Agreement Units

This chapter discusses some of the key features of a typical unitary agreement, its main purpose and its interaction with the JOA. It will focus in particular on national unity (i.e. the association of a territory with two or more licences within the same national borders) and will not deal with cross-border unity (i.e. the unification of a sector that extends licences in two or more different countries). The question then arises as to how parties to different licences can extract hydrocarbons in these areas, by having a community of objectives that maximizes their potential and does not unnecessarily deplete the field, and how to then distribute the revenues from these operations, which must be carried out under two (or more) different licences, how to manage these operations and how they should determine the respective licensees. To address this problem, the oil and gas industry has developed the concept of the Unity and Enterprise Agreement. On or before the date of this agreement, the entity provided the agent with full copies of the fiduciary contract, warranty contract, subscription contract, unit subscription contracts, unit subscription, registration contract and administrative services agreement, and each of these agreements is fully in effect on each of the first closing dates and each expiry date of the option. Different futures contracts may have different contractual units, even if they fall into the same asset class. For example, a CAD/USD futures contract traded on the Chicago Mercantile Exchange (CME) has a contract size of CAD 100,000, while an E-Mini contract, which is also traded on the CME, has a size of CAD 10,000. As a general rule, the host government prefers to transfer its portfolio of assets/blocks to different companies and contracts. This involves awarding different licensing areas and licenses to different licensees. The licensees then enter into a separate agreement (i.e., a joint enterprise agreement) to determine the relationship between them with respect to how they wish to jointly conduct exploration, development and production activities for this specific licence.

However, as is often the case, nature does not fit as easily into the rules made by man. In the oil industry, this can be illustrated by oil and gas deposits that do not always correspond to pre-defined ownership limits, commonly referred to as ”contractual zones.” This is because hydrocarbon reserves can often have two or more licences that would not otherwise be linked to each other. Immediately before the effective deadline, participating holders will contribute rollover shares to the investor in accordance with the equity and underwriting agreements. Investors need to understand the exchange agreements they want to trade on. Otherwise, they may accidentally expose themselves to a transaction with a much larger or lower value than expected. It is imperative that anyone who buys or sells futures contracts be aware of these differences and does not expect the currency unit to be the same everywhere. Notwithstanding the above, as is the case with registered securities, the holder may transfer these securities to any eligible purchaser (as defined in this specific guarantee agreement between the Company and the Continental Stock Transfer Trust Company) during the respective suspension period, but only if that licensee agrees to be bound by the delegation restrictions provided in this agreement, the letter contract and, if applicable, the agreements.

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