The Kentucky Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits is a legal agreement that allows an assignor to transfer a portion of their net revenue interest, after deducting specific costs, to another party known as the assignee. This arrangement is commonly used in the oil and gas industry, where parties want to assign a percentage of their net profits to other individuals or entities. The Kentucky Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest serves as a mechanism to distribute the benefits of oil and gas operations. Under this agreement, the assignor assigns a specific percentage of their net revenue interest, which is the portion of revenue received from the production and sale of oil and gas, after certain costs are deducted. The assignor retains their net revenue interest, but the assigned percentage is transferred to the assignee, granting them a right to receive a portion of the net profits generated from the oil and gas operations. By doing so, the assignor and assignee can distribute the risks and rewards associated with oil and gas ventures, allowing for a more equitable sharing of financial burdens and gains. It's important to note that there might be different variations or specific types of the Kentucky Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits, tailored to individual circumstances or preferences. Some additional variations could include: 1. Partial Assignment: This type of assignment involves transferring only a portion of the assignor's net revenue interest to the assignee, allowing the assignor to maintain a controlling interest while sharing some benefits. 2. Fixed Percentage Assignment: In this case, a fixed percentage of the assignor's net revenue interest is assigned to the assignee, ensuring a consistent share of net profits based on that assigned percentage. 3. Limited Assignment: This type of assignment might place limitations on the assignee's rights and interests, such as restrictions on decision-making powers or a time-limited assignment period. 4. Non-Recourse Assignment: This variation limits the assignee's liability to the assigned net profits and protects them from being held responsible for any debts or obligations beyond the profits generated. In summary, the Kentucky Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits is a legal agreement used in the oil and gas industry to transfer a portion of an assignor's net revenue interest to an assignee, allowing for a more equitable distribution of profits. The different types of this assignment can vary based on the assigned percentage, limitations, or protection against liabilities.
Kentucky Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs - Effectively A Net Profits
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FAQ
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.
Hear this out loud PauseOverriding 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.
Hear this out loud PauseOverriding 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.
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, ...
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.