horizontal Rig Move-On Period shall mean the
number of days after the date of rig release of a
Spudder Rig until the date a rig capable of drilling a
Horizontal Well to its Total Measured Depth has
moved onto location.
Horizontal Rig Move-On Period
Horizontal Well shall have the same meaning as the
term defined by the state regulatory agency having
jurisdiction over the Contract Area, in the absence of
which the term shall mean a well containing one or
more Laterals which are drilled, Completed or
Recompleted in a manner in which the horizontal
component of the Completion interval (1) extends at
least one hundred feet (100’) in the objection
formation(s) and (2) exceeds the vertical component
of the Completion interval in the objective
formation(s).
Horizontal Well
Lateral shall mean that portion of a wellbore of a
Horizontal Well between the point at which the
wellbore initially penetrates the objective Zone and
the Terminus.
Lateral
When used in connection with a Horizontal Well, Plug
Back shall mean an operation to test or Complete the
well at a stratigraphically shallower Zone in which the
operation has been or is being Completed and which
is not in an existing Lateral.
Plug Back
When used in connection with a Horizontal Well,
Sidetrack shall mean the directional control and
deviation of a well outside the existing Lateral(s) so
as to change the Zone or the direction of a Lateral
from the approved proposal (unless done to
straighten the hole or drill around junk in the hole or
to overcome other mechanical difficulties).
Sidetrack
Spudder Rig shall mean a drilling rig utilized only for
drilling all or part of the vertical component of a
Horizontal Well; (a rig used only for setting conductor
pipe shall not be considered a Spudder Rig).
Spudder Rig
Terminus shall have the same meaning as the term
defined by the state regulatory agency having
jurisdiction of the Contract Area, in the absence of
which, the term shall mean the furthest point drilled
in the Lateral.
Terminus
Total Measured Depth, when used in connection
with a Horizontal Well, shall mean the distance from
the surface of the ground to the Terminus, as
measured along and including the vertical
component of the well and Lateral(s).
When the proposed operation(s) is the drilling of, or
operation on, a Horizontal Well, the terms “depth” or
“total depth” wherever used in this agreement shall
be deemed to read “Total Measured Depth”.
Total Measured Depth
For any Horizontal Well drilled under this agreement,
Operator shall drill such well to the Objective Zone(s)
and drill the Lateral in the Zone(s) to the proposed
Displacement, unless drilling operations are terminated
pursuant to Article VI.G (impenetrable substance or
condition in the hole renders further operations
impractical) or Operator deems further drilling is neither
justified nor required.
The Operator may now terminate horizontal drilling
operations if it deems further drilling is neither “justified
nor required.” This provision appears to increase the
discretion of the Operator.
Drilling Obligation for a Horizontal Well
Initial Well. Owner shall commence the drilling of the Initial Well at the following location (if a
Horizontal Well, surface and Terminus/Termini of the Lateral(s)).
Subsequent Operations. If any party desires to drill any well other than the Initial Well, or if any
party should desire to Rework, Sidetrack, Deepen, Recomplete or Plug Back a dry hole or a well no
longer capable of producing in paying quantities in which such party has not otherwise
relinquished its interest in the proposed objective Zone, the party desiring to drill, Rework,
Sidetrack, Deepen, Recomplete or Plug Back such a well shall give a written proposal of the
operation to the parties who have not otherwise relinquished their interest in such objective Zone
under this agreement specifying as relating to a Horizontal Well: (1) that the proposed operation is
a Horizontal Well operation; (2) include drilling and Completion plans specifying the proposed: (i)
Total Measured Depth(s), (ii) surface hole location(s), (iii) Terminus/Termini, (iv) Displacement(s),
(v) utilization and scheduling of rig(s) (Spudder Rig, drilling and Completion), and (vi) stimulation
operations, staging and sizing; and (3) estimated drilling and Completion costs as set forth in a AFE.
The parties to whom such a notice is delivered shall have thirty (30) days after receipt of the notice
within which to notify the party proposing to do the work whether they elect to participate in the
costs of the proposed operation.
Initial Well Description
and Subsequent Operation Proposals
If, during actual drilling operations on the Lateral and prior to reaching the
Displacement specified in an approved proposal for a Horizontal Well (the
“Approved Displacement”), Operator desires an Extension of the Lateral
more than _____% (measured in feet) beyond the Approved
Displacement, Operator shall give the Consenting Parties written notice of
such intent to Extend, together with the estimated costs, not less than 24
hours before Operator estimates reaching the Approved Displacement.
Unless at least ____% interest of the Consenting Parties provide written
notice of their consent to the Extension within 48 hours of receipt of such
notice, Operator shall not Extend the Lateral beyond the Approved
Displacement and will proceed with Completion in accordance with the
lateral approved proposal.
Failure of a Consenting Party to respond to such notice shall be deemed a
rejection. If ___% interest of the Consenting Parties or more consent, the
Extension shall be deemed approved and binding upon all Consenting
Parties.
Extensions and Drag Along Participation
a. Spudder Rig in Approved Well Proposal. If an approved Horizontal Well proposal provides
that a Spudder Rig shall be utilized, and Operator desires to extend the proposed Horizontal
Rig Move-On Period, Operator may obtain one or more extensions, each for a period of
time not to exceed ___ days only upon notice and the affirmative vote of not less that ___%
interest of the Consenting Parties to the drilling of the proposed well.
b. Spudder Rig Not in Approved Well Proposal If an approved Horizontal Well proposal does
not provide that a Spudder Rig may be utilized, and Operator subsequently desires to utilize
a Spudder Rig, Operator may utilize a Spudder Rig upon notice to the Consenting Parties and
the affirmative vote of not less than ___% in interest of the Consenting Parties.
c. Failure to meet Horizontal Rig Move-On Period. If a rig capable of drilling a Horizontal Well
to its Total Measured Depth has not commenced operations within the Horizontal Rig Move-
On Period, or any approved extension(s) thereof, unless ___% in interest of the Consenting
Parties agree to abandon the operation, Operator shall re-propose the well in the manner
provided in Article VI.B. Any party who was a Non-Consenting Party to the original drilling
proposal shall be entitled to a new election.
