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 Indiana Declaration of Election to Convert Overriding Royalty Interest to Working Interest is a crucial legal document that pertains to the conversion process of an overriding royalty interest (ORRIS) to a working interest (WI) in the oil and gas industry. This declaration outlines the specific terms and conditions under which such a conversion can take place, ensuring transparency and legality in the conversion process. In Indiana, there may be different types of declarations of election to convert overriding royalty interest to working interest, which can be categorized based on various factors: 1. Voluntary Conversion: This type of declaration occurs when the holder of an ORRIS voluntarily chooses to convert it to a WI. This could be driven by various reasons, such as the desire for increased control, potential higher returns, or strategic decision-making regarding the oil and gas operation. 2. Involuntary Conversion: In some cases, an ORRIS may be involuntarily converted to a WI due to certain circumstances. This could occur if the lease agreement or contract governing the ORRIS includes provisions for automatic conversion under specific conditions, such as the expiration of a certain time period, reaching production milestones, or failure to meet certain obligations. 3. Partial Conversion: A partial conversion declaration indicates that only a portion of the holder's ORRIS is being converted to a WI. This might happen when the holder wants to maintain a certain level of passive income from the ORRIS while also actively participating in the operation and sharing the risks and rewards of the underlying project. 4. Full Conversion: A full conversion declaration implies the conversion of the entire ORRIS interest into a WI. This indicates the complete transition from a passive royalty interest holder to an active working interest participant. It involves assuming a direct share of the expenses, liabilities, and potential profits of the oil and gas venture. The Indiana Declaration of Election to Convert Overriding Royalty Interest to Working Interest includes essential details such as the names and addresses of all parties involved, a comprehensive description of the ORRIS and WI interests, the effective date of the conversion, and the terms and conditions governing the terms of the new working interest agreement. It also outlines the responsibilities of each party, payment obligations, administrative procedures, and any additional documentation required for the conversion process. Overall, the Indiana Declaration of Election to Convert Overriding Royalty Interest to Working Interest is a legally binding instrument that facilitates the conversion of an ORRIS to a WI in the oil and gas industry. By providing clear guidelines and addressing varying types of conversion scenarios, this document helps ensure the fair and equitable treatment of all parties involved in the process.
