Provisions of Assignments. Each Assignment made pursuant to this Participation Agreement shall incorporate the following provisions: a) NDL will reserve an overriding royalty interest in each Lease equal to the difference between twenty percent (20%) and the royalty and/or overriding royalty interests which burden such Lease on the date of acquisition, such that each Participant will receive an eighty percent (80%) net revenue interest in each Lease, proportionately reduced as to the interest assigned to Participant. In the event NDL acquires a Lease which is burdened by royalty and/or overriding royalty interests in excess of 20% on the date of acquisition, NDL shall not be entitled to reserve an overriding royalty interest and each Participant agrees to accept each such Lease and bear its Proportionate Share of the existing royalty and/or overriding royalty burdens under the terms and conditions upon which NDL acquired the same. b) In the event NDL is required to pool any unleased mineral interest or oil and gas leasehold interests, NDL shall deliver to each Participant an 80% net revenue interest for each Lease or unleased mineral interest pooled, with NDL reserving an overriding royalty equal to the difference between 20% and the burdens delivered under such force pooling order. If the net revenue interest acquired by NDL pursuant to such pooling is less than 80%, NDL shall not be entitled to reserve an overriding royalty interest and each Participant shall receive and bear its Proportionate Share of the net revenue interest resulting from such pooling. c) In the event NDL acquires any Lease subject to a reversionary interest or back-in, said Lease shall be subject to NDL’s reserved overriding royalty interest described above. Each Participant shall also bear its Proportionate Share of any reversionary interest or back-in. d) If NDL is unable to acquire 100% of the oil and gas leasehold estate under the drilling and spacing unit for a Well, then each Participant’s Proportionate Share of the ownership within such drilling and spacing unit shall be proportionately reduced. If NDL is unable to acquire all depths and formations attributable to each Lease, then each Participant’s Proportionate Share of the Leases shall be limited to only those depths and formations so acquired by NDL. e) All assignments shall include a unit description and pooling order, as applicable, and will be made without warranty of title, express or implied, other than a special warranty of title by through and under the assignor but not otherwise.
Appears in 2 contracts
Samples: Participation Agreement (New Source Energy Partners L.P.), Participation Agreement (New Source Energy Corp)
Provisions of Assignments. Each Assignment of undeveloped leases and rights under forced pooling orders made pursuant to this Participation Agreement agreement shall incorporate the following provisions:
a) NDL a. NDL, or its assignees, will reserve be assigned an overriding royalty interest in each Lease drilling and spacing unit equal to the difference between twenty twenty-one percent (2021%) and the royalty and/or overriding royalty interests which that burden such Lease drilling and spacing unit on the date of acquisitionNDL’s acquisition of same, such that each Participant participating in a new well in such drilling and spacing unit will receive an eighty a seventy-nine percent (8079%) net revenue interest in each Leasedrilling and spacing Unit, proportionately reduced as to the interest assigned to such Participant. In the event NDL acquires a acquirement of an Undeveloped Lease which that is burdened by royalty and/or overriding royalty interests in excess of 20% twenty-one percent (21%) or more on the date of such acquisition, NDL shall not be entitled to reserve receive an overriding royalty interest interest, and each Participant agrees participating in a new well in such drilling and spacing unit must agree to accept each such Undeveloped Lease and bear its Proportionate Share of the then existing royalty and/or overriding royalty burdens and under the terms and conditions upon which NDL acquired the same.
b) In the event NDL is required to pool any unleased mineral interest or oil and gas leasehold interests, NDL shall deliver to each Participant an 80% net revenue interest for each Lease or unleased mineral interest pooled, with NDL reserving an overriding royalty equal to the difference between 20% and the burdens delivered under such force pooling order. b. If the net revenue interest acquired by NDL pursuant to such pooling is less than 80%, NDL shall not be entitled to reserve an overriding royalty interest and each Participant shall receive and bear its Proportionate Share of the net revenue interest resulting from such pooling.
c) In the event NDL acquires any Undeveloped Lease subject to a back-in reversionary interest or backin favor of any non-inaffiliate third Party, said Undeveloped Lease shall be subject to NDL’s reserved overriding royalty interest to the extent applicable as described above, but NDL’s overriding royalty interest will not apply to the back-in reversionary interest. Each Participant receiving an assignment of such Undeveloped Lease shall also bear its Proportionate Share of any back-in reversionary interest or back-inin such Undeveloped Lease.
d) c. If NDL owns less than 100% or is unable to acquire 100% %, of the oil and gas leasehold estate under the any drilling and spacing unit for a Wellunit, then the working interest assigned by NDL to each Participant’s Proportionate Share of the ownership within Participant participating in a new well in such drilling and spacing unit shall be proportionately reduced. If NDL is unable to acquire all depths and formations attributable to each Leasedrilling and spacing unit subject to this Participation Agreement, then the interest of each Participant’s Proportionate Share of the Leases Participant participating in a New Well in such drilling and spacing unit shall be limited to only those depths and formations so acquired by NDL.
e) d. All assignments shall include a unit description and pooling order, as applicable, and will be made without warranty of title, express or implied, other than a special warranty of title by delivering title free and clear of all liens, claims, mortgages and other encumbrances by, through and under the assignor and its affiliates but not otherwise.
Appears in 2 contracts
Samples: Joint Operating Agreement, Operating Agreement (New Source Energy Corp)