The Arkansas Partial Assignment of Oil and Gas Lease (Producing Lease. Reservation of Production Payment) is a legal document that allows for the transfer of certain rights and interests in an oil and gas lease while reserving a production payment to the assignor. This type of assignment is commonly used in the oil and gas industry to facilitate the transfer of ownership and to provide a continuous source of income for the assignor. In Arkansas, there are various types of partial assignments of oil and gas leases, each with its own specific provisions and conditions. Some different types of Arkansas partial assignments include: 1. Basic Partial Assignment: This type of assignment involves the transfer of a specific percentage or fractional interest in the oil and gas lease to the assignee. The assignor retains ownership of the remaining percentage or fractional interest and reserves a production payment. 2. Partial Assignment with Overriding Royalty: In this form of assignment, the assignor transfers a partial interest in the lease while retaining an overriding royalty interest. The overriding royalty interest provides the assignor with a percentage of the revenue generated from the lease, typically over and above the regular royalty interests. 3. Partial Assignment with Carried Working Interest: This type of partial assignment involves the transfer of a partial working interest in the lease to the assignee, while the assignor retains a carried working interest. A carried working interest means that the assignor's interest is carried by the assignee, meaning the assignor is not responsible for any costs associated with the lease's development or operations. 4. Partial Assignment with Limited Liability: In some cases, an assignor may want to limit their liability for any potential environmental issues or damages associated with the lease. In this type of partial assignment, the assignor transfers a partial interest while limiting their liability for any future obligations or liabilities arising from the lease. 5. Partial Assignment with Area of Mutual Interest (AMI): An AMI is a defined geographical area within which the assignor and assignee agree to jointly participate in the development of oil and gas leases. This type of partial assignment allows for the transfer of a partial interest within the specified AMI while maintaining a collaborative relationship between the assignor and assignee. It is crucial for both parties involved in an Arkansas Partial Assignment of Oil and Gas Lease to clearly outline their rights, obligations, and expectations within the document. This includes details on the assigned interest, duration of the assignment, terms for the reservation of the production payment, and any additional provisions related to the specific type of assignment being executed. It is advisable to consult with legal professionals experienced in oil and gas lease transactions to ensure that all legal requirements are met and to protect the interests of both parties involved.
Arkansas Partial Assignment of Oil and Gas Lease (Producing Lease. Reservation of Production Payment)
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Partial Assignments: When an assignor conveys 100% record title interest in a portion of the lands in a lease, it creates a partial assignment. Partial assignments segregate the lease into two separate leases. Normally we assign a new lease number to the conveyed portion of the lease.
What is a Held-By-Production Clause? "Held by production" is a provision in an oil or natural gas property lease that allows the lessee, generally an energy company, to continue drilling activities on the property as long as it is economically producing a minimum amount of oil or gas.
Another important thing to look for in your lease is what's called a Pugh Clause. A Pugh Clause basically says that all the acreage need to be developed within the term of the lease or the E&P company needs to pay you to extend the acreage that has yet to be developed.
The point of a retained-acreage provision is to be able to seek a new opportunity to lease unworked land to a different lessee, one who might do something productive with it. A Pugh clause is a negotiated provision in favor of the lessor. Pugh clauses modify pooling/unitization rights.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
In general terms, the Pugh Clause provides that production from a unitized or pooled area located on or including a portion of the leased lands will not be sufficient to extend the primary term for the entire leasehold.
Negotiating an oil and gas lease will require some research upfront. If you're a landowner interested in working with an oil and gas company, you should explore their history and experience. You'll want to work with a reputable company that works in your best interests, holds a high standard, and maintains insurance.
A clause in an oil & gas lease that provides that if the leased land is later owned by separate parties, such as in a sale of part of the property, the lessee can continue to operate, develop, and treat the lease as a whole and pay royalties to each owner based on its percentage of ownership of the entire area.
