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Exploration Participation Agreement

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UNITIZATION AGREEMENT

 UNIT,   COUNTY, 

(Tract Participation based on Productive Area)

TABLE OF CONTENTS

ARTICLE 1  DEFINITIONS

1.1  BTU

1.2  Effective Date

1.3  Engineering Study

1.4  Gas

1.5  Indemnity Agreement

1.6  Net Acre Foot

1.7  Oil

1.8  Oil And Gas Rights

1.9  Original Oil In Place

1.10  Outside Substances

1.11  Productive Acres

1.12  Royalty Interest

1.13  Royalty Owner

1.14  Tract

1.15  Tract Participation

1.16  Unit Area

1.17  Unit Equipment

1.18  Unit Expense

1.19  Unit Operations

1.20  Unit Operator

1.21  Unit Operating Agreement

1.22  Unit Participation

1.23  Unitized Formation

1.24  Unitized Substances

1.25  Working Interest

1.26  Working Interest Owner

ARTICLE 2  EXHIBITS

2.1  Exhibits

2.1.1  Exhibit A: Tract Schedule

2.1.2  Exhibit B: Map of Unit Area

2.1.3  Exhibit C: Electric Log

2.1.4  Exhibit D: Indemnity Agreement

2.2  Reference to Exhibits

2.3  Exhibits Considered Correct

2.4  Correcting Errors

2.5  Additional Well Data

2.6  Filing Revised Exhibits

ARTICLE 3  CREATION AND EFFECT OF UNIT

3.1  Oil and Gas Rights Unitized

3.2  Personal Property Excepted

3.3  Amendment of Leases and Other Agreements

3.4  Continuation of Leases and Term Interests

3.5  Title Unaffected by Unitization

3.6  Injection Rights

3.7  Development Obligation

3.8  Ratification and Extension of Leases

ARTICLE 4  PLAN OF OPERATIONS

4.1  Unit Operator

4.2  Method of Operations

4.3  Change of Method of Operation

ARTICLE 5  TRACT PARTICIPATIONS

5.1  Tract Participations

5.2  Relative Tract Participations

ARTICLE 6  ALLOCATION OF UNITIZED SUBSTANCES

6.1  Allocation to Tracts

6.2  Distribution Within Tracts

6.3  Taking Unitized Substances in Kind

6.4  Failure to Take in Kind

6.5  Responsibility for Royalty Settlements

6.6  Royalty on Outside Substances

ARTICLE 7  PRODUCTION AS OF THE EFFECTIVE DATE

7.1  Oil or Liquid Hydrocarbons in Lease Tanks

7.2  Overproduction

ARTICLE 8  USE OR LOSS OF UNITIZED SUBSTANCES

8.1  Use of Unitized Substances

8.2  Royalty Payments

ARTICLE 9  TRACTS TO BE INCLUDED IN UNIT

9.1  Qualification of Tracts

9.1.1

9.1.2

9.1.3

9.2  Commitment of Interests to Unit

9.3  Revision of Exhibits

9.4  Acquisition of Uncommitted Interest

ARTICLE 10  TITLES

10.1  Removal of Tract from Unit Area

10.2  Revision of Exhibits

10.3  Working Interest Titles

10.4  Royalty Interest Titles

10.5  Production Where Title is in Dispute

10.6  Payment of Taxes to Protect Title

ARTICLE 11  EASEMENTS OR USE OF SURFACE

11.1  Grant of Easements

11.2  Use of Water

11.3  Surface Damages

ARTICLE 12  ENLARGEMENTS OF UNIT AREA

12.1  Enlargements of Unit Area

12.1.1

12.1.2

12.1.3

12.2  Determination of Tract Participation

12.3  Effective Date

ARTICLE 13  TRANSFER OF TITLE - PARTITION

13.1  Transfer of Title

13.2  Waiver of Rights to Partition

ARTICLE 14  RELATIONSHIP OF PARTIES

14.1  No Partnership

14.2  No Joint Refining or Marketing

14.3  Royalty Owners Free of Costs

14.4  Information to Royalty Owners

ARTICLE 15  FORCE MAJEURE

15.1  Force Majeure

ARTICLE 16  EFFECTIVE DATE

16.1  Effective Date

16.2  Ipso Facto Termination

16.3  Certificate of Effectiveness

ARTICLE 17  TERM

17.1  Term

17.2  Termination by Working Interest Owners

17.3  Effect of Termination

17.4  Salvaging Equipment Upon Termination

17.5  Certificate of Termination

17.6  Assignment or Surrender of Lease

ARTICLE 18  EXECUTION

