Florida Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option refers to a legal agreement in the oil and gas industry that involves the transfer of a royalty interest to another party, which can later be converted into a working interest. This type of assignment provides flexibility to the assignee, allowing them to choose to receive royalty payments or to actively participate in the operation and management of the oil or gas project. In Florida, there are various types of Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option, including: 1. Oil and Gas Lease Assignments: These assignments involve the transfer of an overriding royalty interest from the lessor to the assignee, which can be later converted to a working interest at the assignee's discretion. This allows the assignee to become actively involved in the exploration and production activities. 2. Joint Venture Agreements: In these arrangements, parties come together to form a joint venture for the purpose of developing oil and gas properties. The assignee, who holds an overriding royalty interest, may choose to convert it into a working interest, thus becoming a full participant in the joint venture's operations. 3. Farm-out Agreements: These agreements occur when the assignee, who holds an overriding royalty interest, enters into a contract with the assignor to take over the exploration and development of a specific portion of an oil or gas property. The assignee can convert the overriding royalty interest into a working interest to actively participate in extracting resources. 4. Exploration Agreements: In this scenario, the assignee acquires an overriding royalty interest in an oil and gas property with the option to convert it into a working interest during the exploration phase. If commercial quantities of hydrocarbons are discovered, the assignee can exercise the option and take on a working interest. When considering a Florida Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option, parties involved should seek legal advice to understand the specific terms and conditions, payment structure, responsibilities, and potential implications associated with the assignment.
Florida Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option
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If at any time Assignee desires to transfer or dispose of all or any portion of the Overriding Royalty Interest, Assignee must first give to Assignor written notice thereof stating: (a) the amount of the Overriding Royalty Interest offered by Assignee; (b) the form of consideration (which shall be either cash or a ...
There are three main types of royalty interests: 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 (ORRI) 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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
What Determines the Value of an Overriding Royalty Interest? Mineral interest location. One in a shale basin with high production is worth more. Producing oil and gas wells. Wells currently producing are valued more. ... Production reserves and levels. ... Prices.
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.
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, ...