Kansas Assignment of Oil and Gas Leases when Producing with Reservation of Production Payment refers to a legal document used in the oil and gas industry to transfer rights and interests in oil and gas leases while still reserving a production payment. This arrangement allows the original lease owner to receive a portion of the oil and gas production proceeds. In Kansas, there are two common types of Assignment of Oil and Gas Leases when Producing with Reservation of Production Payment: 1. Absolute Assignment with Production Payment Reservation: This type of assignment involves the complete transfer of the oil and gas lease to a new owner while reserving a production payment. The original lease owner gives up all rights and interests in the lease, including the right to receive future production payments after the specified reserved amount has been paid. 2. Security Assignment with Production Payment Reservation: In this type of assignment, the oil and gas lease serves as collateral for a loan. The lease is assigned to the lender, who holds it as security until the borrower repays the loan. The original lease owner retains the right to receive production payments up to the specified reserved amount, which is used to repay the loan. When executing a Kansas Assignment of Oil and Gas Leases when Producing with Reservation of Production Payment, several important factors need to be considered: a. Parties Involved: The document should identify the original lease owner, the assignee, and any lenders involved in the transaction. b. Assignment Details: The assignment should specify the exact oil and gas leases being transferred, including legal descriptions and identifying numbers. c. Reserved Production Payment: The agreement must clearly outline the reserved amount or percentage of production payment that will be paid to the original lease owner. d. Assignment Rights and Obligations: The document should state the rights and obligations of both parties, including any obligations for the assignee to operate and manage the leased property. e. Default and Remedies: The assignment should address what happens in case of default by either party and the available remedies, such as termination or foreclosure. f. Governing Law: It is crucial to specify that the assignment will be governed by the laws of Kansas and any disputes will be resolved in Kansas courts. A Kansas Assignment of Oil and Gas Leases when Producing with Reservation of Production Payment plays a significant role in facilitating the transfer of oil and gas lease interests while ensuring that the original lease owner continues to benefit from ongoing production payments.
Kansas Assignment of Oil and Gas Leases when Producing with Reservation of Production Payment
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FAQ
"Held by production" is a provision in an oil or natural gas property lease that allows the lessee, generally an energy company, to continue drilling activities on the property as long as it is economically producing a minimum amount of oil or gas.
An assignment of oil and gas lease is a contractual agreement between a landowner and an oil or gas company in which the company gains the right to explore for, develop, and produce oil and gas from the property.
The BLM administers the lease but the Forest Service has more direct involvement in the leasing process for lands it administers. The Act also establishes a requirement that all public lands that are available for oil and gas leasing be offered first by competitive leasing.
In a few words, a pooling clause is written into a lease. This oil and gas clause allows the leased premises to be combined with other lands to form a single drilling unit. It's not uncommon for there to be a pool of oil or gas under numerous parcels of land.
What is the granting clause? The granting clause is the clause under which the owner of the oil and gas rights leases the oil and gas rights to the oil and gas company along with the right to develop the oil and gas on a specifically described piece of real estate.
Production Lease means that part of the License Area which is established for development of a Discovery pursuant to the License which is delineated as the Production Lease in a Development Plan approved as a Joint Operation or as an Exclusive Risk Operation.
The primary term is usually for a set amount of years, 1, 3, 5, 7 or 10 years. The secondary term normally takes effect once the primary term has expired and the condition(s) set forth in the term clause, or habendum clause, of your oil and gas lease for the secondary term to take effect is satisfied.
Held by production is an oil & gas industry term indicating a property is under lease and that the lease is being perpetuated in the secondary term by the production of oil or gas in paying quantities. An oil & gas may be in HBP status for many years if the wells located on the leased land keep producing.