18.1  Original Counterpart, or Other Instrument

18.2  Joinder in Dual Capacity

ARTICLE 19  GENERAL

19.1  Amendments Affecting Working Interest Owners

19.2  Action by Working Interest Owners

19.3  Lien and Security Interest of Unit Operator or Working Interest Owners

ARTICLE 20  SUCCESSORS AND ASSIGNS

20.1  Successors and Assigns

UNITIZATION AGREEMENT

 UNIT,   COUNTY, 

The Parties to this Agreement are those signing this Agreement, executing counterparts of this Agreement, and Parties executing Ratification of this Agreement (collectively referred to as “the Parties” or individually as a “Party”).

To promote conservation, increase the ultimate recovery of Unitized Substances from the Field in County, , and to protect the rights of the owners, it is deemed necessary and desirable to enter this Agreement, in conformity with , to unitize the oil and gas rights in the Unitized Formation in order to conduct Unit operations for the conservation and utilization of Unitized Substances as provided in this Agreement.

For the mutual benefit and agreements contained in this Agreement, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

When used in this Agreement the following terms shall have the following meanings:

1.1 BTU: British Thermal Unit. The amount of heat needed to raise the temperature of one pound of water one degree Fahrenheit.

1.2 EFFECTIVE DATE: .

1.3 ENGINEERING STUDY: Means the study of the Unitized Formation dated , approved by the Working Interest Owners on .

1.4 GAS: Natural Gas ...

1.5 INDEMNITY AGREEMENT: That agreement in Exhibit D that will be signed by certain Working Interest owners to qualify a certain Tract(s) under Section 9.1.3 of this Agreement.

1.6 NET ACRE FOOT: Means 43,560 net cubic feet of porous and permeable formation with percent (%) porosity or greater within the reservoir ...

1.7 OIL: Means any liquid hydrocarbon...

1.8 OIL AND GAS RIGHTS: The rights to explore, develop, and operate lands within the Unit Area for the production of Unitized Substances, or to share in the production obtained, or the proceeds of production.

1.9 ORIGINAL OIL IN PLACE: Means the calculated oil, in reservoir barrels, within the Net Acre Feet of the Unitized Formation using the formula: ( x porosity of % or greater, x net acre feet x (1-SW)).

1.10 OUTSIDE SUBSTANCES: All substances purchased or otherwise obtained from any source other than the Unitized Formation that are injected into the Unitized Formation.

1.11 PRODUCTIVE ACRES: Means the surface acres within the line for the unitized formation as shown on the "Net Pay Isopach Map" ...

1.12 ROYALTY INTEREST: The right to or interest in any portion of, or proceeds from the Unitized Substances other than a Working Interest.

1.13 ROYALTY OWNER: A party to this Agreement who owns a Royalty Interest.

1.14 TRACT: Means the land described and given a Tract number in Exhibit A.

1.15 TRACT PARTICIPATION: Means the percentage shown on Exhibit A for allocating Unitized Substances to a Tract under this Agreement.

1.16 UNIT AREA: Means the land described by Tracts in Exhibit A and shown on Exhibit B to which this Agreement becomes effective...

1.17 UNIT EQUIPMENT: Means all personal property, lease and well equipment, plants, and other facilities and equipment taken over or otherwise acquired for the joint account for use in Unit Operations.

1.18 UNIT EXPENSE: Means all cost, expense, or indebtedness incurred by Working Interest Owners or Unit Operator by the terms of this Agreement and the Unit Operating Agreement, for or on account of Unit Operations.

