Guam Assignment of Overriding Royalty Interest with Multiple Leases that are Non Producing with Reservation of the Right to Pool

• Category: Oil Gas and Minerals - Assignments
• State: Multi-State
• Control #: US-OG-691
• Format: Word; Rich Text

Description

This form is used by the Assignor to transfer, assign, and convey to Assignee an overriding royalty interest in multiple non-producing Leases.

Guam Assignment of Overriding Royalty Interest with Multiple Leases that are Non Producing with Reservation of the Right to Pool In the oil and gas industry, an assignment of overriding royalty interest (ORRIS) refers to the transfer of a percentage of the revenue generated from the production of oil or gas from one party to another. Guam, a U.S. territory in the western Pacific Ocean, also experiences oil and gas activities. This detailed description will cover the Guam Assignment of Overriding Royalty Interest with Multiple Leases that are Non Producing with Reservation of the Right to Pool, highlighting its main features, benefits, and potential variations. Description: 1. Overview of Guam: Situated in Micronesia, Guam is the largest and southernmost island in the Mariana archipelago. As a tropical paradise, the island attracts tourists to its pristine beaches, distinct Chamorro culture, and historic landmarks. However, beneath its surface lies a potential source of revenue — oil and gas resources. 2. Assignment of Overriding Royalty Interest: In the context of Guam's oil and gas industry, an assignment of overriding royalty interest involves the transfer of a percentage of the revenue generated from oil or gas production to a third party who does not hold the original lease rights. This transfer typically occurs in exchange for an upfront payment, equity ownership, or a combination of both. 3. Multiple Leases that are Non Producing: The Guam Assignment of Overriding Royalty Interest may involve multiple leases that have not yet commenced oil or gas production. These leases grant the right to explore and develop oil and gas resources within specific areas. Non-producing leases refer to those that have been acquired but are still in the exploration or development stages. 4. Reservation of the Right to Pool: One significant aspect of the Guam Assignment of Overriding Royalty Interest is the reservation of the right to pool. Pooling refers to the combining of multiple leased tracts of land into a larger unit to enhance operational efficiency and maximize resource extraction. By reserving the right to pool, the assignee of ORRIS maintains the ability to consolidate and coordinate operations across different leases for improved economies of scale. Types of Guam Assignment of Overriding Royalty Interest with Multiple Leases: 1. Fixed Percentage Assignment: Under this type, the assignor transfers a fixed percentage of their overriding royalty interest for all non-producing leases within a defined area. The assignee receives a consistent share of revenue generated from all future oil or gas production, regardless of the specific lease location. 2. Lease-Specific Assignment: In this variation, the assignment of overriding royalty interest is limited to specific non-producing leases. The assignor may choose to assign different percentages of their ORRIS for each lease, considering factors such as the lease's potential productivity, geological characteristics, or proximity to existing infrastructure. 3. Partial Assignment with Future Tract Additions: This type allows for partial assignment of overriding royalty interest for non-producing leases, while also providing the assignor the ability to add additional leases to the assignment in the future, subject to certain terms and conditions. 4. Performance-Based Assignment: In some cases, the assignment of overriding royalty interest may be contingent on certain performance benchmarks. The assignee may set specific production targets or milestones that the leaseholder must meet within a defined timeframe to maintain the transfer of ORRIS. In conclusion, the Guam Assignment of Overriding Royalty Interest with Multiple Leases that are Non Producing with Reservation of the Right to Pool offers opportunities for investors to participate in the potential growth of Guam's oil and gas industry. Through various assignment types and considerations, stakeholders can tailor agreements to suit their objectives, fostering collaboration and resource optimization while supporting the economic development of the region.