This form is used when an Assignor was granted the right to receive, at payout, a certain reversionary working interest in the Lease. Payout has not occurred, and Assignor is vested with beneficial ownership of the Interest in the Leases and Lands. The purpose of this Assignment and the intention of Assignor is to assign to Assignee, the Interest.
Title: Exploring the Minnesota Assignment of a Diversionary Working Interest: Types and Detailed Description Introduction: The Minnesota Assignment of a Diversionary Working Interest is a legal concept that holds significant importance in the oil and gas industry. This comprehensive guide aims to provide a detailed description of what it entails, highlighting its types and relevance. By understanding the intricacies of this process, we can gain valuable insights into the establishment and transfer of diversionary working interests in Minnesota. 1. Definition and Purpose: The Minnesota Assignment of a Diversionary Working Interest refers to the transfer of an ownership interest in an oil or gas lease, specifically the working interest, which subsequently reverts to the assignor after certain conditions are met. The purpose is to allow parties to allocate working interests in petroleum leases while ensuring an eventual return of ownership to the original assignor. 2. Types of Minnesota Assignment of a Diversionary Working Interest: a) Partial Diversionary Working Interest Assignment: — In this type, only a portion or percentage of the working interest is assigned, giving the assignee the right to receive a proportional share of future revenues. However, the original assignor holds the right of reversion to the remaining interest. b) Full Diversionary Working Interest Assignment: — Here, the entire working interest is assigned to a third party, providing them with full control over the lease's operations. However, the assignor retains the right of reversion, which comes into effect upon meeting the specified conditions. 3. Conditions Triggering Reversion: In a Minnesota Assignment of a Diversionary Working Interest, the reversion of ownership typically occurs based on predetermined conditions such as: — Completion of the assigned interest holder's share of expenses. — Attaining a specific quantity or value of production volumes. — Expiration of a specified period or term mentioned in the agreement. — Failure to meet certain obligations or conditions outlined in the assignment document. 4. Key Parties Involved: a) Assignor: The original owner of the diversionary working interest who transfers a portion or all of their interest to an assignee. b) Assignee: The party receiving the assigned working interest. They assume responsibility for expenses and operations related to the leased property. c) Operator: The entity authorized to operate the leased property, typically the assignee of the working interest. 5. Legal Considerations: The Minnesota Assignment of a Diversionary Working Interest involves significant legal considerations. Parties must ensure compliance with state laws, proper documentation, contractual agreements, and consideration of potential consequences of the assignment process. Conclusion: The Minnesota Assignment of a Diversionary Working Interest is a crucial mechanism for allocating working interests in petroleum leases while ensuring a subsequent reversion of ownership. By understanding its types, purpose, and associated conditions, stakeholders in the oil and gas industry can navigate this process effectively, ensuring legal compliance and strategic decision-making.
