A Detailed Description of District of Columbia Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool) In the District of Columbia, an Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool) refers to a legal document that allows for the transfer of a non-producing overriding royalty interest in a single lease while reserving the right to pool or combine the assigned interest with other leases or interests. This type of assignment is commonly used in the oil and gas industry and serves as a means for investors or parties to acquire an interest in the potential future production of an oil or gas well. The assignment enables the assignee to receive a percentage of the gross revenue derived from the lease's production, known as the overriding royalty interest. The District of Columbia Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool) can be further classified based on specific terms and conditions outlined within the document. Here are a few possible types: 1. Fixed Percentage Assignment: This type of assignment specifies a fixed percentage of the overriding royalty interest that is being transferred to the assignee. The percentage is typically predetermined and remains constant throughout the life of the assignment. 2. Partial Assignment: In some cases, a partial assignment of overriding royalty interest is made, where only a portion of the available interest is transferred. This allows the assignor to retain a certain percentage while sharing the potential benefits with the assignee. 3. Time-Limited Assignment: A time-limited assignment sets a predetermined duration for the assignment of overriding royalty interest. This type of assignment may be used when the assignor believes that the lease has the potential for future production within a specified timeframe. 4. Contingent Assignment: In a contingent assignment, the transfer of overriding royalty interest is dependent on certain conditions. These conditions may include achieving specific production levels or meeting other predefined criteria. Only when these conditions are met does the assignment come into effect. It is essential to consult legal professionals who have expertise in oil and gas leases when dealing with District of Columbia Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool). They can provide guidance on drafting, interpreting, and executing such assignments to ensure compliance with state laws and industry practices.
District of Columbia Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool)
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FAQ
An overriding royalty interest (ORRI) is an undivided interest in a mineral lease giving the holder the right to a proportional share (receive revenue) of the sale of oil and gas produced. The ORRI is carved out of the working interest or lease.
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.
A gross overriding royalty entitles the owner to a share of the market price of the mined product as at the time they are available to be taken less any costs incurred by the operator to bring the product to the point of sale.
To calculate the number of net royalty acres I'm selling, I use this formula: [acres in tract] X [% of minerals owned] X 8 X [royalty interest reserved in lease] X [fraction of royalty interest being sold]. 640 acres X 25% X 8 X 1/4 X 1/2 = 160 net royalty acres.
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 Interests To calculate the ORRI, multiply the gross production revenue by the ORRI interest percentage, and the figure gotten is what the ORRI owner is entitled to.
