Kentucky Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest is a legal document that outlines the transfer of a partial ownership stake in an oil and gas lease located within the state of Kentucky, while also reserving an overriding royalty interest for the assignor. This assignment agreement allows individuals or entities to sell or transfer a percentage of their rights, interests, and responsibilities in an oil and gas lease to another party, while retaining a portion of the proceeds in the form of an overriding royalty interest. The Kentucky Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest serves as a legally binding contract that protects the interests of both the assignor and the assignee. It ensures that the assignor receives ongoing royalty payments, known as overriding royalties, from the production and sale of oil and gas on the leased property, even after the partial interest has been assigned to another party. This type of assignment agreement is commonly used in the oil and gas industry when a lease owner wants to transfer a portion of their rights to another party, while still maintaining a financial stake in the lease. By reserving an overriding royalty interest, the assignor continues to benefit financially from the production activities on the leased property, while also allowing the assignee to actively participate in the management and decision-making process related to the property. There can be different variations or types of the Kentucky 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 common types may include: 1. Assignment of a Percentage Interest: This type involves transferring a specific percentage of the assignor's interest in the lease to the assignee, while reserving an overriding royalty interest proportional to the assigned percentage. 2. Assignment of Specific Tracts: In some cases, the assignment may apply only to certain tracts or specific portions of the leased property. This allows the assignor to retain an interest in other tracts while granting a partial interest in specific areas. 3. Assignment for a Limited Duration: Occasionally, an assignment may have a time restriction, where the assignor transfers their partial interest for a specific period, after which the rights revert to the assignor. In summary, the Kentucky Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest is a crucial legal document that facilitates the transfer of partial ownership in an oil and gas lease while ensuring the assignor retains a financial interest through overriding royalty payments. The specific terms and conditions of the assignment can vary, depending on the parties involved and the desired outcome.
Kentucky 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 ...
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, ...
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.
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: 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.
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 ...
