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Unitization, redetermination and expert equity services for clients involved in oil and gas fields straddling license boundaries.

Oil Rig

Oil and gas fields frequently straddle several license blocks each with their own particular group of license holders. This can result in an unbalanced spread of the resource entitlements across the licenses (or Tracts). The initial entitlements (or Tract Participations) are usually agreed prior to production start up – during the Unitization of the field. In the Unit Agreement or Unit Operating Agreement any future adjustments of the respective resource entitlements (redeterminations) are regulated in terms of timing/number and technical criteria. Such future resource shifts can be significant as during a field’s life span new data become available and technology advances.

Due to the ambiguity of many Unit Operating Agreements and the possibly significant financial loss or gain involved in any such resource shift, parties frequently do not reach agreement during a redetermination. In that case the agreement that regulates the redeterminations caters for an independent Expert to reach a decision on the new resource split.

Unitization and Equity Determination Services

With a successful track record, as both an Expert and Advisor, we offer:

  • Fully independent Expert services from a reputed global company
  • Significant value creation for our clients in advisory roles
  • Strategic, technical and legal support 
  • Advice can be:
    • Hands-on case preparation
    • As devil’s advocate including exposure sensitivities
    • In review mode
  • Highly experienced staff with true global E&P exposure 
  • Full cross-discipline integration
  • Close cooperation with clients in advisory projects
  • Confidentiality guaranteed in every respect:
    • Separate IT infrastructure
    • Separate office space

Applications

Our services can be delivered for a range of applications:

  • Unit operating agreement preparation
  • Unitization advice
  • Redetermination advice
  • Devil’s advocate
  • Sensitivity studies to define exposure
  • Negotiations
  • Arbitration
  • Expert Witness

Why choose unitization and redetermination services from SGS?

We provide unitization, redetermination and expert equity services. We have acted successfully as Expert for three major Norwegian oil and gas fields and as Expert Witness in a major Unitization case in the Dutch offshore.

Since 2005, SGS has created significant value for its clients through the provision of Unitization and Redetermination advisory support.

In more than 20 major projects spread across Europe, Africa and Australia SGS has acted as strategic and technical advisor during the preparation of submissions to Experts. The advisory role can extend to participating in negotiations where negotiated settlements are an option. Technical advice can focus on either detailed technical work and document preparation, or on a review of the client’s own work. In the Unitization phase we have also contributed to preparation of draft Unit Operating Agreements.

With projects spread across more than 10 countries SGSs’ experience covers a wide variety of legal, procedural and technical settings and types of Unit Operating Agreements.