Oregon Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option is a legal agreement that involves the transfer of a specific interest in an oil or gas project located in the state of Oregon. This type of assignment allows the original assignor, or assignee, to convert their overriding royalty interest into a working interest, granting them more direct participation in the operation and development of the project. In this arrangement, the assignee initially holds an overriding royalty interest, which entitles them to a percentage of the revenue generated from the production of oil or gas. However, through the exercise of their option, the assignee has the choice to convert this royalty interest into a working interest. By doing so, they become actively involved in the exploration, drilling, and extraction processes, shouldering a portion of the project's costs and responsibilities. There are several types of Oregon Assignments of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option: 1. Full Conversion: In this type of assignment, the assignee exercises their option to convert their entire overriding royalty interest into a working interest. By doing so, they become a full participant in the project and take on a proportionate share of the expenses and risks associated with its operations. 2. Partial Conversion: In a partial conversion scenario, the assignee chooses to convert only a portion of their overriding royalty interest into a working interest. This allows them to balance their involvement and personal financial commitment to the project, while still benefiting from the royalty income generated by the remaining interest. 3. Convertible with Conditions: Some assignments may include specific conditions that must be met before the assignee can exercise their option to convert their overriding royalty interest into a working interest. These conditions may include reaching specific production milestones, financial requirements, or other predetermined criteria. 4. Convertible at a Later Date: In certain cases, the option to convert the overriding royalty interest into a working interest may not be immediately available. The assignment agreement may include a provision allowing the assignee to exercise their option at a future specified date, giving them time to evaluate the project's progress or secure additional funding. Overall, an Oregon Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option provides flexibility and potential for increased involvement for the assignee in an oil or gas project. It allows them to assess the project's performance and make strategic decisions regarding their level of participation based on their financial and operational objectives.
Oregon Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option
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Overriding Royalty Interest (ORRI) 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.
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 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, ...
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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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 ...
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.