Title: Understanding the Kansas Assignment of Overriding Royalty Interest Limited As to Depth Introduction: The Kansas Assignment of Overriding Royalty Interest Limited As to Depth is a legal arrangement that governs the ownership and transfer of certain mineral rights in the state of Kansas. This comprehensive guide aims to provide a detailed explanation of this assignment, its purpose, and the various types involved. Keywords: Kansas, Assignment, Overriding Royalty Interest, Limited As to Depth 1. Definition and Purpose: The Kansas Assignment of Overriding Royalty Interest Limited As to Depth is a legally binding agreement wherein an overriding royalty interest (ORRIS) holder assigns a specific portion of their interest to another party for a defined depth limit. The purpose is to allow operators or investors to acquire a fraction of the interest without assuming liability for the entire depth or area of the mineral tract. 2. Mechanics of the Assignment: a. Assigning Interest: In the Kansas Assignment of Overriding Royalty Interest Limited As to Depth, the assignor (current ORRIS holder) transfers a fixed percentage or portion of their ORRIS to the assignee (potential holder) limited to a specific depth below the surface. b. Depth Limitation: The assignment is restricted to a pre-determined depth, typically specified in the agreement, beyond which the assignee has no rights or interests. c. Legal Documentation: The assignment is formalized through legal documentation, including an assignment contract, which outlines the terms and conditions agreed upon by both parties. 3. Different Types of Kansas Assignment of Overriding Royalty Interest Limited As to Depth: a. Singular Depth Limitation: This type involves assigning an overriding royalty interest limited to a single depth, such as 1,000 feet. The assignee's rights extend from the surface to the specified depth, terminating below that point. b. Multiple Depth Limitations: Some assignments permit the assignor to divide their ORRIS into separate depth increments, allowing the assignee to hold distinct interests in various depths. For example, an overriding royalty interest may be assigned limited to 500 feet and another to 1,000 feet. c. Varying Geographical Areas: In some cases, assignments may be limited not only to a specific depth but also to a defined geographical area. This further restricts the assignee's rights to a specific depth within a designated region. 4. Parties Involved: a. Assignor: The current holder of the overriding royalty interest who chooses to transfer a portion of their interest to another party for a limited depth. b. Assignee: The party acquiring a partial interest in the overriding royalty interest, limited to a specific depth below the surface. c. Operator: The entity responsible for developing and operating the mineral tract covered by the assignment. While not directly involved in the assignment process, they benefit from it as the operator of the property. Conclusion: The Kansas Assignment of Overriding Royalty Interest Limited As to Depth is a crucial aspect of mineral rights transactions which allows assignors to maintain partial ownership while giving others an opportunity to benefit from a specific portion of the mineral tract. By understanding the mechanics, different types, and the parties involved, individuals can make informed decisions regarding their overriding royalty interests and depth limitations in Kansas.
Kansas Assignment of Overriding Royalty Interest Limited As to Depth
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However, unlike royalty and working interests, an overriding royalty interest cannot be fractionalized unlike royalty and working interests. The ORRI is a non-possessory, undivided right to a share of the oil and gas production, but it excludes the production costs of the mineral lease.
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.
Essentially, NPRI is the royalty severed from minerals just as minerals are severed from the surface interest. Unlike mineral owners, non-participating royalties do not have executive rights in lease negotiations, leasing incentives, or rental payments. They just receive the actual production proceeds.
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 ...
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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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, ...
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.
