>From observations, since we now own only 33% of the play, regardless of therecent amendment that the entire Mako will be shared in ownership and technicalinformation, does not improve the transparency to us lowly retail owners.

Just thought I'd mention that if and when the 'Mako Basin' is unitized, and the tract interests are announced, that these interests are not set in stone.

"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."

Here is a real-world example, from Husky Energy:

Terra Nova Oil Field

The Terra Nova oil field is located approximately 350 kilometres southeast of St. John’s, Newfoundland and Labrador, 35
kilometres southeast of the Hibernia oil field, in 91 to 100 metres of water. The Terra Nova oil field is divided into three distinct areas, known as the Graben, the East Flank and the Far East. Our current pooled interest in the Terra Nova field is 12.51%. This interest is subject to change, pending re-determination once the field has been further delineated.

---------

Note: Falcon/Exxon and MOL have agreed to at least one re-determination

----------

The Preliminary stage will first involve an Exchange of data between contract groups wishing to unitize. The essence is to evaluate the proportion of reserves lying in the respective contract areas. Even though there are confidentiality clauses as the basis of this agreement, this is to this author’s mind, a pitfall of the unitization scheme because companies will have to share seismic data through which they may be disclosing technical or patent secrets. There is often the stage of joint development of a Well so as to gather more information. The cost of the joint well is often borne by the party on whose own bloc the work is done.These processes can take a long time and parties will keep bringing data which that favour them or give them higher share of the reserve.

The main problem with unitization is Redetermination because it is a process to cure the errors of tract participation when reserves were allocated on the basis of seismic data which has been proven wrong by actual development of the reservoir.

A drafting technique has been introduced in many unitization agreements to avoid the dangers of endless redetermination by; (a) limiting the number of redetermination; (b) placing a vote range to initiate it (C) providing that existing
participation cannot be re-adjusted except on extreme case and ;(d) imposing cost on the party requesting it frivolously.This notwithstanding, unitization costs money and time, and often ends in long litigation.

-----

It's also important to know that "Proportions of participation in unitization is more of a contest than a negotiation."

I'm not sure how that will play out, since Exxon is on both sides of the equation.