Arizona Assignment of Carried Working Interest refers to a legal transfer of the ownership rights of a working interest in an oil and gas lease or project in the state of Arizona. It allows one party, referred to as the assignor, to transfer their working interest to another party, known as the assignee, who will then assume the rights and obligations associated with that working interest. In an Arizona Assignment of Carried Working Interest, the assignee essentially takes on the assigned working interest without having to contribute any capital or funds towards the project's development or ongoing operations. This means that the assignee will reap the benefits of the project, such as revenue from oil and gas production, but will not bear any financial risk or costs associated with the venture. There can be various types of Assignment of Carried Working Interest arrangements in Arizona, depending on the specific terms and conditions agreed upon by the involved parties. Some common types include: 1. Full Assignment of Carried Working Interest: In this type, the entire working interest is transferred from the assignor to the assignee. The assignee assumes complete ownership, including both the financial obligations and the rights to profit. 2. Partial Assignment of Carried Working Interest: With this type, only a portion of the working interest is assigned. The assignor and assignee will agree on the specific percentage or fraction of the working interest to be transferred. 3. Temporary Assignment of Carried Working Interest: This type involves a temporary transfer of the working interest, typically for a specific period or until a specific milestone is achieved. After the agreed-upon condition is met, the working interest reverts to the assignor. 4. Revocable Assignment of Carried Working Interest: Unlike a permanent transfer, this type allows the assignor to revoke the assignment and take back the working interest at any time. When executing an Arizona Assignment of Carried Working Interest, it is crucial for both parties to clearly define the terms, rights, and obligations associated with the working interest transfer. This includes specifying any royalty obligations, duration of the assignment, and any other pertinent details to ensure a mutually beneficial and legally binding agreement.
Arizona Assignment of Carried Working Interest
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How to fill out Arizona Assignment Of Carried Working Interest?
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Calculating Overriding Royalty Interest An ORRI is a straight percentage. For example, a 2% override would appear on the royalty statement as 0.02 interest in the proceeds from the sale of the leased hydrocarbons.
The term ?working interest? is commonly used and is generally considered synonymous with the lessee's interest and the term ?leasehold interest.? As to federal leases, the lessee's leasehold interest includes both record title and operating rights.
Record Title: Primary ownership of an interest in an oil and gas lease including the obligation to pay rent, and the right to transfer and relinquish the lease. Overriding royalty and operating rights are severable from record title interests.
See also Development Costs. Carried Interest / Carried Working Interest: the fractional, non-possessory interest carved out of a Working Interest that is exclusive from all costs of Development and/or operations for a set period of time (i.e., the Carry Period).
In the oil and gas context, a carried interest is a fractional oil and gas interest that is not required to pay for drilling or operational expenses for a limited time (carry period). These expenses are paid by the other working interest owners (called co-tenants) of the property.
The lessee of an oil or gas lease can assign the entire lease or part of it. In other words, the lessee can sell or transfer part of the estate or the entire estate to which they have the working rights. The assignee is assigned the working interest and lease obligations, including override royalty.
The record title interest includes the obligation to pay rent and the rights to assign and relinquish the lease. [1] The operating rights interest authorizes the holder to drill for and conduct operations and produce the leased substances.
