The Arkansas Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits is an important legal document that outlines the transfer of overriding royalty interests in Arkansas. This agreement allows the assignor to grant a portion of their net revenue interest to another party after deducting specific costs. The primary purpose of this assignment is to allocate a percentage of the assignor's net revenue interest to the assignee, providing them with a share of profits generated from the mineral or energy resource being extracted in Arkansas. This agreement enables the assignee to benefit financially from the production or sale of the resource without being directly involved in its extraction or management. The Arkansas Assignment of Overriding Royalty Interests is crucial for stakeholders involved in the oil, gas, or mineral extraction industry in the state. By entering into this arrangement, the assignor can effectively transfer a portion of their net revenue interest to the assignee, ensuring a consistent flow of income even after certain costs are deducted. Moreover, the assignee secures a stake in the project's net profits without assuming any operational or financial risks. Different types of Arkansas Assignment of Overriding Royalty Interests include: 1. Fixed Percentage Assignment: This type of assignment grants a fixed percentage of the assignor's net revenue interest to the assignee. The assignee receives a consistent share of the net profits throughout the term specified in the agreement. 2. Graduated Percentage Assignment: In this assignment, the percentage of the assignor's net revenue interest transferred to the assignee varies based on different performance or revenue thresholds. As the production or revenue increases, the assignee's percentage stake also increases proportionally. 3. Subject to Certain Costs Assignment: This assignment type deducts specific costs from the assignor's net revenue interest before transferring a percentage to the assignee. These costs may include production, transportation, processing, and marketing expenses that are considered necessary for revenue generation. The Arkansas Assignment of Overriding Royalty Interests protects the rights and interests of both the assignor and assignee. It clearly defines the terms and conditions of the assignment, including payment schedules, cost deductions, royalty calculation methods, and duration of the agreement. Overall, this document facilitates the effective transfer of overriding royalty interests in Arkansas, allowing both parties to benefit from the extraction and sale of valuable resources.
Arkansas Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs - Effectively A Net Profits
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How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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.
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: Unlike mineral and royalty interests, an overriding royalty interest runs with a lease and not with the land. Therefore, they only remain in effect for as long as a lease is in effect and they expire when a lease expires.
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, ...
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.
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.