Some Recurring Issues in Operating Agreements and What AAPL's Drafting Committee Might Do About Them
Proceedings of the Rocky Mountain Mineral Law Annual Institute, Vol. 60, No. 27, 2014
SMU Dedman School of Law Legal Studies Research Paper No. 299
41 Pages Posted: 7 Jul 2016
Date Written: 2014
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). Revised forms followed in 1977, 1982, and 1989. The AAPL model forms have become the standard in the United States, and will be the focus of this chapter. The AAPL has begun the process of revising the AAPL Form 610-1989 Model Form Operating Agreement (AAPL Form 610-1989),19 and over the next couple of years everyone active in the industry likely will find themselves discussing what the drafting committee proposes or what the drafting committee ought to do. This chapter will consider some issues that commonly arise with operating agreements and suggest to the drafting committee some changes that they might consider. In particular, this chapter will focus on what we can learn from others, looking at some of the provisions in the Association of International Petroleum Negotiators (AIPN) 2012 Model International JOA (AIPN 2012 JOA), the Canadian Association of Petroleum Landmen (CAPL) 2007 Operating Procedure (CAPL 2007 Operating Procedure), the Australian Mining and Petroleum Law Association (AMPLA) Model Petroleum Joint Operating Agreement (AMPLA 2011 JOA), the United Kingdom Offshore Operators Association (UKOOA) Model Form JOA (UKOOA 2009 JOA), and the model forms issued by the Rocky Mountain Mineral Law Foundation. This chapter will also examine the more recent AAPL drafting ventures for offshore operations, which the AAPL drafting committee might consider to address the recurring issues that will be discussed. Due to time and space limitations, the focus will be on issues related to operators — particularly operator liability and operator removal.
Keywords: operating agreements, American Association of Professional Landmen, AAPL Form 610-1989 Model Form Operating Agreement, oil and gas development
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