Back to Publications

An Overview of Article VI the Drilling and Development Article of the A.A.P.L. Form 610-1989 Model Form Operating Agreement

Jody M. Ellis, Oil and Gas Joint Operating Agreement (1990)

The intent of the current revision of the Operating Agreement was originally aimed at resolving problems created by parties filing for bankruptcy protection under prior agreements. The committee formed by the A.A.P.L. took this opportunity not only to address the bankruptcy problems but also to address other problems and pitfalls they saw contained within the prior agreements. The revisions to Article IV, the Drilling and Development Article, deal primarily with those problems and pitfalls.

Some have commented that the '89 Agreement is too complicated, attempts to resolve problems that are best left unresolved and gives certain parties to the agreement rights they did not have under prior agreements. Generally, I can see the point such critics are making. However, a close scrutiny of the agreement, in light of former agreements, should reveal that such negative reaction to the '89 Agreement is generally unwarranted. I am sure that similar reactions resulted when the '77 and '82 Agreements were first introduced.

If I were to characterize the theme of the revisions made to Article VI of the '89 Agreement, it would be that such revisions were made to “tighten-up” the agreement. This theme, however obvious, should not be perceived as something new or revolutionary. All the Agreements ('56, '77, '82 and '89), in a broad sense, generally are attempting to accompli