Participation Agreement for Oil and Gas Exploration

Create a Legally Structured Gross Overriding Royalty (GORR) Agreement for Alberta Oil & Gas Properties with this easy-to-use template.

Designed for use in Alberta's oil and gas industry, this downloadable Gross Overriding Royalty Agreement (GORR) Template grants a gross overriding royalty interest in petroleum and natural gas rights to an interested party while addressing key operational, payment, and sales / marketing provisions.

This agreement establishes the terms under which the gross overriding royalty is created, administered, paid, and enforced.

What Is a Gross Overriding Royalty?

A Gross Overriding Royalty (GORR) is a royalty interest carved out of a working interest in oil and gas lands. Unlike a working interest owner, the royalty holder is entitled to a share of production revenue without bearing the costs of exploration, drilling, development, operation, production, or transportation.

Unlike an Overriding Royalty (ORR), which is based on net proceeds or wellhead production,  a GORR entitles the royalty holder to a specified percentage of the gross revenues generated from the sale of the petroleum products.

Key Features of This Alberta Gross Overriding Royalty Agreement

• Grant of Gross Overriding Royalty. The Grantee receives a specified percentage royalty on sales of petroleum substances produced from the lands covered by the agreement. The royalty is payable free and clear of exploration, drilling, operating, production, transportation, and other related costs, subject only to any specifically agreed deductions.
• Sales and Marketing. The Grantor markets and sells the petroleum substances as agent for the Grantee on the same terms and conditions applicable to its own production. This ensures the royalty holder receives the benefit of available market opportunities and pricing.
  
  
• Royalty Payments Held in Trust. Any royalty proceeds received by the Grantor on behalf of the Grantee are held in trust until remitted, providing additional protection for royalty revenues.
  
  
• Option to Take Share in Kind. The Grantee may elect, upon proper notice, to receive its royalty share of production in kind rather than in cash, providing flexibility in managing royalty interests.
  
  
• Security and Lien Rights. The agreement grants the Grantee lien and security rights against the Grantor's interest to help secure payment of royalties and other obligations under the contract.
  
  
• Applicable Law. The agreement is governed by the laws of the Province of Alberta, and should only be used for Alberta oil and gas properties and mineral rights.

Benefits of Using This Template

• Save time and legal drafting costs.
• Clearly document royalty ownership and payment obligations.
• Protect royalty revenues with trust and lien provisions.
• Address marketing and sale of production rights.
• Establish procedures for royalty payments and reporting.
• Suitable for oil, gas, petroleum, and natural gas properties in Alberta.
• Easy to customize for specific transactions and royalty arrangements.
• Instant download and immediate use.

Common Uses

This Gross Overriding Royalty Agreement is commonly used in connection with:

• Farmout agreements
• Oil and gas property acquisitions
• Asset purchase transactions
• Working interest assignments
• Joint venture arrangements
• Mineral rights transactions
• Royalty financing transactions
• Production-sharing arrangements.

Download Your Alberta Gross Overriding Royalty Agreement Today

Whether you are a producer, investor, royalty owner, or energy company, this Alberta Gross Overriding Royalty Agreement Template provides a professional cost-effective means to document royalty interests and protect your rights. Download, customize, use and reuse as often as needed.

Prepare a surface lease agreement for oil and gas assets on rural farm land with this downloadable template lease form for lands located in the Province of Alberta.

• Parties. The agreement is between the landowner and the oil company which will extract the resources.
• Use of Land. The lease allows the oil company to use the land for exploration, development and production of oil, gas, and related hydrocarbons.
• Rent. The agreement breaks down the first year's rent and annual rent to show how compensation is allocated for market value (first year), loss of use, adverse effect, general disturbance (first year), and additional wells.
• Maintenance of the Land. The oil company agrees to apply good soil conservation practices to strip, conserve and restore the topsoil, and will construct proper sludge pits and dispose of the sludge in accordance with the laws.
• Surrender. The drilling company has the right to surrender and terminate all or a portion of the leased lands at any time, on proper notice, but will not receive a refund of any rent paid in advance.
• Governing Laws. The agreement is intended for use in the Province of Alberta.
• The template is available in MS Word format. Fully editable and reusable.