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Joint Operating Agreement Exhibits: An Overview

Michael E. Smith, Oil & Gas Agreements: Joint Operations (2007)

A. General. This paper deals with the exhibits commonly attached to the joint operating agreement. Unless otherwise indicated in this paper, “operating agreement” will mean the AAPL Form 610-1989 Model Form Operating Agreement, copyright by the American Association of Petroleum Landmen.

B. Contemplated Exhibits. Article II of the operating agreement contemplates seven Exhibits:

1. Exhibit “A” - A description of the Contract Area; restrictions, if any; the parties and their addresses for notice purposes; the parties' interests in the Contract Area; leasehold and/or interests in the Contract Area; and burden on production.

2. Exhibit “B” - Form of Lease.

3. Exhibit “C” - Accounting Procedure.

4. Exhibit “D” - Insurance Requirements.

5. Exhibit “E” - Gas Balancing Agreement.

6. Exhibit “F” - Non-Discrimination and Certification of Non-Segregated Facilities.

7. Exhibit “G” - Tax Partnership.

C. Inconsistencies. Article II provides that in the event of an inconsistency between the body of the operating agreement and any exhibit, then Exhibits “E”, “F” and “G” prevail over the body, but the body prevails over all other exhibits.

D. Optional v. Mandatory Exhibits.

1. Certain of the exhibits are optional while others are mandatory. Exhibits “A”, “C” and “D” are always required. Without Ex