The Oklahoma Assignment of After Payout Working Interest and the Right to Convert Overriding Royalty Interest to a Working Interest is an important legal agreement that governs the transfer of rights and interests in oil and gas properties in the state of Oklahoma. This assignment allows parties involved to assign their working interests and convert overriding royalty interests to working interests after the payout threshold has been achieved. The main purpose of this assignment is to provide flexibility and options for parties involved in oil and gas operations. It enables the conversion of a passive royalty interest, known as overriding royalty interest (ORRIS), to an active working interest (WI) in the event that the ORRIS owner desires more control and involvement in the operations and development of the property. There are a few different types of Oklahoma Assignment of After Payout Working Interest and the Right to Convert Overriding Royalty Interest to a Working Interest, each with its own variations and conditions: 1. Traditional Assignment: This is the most common type where an ORRIS owner assigns their overriding royalty interest to another party in exchange for an assigned working interest after a specific payout threshold is reached. 2. Partial Assignment: This type allows for the assignment of only a portion of the overriding royalty interest, while retaining the remaining interest. This can be useful when an ORRIS owner wants to balance their passive income with actively participating in the operations. 3. Convertible Assignment: This type involves the potential conversion of overriding royalty interest to working interest, usually at the discretion of the ORRIS owner. The conversion may be triggered by reaching a specific payout threshold or other predetermined conditions. 4. Customized Assignment: Depending on the agreement between parties, assignments may be tailored to meet specific needs and requirements. This could include negotiated terms for payout threshold, assignment percentages, overriding royalty interest conversion, and other relevant terms. The Oklahoma Assignment of After Payout Working Interest and the Right to Convert Overriding Royalty Interest to a Working Interest is a complex legal document that should be prepared and reviewed by experienced professionals knowledgeable in oil and gas law. It is crucial for all parties involved to thoroughly understand the terms and implications of the assignment before entering into any agreements. By utilizing this assignment, stakeholders in oil and gas properties can have the flexibility to tailor their ownership interests according to their requirements and objectives.
Oklahoma Assignment of After Payout Working Interest and the Right to Convert Overriding Royalty Interest to A Working Interest
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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, ...
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
What Determines the Value of an Overriding Royalty Interest? Mineral interest location. One in a shale basin with high production is worth more. Producing oil and gas wells. Wells currently producing are valued more. ... Production reserves and levels. ... Prices.
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.
There are three main types of royalty interests: 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.
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 ...