Title: Rhode Island Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool) Introduction: The Rhode Island Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool) is a legal document that outlines the transfer of an overriding royalty interest from one party to another in relation to an oil or gas lease in Rhode Island. This assignment is applicable when the lease is non-producing but still encompasses the right to pool. Keywords: Rhode Island, Assignment of Overriding Royalty Interest, Non-Producing Lease, Single Lease, Right to Pool, Oil and Gas Lease Types of Rhode Island Assignment of Overriding Royalty Interest: 1. Individual Assignment: In this type of assignment, an individual party transfers their overriding royalty interest to another individual or entity. The assignment includes specific details such as the parties involved, the percentage of the interest being assigned, and the relevant lease agreement. 2. Corporate Assignment: A corporate assignment takes place when a business entity assigns its overriding royalty interest to another company or individual. This type of assignment involves additional considerations related to corporate law, such as authorization from the board of directors or shareholders. 3. Partial Assignment: A partial assignment of overriding royalty interest occurs when only a portion of the interest is transferred, while the assignor retains the remaining interest. This can be done for various reasons, such as diversifying investments or raising capital while maintaining some ownership in the lease. 4. Outright Assignment: An outright assignment is when the assignor completely transfers their entire overriding royalty interest to the assignee. This type of assignment is often used when the assignor wants to sever all ties and obligations related to the lease. Key Components of Rhode Island Assignment of Overriding Royalty Interest: 1. Parties involved: The assignment should clearly state the names, addresses, and roles of the assignor (the party transferring the interest) and assignee (the receiving party). 2. Description of the lease: It should provide detailed information about the oil or gas lease, including its location, identification numbers, and any relevant regulatory references. 3. Percentage of assignment: The assignment should specify the exact percentage or fraction of the overriding royalty interest being transferred from the assignor to the assignee. 4. Rights and obligations: It should outline the rights and obligations of both parties regarding the overriding royalty interest, including any liabilities or obligations to be assumed by the assignee. 5. Reserving the right to pool: This provision ensures that even though the lease might currently be non-producing, the assignor retains the right to pool the leased premises with adjacent properties if and when production occurs in the future. Conclusion: The Rhode Island Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool) is a crucial legal document that facilitates the transfer of an overriding royalty interest within the state. Understanding the different types of assignments and key components involved is essential to ensure proper documentation and the protection of parties' rights and interests.
Rhode Island Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool)
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FAQ
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.
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.
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.
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.
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.
A gross overriding royalty entitles the owner to a share of the market price of the mined product as at the time they are available to be taken less any costs incurred by the operator to bring the product to the point of sale.
Overriding Royalty Interests To calculate the ORRI, multiply the gross production revenue by the ORRI interest percentage, and the figure gotten is what the ORRI owner is entitled to.
