Pennsylvania Assignment of Overriding Royalty Interest (No Proportionate Reduction) is a legal instrument utilized in the oil and gas industry to grant an individual or entity the right to receive a percentage of the revenues generated from the production of oil and gas from a particular property, without any reduction or deduction due to other assignments or interests. In Pennsylvania, there are various types of Assignment of Overriding Royalty Interest (No Proportionate Reduction) that can be executed, depending on the specific terms and conditions agreed upon between the parties involved. These types include: 1. Lease Assignment: A lease assignment is a common type of Pennsylvania Assignment of Overriding Royalty Interest (No Proportionate Reduction), where the assignor transfers his overriding royalty interest to the assignee. This allows the assignee to receive a specific share of the revenue generated from the leased property, without any reduction due to other assignments. 2. Well-specific Assignment: In some cases, an overriding royalty interest may be assigned for a specific well or group of wells, rather than for an entire property. This type of assignment grants the assignee the right to receive a portion of the revenue generated from the specified well(s), without any reduction due to other overriding royalty interests. 3. Lifetime Assignment: A lifetime assignment of overriding royalty interest is a type of assignment where the assignor grants the assignee the right to receive the overriding royalty interest for the assignor's lifetime. This means that the assignee will receive a percentage of the revenue generated from the property without any reduction during the assignor's lifetime, after which the assignment may terminate. It is important to note that the execution of a Pennsylvania Assignment of Overriding Royalty Interest (No Proportionate Reduction) requires a written agreement between the assignor and assignee, specifying the terms and conditions of the assignment, including the percentage of the overriding royalty interest, the duration of the assignment, and any additional provisions or limitations. In conclusion, a Pennsylvania Assignment of Overriding Royalty Interest (No Proportionate Reduction) is a legal arrangement that allows an individual or entity to receive a percentage of the revenue generated from oil and gas production from a specific property, without any reduction or deduction due to other assignments or interests. Different types of assignments can be executed, such as lease assignments, well-specific assignments, or lifetime assignments, depending on the mutually agreed terms.
Pennsylvania Assignment of Overriding Royalty Interest (No Proportionate Reduction)
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FAQ
Royalty interest in the oil and gas industry refers to ownership of a portion of a resource or the revenue it produces. A company or person that owns a royalty interest does not bear any operational costs needed to produce the resource, yet they still own a portion of the resource or revenue it produces.
An overriding royalty interest (ORRI) is an undivided interest in a mineral lease giving the holder the right to a proportional share (receive revenue) of the sale of oil and gas produced. The ORRI is carved out of the working interest or lease.
An overriding royalty interest (ORRI) is similar to a royalty interest in that it is also a portion of the proceeds from the sale of production. However, it is not retained under the terms of the oil and gas lease. An ORRI is granted, assigned and created under the terms of a separate document.
Essentially, NPRI is the royalty severed from minerals just as minerals are severed from the surface interest. Unlike mineral owners, non-participating royalties do not have executive rights in lease negotiations, leasing incentives, or rental payments. They just receive the actual production proceeds.
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.
Calculating Overriding Royalty Interest An ORRI is a straight percentage. For example, a 2% override would appear on the royalty statement as 0.02 interest in the proceeds from the sale of the leased hydrocarbons.
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.