This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
Illinois Reservation of Additional Interests in Production, also known as the Illinois Reservation of Additional Working Interests in Production, is a legal provision that grants certain parties the right to acquire additional working interests in the production of oil and gas within the state of Illinois. This reservation allows the parties involved to maintain their ownership and control over the production process and ensure their economic interests are protected. The Illinois Reservation of Additional Interests in Production can take different forms depending on the specific arrangement between the parties involved. Some types of reservations within this framework include: 1. Overriding Royalty Interests (ORRIS): An overriding royalty interest allows a specified party, usually the lessor, to receive a certain percentage of the gross proceeds or revenue generated from the production, in addition to their regular royalty interest. The ORRIS is distinct from the working interest owner's portion and does not bear the costs of operation. 2. Carried Working Interests (CGI): In a carried working interest, one party carries the financial burden and responsibility for developing and operating the lease or well. The carried party typically does not have to contribute financially until the project reaches a certain level of production or profitability. This allows the carried party to maintain ownership interest and benefit from production without immediate financial obligations. 3. Backup Working Interests (BWI): Backup working interests are typically utilized when the primary working interest holder is unable to fulfill its obligations, either due to financial constraints or other reasons. The backup working interest holder steps in to assume the responsibilities and benefits of the primary working interest, ensuring that the production continues without interruptions. 4. Non-Participating Royalty Interests (NPR): Non-participating royalty interests entitle the holder to a specific percentage of production revenue but do not convey any rights or responsibility for operation or decision-making. NPR holders receive royalty payments based on their percentage interest, regardless of any changes in ownership or operation. It is important to note that the exact terms and conditions of the Illinois Reservation of Additional Interests in Production can vary in each transaction and are typically outlined in specific agreements, such as lease contracts, assignments, or other contractual arrangements. These reservations ensure that various parties involved in the production process can protect their interests and benefit from the economic value generated by the oil and gas operations in Illinois.
