This provision provides for the assignor to except from this assignment and reserve an overriding royalty interest of all oil, gas, casinghead gas, and other minerals that may be produced from the lands under the terms of the Leases that are the subject of this assignment.
The Minnesota Reservation of Overriding Royalty Interest is a legal provision used in the oil and gas industry to grant a specific interest in the production from a property. It is typically established through a written agreement or lease between a mineral owner and a lessee, where the mineral owner reserves the right to receive a share of the production, known as the overriding royalty interest (ORRIS). This interest is separate from the mineral ownership and is paid out of the lessee's share of the production. Keywords: Minnesota Reservation, Overriding Royalty Interest, oil and gas industry, production, property, agreement, lease, mineral owner, lessee, overriding royalty interest (ORRIS), mineral ownership. Different types of Minnesota Reservation of Overriding Royalty Interests: 1. Fixed Override Royalty Interest: This type of ORRIS specifies a fixed percentage or fraction of the production that the mineral owner is entitled to receive. For example, a mineral owner may reserve a 1% ORRIS, which means they are entitled to 1% of the total production from the property. 2. Floating Override Royalty Interest: In this type of ORRIS, the percentage or fraction of the production that the mineral owner is entitled to receive may vary based on certain factors. For instance, the percentage could change depending on the price of oil or gas, the level of production, or other contractual provisions. 3. Time-Limited Override Royalty Interest: This ORRIS is in effect for a specified period rather than being perpetual. The mineral owner retains the overriding royalty interest only until a certain milestone, such as the recovery of a specified volume of production or a specific duration. 4. Cumulative Override Royalty Interest: With this type of ORRIS, the overriding royalty interest accumulates until a certain threshold is reached. Once the threshold is attained, the mineral owner becomes entitled to receive their share of the accumulated ORRIS, which could be paid in a lump sum or over a period determined by the agreement. 5. Non-Participating Override Royalty Interest: This ORRIS provides the mineral owner with a share of the production but does not grant them the right to participate in any other aspects of the lease, such as leasing additional mineral rights or approving drilling operations. 6. Convertible Override Royalty Interest: A convertible ORRIS offers the mineral owner the option to convert their overriding royalty interest into a working interest. This means they can elect to become a direct participant in the management, operation, and costs of production in exchange for giving up their ORRIS. By understanding these different types of Minnesota Reservation of Overriding Royalty Interests, mineral owners and lessees can negotiate agreements that align with their specific needs and objectives in the oil and gas industry.
