This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
Description: The Washington Reservation of Additional Interests in Production (RAIL) is a legal mechanism used in the energy industry to protect and regulate the ownership and distribution of resources. It enables individuals or entities to secure their stake in the production and revenue generated from natural resources like oil, gas, or minerals extracted from a particular area. The RAIL is applicable for both public and private lands in Washington State. It serves as a safeguard for those who have invested in the exploration or development of natural resources by allowing them to reserve additional interests in production beyond their initial rights. There are various types of Washington Reservations of Additional Interests in Production, each fulfilling specific purposes and catering to different stakeholders: 1. Overriding Royalty Interest (ORRIS): ORRIS is the most common type of reservation. It grants the holder a specific percentage of revenue or royalty interest over and above the initial leasehold interest. The ORRIS holder is entitled to a predefined share of the production proceeds without being burdened by the costs of exploration, production, or operations. 2. Working Interest: Working Interest entitles the holder to a share of both production and operational costs. Typically, this interest is reserved by the operator or leaseholder of a well or mining operation. Working interest owners have direct involvement in the decision-making process and bear a proportionate share of expenses and liabilities. 3. Carried Interest: Carried Interest is a reservation that allows the holder to receive a predetermined share of production proceeds without contributing to the upfront exploration or operational costs. This type of reservation is commonly utilized to attract investors while minimizing their risk exposure. 4. Back-in Interest: Back-in Interest provides an existing owner or investor the option to regain or increase their stake in production by acquiring a share of interest relinquished by another party. This reservation helps facilitate changes in ownership or invest additional capital without compromising the rights of the original owners. Overall, the Washington Reservation of Additional Interests in Production is a critical component of the energy industry, ensuring fairness, transparency, and protection for stakeholders involved in resource extraction. The availability of various types of reservations allows parties to negotiate and structure agreements that best suit their specific needs and objectives while maximizing the potential value of their investments.
