1-10 Oil and Gas Joint Operating Agreements § 10.05

Summary

Transfer of minimum interest clauses prohibit a party from transferring less or owning less than a certain minimum percentage interest in the contract area. These provisions are similar to maintenance of uniform interests clauses in that they are designed in part to avoid the administrative and operational inconveniences that result from the operator dealing with multiple parties holding small fractional interests.1238

Most U.S. onshore joint operating agreements do not contain a transfer of minimum interest provision;1239 however, the clause is more likely to be encountered in U.S. offshore joint operating agreements1240