Overriding Royalty Interests. (a) As additional consideration for the making of the Loans by the Lenders, the Borrower agrees to convey to the Lenders, in undivided shares proportionate to their respective Commitments, an overriding royalty interest in the aggregate amount specified below in and to the Oil and Gas Properties referred to below. The overriding royalty shall be conveyed with respect to certain Oil and Gas Properties currently owned by the Borrower. (b) The overriding royalty interest in any Oil and Gas Property required to be conveyed with respect to any well shall equal (i) three percent (3%) of 8/8ths (proportionately reduced) in the Oil and Gas Properties described on Schedule 9.18(b)(i) and (ii) two percent (2%) of 8/8ths (proportionately reduced) in the Oil and Gas Properties described on Schedule 9.18(b)(ii). The overriding royalty shall be subject to the terms and conditions set forth in the form of the ORRI Conveyance. (c) An overriding royalty required to be conveyed hereby: (i) with respect to any well now in existence shall be effective as of the first day of the calendar month in which this Agreement is executed and with respect to any future well the first day of the calendar month in which the relevant well was completed, and (ii) shall survive any termination of the Credit Agreement. (d) If, prior to finalization of the division order process, the Borrower receives proceeds of production from a well with respect to which the Borrower is required to convey an overriding royalty under this Section 9.18, the Borrower shall estimate the amount of such revenue payable on account of the overriding royalty and shall pay such estimated proceeds to the Lenders; provided that, upon the completion of the division order process, if any amounts -------- are determined to have been overpaid or underpaid to the Lenders, the Borrower and the Lenders shall promptly make appropriate adjustments among themselves to give effect to the correct division of interests, retroactive to the effective date of such overriding royalty. (e) Within twenty days (20) after the end of each fiscal quarter, the Borrower will prepare a summary of all xxxxx spudded during the preceding fiscal quarter. Such summary shall indicate the date each well was completed (or anticipated to be completed) and those xxxxx for which an Override pursuant to (c) above has been recorded in the appropriate land records and delivered to the Lenders. For those xxxxx where no override has been filed of record, an approximate date of when the Borrower expects such override to be recorded.
Appears in 5 contracts
Samples: Credit Agreement (Crested Corp), Credit Agreement (Crested Corp), Credit Agreement (Us Energy Corp)
Overriding Royalty Interests. (a) As additional consideration for the making of the Loans Commitment by the LendersLender and in addition to interest accruing on principal evidenced by the Note, the Borrower agrees to convey to the LendersLender, in undivided shares proportionate to their respective Commitmentsas an additional charge, an overriding royalty interest in the aggregate amount specified below in and to the Oil and Gas Properties referred to below. The overriding royalty shall be conveyed with respect to certain Oil and Gas Properties currently owned by the Borrower.
(b) The Borrower in each Override Well. For each Override Well such conveyance of such overriding royalty interest in any Oil and Gas Property required to be conveyed with respect to any well interests (i) shall equal (ix) four hundred ninety three one thousandths of one percent (30.493%) of 8/8ths times (proportionately reducedy) the Net Revenue Interest that the Borrower owns in such Override Well on the Oil and Gas Properties described on Schedule 9.18(b)(i) and date such Override Well was spudded, (ii) two percent (2%) of 8/8ths (proportionately reduced) in the Oil and Gas Properties described on Schedule 9.18(b)(ii). The overriding royalty shall be subject to the terms and conditions set forth in the form of the ORRI Conveyance.
(c) An overriding royalty required to be conveyed hereby: (i) with respect to any well now in existence shall be effective as of the first day of the calendar month in which this Agreement is executed and with respect to any future well the first day of the calendar month in which the relevant well such Override Well was completed, (iii) shall be substantially in the form of Exhibit V attached hereto and (iiiv) shall survive any termination be executed and delivered by the Borrower to the Lender promptly after the completion of such Override Well.
(b) After March 15, 2006 and on or before April 1, 2006 the Borrower has the option to purchase all of the Credit AgreementOverriding Royalty Interests from the Lender effective as of January 1, 2006 at a price equal to the present worth, discounted at the rate of ten percent (10%) per annum of Override Future Revenues attributable to the Overriding Royalty Interests in all of the Override Xxxxx. The basis for such determination shall be the reserve report dated effective January 1, 2006 submitted to the Lender by the Borrower pursuant to Section 5.5.
