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.
Mississippi Reservation of Overriding Royalty Interest (MAORI) is a contractual arrangement commonly used in the oil and gas industry to protect the interest of the lessor or royalty owner in the event of subsequent leases or conveyances. It is a mechanism that allows the lessor to retain a certain percentage of royalties or interests on future mineral leases executed by the lessee, even after the original lease has expired or been assigned to another party. The MAORI serves as a safeguard to ensure that the lessor continues to receive benefits from subsequent leases, regardless of any changes in ownership or assignment. The overriding royalty interest refers to the percentage or fractional interest that the lessor retains in the future leases, which are in addition to the primary royalty interest usually established in the original lease agreement. The MAORI can be categorized into two main types: perpetual and term. 1. Perpetual MAORI: As the name suggests, a perpetual MAORI grants the lessor an overriding royalty interest that extends indefinitely, even beyond the expiration or termination of the original lease. This type of reservation ensures that the lessor maintains a continuous interest in future mineral leases for as long as production activities continue on the property. It can be assigned or conveyed along with the underlying land. 2. Term MAORI: A term MAORI, on the other hand, only entitles the lessor to retain an overriding royalty interest for a specific period defined in the original lease contract. Once the term expires, the overriding royalty interest ceases to exist, and the lessee or subsequent assigns can freely negotiate new leases without any encumbrances. Both types of MAORI have their specific advantages and limitations, depending on the lessor's objectives and the dynamics of the particular mineral rights involved. Perpetual MAORI provides a more secure long-term interest, whereas term MAORI may allow for more flexibility in reevaluating and renegotiating future lease terms. The Mississippi Reservation of Overriding Royalty Interest is an essential contractual tool that safeguards the lessor's interest and ensures a continued flow of royalties from subsequent mineral leases. It adds a layer of protection for the lessor, even in situations where the original lease may change hands or expire.