Spudder Rigs - Delays in Drilling Lateral Wells
Must be Approved by Consenting Parties
If multiple Horizontal Wells are drilled or proposed
to be drilled from a single pad or location, the costs
of such pad or location shall be allocated, and/or
reallocated as necessary, to the Consenting Parties of
each of the wells thereon.
Multi-Well Pad Costs
Without the consent of all parties, no well shall be
drilled, Deepened or Sidetracked, except any well drilled,
Deepened or Sidetracked pursuant to the provisions of
Article VI.B.2. of this agreement. Consent to the drilling,
Deepening or Sidetracking shall include:
All necessary expenditures for the drilling, Deepening or
Sidetracking, testing, Completion and equipping of the
well, including tankage and/or surface facilities.
Horizontal Well Completion
(No Separate Completion Election)
Key (2/7): Exculpatory clause, prudent O
O shall conduct its activities under [K]
as a reasonably prudent oper, in a
good and workmanlike manner … in
accordance w/ good oilfield practice,
and … applicable law…
However, in no event shall it have any
liability as O to the other parties for
losses sustained or liabilities incurred
in connection with authorized or
approved operations under this
agreement except such as may result
from gross negligence or willful
misconduct.
New clause
1989: in no event shall it have any liability as Operator to the other
parties for losses sustained or liabilities incurred [] except such
as may result from gross negligence or willful misconduct
Analysis & Implication
• Response to Reeder*:
– all of O’s “activities” under JOA
covered: no breach of K claims
– v. Abraxas, etc., under 1982
• New: Rejects Reeder, adopts Abraxas
– only approved ops need gross neg
– not other contractual obligations
Good – New reflects risk to Operator
• Operations, downhole – neg nuts
–and not standard: IADC, MSAs
• Not so normal contractual activities–
higher not needed
Other improvements (3/7): Operator
Authority better matches practice
Mixed-bags (more later)
• Non-owner Operator
• Authority:
–to defend third-party
uninsured suits
–to make ordinary
pooling filings
• Not all WI execute—
treat as non-consent
• Update Exh. A
Clear wins
• Clarified rules of resignation, removal, successor
– separated Resignation v. Removal
– Successor vote – no 2-party deadlocks
– Operatorship not assignable nor forfeited
• Allow “deviations from approved proposals”
• Definitions: clarify – rework is a subsequent op
– new: “Workover” is routine maintenance
• Broadened routine maint. drag-along:
– workovers & artificial lift included
– not SWD wells, other ancillary facilities
• Title, Operator authority clarified: (i) landman
costs repaid, (ii) obtain cures, (iii) approve title
Operatorship is neither assignable nor forfeited except in
accordance with the provisions of Article V.
The Operator’s Assignee must now comply with the
voting mechanism in the agreement to claim
operatorship.
In its performance of services for the Non-Operators,
Operator shall be an independent contractor not subject
to the control or direction of the Non-Operators except
as to the type of operation to be undertaken in
accordance with the election procedures contained in
this agreement.
The Operator - Non-Assignment of
Operatorship & Independent Contractor
The successor Operator shall be selected by the
affirmative vote of one (1) or more parties owning
majority interest based on ownership as shown on
Exhibit “A”
The Assignee of an Operator is entitled to vote the
assigned interest.
In the event that such vote results in a tie, the candidate
supported by the former Operator or the majority of its
transferee(s), shall become the successor Operator.
Selection of Successor Operator
If Operator, in its reasonable judgment, deviates from an
approved proposal based upon information derived from
facts and circumstances determined subsequent to the
commencement of the operations relating to such proposal
(including, without limitation, revision of the originally
proposed Completion staging and design), such deviations in
and of themselves will not result in liability of the Operator to
the Parties.
This provision appears to greatly expand the discretion of the
Operator in that it permits the Operator to deviate from an
approved drilling and/or completion program.
Operator Deviations
From Approved Proposals
Workover shall mean routine maintenance and repair
work performed on a well but does not include a
Rework operation.
A Rework operation is proposed pursuant to the
subsequent operations provision and is subject to
non-consent penalty provisions.
A Workover operation is subject to a drag-along
provision, rather than a non-consent provision.
Workover
If requested by Operator, a party shall be responsible
for securing curative matter and pooling
amendments or agreements required in connection
with Leases or Oil and Gas Interests contributed by
such party; otherwise, Operator shall be responsible
for such activities.
Generally, the Operator will be responsible for
securing title opinions, curing title issues and
approving title. The title and curative costs are billed
to the joint account.
Title Examination
Others (4/7): Operations fixes, minor
Art. Change Analysis/Comment
• …
• VI.F
• VII.C
• VII.F
passim
• XIV.C
• Notify WI operations commenced
• Any party may propose to abandon
a non-economic well
• Advanced payments 30 days to pay
• Disproportionate taxes = “burden”
• “under this K”, not “on the K Area”
• Regulatory agencies:
–All now!, not just FERC & DOE
–Oper misinterprets rule? Liable
• “use reasonable efforts”
• Non-Consenting parties too;
practical effect?
• Was 15; only next month’s cost
• Borne by contributing party
• Needed: build facilities off area,
ops for other units on
• For proportionate part only,
– unless willful/gross neg
• No safe harbor…
• VII.D • Usury savings clause • For non-consent penalties
Others (5/7): Substantive & important
New provision Comments
Assignor &
Assignee
liability for
future
operation
costs
• Assignor: pre-transfer costs
– not liable: future ops it did
not consent to
– ops it did – jointly &
severally with Assignee
• Assignee liable – costs
incurred post-transfer
– w/ assignor, if its consent
– No assumption needed
• Improvement:
– Seagull bad
– Assignor liable, did not
consent to op – contra
JOA principles
• Assignee – can’t let off!
