3186.2 Model collective bond.§ 3186.2 Model collective bond. Collective Corporate Surety Bond
Know all men by these presents. That we, _________ (Name of unit operator), signing as Principal, for and on behalf of the record owners of unitized substances now or hereafter covered by the unit agreement for the _________ (Name of unit), approved _________ (Date) __________ (Name and address of Surety), as Surety are jointly and severally held and firmly bound unto the United States of America in the sum of ___ (Amount of bond) Dollars, lawful money of the United States, for the use and benefit of and to be paid to the United States and any entryman or patentee of any portion of the unitized land here-to-fore entered or patented with the reservation of the oil or gas deposits to the United States, for which payment, well and truly to be made, we bind ourselves, and each of us, and each of our heirs, executors, administrators, successors, and assigns by these presents.
The condition of the foregoing obligation is such, that, whereas the Secretary of the Interior on ________ (Date) approved under the provisions of the Act of February 25, 1920, 41 Stat. 437, 30 U.S.C. secs. 181 et seq., as amended by the Act of August 8, 1946, 60 Stat. 950, a unit agreement for the development and operation of the ___________ (Name of unit and State); and
Whereas said Principal and record owners of unitized substances, pursuant to said unit agreement, have entered into certain covenants and agreements as set forth therein, under which operations are to be conducted; and
Whereas said Principal as Unit Operator has assumed the duties and obligations of the respective owners of unitized substances as defined in said unit agreement; and
Whereas said Principal and Surety agree to remain bound in the full amount of the bond for failure to comply with the terms of the unit agreement, and the payment of rentals, minimum royalties, and royalties due under the Federal leases committed to said unit agreement; and
Whereas the Surety hereby waives any right of notice of and agrees that this bond may remain in force and effect notwithstanding;
(a) Any additions to or change in the ownership of the unitized substances herein described;
(b) Any suspension of the drilling or producing requirements or waiver, suspension, or reduction of rental or minimum royalty payments or reduction of royalties pursuant to applicable laws or regulations thereunder; and
Whereas said Principal and Surety agree to the payment of compensatory royalty under the regulations of the Interior Department in lieu of drilling necessary offset wells in the event of drainage; and
Whereas nothing herein contained shall preclude the United States (from requiring an additional bond at any time when deemed necessary);
Now, therefore, if the said Principal shall faithfully comply with all of the provisions of the above-indentified unit agreement and with the terms of the leases committed thereto, then the above obligation is to be of no effect; otherwise to remain in full force and virtue.
Signed, sealed, and delivered this ___ day of __________, in the presence of: