This form is used when, as a result of continuous production from the Lease and Lands, payout, as defined in an Assignment, has occurred, and Declarant is entitled to elect to convert the Override to a Working Interest, as provided for in the Assignment.
New Mexico Declaration of Election to Convert Overriding Royalty Interest to Working Interest is a legal document used in the state of New Mexico to convert an overriding royalty interest (ORRIS) to a working interest (WI) in an oil or gas lease. This declaration allows the holder of an ORRIS to exercise their right to convert their interest into a WI, thereby becoming an active participant in the operations and development of the lease. Keywords: New Mexico, Declaration of Election, Convert, Overriding Royalty Interest, Working Interest, oil lease, gas lease, legal document, active participant, operations, development. There are two primary types of New Mexico Declaration of Election to Convert Overriding Royalty Interest to Working Interest: 1. Individual Declaration: This type of declaration is made by an individual or entity holding an ORRIS in a lease agreement. By submitting this declaration, the holder formally expresses their intent to convert their ORRIS into a WI, assuming responsibilities and liabilities associated with ownership. 2. Company Declaration: In cases where a company or organization holds an ORRIS, they would utilize this type of declaration to convert their interest into a WI. Similar to the individual declaration, a company declaration entails assuming the obligations and rights tied to a WI. The New Mexico Declaration of Election provides specific details and terms related to the conversion process. This includes information about the lease agreement, parties involved, effective date of conversion, percentage of interest being converted, and any additional provisions agreed upon by the parties. By converting to a WI, the holder gains enhanced control and decision-making power over the lease, including the ability to participate directly in drilling operations, development decisions, and cost-sharing arrangements. It also entitles them to a share of production revenue, subject to operational expenditures and royalties payable to other stakeholders. Before submitting the New Mexico Declaration of Election, it is crucial to consult legal counsel and thoroughly review the original lease agreement. Understanding the rights, obligations, and potential risks associated with converting an ORRIS to a WI is vital to making an informed decision. In conclusion, the New Mexico Declaration of Election to Convert Overriding Royalty Interest to Working Interest is an essential legal document that enables individuals and companies holding an ORRIS in a lease agreement to convert their interest into a WI. By doing so, they become active participants in the lease's operations and development, assuming greater responsibility and potentially reaping increased benefits.
