Unitization? A Mathematical Formula to Calculate Redeterminations
Article from: OGEL 2 (2007), in Unitisation and JDZs
As the oil and gas industry matures, observers will continue to witness a marked increase in the number of unitizations. In many units, notably units created outside the United States, a mechanism exists to allow the parties to readjust their individual economic returns to the extent that it is later substantiated that their individual equity interest or ownership of the reservoir, on a percentage basis, increases or decreases. This mechanism to readjust the individual equity interests is called redetermination. The upstream sector is now struggling with how best to handle equity ...