North Carolina Assignment of Overriding Royalty Interest with Proportionate Reduction is a legal arrangement that involves the transfer of a portion of the royalty interest associated with an oil and gas lease. This type of assignment is specific to the state of North Carolina and is commonly used in the oil and gas industry. An overriding royalty interest (ORRIS) is a percentage of the revenue generated from the production of oil and gas, paid to the interest holder. The North Carolina Assignment of ORRIS with Proportionate Reduction allows for the transfer of a specific percentage of the ORRIS to another party, while also proportionately reducing the interest of the assigning party. There are several types of North Carolina Assignment of ORRIS with Proportionate Reduction, each with its own unique provisions and conditions: 1. Partial Assignment: This type of assignment involves the transfer of a specific portion of the ORRIS. It allows the assigning party to maintain a part of the interest while sharing the revenue with the assignee. 2. Temporary Assignment: In certain cases, a temporary assignment of the ORRIS may be made, granting the assignee rights to the royalty interest for a specified period. This can be beneficial in situations where the assigning party temporarily requires funds or wants to diversify their portfolio. 3. Permanent Assignment: A permanent assignment means that the assigning party completely transfers their ORRIS to the assignee. This type of assignment is often made when the assigning party wants to divest themselves of their interest entirely. 4. Proportionate Reduction: The proportionate reduction aspect of the assignment ensures that the assigning party's retained interest is adjusted proportionally with the assigned percentage. This maintains the balance of interests in all parties involved. The North Carolina Assignment of ORRIS with Proportionate Reduction typically includes detailed provisions regarding the assignment process, payment terms, and conditions for transferring the interest. It also ensures that all parties involved comply with state laws and regulations regarding oil and gas leasing. Overall, the North Carolina Assignment of ORRIS with Proportionate Reduction is a legal instrument used in the oil and gas industry to transfer a portion of the royalty interest while proportionately reducing the assigning party's stake. These assignments can take various forms, such as partial, temporary, or permanent, depending on the specific needs and intentions of the parties involved.
North Carolina Assignment of Overriding Royalty Interest with Proportionate Reduction
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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.
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.
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.
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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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, ...
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.
Overriding 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.
