The New Mexico Partial Assignment of Oil and Gas Lease (Producing Lease. Reservation of Production Payment) is a legal document that outlines the terms and conditions for the partial assignment of an oil and gas lease in the state of New Mexico. This particular type of assignment involves a reservation of production payment, which grants the assignor a specified portion of the production proceeds generated from the lease. This agreement is essential in the oil and gas industry as it allows parties to diversify their investments and maximize their returns. The partial assignment allows for the assignee to acquire a percentage interest in the lease, while the assignor retains a reservation of production payment. This arrangement can be beneficial for both parties involved, as it allows for the assignor to maintain an ongoing revenue stream while providing the assignee with an opportunity to benefit from the future production of the lease. There are also different variations of the New Mexico Partial Assignment of Oil and Gas Lease (Producing Lease. Reservation of Production Payment) that can cater to specific needs or circumstances. Some of these variations may include: 1. Non-Operated Partial Assignment: This type of partial assignment occurs when the assignee does not have any operational responsibilities and is solely entitled to a percentage of the production proceeds. 2. Operated Partial Assignment: In contrast to the non-operated assignment, the assignee in this type of partial assignment has operational responsibilities and holds a percentage interest in the lease as well. 3. Fixed Percentage Partial Assignment: This variation establishes a fixed percentage interest for the assignee, which remains consistent regardless of changes in production levels or lease operations. 4. Variable Percentage Partial Assignment: With this type of partial assignment, the assignee's percentage interest may fluctuate based on changes in production levels or lease operations. The assignor may have the ability to adjust the assignee's interest periodically. Overall, the New Mexico Partial Assignment of Oil and Gas Lease (Producing Lease. Reservation of Production Payment) is a flexible and important agreement that allows for the efficient utilization of oil and gas leases. By clearly defining the rights and obligations of both parties, this document ensures a fair and sustainable partnership in the oil and gas industry while maximizing the value of the lease.
New Mexico Partial Assignment of Oil and Gas Lease (Producing Lease. Reservation of Production Payment)
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FAQ
Partial Assignments: When an assignor conveys 100% record title interest in a portion of the lands in a lease, it creates a partial assignment. Partial assignments segregate the lease into two separate leases. Normally we assign a new lease number to the conveyed portion of the lease.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
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.
Granting Clause: The clause in the deed that lists the grantor and the grantee and states that the property is being transferred between the parties.
A ?special warranty? is a covenant made by the lessor to defend the lessee against encumbrances or clouds on the oil and gas title created by the lessor during his ownership of the estate. The protection offered by this warranty is therefore limited to those title defects caused or created by the lessor himself.
What is a Held-By-Production Clause? "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.
ASSIGNMENT: The legal instrument whereby Oil and Gas Leases or Overriding Royalty interests are assigned or conveyed. ASSIGNMENT CLAUSE: A clause in any legal instrument that allows either party to the contract to assign all or part of his or her interest to others.
Granting Clause: This clause specifies: (a) the land that is being leased; (b) which minerals are being leased (oil, gas, uranium, etc.); and (c) and what rights the production company has to use the surface land in an effort to produce the leased minerals.