(c) Notwithstanding anything to the contrary in Subsections 2.6(a) or (b), upon the Lender's receipt of proceeds from the Overriding Royalty Interests in the Threshold Override Xxxxx which, when aggregated with all amounts received by the Lender as interest (including, without limitation, the facility fee received pursuant to Section 2.4 and interest on past due principal or interest) on the Advances made pursuant to Section 2.1 and other Loans made pursuant to Section 2.8 equals the Threshold Amount, the Borrower has the right at any time within ninety (90) days from the date the Threshold Amount is reached to purchase all of the Overriding Royalty Interests in all of the Override Xxxxx from the Lender in an amount equal to the present worth, discounted at a rate of ten percent (10%) per annum, of Override Future Revenues attributable to all of the Overriding Royalty Interests in all of the Override Xxxxx as of the date the Threshold Amount is reached. The basis for such determination shall be the most recent reserve report submitted to the Lender by the Borrower pursuant to Section 5.5, adjusted for cumulative production since the effective date of such reserve report. If either the Borrower or the Lender in good faith determines that the most recent reserve report does not accurately reflect the value of the Override Xxxxx, then the Borrower shall obtain from the independent firm of petroleum engineers who prepared the Borrower's most recent reserve report or another firm of independent petroleum engineers acceptable to the Lender, an updated reserve report effective through the date the Threshold Amount is reached. If the Borrower purchases all of the Overriding Royalty Interests from the Lender pursuant to this Subsection 2.6(c), the Borrower will no longer be obligated to make any conveyance to the Lender pursuant to Subsection 2.6(a).
(d) IfThe Borrower shall pay, prior to finalization or reimburse the Lender for, all cost and expense of the division order processpreparation, execution, delivery and recording of any conveyance of Overriding Royalty Interest, whether from the Borrower receives proceeds of production from a well with respect to which the Borrower is required to convey an overriding royalty under this Section 9.18, the Borrower shall estimate the amount of such revenue payable on account of the overriding royalty and shall pay such estimated proceeds to the Lenders; provided that, upon Lender or the completion of the division order process, if any amounts -------- are determined to have been overpaid or underpaid Lender to the Lenders, the Borrower and the Lenders shall promptly make appropriate adjustments among themselves to give effect to the correct division of interests, retroactive to the effective date of such overriding royaltyBorrower.
(e) Within twenty days (20) after the end of each fiscal quarter, the Borrower will prepare a summary of all xxxxx spudded during the preceding fiscal quarter. Such summary shall indicate the date each well was completed (or anticipated to be completed) and those xxxxx for which an Override pursuant to (c) above has been recorded in the appropriate land records and delivered to the Lenders. For those xxxxx where no override has been filed of record, an approximate date of when the Borrower expects such override to be recorded.
Appears in 1 contract
Overriding Royalty Interests. (a) As additional consideration for the making of the Loans by the Lenders, the Borrower agrees to convey to the Lenders, in undivided shares proportionate to their respective Commitments, an overriding royalty interest in the aggregate amount specified below in and to the Oil and Gas Properties referred to below. The overriding royalty shall be conveyed with respect to certain (i) each of the Oil and Gas Properties currently owned by the BorrowerBorrower or any Affiliate and (ii) any additional Oil and Gas Property acquired by the Borrower or any Subsidiary or in which the Borrower or any Affiliate acquires an additional interest, in each case after the Effective Date through the date this Agreement is terminated.
(b) The overriding royalty interest in any Oil and Gas Property required to be conveyed with respect to any well shall equal (i) three percent (3%) of 8/8ths (8/8ths, and shall be proportionately reduced) reduced to the interest in the Oil and Gas Properties described on Schedule 9.18(b)(i) and (ii) two percent (2%) owned by the Borrower in each of 8/8ths (proportionately reduced) in the Oil and Gas Properties described on Schedule 9.18(b)(ii)Properties. The overriding royalty shall be subject to the terms and conditions set forth in the form of the ORRI Conveyance, and any other agreements currently in existence as of the time of the acquisition of such Properties and validly affecting the underlying leases.
