Common use of UNIT AREA Clause in Contracts

UNIT AREA. The area specified on the map attached hereto marked Exhibit (a) Unit Operator, on its own motion (after preliminary concurrence by the AO), or on demand of the AO, or the Land Commissioner (after preliminary concurrence by the AO and the Land Commissioner) shall prepare a notice of proposed expansion or contraction describing the contemplated changes in the boundaries of the unit area, the reasons therefore, any plans for additional drilling, and the proposed effective date of the expansion or contraction, preferably the first day of a month subsequent to the date of notice. (b) Said notice shall be delivered to the proper Bureau of Land Management office and the Land Commissioner and copies thereof mailed to the last known address of each working interest owner, ▇▇▇▇▇▇ and lessor whose interests are affected, advising that 30 days will be allowed for submission to the Unit Operator of any objections. (c) Upon expiration of the 30-day period provided in the preceding item (b) hereof, Unit Operator shall file with the AO and the Land Commissioner , evidence of mailing of the notice of expansion or contraction and a copy of any objections thereto which have been filed with the Unit Operator, together with an application in triplicate, for approval of such expansion or contraction and with appropriate joinders. (d) After due consideration of all pertinent information, the expansion or contraction shall, upon approval by the AO and the Land Commissioner, become effective as of the date prescribed in the notice thereof or such other appropriate date. (e) All legal subdivisions of lands (i.e., 40 acres by Government survey or its nearest lot or tract equivalent; in instances of irregular surveys, unusually large lots or tracts shall be considered in multiples of 40 acres or the nearest aliquot equivalent thereof), no parts of which are in or entitled to be in a participating area (as defined in Section 11) on or before the fifth anniversary of the effective date of the first initial participating area established under this unit agreement, shall be eliminated automatically from this agreement, effective of said fifth anniversary, and such lands shall no longer be a part of the unit area and shall no longer be subject to this agreement, unless diligent drilling operations under an approved plan of development are in progress on unitized lands on said fifth anniversary, in which event all such lands shall remain subject hereto for so long as such drilling operations are continued diligently, with not more than 90-days time elapsing between the completion of one such well and the commencement of the next such well. All legal subdivisions of lands not entitled to be in a participating area within 10 years after the effective date of the first initial participating area approved under this agreement shall be automatically eliminated from this agreement as of said tenth anniversary. The Unit Operator shall, within 90 days after the effective date of any elimination hereunder, describe the area so eliminated to the satisfaction of the AO and the Land Commissioner and promptly notify all parties in interest. All lands reasonably proved productive of unitized substances in paying quantities and developed to the satisfaction of the AO and the Land Commissioner by diligent drilling operations under an approved plan of development after the aforesaid five-year period shall become participating in the same manner as during said first five-year period. However, when such diligent drilling operations cease, all nonparticipating lands not then entitled to be in a participating area shall be automatically eliminated effective as of the 91st day thereafter. Any expansion of the unit area pursuant to this section which embraces lands theretofore eliminated pursuant to this subsection 2(e) shall not be considered automatic commitment or recommitment of such lands. If conditions warrant extension of the 10-year period specified in this subsection, a single extension of not to exceed two years may be accomplished by consent of the owners of 90 percent of the working interest in the current nonparticipating unitized lands and the owners of 60 percent of the basic royalty interests (exclusive of the basic royalty interests of the United States) in nonparticipating unitized lands with approval of the AO, if on Federal land, and the Land Commissioner, if on state land, provided such extension application is submitted not later than 60 days prior to the expiration of said 10-year period.

