Rhode Island Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits, is a legal document that transfers a portion of the assignor's net revenue interest to another party in the form of overriding royalty interests (ORI's). ORI's refer to the rights granted to an entity or individual to receive a percentage of revenue generated from an oil and gas lease or production. In this assignment, the assignor agrees to transfer a specific percentage of their net revenue interest to the assignee. The net revenue interest is calculated after deducting certain costs such as production expenses, marketing costs, and other relevant deductions. This allocation is crucial as it ensures the assignor receives their share of the revenue only after deducting necessary expenses. The Rhode Island Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits can be categorized into different types: 1. Fixed Percentage Assignment: This type of assignment establishes a fixed percentage of the assignor's net revenue interest that is transferred to the assignee. This percentage remains constant throughout the agreement, ensuring both parties have a clear understanding of their respective shares. 2. Floating Percentage Assignment: In this type of assignment, the percentage of assignor's net revenue interest that is transferred may vary based on specific conditions or events. For instance, the assignor may agree to assign a larger percentage if production exceeds a certain threshold or if certain milestones are achieved. 3. Limited-Term Assignment: This assignment type involves transferring the overriding royalty interests in a defined period. The assignee receives the assigned percentage of net revenue interest for a specific duration, after which the rights revert to the assignor. 4. Permanent Assignment: Unlike the limited-term assignment, a permanent assignment transfers the overriding royalty interests permanently from the assignor to the assignee. There is no expiration or reversion of rights in this type of assignment, and the assignee will continue to receive the assigned percentage of net revenue interest indefinitely. It is important to note that the specific terms and conditions of the Rhode Island Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs — Effectively A Net Profits can vary depending on the agreement between the parties involved. Seeking legal advice and ensuring clear and comprehensive documentation is crucial when dealing with such assignments to protect the interests of all parties involved.
Rhode Island Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs - Effectively A Net Profits
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FAQ
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.
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.
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.
Overriding Royalty Interest Example The mineral estate can be severed from the surface, beginning two separate chains of title. The mineral owner has the right to explore and develop the minerals, but the vast majority do not have the finances or knowledge to drill and operate a well.
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, ...