(c) An overriding royalty required to be conveyed hereby: (i) with respect to any well now in existence shall be effective as of the first day of the calendar month in which this Agreement is executed executed, and with respect to any future well well, the first day of the calendar month in which the relevant well was completedcompleted or acquired, (ii) shall be substantially in the form of the ORRI Conveyance, (iii) shall be executed and filed for recording by the Borrower promptly after the receipt, delivery and recording of applicable assignments into the Borrower establishing its interest of record in any Oil and Gas Properties, (iv) shall be delivered by the Borrower to the Lenders promptly after its return from recording, and (iiv) shall survive any termination of the Credit Agreement.
(d) If, prior to finalization of the division order process, the Borrower receives proceeds of production from a well with respect to which the Borrower is required to convey an overriding royalty under this Section 9.18, the Borrower shall estimate the amount of such revenue payable on account of the overriding royalty and shall pay such estimated proceeds to the Lenders; provided that, upon the completion of the division order process, if any amounts -------- are determined to have been overpaid or underpaid to the Lenders, the Borrower and the Lenders shall promptly make appropriate adjustments among themselves to give effect to the correct division of interests, retroactive to the effective date of such overriding royalty.
(e) Within twenty forty-five (45) days (20) after the end of each fiscal quarter, the Borrower will prepare a summary of all xxxxx wxxxx spudded during the preceding fiscal quarter. Such summary shall indicate the date each well was completed (or anticipated to be completed) and those xxxxx wxxxx for which an Override override pursuant to (c) above has been recorded in the appropriate land records and delivered to the Lenders. For those xxxxx wxxxx where no override has been filed of record, an approximate date of when the Borrower expects such override to be recorded.
Appears in 1 contract
Overriding Royalty Interests. (a) As additional consideration for the making of the Loans by the Lenders, the Borrower agrees to and will cause any Subsidiary to, convey to the LendersLenders or their designees, in undivided shares proportionate to their respective Commitments, an overriding royalty interest in the aggregate amount specified below in and to the Oil and Gas Properties referred to below. The overriding royalty shall be conveyed with respect to certain each (i) Oil and Gas Properties Property currently owned by the BorrowerBorrower and any Subsidiary and (ii) any additional Oil and Gas Property acquired by the Borrower or any Subsidiary or in which the Borrower or any Subsidiary acquires an additional interest, in each case, after the effective date through the date this Agreement is terminated.
(b) The overriding royalty interest in any Oil and Gas Property required to be conveyed with respect to any well shall equal (i) three two percent (32.00%) of 8/8ths (proportionately reducedreduced to the undivided working interest owned by the Borrower and any of its Subsidiaries therein, as such working interest may increase or decrease from time to time in accordance with the provisions of any agreement in effect at the time of creation of the relevant overriding royalty interest) in the each such Oil and Gas Property other than with respect to the Bayou Couba Properties described on Schedule 9.18(b)(i) for depths below 10,000 feet in which case the overriding royalty interest in any such Oil and (ii) two Gas Property required to be conveyed shall equal one percent (21.00%) of 8/8ths (proportionately reducedreduced to the undivided working interest owned by the Borrower and any of its Subsidiaries therein, as such working interest may increase or decrease from time to time in accordance with the provisions of any agreement in effect at the time of creation of the relevant overriding royalty interest). In addition to the above, in the event that the Bridge Loans have not been repaid in full prior to the Bridge Loan Termination Date, Borrower will grant an additional one percent (1.00%) (proportionately reduced to the undivided working interest owned by the Borrower and any of its Subsidiaries therein, as such working interest may increase or decrease from time to time in accordance with the provisions of any agreement in effect at the time of creation of the relevant overriding royalty interest) in the each Oil and Gas Properties described Property of the Borrower and its Subsidiaries on Schedule 9.18(b)(ii)the Bridge Loan Termination Date and thereafter on each monthly anniversary date thereafter until such time that the Bridge Loans have been repaid in full. The overriding royalty shall be subject to the terms and conditions set forth in the form of the ORRI ConveyanceAssignment, and any other agreements currently in existence as of the time of the acquisition of such Properties and validly affecting the underlying leases.
