This form is used when an Assignor assigns, transfers, and conveys to Assignee an overriding royalty interest in the Lease and all of the oil and gas produced, saved and marketed from the Lease, out of the interest owned by Assignor, with proportionate reduction (the Override ).
A New York Assignment of Overriding Royalty Interest for Single Lease — Proportionate Reduction is a legal document used in the oil and gas industry to transfer the rights of an overriding royalty interest (ORRIS) from one party to another in New York. This document is particularly focused on the concept of proportionate reduction. In the oil and gas sector, an overriding royalty interest refers to a share of production revenues that is granted to a party, known as the overriding royalty owner, without having an ownership interest in the underlying lease or property. This interest is often assigned, or transferred, to another party through an assignment agreement. The New York Assignment of Overriding Royalty Interest for Single Lease — Proportionate Reduction specifies the terms and conditions of the assignment, specifically addressing the proportionate reduction aspect. Proportionate reduction refers to the adjustment made to the overriding royalty interest when the underlying lease is subject to a reduction in the working interest. There are different types of New York Assignment of Overriding Royalty Interest for Single Lease — Proportionate Reduction, which may include: 1. Standard Assignment: This is the most common type, where an overriding royalty interest is assigned to a new party with a proportionate reduction clause. The assignee will receive a reduced share of production revenues if a reduction in working interest occurs. 2. Partial Assignment: In some cases, only a portion of the overriding royalty interest is assigned to a new party, while the assignor retains the remaining interest. The proportionate reduction clause will still apply to the assignee's share if a reduction in the working interest occurs. 3. Temporary Assignment: This type of assignment is executed for a predetermined period or until a specific condition is met. The assignee receives the overriding royalty interest with a proportionate reduction provision for the assigned term or condition. 4. Permanent Assignment: Unlike temporary assignments, a permanent assignment transfers the overriding royalty interest permanently to the assignee. The proportionate reduction clause remains in effect indefinitely, applying to any future reduction in the working interest. It is crucial to consult with legal professionals experienced in oil and gas law in New York when drafting or executing a New York Assignment of Overriding Royalty Interest for Single Lease — Proportionate Reduction. This document should accurately capture the terms of the assignment, the proportionate reduction calculation, any conditions or limitations, and the legal obligations of all parties involved.
