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Texas law has only recently codified in precedential decisions a reasonable formula forproduction allocations for horizontal, including fracked, wells. The ancient regime of the Rule of Capture does not generally apply, because of the nature of the geologic
deposits and the new technology. This reasonable formula is applicable in the international arena for cross-border deposits and production blocks. Other national law and international treaties provide scant guidance in these matters and governments, national oil companies and international oil companies should review this formula to aid in negotiations for fair and equitable allocations that should preclude unnecessary disputes and litigation
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Kembali