– Don’t need assumption if
reference in public records
• Q: P&A costs, when
incurred?
Before?
• Seemingly
same…
• Seagull, TX SC:
– Assignor liable
costs of later
ops
– Assignee not
liable absent
express
assumption
• Content required set forth
– Vertical or horizontal op
– Plans, incl depth,
locations, objective
– Rig plans, if stimulation
– Estimated costs – AFE
• Horizontal & vertical wells
• Improvement in principle –
– memorializing practice
– Reduces room for bad
faith or sharp practices
• We’ll see how courts apply
• Ambiguous! –
industry
practice not
reflected
• Required in
1989-H,
copied here
Content of
well
proposals
The transferee shall be jointly and severally liable
with its transferor for payment of its share of all
costs and expenses attributable to an approved
operation conducted hereunder in which its
transferor had agreed to participate.
Transferee of Interests Responsible for Costs
and Expenses of Transferor
Others (6/7): Substantive & minor
New provision Comments
Definitions • Added “Affiliate”
• “Consenting Party”
swallowed “Drilling Party”
• “Affiliate”: 2005 COPAS def
– “common control”
– 50% ownership
Before?
• Not defined,
ambiguous
• Duplicate,
confusing
• Non-Consenting parties:
– no access to sites &
records of that op
– Well accounting
• Good rule
• Consider whether to restrict
further, esp. re: invitees
•Access rightsNon-Consent
Parties –
limited
access
• “[A]ll burdens except
Subsequently Created
Interests”.
• Reflects Texas practice
• Better rule
• Was blank,
• Filled: lowest
% royalty in
Lease
Default
royalty owed
by WI
A Non-Consenting Party is not entitled to access to the well
location, information and reports relating to such non-consented
operation until the earlier of: full recoupment by the Consenting
Parties of the non-consent penalties, or 2 years following the date
the non-consented operation was commenced.
Thereafter, Operator shall promptly furnish such access,
information and reports upon receipt of a written request from the
Non-Consenting Party.
Prior to payout, a Non-Consenting Party shall be entitled to review
the joint account records pertaining to a non-consented operation
to the extent necessary to conduct an audit of the payout account.
Non-Consenting Parties’ Access
to Contract Area and Records
Other Improvements (7/7): Form & Style
• Scrivener’s guides/notes
– p. 2 – “Scribener’s Instructions”
– p. 18: Art. XV(E): “Conflict of Terms”, that Article XVI prevails
• Readability/formatting
– no more numbers on side
– spacing/formatting of paragraphs
• Clarified term “commencement of operations”, V.D.7(a)
– replaces cumbersome, potentially ambiguous
– ‘when spudded or date drilling operations are commenced’
• Preparer representation – form is Form 610-2015
– …and no changes except shown in strikethrough
– Reflects industry practice
 nice to have memorialized
 …potential source of conflict?
Notwithstanding anything in this agreement to the
contrary, in the event of any conflict between the
provisions of Articles I through XV of this agreement
and the provisions of Article XVI, if any, the
provisions of Article XVI, if any, shall govern.
Conflict Between Articles I – XV and the Special
Provisions of Article XVI
_________, who has prepared and circulated this
form for execution, represents and warrants that the
form was printed from and, with the exception(s)
listed below, is identical to the AAPL Form 610-2015
Model Form Operating Agreement, as published in
computerized from by AAPL. No changes,
alterations, or modifications, other than those made
by strikethrough and/or insertion and that are
clearly recognizable as changes in Articles ________,
have been made to the form.
Preparer Representations
Agenda
• Introduction
• Generally – how new?
• Key changes – improvements
• Others: imperfect progress -> future issues?
• Unresolved issues – (lack of) fit with Louisiana law
Each Email Notice shall clearly state that it
is a notice or response to a notice under
this agreement.
An Email Notice shall be deemed delivered
only when affirmatively acknowledged by
email reply from the receiving party.
Automatic delivery receipts issued,
without direct acknowledgement of the
Email Notice, are not evidence of Receipt
for purposes of this agreement.
If the receiving party fails … to
affirmatively acknowledge…, then Receipt
of the notice shall only be deemed to
have occurred when received … as
otherwise provided in the agreement.
Imperfect progress (1/4): Email Notices
• So close!
– allowing good
– reflects
practice
• Receipt rules?!?
– Not in your
control, can’t
rely on it
– Ruins it
• Modify to allow,
I do: standard
language
Imperfect (2/4): Operator’s new duties
New provision Benefit Issue
Update
Exhibit A,
parties’
interests
• Oper updates – reflect
assignments, fix mistakes
• Distributes, asks consent of
party if new interest
• No consent? Legal opinion
– Can change, and
– Conclusive – Wi must sue
• List useful
• Oper new
duty, not
new risk
• Clarity
what to do,
if do
conclusive
• To protect
neutral, cautious
• Some Os not…
then mixed bag.
• Small interests –
legal costs
• Pushes to suit
Before?
• No duty
• Operator
maintained
list on own
• Freedom,
but no
clarity, risk
• Takes defense of non-
insured claims
• WI – can opt-out, 14 days,
– owe share of defense costs
• Reflects
practice
• Practical
• Next slide discuss,
Sam
•Not in Op
authority
•Consent
each suit
Claims &
lawsuits
• Limited: record pooling
declarations & orders
– after notice to WI, who
can opt out
• Closer to
practice
• Helpful
•La. Conservation
practice missed
•Active role of
Operator
•No agency
•Art. IV.A –
Title, can
conduct unit
hearings
Agency to file
ordinary
course
pooling filings
If the amount required for settlement exceeds the
amount authorized in the agreement, Operator shall
promptly give notice to Non-Operators and Operator
shall assume and handle the claim or suit on behalf of all
parties unless, within 14 days after receipt of such
notice, a party gives notice to Operator and the other
parties of its affirmative election to assume and handle
the claim or suit on its own behalf, which assumption
and handling shall be done at said party’s own expense
and over and above said party’s proportionate share
chargeable to the joint account as hereinafter provided.
Claims and Lawsuits
The Operator shall own an interest in the Contract Area except as
provided in this Article V.A and subject to the provisions of Article V.B.5.
A non-owning operator may serve as Operator but, as a condition
precedent to serving as Operator, the non-owing operator and the Non-
Operators must enter into a separate agreement, or insert Article XVI
provisions to this agreement, to govern the relationship between them.
Unless such separate agreement or Article XVI provisions provide
otherwise, said non-owning operator shall be bound by all terms and
conditions of this agreement applicable to Operator.
The failure of a non-owning operator and Non-Operators to enter into
such a separate agreement or such Article XVI provisions shall disqualify
said non-owing operator from serving as O … [must designate WI owner]
Imperfect progress (3/4): Non-Owning Operator
• Normal: Operator aligned with WI – reimbursed, not paid, profit from WI
– Pays share of costs of operations, signs JOA, consent/proposal rights
• Now: allow, require agreement– no common rules, force parties to talk
Unless the parties have otherwise agreed, a non-owning
Operator may be removed at any time, with or without
cause, by the affirmative vote of parties owning a
majority interest based on ownership as shown on
Exhibit “A.”
If good cause for removal of such non-owning Operator,
exists, the non-owning Operator may be removed by the
affirmative vote of Non-Operators owning a majority
interest based on ownership as shown on Exhibit “A”
remaining after excluding the voting interest of any non-
operator who is an Affiliate of non-owning Operator.
Removal of Non-Owning Operator
Imperfect progress (4/4): not all execute
Improvement Partial improvement … only partial because issue
• New option:
– to treat non-
signatories like non-
consent parties
– Divide their interest
proportionately
among other WI
owners
• Before – Operator
could take all risk, get
all revenue.
– Now: that’s 1 of 2
options
• Partial improvement:
Oper can keep its
from preparing for
drilling of initial well
• Helpful to Operator:
– no longer out on
limb with costs
– Or having to wait
for everyone,
missing rig dates
• Only from funds prepaid
for Initial Well, already
received at termination
• Why only prepaid?
– all who executed?
• Incentives:
– reward malingering
late-payors?
– penalizes early payors
• At least: be cautious
paying early, advise
clients accordingly
In the event operations on a well shall be commenced without execution of this
agreement by all persons listed on Exhibit “A”, or in the event that subsequent to
the commencement of operations on the well previously unknown or undisclosed
persons owning working interests in a well are discovered, or both, the parties
executing the agreement agree to one of the following:
Option No. 1: Operator shall indemnify executing Non-Operators with respect to
all costs incurred for the well which would have been received by such person
under this agreement as if such person had executed the same and Operator shall
receive all revenues which would have been received by each such person under
this agreement as if such person had executed the same.
Option No. 2: The Operator shall advise all parties of the total interest of the
parties that have executed this agreement. Each party executing this agreement,
within forty-eight (48) hours after delivery of such notice, shall advise the
Operator of its desire to (i) limit participation, (ii) carry only its proportionate part
of non-executing persons’ interests, or (iii) carry it proportionate part of non-
executing persons’ interests together with all or a portion of its proportionate part
of any non-executing persons interests that any executing party did not elect to
take.
Failure of Parties to Execute the Operating
Agreement
Agenda
• Introduction
• Generally – how new?
• Key changes – improvements
• Others: imperfect progress -> future issues?
• Unresolved issues – (lack of) fit with Louisiana law
Louisiana exceptionalism – for future
• Form JOA, always been:
– poor fit with La. law & practice
– But nobody uses La. form OA
• Why? Two causes:
– Conservation practice –
mandatory unitization, active
role of operator
– Terminology
 can’t redefine “common”
terms used everywhere else
 but different here
Issue & Cause
• Conform to existing well spacing
rules, proposed wells must, VI.B.8
– 2015: or to exception already
approved
– Not practice in Louisiana
 propose, drill, then get permit
 Can’t do this under Form JOA
• Terminology – “Zone”
– Form: a stratum of earth w/ a
common accumulation of oil &
gas separately producible…
– La. – multiple pools in 1 Zone
Illustration
QUESTIONS?

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2018 10-23-pbs duck lunch presentation new aapl joa sem pbs v2

  • 1. NEW ORLEANS | LAFAYETTE | BATON ROUGE | HOUSTON The New AAPL FORM 610-2015 We swear it’s not an ugly duckling Sam Masur & Paul Simon Duck Lunch 2018
  • 2. 10/30/2018 Paul B. Simon Oil & Gas lawyers Principals in the Firm’s Lafayette office Who are we? Samuel E. Masur
  • 3. • Introduction • Generally – how new? • Key changes – improvements • Others: imperfect progress -> future issues? • Unresolved issues – (lack of) fit with Louisiana law Agenda
  • 4. Agenda • Introduction • Generally – how new? • Key changes – improvements • Others: imperfect progress -> future issues? • Unresolved issues – (lack of) fit with Louisiana law
  • 5. • AAPL has created a new form 610 JOA • Previous version from 1989—almost 20 years Introduction – We have a new form JOA!
