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.
The North Dakota Reservation of Additional Interests in Production refers to a legal mechanism allowing certain parties to reserve additional interests in oil and gas production in the state of North Dakota. This reservation allows for specific individuals or entities to retain certain rights or benefits from the production activities taking place on a particular property. There are various types of North Dakota Reservation of Additional Interests in Production, including: 1. Overriding Royalty Interest (ORRIS): An ORRIS grants a party a fixed percentage of the revenue generated from oil and gas production, typically non-operating parties such as mineral rights owners or investors. It is an interest that is paid out of the production revenue before the calculation of the landowner's royalty share. 2. Carried Interest: A carried interest allows an operating party or “carried party” to own a portion of the working interest in a property without bearing the associated costs. The carried party receives a proportionate share of the production revenue but is not liable for the expenses tied to exploration, drilling, or development of the property. 3. Net Profits Interest (NPI): A NPI entitles the beneficiary to a percentage of the net profits generated from oil and gas production activities. It is calculated after deducting all associated operating costs, including production-related expenses. 4. Production Payment: A production payment is a temporary interest where a party receives a fixed sum or a percentage of production revenue from oil and gas operations until a predetermined limit or time period is reached. Once the limit is met, the production payment interest terminates. These different types of reservations of additional interests in production provide flexibility for parties involved in the oil and gas industry, allowing them to structure ownership rights, manage financial risks, and create diverse investment opportunities. It is essential to consult legal professionals or experts familiar with North Dakota laws to ensure compliance and accurate implementation of these reservation agreements.
