A Hawaii Assignment of Overriding Royalty Interest with Proportionate Reduction is a legal agreement specific to the state of Hawaii that involves the transfer of overriding royalty interests from one party to another, while also adjusting the proportional allocation of those interests among different parties involved in the arrangement. This assignment is commonly used in the oil, gas, and mineral industries, where owners of mineral rights or leases may choose to assign a portion of their overriding royalty interests to third parties. The Hawaii Assignment of Overriding Royalty Interest with Proportionate Reduction allows the assigning party, known as the "assignor," to transfer a portion of their overriding royalty interest to the "assignee" in exchange for certain considerations, typically monetary compensation. This assignment is typically documented through a formal agreement, which outlines the terms and conditions of the transfer, including the specific percentage or fraction of the overriding royalty interest being assigned and any additional provisions that may be relevant to the parties involved. The assignment also involves a proportionate reduction in the interests of the other parties who hold an existing overriding royalty interest. This allocation adjustment ensures that the assigning party's reduction in interest is distributed proportionally among the remaining parties, maintaining balance and consistency in the overall ownership structure. Different types of Hawaii Assignment of Overriding Royalty Interest with Proportionate Reduction can vary depending on the specific terms and conditions agreed upon by the parties involved. Some common variations include: 1. Partial Assignment: This type of assignment involves the transfer of a specific fraction or percentage of the overriding royalty interest, leaving the assignor with a remaining interest. 2. Full Assignment: In this variation, the assignor transfers their entire overriding royalty interest to the assignee, relinquishing all rights associated with the interest. 3. Multi-Party Assignment: This type of assignment involves multiple assignors and assignees, allowing for the redistribution of overriding royalty interests among several parties while maintaining proportionate reduction. 4. Conditional Assignment: An assignment that includes certain conditions or contingencies, such as performance milestones or future events that need to occur before the transfer takes effect. It's important to note that the specific terms and conditions of a Hawaii Assignment of Overriding Royalty Interest with Proportionate Reduction may vary depending on the negotiation between the parties involved and the unique circumstances of the agreement. Additionally, seeking professional legal advice from an attorney familiar with Hawaii oil, gas, and mineral laws is recommended to ensure compliance with local regulations and optimal protection of interests in all parties involved in the assignment.
Hawaii Assignment of Overriding Royalty Interest with Proportionate Reduction
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FAQ
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: 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.
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.
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, ...
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.
