Also known as: carried interests · carry
Written by attorneys · grounded in primary & secondary sources — see below
A fractional interest in an oil-and-gas lease that is free of some or all costs of exploring, drilling, and completing the well. The holder earns royalties on production but lacks a working interest until the carrying party recoups its costs and often an additional multiple of those costs.
Connor Clark transferred a fractional working interest in his lease to Cobalt Energy. Cobalt agreed to drill and test the well to the casing point at its sole expense. Once Cobalt recovered its drilling costs plus an additional twenty percent, Connor regained a full working interest and began receiving production revenue.
Charlotte Chung retained counsel to negotiate a carried interest in a new prospect. She instructed her lawyer that the carry must extend through completion and that she would accept a reduced royalty in exchange. The lawyer followed those objectives when drafting the assignment.
Caitlin Crowley granted a carried interest to Continental Bank under a recorded assignment. When a later purchaser disputed the scope of the carry, the court examined the assignment language and surrounding circumstances to determine that the carry extended only to the casing point.
Select any source to read its text and confirm it supports the definition.
Colin Chambers formed a partnership that used a carried interest to finance drilling. The arrangement allowed the partnership to implement its enumerated power to develop the lease by shifting upfront costs to the carrying party.
Clifford Cox and Cardinal Insurance associated to carry on oil and gas development as co-owners for profit. Cox contributed the lease while Cardinal provided the carried interest covering all drilling costs, forming a partnership under the statute.
Camila Cervantes voluntarily assigned a carried interest to Cypress Technologies. The assignment reflected her deliberate choice to shift drilling costs rather than an involuntary muscular reaction or external compulsion.
A carried interest is free of some or all costs of exploring, drilling, and completing the well. The carry often extends only to the casing point, after which the carried party may bear its share of further expenses.
A carried interest is a fractional working-interest share that becomes burdened with costs only after payout. A royalty interest is a nonoperating interest that never bears drilling or operating costs.
The carried party typically regains a working interest once the carrying party recovers its costs plus any agreed multiple. Production income is then reallocated between the parties.
The term appears in private-equity and hedge-fund compensation, where managers receive a profits interest taxed at capital-gains rates. The core definition and examples remain grounded in oil-and-gas transactions.
…to do; for, according to the principle acted on in Smith v. Kenrick , the person working the mine had a right to win and carry away all the coal without leaving any wall or barrier. But that is not the real state of the case. The Defendants, in order to effect an object of their own, brought on to their land, or on…