This is a Preferential Right to Purchase Production form. The assignor reserves the right at any time and from time to time to purchase or designate a purchaser for all of assignees oil and other liquid hydrocarbons produced and saved from the interests in the lands and leases that are the subject of this assignment.
North Dakota Preferential Right to Purchase Production is a legal concept that grants certain individuals or entities in North Dakota the first opportunity to purchase an ownership interest or production share in oil and gas lease operations within the state. This right exists to protect the interests of those who hold existing lease contracts or have a direct connection to the land where the production is taking place. Keywords: North Dakota, Preferential Right, Purchase Production, Oil and Gas Lease, Ownership Interest, Production Share There are two main types of North Dakota Preferential Right to Purchase Production: 1. Surface Owner's Preferential Right: This type of preferential right is granted to the owner of the surface land above the oil or gas lease. It allows them to purchase an ownership interest or production share in the lease before any other party. This right is significant as it aims to safeguard the interests of surface owners who may be affected by the extraction activities. 2. Royalty Owner's Preferential Right: Royalty owners in North Dakota also have a preferential right to purchase production. This right enables them to acquire additional ownership interest or production share in the lease beyond their existing royalty interests. It is designed to ensure that royalty owners have an opportunity to participate further in the lease and benefit from potential upside. The North Dakota Preferential Right to Purchase Production can be exercised when an existing lease operator intends to transfer or assign the lease to a new party. Before completing such a transaction, the operator must provide written notice of the proposed transfer to the eligible parties with the preferential right. This notice triggers a specific timeframe within which the eligible party can exercise their preferential right to purchase the interest being transferred. It is important to note that the preferential right is not an automatic obligation for the current leaseholder to sell to the eligible party. The eligible party must still negotiate and agree on the terms and conditions of the purchase, including the purchase price, with the leaseholder. Additionally, the preferential right must be exercised within the specified timeframe, failing which the right may be lost. In summary, the North Dakota Preferential Right to Purchase Production grants surface owners and royalty owners the first opportunity to purchase an ownership interest or production share in oil and gas lease operations within the state. This right aims to protect the interests of these parties and allows them to be actively involved in the lease transfer process.
