Canada Oil and Gas Operations Act

Marginal note:Contents of unitization application

• 40 (1) An application for a unitization order shall contain

  • (a) a plan showing the unit area that the applicant desires to be made subject to the order;

  • (b) one copy each of the unit agreement and the unit operating agreement;

  • (c) a statement of the nature of the operations to be carried out; and

  • (d) a statement showing

    • (i) with respect to each proposed unit tract, the names and addresses of the working interest owners and royalty owners in that tract, and

    • (ii) the tracts that are entitled to be qualified as unit tracts under the provisions of the unit agreement.

• Marginal note:Details required of unit agreement

  (2) The unit agreement referred to in subsection (1) shall include

  • (a) a description of the unit area and the unit tracts included in the agreement;

  • (b) an allocation to each unit tract of a share of the production from the unitized zone not required, consumed or lost in the unit operation;

  • (c) a provision specifying the manner in which and the circumstances under which the unit operation shall terminate; and

  • (d) a provision specifying that the share of the production from a unit area that has been allocated to a unit tract shall be deemed to have been produced from that unit tract.

• Marginal note:Details required of unit operating agreement

  (3) The unit operating agreement referred to in subsection (1) shall make provision

  • (a) for the contribution or transfer to the unit, and any adjustment among the working interest owners, of the investment in wells and equipment within the unit area;

  • (b) for the charging of the costs and expenses of the unit operation to the working interest owners;

  • (c) for the supervision of the unit operation by the working interest owners through an operating committee composed of their duly authorized representatives and for the appointment of a unit operator to be responsible, under the direction and supervision of the operating committee, for the carrying out of the unit operation;

  • (d) for the determination of the percentage value of the vote of each working interest owner; and

  • (e) for the determination of the method of voting on any motion before the operating committee and the percentage value of the vote required to carry the motion.