This form is used when the Assignor transfers, assigns, and conveys to Assignee, as a production payment, a percentage of 8/8 of all oil, gas, and other minerals produced and saved from the Lands under the terms of the Lease and any renewals or extensions of the Lease which are obtained by Assignor or Assignor's successors and/or assigns.
A Puerto Rico Assignment of Production Payment by Lessee to Third Party is a legal agreement that transfers the right to receive future production payments from a lessee (usually an oil or gas producer) to a third party. This arrangement allows the lessee to assign their future payment rights to another entity, providing them with immediate liquidity while relinquishing the future payment obligations. There are several types of Puerto Rico Assignment of Production Payment by Lessee to Third Party agreements, including: 1. Absolute Assignment: In this type of assignment, the lessee irrevocably transfers all of their rights, title, and interest in the production payments to the third party. The third party assumes complete ownership and control over the assigned production payments. 2. Security Assignment: A security assignment is used to provide collateral for a loan or financing arrangement. The lessee assigns the production payments to the third party as security, ensuring that the third party will receive the payment proceeds if the lessee defaults on the loan or fails to meet their obligations. 3. Partial Assignment: A partial assignment allows the lessee to assign only a portion of their production payments to a third party. The remaining payment rights are still held by the lessee, providing them with some financial flexibility while sharing the payment stream with the assignee. 4. Non-recourse Assignment: In this type of assignment, the assignee assumes all the risks associated with the production payments. If there is a shortfall in the payment stream, the assignee cannot seek recovery from the lessee or their assets. This type of assignment is often used in structured finance transactions. The Puerto Rico Assignment of Production Payment by Lessee to Third Party agreements are typically governed by Puerto Rico laws and must comply with local regulations and contractual requirements. It is advisable to seek professional legal counsel to draft and execute such agreements to ensure compliance and protect the rights of all parties involved.
