Common use of Outstanding Royalties Clause in Contracts

Outstanding Royalties. If the existing Working Interest Owners or a person who is not an existing Working Interest Owner assume, pursuant to clause 5.1, the Working Interest covered by the Lease which has been cancelled, surrendered or terminated, they shall pay the net proceeds, after the deduction of all of their costs, of the share of Production Allocation Substances allocated to that Working Interest to the Royalty Interest Owner until such time as the Royalty Interest Owner has recovered any outstanding royalty liability relating to Production Allocation Substances previously allocated to such Working Interest.

Outstanding Royalties. If some or all of the existing Working Interest Owners or a person who is not an existing Working Interest Owner assume, pursuant to clause 5.1, the Working Interest covered by the Lease which has been cancelled, surrendered or terminated, they shall pay the net proceeds, after the deduction of all of their costs, of the share of Production Allocation Substances allocated to that Working Interest to the Royalty Interest Owner until such time as the Royalty Interest Owner has recovered any outstanding ascertained royalty liability relating to Production Allocation Substances previously allocated to such Working Interest.