1.19 UNIT OPERATIONS: Means all operations conducted by the terms of this Agreement and the Unit Operating Agreement.

1.20 UNIT OPERATOR: The party designated by Working Interest Owners under the Unit Operating Agreement to conduct Unit Operations, and act as operator.

1.21 UNIT OPERATING AGREEMENT: The agreement entered by Working Interest Owners, having the same Effective Date as this Agreement, entitled "Unit Operating Agreement," , , , including all amendments to the Unit Operating Agreement.

1.22 UNIT PARTICIPATION: The Unit Participation of a Royalty Interest Owner is the sum of the percentages obtained by multiplying the Royalty Interest ...

1.23 UNITIZED FORMATION: Means the subsurface portion of the Unit Area commonly known as the , , ...

1.24 UNITIZED SUBSTANCES: Means all oil, gas, gaseous substances, sulfur contained in oil or gas, condensate, distillate, and all associated and constituent liquid or liquefiable hydrocarbons ...

1.25 WORKING INTEREST: An interest in Unitized Substances by virtue of a lease, operating agreement, fee title, or otherwise ...

1.26 WORKING INTEREST OWNER: A party to this Agreement owning a Working Interest.

ARTICLE 2

EXHIBITS

2.1 EXHIBITS. The following are Exhibits to and are attached to this Agreement. Each Exhibit is incorporated into this Agreement by reference.

2.1.1 EXHIBIT A is a schedule describing each Tract in the Unit Area, showing its Tract Participation and identifying all Working Interest Owners and their Working Interest and Unit Interest in the Tract.

2.1.2 EXHIBIT B is a map that shows the boundary lines of the Unit Area and the Tracts in the Unit.

2.1.3 EXHIBIT C is a portion of the electric log run on the Well referred to in Section 1.23.

2.1.4 EXHIBIT D is an Indemnity Agreement for certain Working Interest Owners.

2.2 REFERENCE TO EXHIBITS: When reference is made to an Exhibit, it is to the original Exhibit to this Agreement, or, if revised, to the last revision.

2.3 EXHIBITS CONSIDERED CORRECT: Exhibits A and B shall be considered to be correct until revised as provided for in Sections 2.4 and 2.5.

2.4 CORRECTING ERRORS: The shapes and descriptions of the Tracts ...

2.5 ADDITIONAL WELL DATA: If any well(s) is drilled and completed after , and before the Effective Date of the Unit ...

2.6 FILING REVISED EXHIBITS: If an Exhibit is revised after the Effective Date, Unit Operator shall execute an appropriate instrument with the revised Exhibit attached and file for record the instrument with the revised Exhibit in , .

ARTICLE 3

CREATION AND EFFECT OF UNIT

3.1 OIL AND GAS RIGHTS UNITIZED: All Oil and Gas Rights ...

3.2 PERSONAL PROPERTY EXCEPTED: All lease and well equipment ...

3.3 AMENDMENT OF LEASES AND OTHER AGREEMENTS: ...

3.4 CONTINUATION OF LEASES AND TERM INTERESTS: ...

3.5 TITLE UNAFFECTED BY UNITIZATION: ...

3.6 INJECTION RIGHTS: Royalty Owners expressly grant Working Interest Owners the right to inject into the Unitized Formation or in the remainder of the Field ...

3.7 DEVELOPMENT OBLIGATION: ...

3.8 RATIFICATION AND EXTENSION OF LEASES: ...

ARTICLE 4

PLAN OF OPERATIONS

4.1 UNIT OPERATOR: Working Interest Owners are concurrently entering into a Unit Operating Agreement, designating as the initial Unit Operator.

