An Alaska Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option is a legal agreement often used in the oil and gas industry. This document allows the assignor (the current owner of the royalty interest) to transfer their overriding royalty interest (ORRIS) in an Alaska oil and gas project to the assignee (the new owner). Keywords: Alaska, Assignment, Overriding Royalty Interest, Convertible, Working Interest, Option There are various types of Alaska Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option, depending on the specific terms and conditions outlined in the agreement. These types include: 1. Fixed Conversion Rate Agreement: This type of assignment specifies a fixed conversion rate at which the overriding royalty interest can be converted into a working interest. The assignor and assignee agree to a predetermined ratio or percentage for the conversion. 2. Formulaic Conversion Agreement: In this type of assignment, the conversion rate is determined based on a pre-defined formula. The formula may include factors such as commodity prices, production rates, or other industry-related variables. The assignee has the option to convert the ORRIS into a working interest based on the calculated rate. 3. Variable Conversion Rate Agreement: Unlike the fixed or formulaic conversion rate agreements, a variable conversion rate agreement allows the conversion rate to be adjusted over time. This adjustment is typically made in response to changes in market conditions, government regulations, or project-specific factors. 4. Partial Conversion Agreement: This type of assignment enables the assignee to convert only a portion of the overriding royalty interest into a working interest. The assignee can exercise this option based on their preference or specific project requirements. It allows for a more flexible allocation of ownership interests. 5. Time-Limited Conversion Agreement: In some cases, the assignment may include a specific time limit during which the assignee can exercise their option to convert the ORRIS into a working interest. This agreement provides a predefined window of opportunity for the assignee to decide if they want to convert their interest. Overall, an Alaska Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option is a versatile legal agreement that allows parties involved in an oil and gas project to transfer ownership interests and provides the assignee with the flexibility to convert their ORRIS into a working interest based on various options and terms.
Alaska Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option
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FAQ
Working Interest (WI) Value ? Since the overriding royalty interest (ORRI) is a portion of the working interest, the WI value is the major determinant of the value of overriding mineral rights. The WI owner incurs all of the costs associated with exploration and development activity.
ORRIs are created out of the working interest in a property and do not affect mineral owners. An overriding royalty interest (ORRI) is often kept or assigned to a geologist, landman, brokerage, or any entity that was able to reserve an interest in the properties.
An overriding royalty interest (ORRI) is an interest carved out of a working interest. It is: A percentage of gross production that is not charged with any expenses of exploring, developing, producing, and operating a well.
Overriding Royalty Interest Conveyance means an assignment, in form and substance acceptable to Lender, pursuant to which Borrower grants in favor of Lender an overriding royalty interest equal to six and one-fourth percent (6.25%) of Hydrocarbons produced, saved and sold or used off the premises of the relevant Lease, ...
Calculating Overriding Royalty Interest An ORRI is a straight percentage. For example, a 2% override would appear on the royalty statement as 0.02 interest in the proceeds from the sale of the leased hydrocarbons.
You may convey overriding royalty interest on either an Assignment of Record Title Interest (Form 3000-3), a Transfer of Operating Rights (Form 3000-3a), or on a private assignment. We only require filing of one signed copy per assignment plus a nonrefundable filing fee found at 43 CFR 3000.12.
Overriding Royalty Interest: A given interest severed out of the record title interest or lessee's share of the oil, and not charged with any of the cost or expense of developing or operation. The interest provides no control over the operations of the lease, only revenue from lease production.