(c) An overriding royalty interest required to be conveyed hereby: (i) with respect to any well now in existence currently owned Oil and Gas Property shall be effective as of to Hydrocarbons produced on and after the first day of the first calendar month in following the date upon which this Agreement is executed and with respect to any future well subsequently acquired Oil and Gas Property or increased interest in a currently owned Oil and Gas Property shall be effective as to Hydrocarbons produced on and after the first day of the first calendar month in which following the date of the relevant well was completedacquisition, (ii) shall be conveyed by a conveyance substantially in the form of the ORRI Assignment executed by the appropriate grantor and filed for recording by the Borrower promptly after the receipt, delivery and recording of applicable assignments into the Borrower or any Subsidiary establishing its interest of record in any Oil and Gas Properties and shall be delivered by the Borrower to the Lenders or their designees promptly after its return from recording, and (iiiii) shall survive any termination of the Credit this Agreement.
(d) If, prior to finalization of the division order process, the Borrower or any Subsidiary receives proceeds of production from a well with respect to which the Borrower or any Subsidiary is required to convey an overriding royalty interest under this Section 9.189.17, the Borrower shall estimate the amount of such revenue payable on account of the overriding royalty interest and shall pay or cause the relevant subsidiary to pay such estimated proceeds to the Lenders; provided that, upon the completion of the division order process, if any amounts -------- are determined to have been overpaid or underpaid to the LendersLenders or their designees, the Borrower or any relevant Subsidiary and the Lenders or their designees shall promptly make appropriate adjustments among themselves to give effect to the correct division of interests, retroactive to the effective date of such overriding royaltyroyalty interest.
(e) Within twenty sixty days (2060) after the end of each fiscal quarter, the Borrower will prepare a summary of all xxxxx wxxxx spudded on the Oil and Gas Properties of the Borrower or any Subsidiary during the preceding fiscal quarter. Such summary shall indicate the date each well was completed (or anticipated to be completed) and those xxxxx wxxxx for which an Override overriding royalty 57 interest pursuant to (cSection 9.17(c) above has been recorded in the appropriate land records and delivered to the Lenders. For those xxxxx wxxxx where no override overriding royalty interest has been filed of record, an approximate date of when the Borrower expects such override overriding royalty interest to be recorded.
Appears in 1 contract
Samples: Credit Agreement (Dune Energy Inc)
Overriding Royalty Interests. (a) As additional consideration for the making of the Loans by the Lenders, the Borrower agrees to convey to the Lenders, in undivided shares proportionate to their respective Commitments, an overriding royalty interest in the aggregate amount specified below in and to the Oil and Gas Properties referred to below. The overriding royalty shall be conveyed with respect to certain each (i) Oil and Gas Properties currently owned by the BorrowerBorrower and (ii) any additional Oil and Gas Property acquired by the Borrower or any Subsidiary or in which the Borrower or any Subsidiary acquires an additional interest, in each case, after the effective date through the date this Agreement is terminated.
(b) The overriding royalty interest in any Oil and Gas Property required to be conveyed with respect to any well shall equal (i) three four percent (34.00%) of 8/8ths (proportionately reducedreduced to the undivided interest owned by the Borrower and any of its Subsidiaries therein) in the each such Oil and Gas Properties described on Schedule 9.18(b)(iProperty. If the Borrower raises $15,000,000 or more of new equity within six (6) months of the Effective Date, the overriding royalty interest in all Oil and (ii) two Gas Property conveyed shall be permanently reduced to three and one-half percent (23.50%) of 8/8ths (proportionately reducedreduced to the undivided interest owned by the Borrower and any of its Subsidiaries therein) in the each such Oil and Gas Properties described on Schedule 9.18(b)(ii)Property. Borrower and Lenders shall execute such an assignment document (in form acceptable to the Lenders) reconveying such a one-half percentage (0.50%) of 8/8ths(proportionately reduced to the undivided interest owned by the Borrower and any of its Subsidiaries therein) overriding royalty to the Borrower. Such reconveyance shall be without any representations or warranties of any kind other than that the Lenders have not encumbered such interest. The overriding royalty shall be subject to the terms and conditions set forth in the form of the ORRI ConveyanceAssignment, and any other agreements currently in existence as of the time of the acquisition of such Properties and validly affecting the underlying leases.
