This form is used when, as a result of continuous production from the Lease and Lands, payout, as defined in an Assignment, has occurred, and Declarant is entitled to elect to convert the Override to a Working Interest, as provided for in the Assignment.
The Arizona Declaration of Election to Convert Overriding Royalty Interest to Working Interest is a legal document specific to the state of Arizona that allows individuals or entities with an overriding royalty interest (ORRIS) in an oil or gas lease to convert it into a working interest (WI). This conversion grants the owner more involvement and control over the operations and revenues generated from the lease. Keywords: Arizona, Declaration of Election, Convert, Overriding Royalty Interest, Working Interest, Oil, Gas, Lease, Revenue, Operations, Control. There are different types of Arizona Declaration of Election to Convert Overriding Royalty Interest to Working Interest, based on various factors and circumstances: 1. Individual Conversion: In this scenario, an individual who holds an overriding royalty interest can elect to convert it into a working interest. It often occurs when the individual desires to have more control and direct involvement in the oil or gas lease operations. 2. Entity Conversion: Entities such as corporations, partnerships, or limited liability companies can choose to convert their overriding royalty interest to working interest. This conversion allows the entity to actively participate in decision-making, operations, and share in the revenues generated by the lease. 3. Partial Conversion: Sometimes, an owner may not wish to convert their entire overriding royalty interest to working interest. In such cases, the Arizona Declaration of Election allows for partial conversion, where the owner retains a portion of their ORRIS while converting the remaining interest into a WI. 4. Time-Limited Conversion: In certain circumstances, an Arizona Declaration of Election may include provisions for a time-limited conversion of an overriding royalty interest to working interest. This allows the owner to have a working interest for a specified period, after which the interest reverts to an ORRIS. 5. Conversion Upon Trigger Event: This type of Declaration becomes effective upon the occurrence of a specific trigger event, such as a change in operator, expiration of a lease, or the achievement of a certain production level. It offers flexibility and control for the owner, allowing them to convert their ORRIS to a WI based on determined conditions. 6. Conversion with Economic Thresholds: In some cases, the Arizona Declaration of Election may stipulate certain economic thresholds that need to be met before the overriding royalty interest can be converted into a working interest. These thresholds are typically based on financial viability or specific revenue benchmarks. It is essential to consult legal professionals and thoroughly understand the terms and implications outlined in the Arizona Declaration of Election to Convert Overriding Royalty Interest to Working Interest before making any decisions, as it involves complex legal and financial considerations.
