North Dakota Federal And Indian Communitization Agreement Page 3
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55.
The communitized area shall be developed and operated as an entirety, with the
understanding and agreement between the parties hereto that all communitized
substances produced therefrom shall be allocated among the leaseholds comprising
said area in the proportion that the acreage interest of each leasehold bears to the entire
acreage interest committed to this agreement.
All proceeds, 8/8ths, attributed to unleased Indian, Federal, State or fee land included
within the CA area are to be placed in an interest earning escrow or trust account by the
designated operator until the land is leased or ownership is established.
The royalties payable on communitized substances allocated to the individual leases
6.
comprising the communitized area and the rentals provided for in said leases shall be
determined and paid on the basis prescribed in each of the individual leases. Payments
of rentals under the terms of leases subject to this agreement shall not be affected by this
agreement except as provided for under the terms and provisions of said leases or as
may herein be otherwise provided. Except as herein modified and changed, the oil and
gas leases subject to this agreement shall remain in full force and effect as originally
made and issued.
It is agreed that for any Federal lease bearing a sliding- or step-scale rate of royalty, such
rate shall be determined separately as to production from each communitization
agreement to which such lease may be committed, and separately as to any
noncommunitized lease production, provided, however, as to leases where the rate of
royalty for gas is based on total lease production per day, such rate shall be determined
by the sum of all communitized production allocated to such a lease plus any
noncommunitized lease production.
7.
There shall be no obligation on the lessees to offset any well or wells completed in the
same formation as covered by this agreement on separate component tracts into which
the communitized area is now or may hereafter be divided, nor shall any lessee be
required to measure separately communitized substances by reason of the diverse
ownership thereof, but the lessees hereto shall not be released from their obligation to
protect said communitized area from drainage of communitized substances by a well
or wells which may be drilled offsetting said area.
The commencement, completion, continued operation, or production of a well or wells
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for communitized substances on the communitized area shall be construed and
considered as the commencement, completion, continued operation, or production on
each and all of the lands within and comprising said communitized area, and operations
or production pursuant to this agreement shall be deemed to be operations or production
as to each lease committed hereto.
9.
Production of communitized substances and disposal thereof shall be in conformity with
allocation, allotments, and quotas made or fixed by any duly authorized person or
regulatory body under applicable Federal or State statutes. This agreement shall besubject
to all applicable Federal and State laws or executive orders, rules and regulations,and no
party hereto shall suffer a forfeiture or be liable in damages for failure to comply with any
of the provisions of this agreement if such compliance is prevented by, or if such failure
results from, compliance with any such laws, orders, rules or regulations.
ND FED & INDIAN CA
revised 10/6/2014
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