Kansas Assignment of Overriding Royalty Interest (By Owner of Override) refers to the legal process through which the owner of an overriding royalty interest in Kansas assigns or transfers their interest to another party. This assignment allows the assignee to collect and receive a portion of the proceeds from the production and sale of oil, gas, or other minerals associated with a lease or property. The Kansas Assignment of Overriding Royalty Interest provides a mechanism for the owner of the override to monetize their interest and potentially divest their ownership rights. This assignment is typically documented through a written agreement that outlines the terms, conditions, and responsibilities of both parties involved. There are two common types of Kansas Assignment of Overriding Royalty Interest (By Owner of Override): 1. Absolute Assignment: This type of assignment involves a complete transfer of the override interest from the owner to the assignee. The assignee assumes full ownership and receives all future royalty payments associated with the assigned interest. 2. Partial Assignment: In this type of assignment, the owner of the override transfers only a portion of their royalty interest to the assignee. The assignee will then receive a percentage of the future royalty payments associated with the assigned interest, while the owner retains the remaining percentage. Key Terms related to Kansas Assignment of Overriding Royalty Interest: 1. Overriding Royalty Interest: It refers to an interest in the production and sale of oil, gas, or other minerals that is separate from the working interest. The override is usually expressed as a percentage and entitles the owner to a portion of the proceeds before the working interest owners. 2. Assignor: The owner of the overriding royalty interest who is transferring or assigning their interest to another party is referred to as the assignor. 3. Assignee: The party receiving the assigned overriding royalty interest is referred to as the assignee. 4. Royalty Payments: Royalty payments are the monetary compensation received by the owner(s) of the overriding royalty interest from the production and sale of minerals associated with a lease or property. 5. Lease or Property: The agreement or contract granting rights to extract and produce minerals from a specific area of land is referred to as a lease or property. In summary, the Kansas Assignment of Overriding Royalty Interest (By Owner of Override) is a legal process that allows owners of overriding royalty interests to assign or transfer their rights to another party. The two main types are absolute assignment, involving a complete transfer, and partial assignment, where only a portion is transferred. This assignment serves as a means to monetize the overriding royalty interest in participating in the proceeds generated from mineral production in Kansas.
Kansas Assignment of Overriding Royalty Interest (By Owner of Override)
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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.
Calculating Overriding Royalty Interest An ORRI is a straight percentage. For example, a 2% override would appear on the royalty statement as 0.02 interest in the proceeds from the sale of the leased hydrocarbons.
To calculate the number of net royalty acres I'm selling, I use this formula: [acres in tract] X [% of minerals owned] X 8 X [royalty interest reserved in lease] X [fraction of royalty interest being sold]. 640 acres X 25% X 8 X 1/4 X 1/2 = 160 net royalty acres.
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.
An overriding royalty interest (ORRI) is an undivided interest in a mineral lease giving the holder the right to a proportional share (receive revenue) of the sale of oil and gas produced. The ORRI is carved out of the working interest or 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.
Overriding Royalty Interests To calculate the ORRI, multiply the gross production revenue by the ORRI interest percentage, and the figure gotten is what the ORRI owner is entitled to.