  • 6. • Recent court decisions – mainly in Texas • Industry changes ……..…………… • Better reflect industry practice • Technology changes • Progress is good Why do we have a new form JOA? Factors Examples • Reeder – gross neg for all activities • Seagull v. Eland – WI assignor liability for future costs • Horizontal drilling; no separate completion election • Operator can handle suits; Non- owning operator • Email for notice • Art. XVI prevails; parties who refuse to sign
  • 7. • If no, not abnormal – same happened with 1989 Form –1990-92, rarely used –1993-94, became common • By that schedule: – 2019, next year – will begin to be used – 2020 – will become common Is anyone here using it? Our message • It’s not an ugly duckling • Can use – most changes good
  • 8. Agenda • Introduction • Generally – how new? • Key changes – improvements • Others: imperfect progress -> future issues? • Unresolved issues – (lack of) fit with Louisiana law
  • 9. Similar to 1989 form Changes? Newish (1/2): Minor changes from 1989 • Same structure • Table of contents virtually identical • Mainly improvement – modest but real • Some improvements, but could create future issues • Not panacea: –some issues unresolved –Especially for Louisiana • Do you use the 1989 form? • If yes, you’ll recognize and be comfortable with this
  • 10. • Committee: – Formed & first meeting November 2011 – Nine (9) members, national, lawyers and landmen • Used 1989 Form as template: – not broke, don’t fix – Changes only where “absolutely necessary” • Consensus – Only changed if national consensus • Proposal – Generated proposed revision, – reviewed extensively with peers before finalizing Newish (2/2): Reflects conservative and deliberative process of committee
  • 11. Agenda • Introduction • Generally – how new? • Key changes – improvements • Others: imperfect progress -> future issues? • Unresolved issues – (lack of) fit with Louisiana law
  • 12. Key Improvements (1/7): Horizontal drilling The Biggest & most important change • Main impetus for new JOA Form • New horizontal techniques of shale plays not accommodated by ‘89 Form – New: not in 1989 -> not in 1989 Form  Shale, its unique drilling techniques  Tech: long laterals, fracking • Legal, land & regulatory, has changed: – huge drilling blocks, rig contracts – changes in leasing & pooling. • Industry changed • Law, legal practice with • JOA Form not – getting outdated
  • 13. Displacement shall have the same meaning as defined by the state regulatory agency having jurisdiction over the Contract Area, in the absence of which, the term shall otherwise mean the length of a Lateral. Displacement
  • 14. When used in connection with a Horizontal Well, Drillsite shall mean (i) the surface hole location, and (ii) the Oil and Gas Leases or Oil and Gas Interests within the Drilling Unit on or under which the wellbore, including the Lateral, is located. Drillsite
  • 15. Extension or Extend shall mean an operation related to a Horizontal Well whereby a Lateral is drilled in the same Zone to a Displacement greater than (i) the Displacement contained in the proposal for such operation approved by the Consenting Parties, or (ii) the Displacement to which the Lateral was drilled pursuant to a previous proposal. If an Operator desires to Extend the Lateral beyond the original proposal, upon approval of the designated percent of parties, the Extension Operation may be conducted and is binding on all Consenting Parties – in other words those who object are dragged-along in the Extension. Extension Operations
  • 16. Horizontal Rig Move-On Period shall mean the number of days after the date of rig release of a Spudder Rig until the date a rig capable of drilling a Horizontal Well to its Total Measured Depth has moved onto location. Horizontal Rig Move-On Period
  • 17. Horizontal Well shall have the same meaning as the term defined by the state regulatory agency having jurisdiction over the Contract Area, in the absence of which the term shall mean a well containing one or more Laterals which are drilled, Completed or Recompleted in a manner in which the horizontal component of the Completion interval (1) extends at least one hundred feet (100’) in the objection formation(s) and (2) exceeds the vertical component of the Completion interval in the objective formation(s). Horizontal Well
  • 18. Lateral shall mean that portion of a wellbore of a Horizontal Well between the point at which the wellbore initially penetrates the objective Zone and the Terminus. Lateral
  • 19. When used in connection with a Horizontal Well, Plug Back shall mean an operation to test or Complete the well at a stratigraphically shallower Zone in which the operation has been or is being Completed and which is not in an existing Lateral. Plug Back
  • 20. When used in connection with a Horizontal Well, Sidetrack shall mean the directional control and deviation of a well outside the existing Lateral(s) so as to change the Zone or the direction of a Lateral from the approved proposal (unless done to straighten the hole or drill around junk in the hole or to overcome other mechanical difficulties). Sidetrack
  • 21. Spudder Rig shall mean a drilling rig utilized only for drilling all or part of the vertical component of a Horizontal Well; (a rig used only for setting conductor pipe shall not be considered a Spudder Rig). Spudder Rig
  • 22. Terminus shall have the same meaning as the term defined by the state regulatory agency having jurisdiction of the Contract Area, in the absence of which, the term shall mean the furthest point drilled in the Lateral. Terminus
  • 23. Total Measured Depth, when used in connection with a Horizontal Well, shall mean the distance from the surface of the ground to the Terminus, as measured along and including the vertical component of the well and Lateral(s). When the proposed operation(s) is the drilling of, or operation on, a Horizontal Well, the terms “depth” or “total depth” wherever used in this agreement shall be deemed to read “Total Measured Depth”. Total Measured Depth
  • 24. For any Horizontal Well drilled under this agreement, Operator shall drill such well to the Objective Zone(s) and drill the Lateral in the Zone(s) to the proposed Displacement, unless drilling operations are terminated pursuant to Article VI.G (impenetrable substance or condition in the hole renders further operations impractical) or Operator deems further drilling is neither justified nor required. The Operator may now terminate horizontal drilling operations if it deems further drilling is neither “justified nor required.” This provision appears to increase the discretion of the Operator. Drilling Obligation for a Horizontal Well
