A Conversion of Reserved Overriding Royalty Interest to Working Interest form. The assignee shall be entitled to recover, out of the total proceeds derived from the sale of oil and gas produced from each well drilled and completed as a well capable of producing oil or gas in paying quantities on the Land, the total cost of drilling, completing, and equipping such well together with the cost of operating such well until the time of such recovery.
Oklahoma Conversion of Reserved Overriding Royalty Interest to Working Interest is a legal procedure in the oil and gas industry that involves the transfer of ownership and rights in a piece of land from reserved overriding royalty interest to a working interest. This transfer allows the working interest owner to actively participate in the extraction and production of oil or gas from the property. In Oklahoma, there are two main types of conversion of reserved overriding royalty interest to working interest: 1. Partial Conversion: This type of conversion typically occurs when the owner of the overriding royalty interest decides to retain a portion of the interest while converting the remaining interest to working interest. The owner's decision may be influenced by factors such as the potential for increased profitability by actively participating in production or diversifying their investment portfolio. 2. Complete Conversion: In this type of conversion, the owner of the reserved overriding royalty interest decides to fully convert their interest into a working interest. By doing so, they become an active participant in the exploration, drilling, and production activities taking place on the property. This conversion affords them the opportunity to influence decision-making processes and potentially increase their return on investment. The process of conversion typically involves negotiation and agreement between the parties involved, including the overriding royalty interest owners, the working interest owners, and possibly a lease operator or operator company. Legal documentation, such as an agreement or amendment to lease contracts, is essential to formalize and facilitate the conversion process. Parties must consider factors such as the allocation of costs and liabilities associated with exploration, drilling, and production, revenue sharing arrangements, and other contingencies. Keywords: Oklahoma, conversion, reserved overriding royalty interest, working interest, oil and gas industry, transfer of ownership, extraction, production, legal procedure, exploration, drilling, profitability, investment, negotiation, agreement, lease contracts, costs, revenue sharing, contingency.
