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Assigning Interest

Discuss anything to do with property law - buying, selling property

Assigning Interest

Postby Seorus » Sun Mar 12, 2017 2:29 am

I am new in the oil and gas business and am confused about the differences between companies assigning lease interest, working interest and wellbore interest.  Could you help explain the differences.  Thank you for your input
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Assigning Interest

Postby Radnor » Mon Mar 13, 2017 6:25 pm

Hello Michelle.  I will answer from a Texas perspective.  All of the assignments mentioned by you are leasehold assignments, or assignments of working interests.   A working interest in a lease is a "lease interest"---for example, If I take a lease and I own the working interest in the lease(which is the cost bearing side), and I assign a 25% leasehold interest to you, you will own 25% of the working interest in the lease.  In effect, leasehold interest is often used interchangeably with the term working interest.

A wellbore assignment is an assignment of working or leasehold interest in a lease, but only as to the wellbore of the assigned well.  A wellbore interest is entitled to only that production which comes from that wellbore, and has no other interest in the lease outside of that wellbore.

I hope this helps. Let me know if you have any further questions.
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