  • 25. Initial Well. Owner shall commence the drilling of the Initial Well at the following location (if a Horizontal Well, surface and Terminus/Termini of the Lateral(s)). Subsequent Operations. If any party desires to drill any well other than the Initial Well, or if any party should desire to Rework, Sidetrack, Deepen, Recomplete or Plug Back a dry hole or a well no longer capable of producing in paying quantities in which such party has not otherwise relinquished its interest in the proposed objective Zone, the party desiring to drill, Rework, Sidetrack, Deepen, Recomplete or Plug Back such a well shall give a written proposal of the operation to the parties who have not otherwise relinquished their interest in such objective Zone under this agreement specifying as relating to a Horizontal Well: (1) that the proposed operation is a Horizontal Well operation; (2) include drilling and Completion plans specifying the proposed: (i) Total Measured Depth(s), (ii) surface hole location(s), (iii) Terminus/Termini, (iv) Displacement(s), (v) utilization and scheduling of rig(s) (Spudder Rig, drilling and Completion), and (vi) stimulation operations, staging and sizing; and (3) estimated drilling and Completion costs as set forth in a AFE. The parties to whom such a notice is delivered shall have thirty (30) days after receipt of the notice within which to notify the party proposing to do the work whether they elect to participate in the costs of the proposed operation. Initial Well Description and Subsequent Operation Proposals
  • 26. If, during actual drilling operations on the Lateral and prior to reaching the Displacement specified in an approved proposal for a Horizontal Well (the “Approved Displacement”), Operator desires an Extension of the Lateral more than _____% (measured in feet) beyond the Approved Displacement, Operator shall give the Consenting Parties written notice of such intent to Extend, together with the estimated costs, not less than 24 hours before Operator estimates reaching the Approved Displacement. Unless at least ____% interest of the Consenting Parties provide written notice of their consent to the Extension within 48 hours of receipt of such notice, Operator shall not Extend the Lateral beyond the Approved Displacement and will proceed with Completion in accordance with the lateral approved proposal. Failure of a Consenting Party to respond to such notice shall be deemed a rejection. If ___% interest of the Consenting Parties or more consent, the Extension shall be deemed approved and binding upon all Consenting Parties. Extensions and Drag Along Participation
  • 27. a. Spudder Rig in Approved Well Proposal. If an approved Horizontal Well proposal provides that a Spudder Rig shall be utilized, and Operator desires to extend the proposed Horizontal Rig Move-On Period, Operator may obtain one or more extensions, each for a period of time not to exceed ___ days only upon notice and the affirmative vote of not less that ___% interest of the Consenting Parties to the drilling of the proposed well. b. Spudder Rig Not in Approved Well Proposal If an approved Horizontal Well proposal does not provide that a Spudder Rig may be utilized, and Operator subsequently desires to utilize a Spudder Rig, Operator may utilize a Spudder Rig upon notice to the Consenting Parties and the affirmative vote of not less than ___% in interest of the Consenting Parties. c. Failure to meet Horizontal Rig Move-On Period. If a rig capable of drilling a Horizontal Well to its Total Measured Depth has not commenced operations within the Horizontal Rig Move- On Period, or any approved extension(s) thereof, unless ___% in interest of the Consenting Parties agree to abandon the operation, Operator shall re-propose the well in the manner provided in Article VI.B. Any party who was a Non-Consenting Party to the original drilling proposal shall be entitled to a new election. Spudder Rigs - Delays in Drilling Lateral Wells Must be Approved by Consenting Parties
  • 28. If multiple Horizontal Wells are drilled or proposed to be drilled from a single pad or location, the costs of such pad or location shall be allocated, and/or reallocated as necessary, to the Consenting Parties of each of the wells thereon. Multi-Well Pad Costs
  • 29. Without the consent of all parties, no well shall be drilled, Deepened or Sidetracked, except any well drilled, Deepened or Sidetracked pursuant to the provisions of Article VI.B.2. of this agreement. Consent to the drilling, Deepening or Sidetracking shall include: All necessary expenditures for the drilling, Deepening or Sidetracking, testing, Completion and equipping of the well, including tankage and/or surface facilities. Horizontal Well Completion (No Separate Completion Election)
  • 30. Key (2/7): Exculpatory clause, prudent O O shall conduct its activities under [K] as a reasonably prudent oper, in a good and workmanlike manner … in accordance w/ good oilfield practice, and … applicable law… However, in no event shall it have any liability as O to the other parties for losses sustained or liabilities incurred in connection with authorized or approved operations under this agreement except such as may result from gross negligence or willful misconduct. New clause 1989: in no event shall it have any liability as Operator to the other parties for losses sustained or liabilities incurred [] except such as may result from gross negligence or willful misconduct Analysis & Implication • Response to Reeder*: – all of O’s “activities” under JOA covered: no breach of K claims – v. Abraxas, etc., under 1982 • New: Rejects Reeder, adopts Abraxas – only approved ops need gross neg – not other contractual obligations Good – New reflects risk to Operator • Operations, downhole – neg nuts –and not standard: IADC, MSAs • Not so normal contractual activities– higher not needed
  • 31. Other improvements (3/7): Operator Authority better matches practice Mixed-bags (more later) • Non-owner Operator • Authority: –to defend third-party uninsured suits –to make ordinary pooling filings • Not all WI execute— treat as non-consent • Update Exh. A Clear wins • Clarified rules of resignation, removal, successor – separated Resignation v. Removal – Successor vote – no 2-party deadlocks – Operatorship not assignable nor forfeited • Allow “deviations from approved proposals” • Definitions: clarify – rework is a subsequent op – new: “Workover” is routine maintenance • Broadened routine maint. drag-along: – workovers & artificial lift included – not SWD wells, other ancillary facilities • Title, Operator authority clarified: (i) landman costs repaid, (ii) obtain cures, (iii) approve title
