I recently attended a seminar called Joint Operating Agreements, Exploration and Participation Agreements, hosted by the AAPL, taught by Dorsey Roach, CPL. Not having much direct experience with these type of agreements, other than reading them, I assumed that I stood to learn quite a bit. I was pleasantly surprised by the 2-day course, and found it very informative.
While the title of course might lead you to think that it only addresses joint operating agreements, Mr. Roach also broached the topic of Participation Agreements and Exploration Agreements. He feels that these agreements are being used much more often, and in conjunction with JOAs. This facilitates a need to address those types of agreements as well, and it was the first thing he covered in the class.
Most landmen have heard of a 1982 JOA, 1956 JOA, or a 1989 JOA — but might not know how those various versions are different than their counterparts. Much of the class centered on going through each form and the differences between those forms. Landmen who are dealing with legacy properties will likely have production that is governed by early forms of joint operating agreements and it’s important to know the pitfalls associated with them.
While at the beginning of the class I didn’t quite understand why we were discussing all these different versions, after hearing Mr. Roach tell us about various situations that would be handled differently under different forms of the agreement I started to see the light. I also didn’t know why many operators still prefer to use the ‘old’ 1982 JOA as opposed to the 1989 form. The class helped me to see that in many situations it might be optimal to be governed by older, less precise, language. The 1989 form sought to remove sources of confusion from earlier forms, but many operators like that language for precisely the same reasons — it would allow them to reasonably argue that they have to right to do more with less consent.
Included in the class was two nicely bound workbooks. One was an overview of the material that would be presented, and those other was forms of all the agreements we reviewed in the class. It will be nice to have a handy reference manual, for instance to see what an ‘un-altered’ 1956 JOA form should look like. I’m told these bound volumes are a new addition to the class, and there were several typos. They didn’t detract from the material and I’m sure the AAPL will iron out the typos in the next revision of the workbook.
Don’t forget that these continuing education classes are a great place to meet like minded professionals. Networking sure is important for landmen, and these classes are a great way to expand your network. As I mentioned in my blog post It’s a Tough World For a Lone Landman – Start Networking Now, there are many ways to network and this is a great one.
I’d recommend this class, Joint Operating Agreements, Exploration and Participation Agreements to any landmen that are interested in learning more about their field. I’d definitely recommend it to any land professionals that are regularly dealing with these types of agreements. Some of the topics of discussion will require a more advanced knowledge of land terminology and issues, but if you have a few years of land experience you should be fine.