4.2 METHOD OF OPERATIONS: ...

4.3 CHANGE OF METHOD OF OPERATION: ...

ARTICLE 5

TRACT PARTICIPATIONS

5.1 TRACT PARTICIPATIONS: Beginning 7 a.m. on the Effective Date, the Tract Participation of each Tract will be as shown on Exhibit A. The Tract Participations are based on:

Productive Acreage: percent (%)

Net Acre Feet: percent (%)

Original Oil in Place: percent (%)

5.2 RELATIVE TRACT PARTICIPATIONS: ...

ARTICLE 6

ALLOCATION OF UNITIZED SUBSTANCES

6.1 ALLOCATION TO TRACTS: ...

6.2 DISTRIBUTION WITHIN TRACTS: ...

6.3 TAKING UNITIZED SUBSTANCES IN KIND: ...

6.4 FAILURE TO TAKE IN KIND: ...

6.5 RESPONSIBILITY FOR ROYALTY SETTLEMENTS: ...

6.6 ROYALTY ON OUTSIDE SUBSTANCES: ...

ARTICLE 7

PRODUCTION AS OF THE EFFECTIVE DATE

7.1 OIL OR LIQUID HYDROCARBONS IN LEASE TANKS: ...

7.2 OVERPRODUCTION: ...

ARTICLE 8

USE OR LOSS OF UNITIZED SUBSTANCES

8.1 USE OF UNITIZED SUBSTANCES: ...

8.2 ROYALTY PAYMENTS: ...

ARTICLE 9

TRACTS TO BE INCLUDED IN UNIT

9.1 QUALIFICATION OF TRACTS: ...

9.1.1 working interest; and royalty interest.

9.1.2 working interest; royalty interest.

9.1.3 working interest; indemnity agreement.

9.2 COMMITMENT OF INTERESTS TO UNIT: ...

9.3 REVISION OF EXHIBITS: ...

9.4 ACQUISITION OF UNCOMMITTED INTEREST: ...

ARTICLE 10

TITLES

10.1 REMOVAL OF TRACT FROM UNIT AREA: ...

10.2 REVISION OF EXHIBITS: ...

10.3 WORKING INTEREST TITLES: ...

10.4 ROYALTY INTEREST TITLES: ...

10.5 PRODUCTION WHERE TITLE IS IN DISPUTE: ...

10.6 PAYMENT OF TAXES TO PROTECT TITLE: ...

ARTICLE 11

EASEMENTS OR USE OF SURFACE

11.1 GRANT OF EASEMENTS: ...

11.2 USE OF WATER: ...

11.3 SURFACE DAMAGES: ...

ARTICLE 12

ENLARGEMENTS OF UNIT AREA

12.1 ENLARGEMENTS OF UNIT AREA: ...

12.1.1 The acreage shall qualify under Article 9.

12.1.2

12.1.3 No retroactive allocation or adjustment.

12.2 DETERMINATION OF TRACT PARTICIPATION: ...

12.3 EFFECTIVE DATE:

ARTICLE 13

TRANSFER OF TITLE - PARTITION

13.1 TRANSFER OF TITLE: ...

13.2 WAIVER OF RIGHTS TO PARTITION: ...

ARTICLE 14

RELATIONSHIP OF PARTIES

14.1 NO PARTNERSHIP: ...

14.2 NO JOINT REFINING OR MARKETING: ...

14.3 ROYALTY OWNERS FREE OF COSTS: ...

14.4 INFORMATION TO ROYALTY OWNERS: ...

ARTICLE 15

FORCE MAJEURE

15.1 FORCE MAJEURE: ...

ARTICLE 16

EFFECTIVE DATE

16.1 EFFECTIVE DATE: and filing by Unit Operator in county records.

16.2 IPSO FACTO TERMINATION: If requirements are not accomplished on or before , the Agreement terminates unless extended.

16.3 CERTIFICATE OF EFFECTIVENESS: ...

ARTICLE 17

TERM

17.1 TERM: ...

17.2 TERMINATION BY WORKING INTEREST OWNERS: %

17.3 EFFECT OF TERMINATION: ...

17.4 SALVAGING EQUIPMENT UPON TERMINATION: ...

17.5 CERTIFICATE OF TERMINATION: ...

17.6 ASSIGNMENT OR SURRENDER OF LEASE: ...

ARTICLE 18

EXECUTION

18.1 ORIGINAL COUNTERPART, OR OTHER INSTRUMENT: ...

18.2 JOINDER IN DUAL CAPACITY: ...

ARTICLE 19

GENERAL

19.1 AMENDMENTS AFFECTING WORKING INTEREST OWNERS: ...

19.2 ACTION BY WORKING INTEREST OWNERS: ...

19.3 LIEN AND SECURITY INTEREST OF UNIT OPERATOR OR WORKING INTEREST OWNERS: ...

ARTICLE 20

SUCCESSORS AND ASSIGNS

20.1 SUCCESSORS AND ASSIGNS: ...

This Agreement is executed by each Party on the date of the acknowledgement of the Party’s signature, but shall be deemed effective as of the Effective Date provided for in Article 16.

