Operating Agreement and Financing Statement

Can anyone out there tell me what this is? In plain english. I cannot understand to much of it. The whole title is Model Form Recording Supplement to Operating Agreement and Financing Statement. Thanks in advance.

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2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 31, 2012 at 7:48am

They are documents between the various working interest owners in the well and have nothing whatsoever to do with landowners, nor are they impacted by it.  A JOA (Joint Operating Agreement) governs the relationships between the various working interest owners.  The Financing Statement part of it merely provides that each of the parties own their own rights to their own share of gas and the proceeds attributable to the sale... regardless of whether or not the operator sells the gas on behalf of all parties.  That way a lender to one of the parties cannot encumber the interests or the monies due and owing to one of the other working interest owners.

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