AG-2 Unitization Accounting

AG-2 explains different forms of unitizations common in the industry and outlines the accounting generally associated with each. AG-2 can be used as a guide for accounting situations involved in Unit Operations which are not covered in an existing agreement or accounting procedure.  34 pages. Pub. 1971




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Table of Contents

  1. Secondary Recovery Units
    1. Formation and Development of Secondary Recovery Units
    2. Preunitization Expense
    3. Investment Adjustments
    4. Expense and Investment Accounting for Secondary Recovery Units
    5. Ad Valorem Tax Expense
    6. Unpaid Unit Expense
    7. Adjustments for Non-Usable Wells
  2. Conservation Units, Forced Unitizations, Spacing Units, Forced Fool Units
    1. Preunitization Expense
    2. Initial Ownership
    3. Well Cost Ownership Adjustments
    4. Owner Approval of Well Cost Adjustment
    5. Subsequent Investment Adjustments
    6. Accounting for Unit Expense
  3. Federal Exploratory Units
    1. Preunitization Expense
    2. The Unit Agreement
    3. The Unit Operating Agreement
    4. Methods of Sharing Costs and Production
    5. Investment Adjustment – Divided Form
    6. Investment Adjustment Statement
    7. Expense Accounting



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