Net Profits Interest definition

Net Profits Interest means an interest in a Producing Property which entitles the holder thereof to a share of the gross revenues from oil and gas production from the Producing Property less all operating, production, development, transportation, transmission and marketing expenses, severance, sales, ad valorem and excise taxes (including the windfall profit tax) attributable to such production.

Net Profits Interest means a non-operating interest that creates a share in gross production from another (operating or non-operating) interest in oil and natural gas properties. The share is determined by net profits from the sale of production and customarily provides for the deduction of capital and operating costs from the proceeds of the sale of production. The owner of a net profits interest is customarily liable for the payment of capital and operating costs only to the extent that revenue is sufficient to pay such costs but not otherwise.

Net Profits Interest has the meaning set forth in the recitals.

Examples of Net Profits Interest in a sentence

• The Trustee shall cause a reserve report to be prepared by or for the Trust by the Independent Reserve Engineers as of December 31 of each year in accordance with criteria established by the Commission showing estimated proved oil, natural gas and natural gas liquids reserves attributable to the Net Profits Interest as of December 31 of such year and other reserve information required to comply with Section 5.03.

• The Trust uses the modified cash basis of accounting to report Trust receipts of the Net Profits Interest and payments of expenses incurred.

• Contingencies related to the Underlying Properties that are unfavorably resolved would generally be expected to result in reductions to cash receipts to the Trust in respect of the Net Profits Interest with corresponding reductions to cash distributions to Trust unitholders.

• The Net Profits Interest is passive in nature and neither the Trust nor the Trustee has any control over, or responsibility for, costs relating to the operation of the Underlying Properties.

• In both cases, CIRI will have the option to replace the NSR Royalty with a Net Profits Interest Royalty (10% before payback and 20% after).• CIRI Participation Option: Upon a production decision being made, CIRI will have the right to acquire up to a 15% working interest in the leased area by contributing 2 times its pro rata share of the cumulative project expenditures by the Company (other than AMR payments) to the date of the exercise of CIRI’s participation option.

More Definitions of Net Profits Interest

Net Profits Interest shall have the meaning given such term in Article I.

Net Profits Interest means the net profits interest to be conveyed to the Trust pursuant to the Conveyance.

Net Profits Interest means an overriding royalty calculated as a variable undivided percentage interest in and to the Subject Hydrocarbons entitling Grantee to receive a sum equal to the Proceeds Percentage of the Net Profits for each Payment Period for the term of this Conveyance.

Net Profits Interest means the net profits interest to be conveyed by Boaz Energy to the Trust pursuant to the Conveyance.

Net Profits Interest means the net profits interest to be conveyed by Enduro (through its wholly owned subsidiary) to the Trust through the Merger.

Net Profits Interest means that certain net profits overriding royalty interest defined on Annex 1 to the Assignment.

Net Profits Interest means each of (i) the net profits interest in the Developed Properties to be conveyed by PCEC to the Trust in the Conveyance and (ii) the net profits interest in the Remaining Properties to be conveyed by PCEC to the Trust in the Conveyance.