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.
Hawaii Reservation of Additional Interests in Production is a legal term often used in the context of oil and gas leases. It refers to a provision that allows the lessor (the Hawaiian government) to retain a share of the produced oil or gas in addition to the royalty payments. Under the Hawaii Reservation of Additional Interests in Production, the lessor reserves the right to receive a certain percentage or quantity of the produced hydrocarbons. This provision ensures that the Hawaiian government maintains an ownership interest in the natural resources being extracted from its land or waters, in addition to receiving royalty payments from the lessee (the company undertaking the extraction). There are two main types of Hawaii Reservation of Additional Interests in Production commonly employed in lease agreements: 1. Overriding Royalty Interest (ORRIS): This type of reservation gives the lessor a specified percentage of the hydrocarbons produced, usually free of any costs related to exploration, drilling, or operation. The ORRIS does not include any financial responsibilities, but it entitles the lessor to receive a proportionate share of the revenue generated by the production. 2. Net Profit Interest (NPI): In contrast to an ORRIS, a Net Profit Interest provides the lessor with a share of the actual net profits generated from the sale of the produced hydrocarbons. Unlike an ORRIS, the NPI includes the proportionate share of costs, including production, transportation, processing, and marketing expenses. The lessor's interest is calculated after deducting these costs from the gross revenue. Both the ORRIS and NPI serve to protect the Hawaiian government's stake in the production while ensuring it shares in the financial benefits derived from the extraction. These provisions help balance the interests of both parties involved in an oil and gas lease. In conclusion, the Hawaii Reservation of Additional Interests in Production is a contractual provision that allows the lessor to retain a share of the produced hydrocarbons in addition to royalty payments. The two main types, Overriding Royalty Interest (ORRIS) and Net Profit Interest (NPI), outline different ways in which the lessor can participate in the financial benefits of the production. These provisions aim to establish a fair and equitable arrangement between the Hawaiian government and the lessee.Hawaii Reservation of Additional Interests in Production is a legal term often used in the context of oil and gas leases. It refers to a provision that allows the lessor (the Hawaiian government) to retain a share of the produced oil or gas in addition to the royalty payments. Under the Hawaii Reservation of Additional Interests in Production, the lessor reserves the right to receive a certain percentage or quantity of the produced hydrocarbons. This provision ensures that the Hawaiian government maintains an ownership interest in the natural resources being extracted from its land or waters, in addition to receiving royalty payments from the lessee (the company undertaking the extraction). There are two main types of Hawaii Reservation of Additional Interests in Production commonly employed in lease agreements: 1. Overriding Royalty Interest (ORRIS): This type of reservation gives the lessor a specified percentage of the hydrocarbons produced, usually free of any costs related to exploration, drilling, or operation. The ORRIS does not include any financial responsibilities, but it entitles the lessor to receive a proportionate share of the revenue generated by the production. 2. Net Profit Interest (NPI): In contrast to an ORRIS, a Net Profit Interest provides the lessor with a share of the actual net profits generated from the sale of the produced hydrocarbons. Unlike an ORRIS, the NPI includes the proportionate share of costs, including production, transportation, processing, and marketing expenses. The lessor's interest is calculated after deducting these costs from the gross revenue. Both the ORRIS and NPI serve to protect the Hawaiian government's stake in the production while ensuring it shares in the financial benefits derived from the extraction. These provisions help balance the interests of both parties involved in an oil and gas lease. In conclusion, the Hawaii Reservation of Additional Interests in Production is a contractual provision that allows the lessor to retain a share of the produced hydrocarbons in addition to royalty payments. The two main types, Overriding Royalty Interest (ORRIS) and Net Profit Interest (NPI), outline different ways in which the lessor can participate in the financial benefits of the production. These provisions aim to establish a fair and equitable arrangement between the Hawaiian government and the lessee.