  • 32. Operatorship is neither assignable nor forfeited except in accordance with the provisions of Article V. The Operator’s Assignee must now comply with the voting mechanism in the agreement to claim operatorship. In its performance of services for the Non-Operators, Operator shall be an independent contractor not subject to the control or direction of the Non-Operators except as to the type of operation to be undertaken in accordance with the election procedures contained in this agreement. The Operator - Non-Assignment of Operatorship & Independent Contractor
  • 33. The successor Operator shall be selected by the affirmative vote of one (1) or more parties owning majority interest based on ownership as shown on Exhibit “A” The Assignee of an Operator is entitled to vote the assigned interest. In the event that such vote results in a tie, the candidate supported by the former Operator or the majority of its transferee(s), shall become the successor Operator. Selection of Successor Operator
  • 34. If Operator, in its reasonable judgment, deviates from an approved proposal based upon information derived from facts and circumstances determined subsequent to the commencement of the operations relating to such proposal (including, without limitation, revision of the originally proposed Completion staging and design), such deviations in and of themselves will not result in liability of the Operator to the Parties. This provision appears to greatly expand the discretion of the Operator in that it permits the Operator to deviate from an approved drilling and/or completion program. Operator Deviations From Approved Proposals
  • 35. Workover shall mean routine maintenance and repair work performed on a well but does not include a Rework operation. A Rework operation is proposed pursuant to the subsequent operations provision and is subject to non-consent penalty provisions. A Workover operation is subject to a drag-along provision, rather than a non-consent provision. Workover
  • 36. If requested by Operator, a party shall be responsible for securing curative matter and pooling amendments or agreements required in connection with Leases or Oil and Gas Interests contributed by such party; otherwise, Operator shall be responsible for such activities. Generally, the Operator will be responsible for securing title opinions, curing title issues and approving title. The title and curative costs are billed to the joint account. Title Examination
  • 37. Others (4/7): Operations fixes, minor Art. Change Analysis/Comment • … • VI.F • VII.C • VII.F passim • XIV.C • Notify WI operations commenced • Any party may propose to abandon a non-economic well • Advanced payments 30 days to pay • Disproportionate taxes = “burden” • “under this K”, not “on the K Area” • Regulatory agencies: –All now!, not just FERC & DOE –Oper misinterprets rule? Liable • “use reasonable efforts” • Non-Consenting parties too; practical effect? • Was 15; only next month’s cost • Borne by contributing party • Needed: build facilities off area, ops for other units on • For proportionate part only, – unless willful/gross neg • No safe harbor… • VII.D • Usury savings clause • For non-consent penalties
  • 38. Others (5/7): Substantive & important New provision Comments Assignor & Assignee liability for future operation costs • Assignor: pre-transfer costs – not liable: future ops it did not consent to – ops it did – jointly & severally with Assignee • Assignee liable – costs incurred post-transfer – w/ assignor, if its consent – No assumption needed • Improvement: – Seagull bad – Assignor liable, did not consent to op – contra JOA principles • Assignee – can’t let off! – Don’t need assumption if reference in public records • Q: P&A costs, when incurred? Before? • Seemingly same… • Seagull, TX SC: – Assignor liable costs of later ops – Assignee not liable absent express assumption • Content required set forth – Vertical or horizontal op – Plans, incl depth, locations, objective – Rig plans, if stimulation – Estimated costs – AFE • Horizontal & vertical wells • Improvement in principle – – memorializing practice – Reduces room for bad faith or sharp practices • We’ll see how courts apply • Ambiguous! – industry practice not reflected • Required in 1989-H, copied here Content of well proposals
  • 39. The transferee shall be jointly and severally liable with its transferor for payment of its share of all costs and expenses attributable to an approved operation conducted hereunder in which its transferor had agreed to participate. Transferee of Interests Responsible for Costs and Expenses of Transferor
  • 40. Others (6/7): Substantive & minor New provision Comments Definitions • Added “Affiliate” • “Consenting Party” swallowed “Drilling Party” • “Affiliate”: 2005 COPAS def – “common control” – 50% ownership Before? • Not defined, ambiguous • Duplicate, confusing • Non-Consenting parties: – no access to sites & records of that op – Well accounting • Good rule • Consider whether to restrict further, esp. re: invitees •Access rightsNon-Consent Parties – limited access • “[A]ll burdens except Subsequently Created Interests”. • Reflects Texas practice • Better rule • Was blank, • Filled: lowest % royalty in Lease Default royalty owed by WI
  • 41. A Non-Consenting Party is not entitled to access to the well location, information and reports relating to such non-consented operation until the earlier of: full recoupment by the Consenting Parties of the non-consent penalties, or 2 years following the date the non-consented operation was commenced. Thereafter, Operator shall promptly furnish such access, information and reports upon receipt of a written request from the Non-Consenting Party. Prior to payout, a Non-Consenting Party shall be entitled to review the joint account records pertaining to a non-consented operation to the extent necessary to conduct an audit of the payout account. Non-Consenting Parties’ Access to Contract Area and Records
  • 42. Other Improvements (7/7): Form & Style • Scrivener’s guides/notes – p. 2 – “Scribener’s Instructions” – p. 18: Art. XV(E): “Conflict of Terms”, that Article XVI prevails • Readability/formatting – no more numbers on side – spacing/formatting of paragraphs • Clarified term “commencement of operations”, V.D.7(a) – replaces cumbersome, potentially ambiguous – ‘when spudded or date drilling operations are commenced’ • Preparer representation – form is Form 610-2015 – …and no changes except shown in strikethrough – Reflects industry practice  nice to have memorialized  …potential source of conflict?
