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Exploring the Legal Definition of Marginal Field (Oil and Gas)
Definition & Meaning
A marginal field in the oil and gas industry refers to an oil field that currently does not generate sufficient net income to justify its development. However, if there are changes in technical or economic conditions, such a field could become commercially viable. Marginal fields are typically linked to small reserves of hydrocarbons that may have a limited production period, often lasting only a few years. Various factors can affect the status of marginal fields, including environmental issues, political stability, accessibility, remoteness, and fluctuations in the prices of the extracted gas or liquids.
Table of content
Legal Use & context
The term "marginal field" is primarily used in the context of oil and gas law, which encompasses regulations and agreements related to the exploration and extraction of natural resources. Legal practitioners may encounter this term when dealing with contracts, environmental regulations, and permits. Users may find it beneficial to utilize legal templates from US Legal Forms to navigate the complexities involved in developing or investing in marginal fields.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
One example of a marginal field might be a small offshore oil reserve that has been deemed too costly to develop due to low oil prices. However, if oil prices increase significantly, the field could become profitable and attract investment for development. (hypothetical example)
State-by-state differences
Examples of state differences (not exhaustive):
State
Regulatory Authority
Key Considerations
Texas
Texas Railroad Commission
Specific regulations on marginal field development and environmental impact.
California
California Department of Conservation
Strict environmental regulations that may impact marginal field viability.
Alaska
Alaska Department of Natural Resources
Unique challenges related to remote locations and environmental concerns.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Marginal Field
An oil field with insufficient current income for development.
May become viable with changes in market conditions.
Commercial Field
An oil field that is currently profitable and developed.
Already generating sufficient income; no need for market change.
Exploratory Field
A site where oil and gas exploration is ongoing.
Not yet producing; potential for discovery of new reserves.
Common misunderstandings
What to do if this term applies to you
If you are considering investing in or developing a marginal field, it is essential to conduct thorough research on the economic and technical feasibility. Consulting with legal professionals who specialize in oil and gas law can provide valuable insights. Additionally, users can explore US Legal Forms' templates to assist with necessary legal documents and agreements.
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