PARTIES TO AGREEMENT

EXHIBIT A

TO

UNIT AGREEMENT

____ UNIT

____ COUNTY, ____

TRACTS AND TRACT PARTICIPATIONS

EXHIBIT B / MAP OF UNIT AREA

EXHIBIT C / ELECTRIC LOG

EXHIBIT D / INDEMNITY AGREEMENT

EXHIBIT "D"

TO

UNIT AGREEMENT

INDEMNITY AGREEMENT

Section 9.1.3 of the Agreement entitled "Unit Agreement, , , " dated , provides that under certain circumstances and conditions a Tract that fails to qualify for inclusion in the Unit Area may be included in the Unit if the requisite Working Interest Owners ...

Tract , described in the Unit Agreement is such a Tract.

The undersigned are owners of Working Interest in this Tract and have become Parties to the Unit Agreement and the Unit Operating Agreement and desire the inclusion of the Tract in the Unit Area.

In consideration of and conditioned upon the Tract meeting the other requirements of Section 9 of the Unit Agreement, and its inclusion in the Unit Area, the undersigned request the inclusion of this Tract in the Unit Area and agree to indemnify and hold harmless all other Working Interest Owners in the Unit Area ...

This indemnity shall become void with respect to all claims and demands based on occurrences subsequent to the time when the conditions are met that would have initially qualified this Tract for inclusion in the Unit Area without this indemnity.

This Agreement shall be binding on and inure to the benefit of the heirs, devisees, legal representatives, successors, and assigns of the respective Parties initially bound or benefited by the provisions of this Indemnity Agreement.

Each of the undersigned has executed this Agreement on the date opposite their signatures.

Date

Signatures

Additional Notes

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What an Exploration Participation Agreement Covers

An Exploration Participation Agreement is a legal contract that defines terms under which a party participates in exploratory activities such as mineral, geotechnical, or environmental surveys on land or offshore sites. It allocates rights and obligations including access, data ownership, payment or cost-sharing, risk allocation, insurance, confidentiality, and duration. The agreement typically establishes permit and compliance responsibilities, outlines sampling or drilling protocols, and sets dispute-resolution methods. Parties should specify governing law, termination conditions, and signature blocks to thereby ensure enforceability.

Why this agreement matters for exploration projects

An Exploration Participation Agreement clarifies access, cost-sharing, data rights, and liability before field work begins, reducing disputes and unexpected expenses. It provides a contractual framework for regulatory compliance, health and safety protocols, and data reuse, improving operational predictability and legal certainty for all parties.

Why this agreement matters for exploration projects

Who typically signs and completes this agreement

Typical parties include landowners, exploration companies, joint venture partners, government agencies, and contractors providing field services or data analysis.

  • Exploration companies — operator or licensee coordinating surveys, permits, and reporting obligations.
  • Landowners — grant access, negotiate compensation, and retain certain property rights or restrictions.
  • Contractors and consultants — perform field sampling, provide equipment, and deliver technical reports.

Review signatory authority, insurance requirements, and data ownership clauses to ensure appropriate parties sign and obligations are enforceable.

Core sections to include in a professional agreement

Core sections commonly included in a professional Exploration Participation Agreement help allocate risk, define deliverables, and set operational rules for field activities.

Parties & Definitions

Identifies each party, contact details, and precise definitions of key terms such as 'Exploration Area', 'Data', 'Confidential Information', and 'Field Operations' to avoid ambiguity in interpretation and enforcement.

Scope of Work

Describes permitted activities, geographic limits, access windows, equipment allowed, sampling protocols, and environmental protections. Attach maps, coordinates, and technical specifications as enforceable exhibits.

Compensation

Sets payment amounts, timing, invoicing procedures, reimbursements, taxes, withholding, and budget caps. Include default remedies and interest on late payments.

Data Rights

Specifies ownership of raw and processed data, licensing terms, permitted third-party disclosures, anonymization standards, and publication rights for technical reports.

Liability & Insurance

Allocates indemnities, caps on liability, required insurance types and minimum coverage amounts, and procedures for claims and notices of incidents.

Termination & Dispute Resolution

Defines termination rights, cure periods, post-termination obligations, and preferred dispute-resolution mechanisms such as arbitration or jurisdiction for litigation.

Step-by-step: completing the agreement

Complete the Exploration Participation Agreement in a systematic order to avoid omissions and ensure legal sufficiency.

  • 01
    Prepare Parties: Collect legal names, contacts, and authority documents.
  • 02
    Define Scope: Describe activities, locations, and permitted access windows.
  • 03
    Allocate Costs: State payment terms, invoicing, and reimbursable expenses clearly.
  • 04
    Sign & Record: Obtain signatures, notarize if required, and distribute executed copies.

Setting up the online signing workflow

Configure the online agreement workflow to assign roles, set field requirements, and automate routing for signatures and approvals.

Field Configuration
Signer Order Sequential or parallel routing
Authentication Email link, SMS code, or KBA
Conditional Fields Show fields based on responses
Notifications Custom alerts and reminders

Typical submission and execution flow

Typical submission and execution steps for the Exploration Participation Agreement are summarized below to guide senders and signers through completion.

  • Upload Doc: Attach final PDF or Word document.
  • Place Fields: Insert signature, initial, date, and text fields.
  • Send: Email invite or public signing link.
  • Complete: Signer authenticates and executes the document.

Technical requirements for eSubmission and storage

Choose a platform that supports eSignatures, audit trails, and secure file storage to manage execution and recordkeeping.

  • File Formats: PDF, DOCX, and HTML support
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Authentication: Email, SMS, or advanced auth

Key dates and timing considerations

Key filing and timing considerations for agreements, payments, and permit submissions are listed so parties can meet obligations.

Agreement Effective Date and Commencement:

Date parties select; starts obligations.

Signature Deadline and Return Instructions:

By date specified; send executed PDFs to all parties.

Permit Application and Compliance Deadlines:

Follow agency schedules; allow lead time for review.

Insurance Certificate Submission Deadline Required:

Provide COI before field mobilization.

Record Retention Start and Notice Period:

Start on effective date; note post-termination retention obligations.

Security and compliance controls to look for

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Certifications: SOC 2 Type II, ISO 27001, PCI DSS
HIPAA: BAA available for covered entities
Audit Trail: Detailed timestamps, IPs, action history
Access Controls: Role-based access and SSO options
Legal Frameworks: ESIGN compliance and UETA support

Common penalties and legal risks to avoid

Tax Penalties: $60 to $330 per late form
I-9 Violations: Fines $281–$2,789 per error
Data Disputes: Ambiguous rights cause litigation risk
Invalid Signatures: Enforceability challenges without intent evidence
Permit Noncompliance: Regulatory fines and work stoppage
Wrongful Access: Privacy breach exposures, HIPAA penalties

Frequent preparation mistakes and their consequences

  • Incomplete party details lead to execution delays and may prevent notarization or proper service of notices; verify legal names and signatory authority before sending.
  • Vague cost-sharing language creates disputes; define payment milestones, reimbursement formulas, invoicing procedures, and interest or late fee rules.
  • Failing to specify data ownership or reuse rights can block publication or commercialization of exploration results and harm revenue potential.
  • Skipping environmental permit responsibilities risks enforcement actions, project delays, and additional remediation costs for noncompliant activities.

Pricing and capability snapshot for common eSignature platforms

Cost and feature snapshot for common eSignature providers used to execute Exploration Participation Agreements. signNow is listed first following comparison format requirements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

FAQs and troubleshooting for execution and eSigning

Common questions and solutions for completing, signing, and managing Exploration Participation Agreements are summarized below.


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