  • 43. Notwithstanding anything in this agreement to the contrary, in the event of any conflict between the provisions of Articles I through XV of this agreement and the provisions of Article XVI, if any, the provisions of Article XVI, if any, shall govern. Conflict Between Articles I – XV and the Special Provisions of Article XVI
  • 44. _________, who has prepared and circulated this form for execution, represents and warrants that the form was printed from and, with the exception(s) listed below, is identical to the AAPL Form 610-2015 Model Form Operating Agreement, as published in computerized from by AAPL. No changes, alterations, or modifications, other than those made by strikethrough and/or insertion and that are clearly recognizable as changes in Articles ________, have been made to the form. Preparer Representations
  • 45. Agenda • Introduction • Generally – how new? • Key changes – improvements • Others: imperfect progress -> future issues? • Unresolved issues – (lack of) fit with Louisiana law
  • 46. Each Email Notice shall clearly state that it is a notice or response to a notice under this agreement. An Email Notice shall be deemed delivered only when affirmatively acknowledged by email reply from the receiving party. Automatic delivery receipts issued, without direct acknowledgement of the Email Notice, are not evidence of Receipt for purposes of this agreement. If the receiving party fails … to affirmatively acknowledge…, then Receipt of the notice shall only be deemed to have occurred when received … as otherwise provided in the agreement. Imperfect progress (1/4): Email Notices • So close! – allowing good – reflects practice • Receipt rules?!? – Not in your control, can’t rely on it – Ruins it • Modify to allow, I do: standard language
  • 47. Imperfect (2/4): Operator’s new duties New provision Benefit Issue Update Exhibit A, parties’ interests • Oper updates – reflect assignments, fix mistakes • Distributes, asks consent of party if new interest • No consent? Legal opinion – Can change, and – Conclusive – Wi must sue • List useful • Oper new duty, not new risk • Clarity what to do, if do conclusive • To protect neutral, cautious • Some Os not… then mixed bag. • Small interests – legal costs • Pushes to suit Before? • No duty • Operator maintained list on own • Freedom, but no clarity, risk • Takes defense of non- insured claims • WI – can opt-out, 14 days, – owe share of defense costs • Reflects practice • Practical • Next slide discuss, Sam •Not in Op authority •Consent each suit Claims & lawsuits • Limited: record pooling declarations & orders – after notice to WI, who can opt out • Closer to practice • Helpful •La. Conservation practice missed •Active role of Operator •No agency •Art. IV.A – Title, can conduct unit hearings Agency to file ordinary course pooling filings
  • 48. If the amount required for settlement exceeds the amount authorized in the agreement, Operator shall promptly give notice to Non-Operators and Operator shall assume and handle the claim or suit on behalf of all parties unless, within 14 days after receipt of such notice, a party gives notice to Operator and the other parties of its affirmative election to assume and handle the claim or suit on its own behalf, which assumption and handling shall be done at said party’s own expense and over and above said party’s proportionate share chargeable to the joint account as hereinafter provided. Claims and Lawsuits
  • 49. The Operator shall own an interest in the Contract Area except as provided in this Article V.A and subject to the provisions of Article V.B.5. A non-owning operator may serve as Operator but, as a condition precedent to serving as Operator, the non-owing operator and the Non- Operators must enter into a separate agreement, or insert Article XVI provisions to this agreement, to govern the relationship between them. Unless such separate agreement or Article XVI provisions provide otherwise, said non-owning operator shall be bound by all terms and conditions of this agreement applicable to Operator. The failure of a non-owning operator and Non-Operators to enter into such a separate agreement or such Article XVI provisions shall disqualify said non-owing operator from serving as O … [must designate WI owner] Imperfect progress (3/4): Non-Owning Operator • Normal: Operator aligned with WI – reimbursed, not paid, profit from WI – Pays share of costs of operations, signs JOA, consent/proposal rights • Now: allow, require agreement– no common rules, force parties to talk
  • 50. Unless the parties have otherwise agreed, a non-owning Operator may be removed at any time, with or without cause, by the affirmative vote of parties owning a majority interest based on ownership as shown on Exhibit “A.” If good cause for removal of such non-owning Operator, exists, the non-owning Operator may be removed by the affirmative vote of Non-Operators owning a majority interest based on ownership as shown on Exhibit “A” remaining after excluding the voting interest of any non- operator who is an Affiliate of non-owning Operator. Removal of Non-Owning Operator
  • 51. Imperfect progress (4/4): not all execute Improvement Partial improvement … only partial because issue • New option: – to treat non- signatories like non- consent parties – Divide their interest proportionately among other WI owners • Before – Operator could take all risk, get all revenue. – Now: that’s 1 of 2 options • Partial improvement: Oper can keep its from preparing for drilling of initial well • Helpful to Operator: – no longer out on limb with costs – Or having to wait for everyone, missing rig dates • Only from funds prepaid for Initial Well, already received at termination • Why only prepaid? – all who executed? • Incentives: – reward malingering late-payors? – penalizes early payors • At least: be cautious paying early, advise clients accordingly
  • 52. In the event operations on a well shall be commenced without execution of this agreement by all persons listed on Exhibit “A”, or in the event that subsequent to the commencement of operations on the well previously unknown or undisclosed persons owning working interests in a well are discovered, or both, the parties executing the agreement agree to one of the following: Option No. 1: Operator shall indemnify executing Non-Operators with respect to all costs incurred for the well which would have been received by such person under this agreement as if such person had executed the same and Operator shall receive all revenues which would have been received by each such person under this agreement as if such person had executed the same. Option No. 2: The Operator shall advise all parties of the total interest of the parties that have executed this agreement. Each party executing this agreement, within forty-eight (48) hours after delivery of such notice, shall advise the Operator of its desire to (i) limit participation, (ii) carry only its proportionate part of non-executing persons’ interests, or (iii) carry it proportionate part of non- executing persons’ interests together with all or a portion of its proportionate part of any non-executing persons interests that any executing party did not elect to take. Failure of Parties to Execute the Operating Agreement
  • 53. Agenda • Introduction • Generally – how new? • Key changes – improvements • Others: imperfect progress -> future issues? • Unresolved issues – (lack of) fit with Louisiana law
  • 54. Louisiana exceptionalism – for future • Form JOA, always been: – poor fit with La. law & practice – But nobody uses La. form OA • Why? Two causes: – Conservation practice – mandatory unitization, active role of operator – Terminology  can’t redefine “common” terms used everywhere else  but different here Issue & Cause • Conform to existing well spacing rules, proposed wells must, VI.B.8 – 2015: or to exception already approved – Not practice in Louisiana  propose, drill, then get permit  Can’t do this under Form JOA • Terminology – “Zone” – Form: a stratum of earth w/ a common accumulation of oil & gas separately producible… – La. – multiple pools in 1 Zone Illustration