UNIT AREA. The area specified on the map attached hereto marked ExhibitExhibit A is hereby designated and recognized as consti- tuting the unit area, containing ll acres, more or less. Exhibit A shows, in addition to the bound- ary of the unit area, the boundaries and identity of tracts and leases in said area to the extent known to the Unit Operator. Ex- hibit B attached hereto is a schedule show- ing to the extent known to the Unit Oper- ator, the acreage, percentage, and kind of ownership of oil and gas interests in all lands in the unit area. However, nothing herein or in Exhibits A or B shall be construed as a representation by any party hereto as to the ownership of any interest other than such in- terest or interests as are shown in the Exhib- its as owned by such party. Exhibits A and B shall be revised by the Unit Operator when- ever changes in the unit area or in the own- ership interests in the individual tracts render such revision necessary, or when re- quested by the Authorized Officer, herein- after referred to as AO and not less than four copies of the revised Exhibits shall be filed with the proper BLM office. The above-described unit area shall when practicable be expanded to include therein any additional lands or shall be contracted to exclude lands whenever such expansion or contraction is deemed to be necessary or ad- visable to conform with the purposes of this agreement. Such expansion or contraction shall be effected in the following manner: (a) Unit Operator, on its own motion (after preliminary concurrence by the AO), or on demand of the AO, or the Land Commissioner (after preliminary concurrence by the AO and the Land Commissioner) shall prepare a notice of proposed expansion or contraction describing the contemplated changes in the boundaries of the unit area, the reasons thereforetherefor, any plans for additional drilling, and the proposed pro- posed effective date of the expansion or contractioncon- traction, preferably the first day of a month subsequent to the date of notice. (b) Said notice shall be delivered to the proper Bureau of Land Management office and the Land Commissioner BLM office, and copies thereof mailed to the last known address of each working interest owner, ▇▇▇▇▇▇ and lessor whose interests inter- ests are affected, advising that 30 days will be allowed for submission to the Unit Operator Oper- ator of any objections. (c) Upon expiration of the 30-day period provided in the preceding item (b) hereof, Unit Operator shall file with the AO and the Land Commissioner , evidence of mailing of the notice of expansion or contraction con- traction and a copy of any objections thereto which have been filed with the Unit Operator, together to- gether with an application in triplicate, for approval of such expansion or contraction and with appropriate joinders. (d) After due consideration of all pertinent information, the expansion or contraction shall, upon approval by the AO and the Land CommissionerAO, become effective ef- fective as of the date prescribed in the notice thereof or such other appropriate date. (e) All legal subdivisions of lands (i.e., 40 acres by Government survey or its nearest lot or tract equivalent; in instances of irregular irreg- ular surveys, unusually large lots or tracts shall be considered in multiples of 40 acres or the nearest aliquot equivalent thereof), no parts of which are in or entitled to be in a participating area (as defined in Section 11) on or before the fifth anniversary an- niversary of the effective date of the first initial participating area established under this unit agreement, shall be eliminated automatically from this agreement, effective as of said fifth anniversary, and such lands shall no longer be a part of the unit area and shall no longer be subject to this agreement, unless diligent drilling operations under an approved plan of development are in progress on unitized lands not entitled to participation on said fifth anniversary, in which event all such lands shall remain subject sub- ject hereto for so long as such drilling operations oper- ations are continued diligently, with not more than 90-days time elapsing between the completion of one such well and the commencement com- mencement of the next such well. All legal subdivisions of lands not entitled to be in a participating area within 10 years after the effective date of the first initial participating partici- pating area approved under this agreement shall be automatically eliminated from this agreement as of said tenth anniversary. The Unit Operator shall, within 90 days after the effective date of any elimination hereunder, describe the area so eliminated to the satisfaction satis- faction of the AO and the Land Commissioner and promptly notify all parties in interest. All lands reasonably proved productive of unitized substances in paying quantities and developed to the satisfaction of the AO and the Land Commissioner by diligent drilling operations under an approved plan of development oper- ations after the aforesaid five5-year period shall become participating in the same manner as during said first five5-year period. However, when such diligent drilling operations cease, all nonparticipating lands not then entitled to be in a participating area shall be automatically auto- matically eliminated effective as of the 91st day thereafter. Any expansion of the unit area pursuant to this section which embraces lands theretofore thereto- fore eliminated pursuant to this subsection 2(e) shall not be considered automatic commitment com- mitment or recommitment of such lands. If conditions warrant extension of the 10-year period specified in this subsection, a single extension of not to exceed two 2 years may be accomplished ac- complished by consent of the owners of 90 percent of the working interest in the current cur- rent nonparticipating unitized lands and the owners of 60 percent of the basic royalty interests in- terests (exclusive of the basic royalty interests inter- ests of the United States) in nonparticipating nonpartici- pating unitized lands with approval of the AO, if on Federal land, and the Land Commissioner, if on state land, provided such extension application is submitted not later than 60 days prior to the expiration of said 10-year period.