This form is used when, as a result of continuous production from the Lease and Lands, payout, as defined in an Assignment, has occurred, and Declarant is entitled to elect to convert the Override to a Working Interest, as provided for in the Assignment.
The Guam Declaration of Election to Convert Overriding Royalty Interest to Working Interest is a legal document that pertains to the conversion of overriding royalty interests (ORI's) to working interests in Guam. This declaration serves as a formal agreement between parties involved in oil and gas exploration and production. The main purpose of the Guam Declaration is to outline the terms and conditions under which the conversion of ORI's to working interests can occur. ORI's typically entitle the holder to a percentage of the revenue generated from the production of oil and gas, but as they do not carry the obligation to bear expenses, they are sometimes converted to working interests. By electing to convert an ORI to a working interest, the holder takes on both the benefits and responsibilities associated with the operation. This includes sharing in the costs of drilling, exploration, and development activities, as well as the risks involved in the venture. In return, the holder gains a direct ownership stake in the project, allowing for a more involved role in decision-making and potentially greater financial returns. There may be different types or variations of the Guam Declaration of Election to Convert Overriding Royalty Interest to Working Interest, depending on specific circumstances or negotiated agreements between the parties involved. These variations could include provisions related to payment terms, working interest percentages, operational obligations, or any other terms deemed necessary for the conversion process. In conclusion, the Guam Declaration of Election to Convert Overriding Royalty Interest to Working Interest serves as a legally binding and formal agreement when converting ORI's to working interests in Guam's oil and gas sector. It allows parties to define the terms, obligations, and benefits associated with such a conversion, enabling a more comprehensive and collaborative approach to projects in the region.
