>i hope you will provide us more interest insights as the "unitization" concept
The links I provided explain the process in precise detail.
What I think is particularly important is how the unitization concept provides some insight into what Falcon / Exxon / MOL are most likely up to.
Take for example the re-allocation of Falcons money. When I first read that, I was totally baffled as to why Falcon would be committing funds prior to land committments being made. With unitization, the participating interest formula includes a consideration of how much money each party is committing to the project. By re-allocating the funds that will be spent by Exxon in phase 2 & 3, Falcon is able to make that committment without actually having to come up with any cash up front. That's especially important these days considering how hard it would be to come up with money these days.
"Generally speaking, UK unitization statutes require that an approved plan of compulsory unitization include the following items: (a) a description of the unit area, (b) a statement in reasonable detail of the operations contemplated, (c) a plan for allocating to the separately owned tracts in the unit the oil and gas produced therefrom, (d) provisions concerning the financing and allocation of costs incurred"
<!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} -->
"One subject that is sometimes overlooked in unitization agreements is the transition from ongoing operations under the existing tract operating agreements to operations under the unitization agreement. Some previously approved budget items and authorizations for expenditure may need to be transferred from the tract operating agreements to the unitization agreement, particularly those representing work in progress on the unit area."