(c) An overriding royalty required to be conveyed hereby: (i) with respect to any well now in existence shall be effective as of the first day of the calendar month in which this Agreement is executed and with respect to any future well the first day of the calendar month in which the relevant well was completed, (ii) shall be substantially in the form of the ORRI Assignment, (iii) shall be executed and filed for recording by the Borrower promptly after the receipt, delivery and recording of applicable assignments into the Borrower establishing its interest of record in any Oil and Gas Properties, (iv) shall be delivered by the Borrower to the Lenders promptly after its return from recording, and (iiv) shall survive any termination of the Credit Agreement.
(d) If, prior to finalization of the division order process, the Borrower receives proceeds of production from a well with respect to which the Borrower is required to convey an overriding royalty under this Section 9.18, the Borrower shall estimate the amount of such revenue payable on account of the overriding royalty and shall pay such estimated proceeds to the Lenders; provided that, upon the completion of the division order process, if any amounts -------- are determined to have been overpaid or underpaid to the Lenders, the Borrower and the Lenders shall promptly make appropriate adjustments among themselves to give effect to the correct division of interests, retroactive to the effective date of such overriding royalty.
(e) Within twenty forty-five days (2045) after the end of each fiscal quarter, the Borrower will prepare a summary of all xxxxx spudded during the preceding fiscal quarter. Such summary shall indicate the date each well was completed (or anticipated to be completed) and those xxxxx for which an Override override pursuant to (c) above has been recorded in the appropriate land records and delivered to the Lenders. For those xxxxx where no override has been filed of record, an approximate date of when the Borrower expects such override to be recorded.
Appears in 1 contract
Overriding Royalty Interests. (a) As additional consideration for the making of the Loans by the Lenders, the Borrower agrees to convey to the Lenders, in undivided shares proportionate to their respective Commitments, an overriding royalty interest in the aggregate amount specified below in and to the Oil and Gas Properties referred to below. The overriding royalty shall be conveyed with respect to certain Oil and Gas Properties currently owned by the Borrower.
(b) The overriding royalty interest in any Oil and Gas Property required to be conveyed with respect to any well shall equal (i) three fifty hundredths percent (3.50%) of 8/8ths (proportionately reduced) in the Oil and Gas Properties described on Schedule 9.18(b)(i) and (ii) two percent (2%) of 8/8ths (proportionately reduced) in the Oil and Gas Properties described on Schedule 9.18(b)(ii)Borrower. The overriding royalty shall be subject to the terms and conditions set forth in the form of the ORRI Conveyance.
(c) An overriding royalty required to be conveyed hereby: (i) with respect to any well now in existence shall be effective as of the first day of the calendar month in which this Agreement is executed and with respect to any future well the first day of the calendar month in which the relevant well was completed, and (ii) shall survive any termination of the Credit Agreement.
(d) If, prior to finalization of the division order process, the Borrower receives proceeds of production from a well with respect to which the Borrower is required to convey an overriding royalty under this Section 9.188.18, the Borrower shall estimate the amount of such revenue payable on account of the overriding royalty and shall pay such estimated proceeds to the Lenders; provided that, upon the completion of the division order process, if any amounts -------- are determined to have been overpaid or underpaid to the Lenders, the Borrower and the Lenders shall promptly make appropriate adjustments among themselves to give effect to the correct division of interests, retroactive to the effective date of such overriding royalty.
(e) Within twenty days (20) after the end of each fiscal quarter, the Borrower will prepare a summary of all xxxxx wells spudded during the xxx preceding fiscal quarter. Such summary shall indicate the date each well was completed (or anticipated to be completed) and those xxxxx wells for which an Override Xxxrride pursuant to (c) above has been recorded in the appropriate land records and delivered to the Lenders. For those xxxxx wells where no override has overridx xxx been filed of record, an approximate date of when the Borrower expects such override to be recorded.
Appears in 1 contract
