Illinois Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest is a legal document that allows individuals or entities to assign only a portion of their interest in an oil and gas lease while reserving the right to receive a portion of the royalties generated from the lease. This type of assignment is commonly used in the oil and gas industry to allow for the sale or transfer of a partial interest in a lease while still retaining some financial benefits. The Illinois Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest includes several key elements. First, it identifies the assignor, who is the party currently holding the interest in the oil and gas lease, and the assignee, who is the party acquiring the partial interest. The document also specifies the percentage or fraction of the assignor's interest that is being assigned, along with any specific terms or conditions of the assignment. One important aspect of this type of assignment is the reservation of an overriding royalty interest in the assignor. An overriding royalty is a percentage of the gross production from the lease that is reserved by the assignor, regardless of the size of their assigned interest. This can be a valuable benefit for the assignor, as it provides them with ongoing income even after transferring a portion of their ownership in the lease. It is worth noting that there can be different types of Illinois Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest depending on the specific terms and conditions agreed upon by the parties involved. Some variations may include additional provisions such as cost-sharing agreements, operational rights, or limitations on the assignee's ability to further assign their interest. In summary, the Illinois Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest is a legal document that enables the sale or transfer of a partial interest in an oil and gas lease while reserving the right to receive a portion of the royalties generated from the lease. Assignors benefit from this arrangement by retaining an overriding royalty interest, providing them with ongoing financial benefits. Different types of this assignment may exist, depending on the agreed-upon terms and additional provisions between the parties involved.
Illinois Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest
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How to fill out Assignment Of Partial Interest In Oil And Gas Lease Reserving An Overriding Royalty Interest?
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FAQ
Any partial assignment of any lease shall segregate the assigned and retained portions thereof, and as above provided, release and discharge the assignor from all obligations thereafter accruing with respect to the assigned lands; and such segregated leases shall continue in full force and effect for the primary term ...
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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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 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.
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.
