Georgia Assignment of Overriding Royalty Interest (No Proportionate Reduction) is a legal agreement pertaining to the allocation of royalties derived from oil and gas production in the state of Georgia. This document ensures that the assignee receives a fixed percentage of the total royalty interest without any reduction, even if the production levels increase. The key purpose of the Georgia Assignment of Overriding Royalty Interest (No Proportionate Reduction) is to provide certainty and stability to the assignee by safeguarding their interest against any decrease that would typically occur due to the increase in overall production. This assignment agreement guarantees a static percentage of overriding royalty interest, irrespective of fluctuations in the production levels over time. There are several types of Georgia Assignment of Overriding Royalty Interest (No Proportionate Reduction), some of which include: 1. Individual Assignment: This type of assignment involves a single assignee, who receives a fixed percentage of the overriding royalty interest without any proportionate reduction regardless of production fluctuations. 2. Corporate Assignment: In this case, a corporate entity is assigned the overriding royalty interest, ensuring a constant percentage return on the total royalty interest. 3. Limited Partnership Assignment: This type of assignment involves a limited partnership that receives a predetermined share of the overriding royalty interest, unaffected by changes in production levels. 4. Trust Assignment: A trust is assigned the overriding royalty interest, guaranteeing a fixed percentage of the royalty income without any reduction, irrespective of the changes in production. The Georgia Assignment of Overriding Royalty Interest (No Proportionate Reduction) is a crucial legal agreement that protects the assignee's interest in securing a fixed percentage of the royalty income regardless of variations in production levels. The different types of assignments cater to various entities, including individuals, corporations, limited partnerships, and trusts, allowing them to benefit from stable royalty returns to the state of Georgia.
Georgia Assignment of Overriding Royalty Interest (No Proportionate Reduction)
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FAQ
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.
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.
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.
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 (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.
An overriding royalty interest (ORRI) is similar to a royalty interest in that it is also a portion of the proceeds from the sale of production. However, it is not retained under the terms of the oil and gas lease. An ORRI is granted, assigned and created under the terms of a separate document.
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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.