South Carolina Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest is a legal document used in the state of South Carolina to transfer ownership of a portion of an oil and gas lease while reserving the right to receive overriding royalty interest. This assignment allows individuals or entities to sell, transfer, or assign a part of their rights and interests in an oil and gas lease to another party, while retaining a percentage of the royalty interest derived from the production of oil and gas on the leased property. Keywords: 1. South Carolina: This assignment is specific to the state of South Carolina, indicating that it is governed by the laws and regulations of the state. 2. Assignment: Refers to the act of transferring ownership rights and interests from one party to another. In this case, it involves assigning a partial interest in an oil and gas lease. 3. Partial Interest: Denotes that only a portion of the rights and interests in the lease is being transferred, allowing the assignor to retain some control and benefits. 4. Oil and Gas Lease: Indicates the specific type of lease being assigned, which grants the lessee the right to explore and extract oil and gas from a particular property. 5. Reserving: Signifies that the assignor is retaining certain rights or interests in the assigned lease. 6. Overriding Royalty Interest: Refers to the right to receive a percentage of the production revenue derived from the lease, even after the partial interest has been assigned. Types of South Carolina Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest: 1. Individual to Individual Assignment: This type of assignment involves the transfer of a partial interest in an oil and gas lease from one individual to another, while reserving an overriding royalty interest. 2. Individual to Company Assignment: In this case, an individual assigns a portion of their interest in an oil and gas lease to a company or corporation, while retaining an overriding royalty interest. 3. Company to Company Assignment: This type of assignment occurs when one company transfers a part of its rights and interests in an oil and gas lease to another company, while reserving an overriding royalty interest. 4. Company to Individual Assignment: Here, a company assigns a portion of its ownership rights in an oil and gas lease to an individual, while reserving a percentage of the overriding royalty interest. It is important to consult a legal professional to ensure the accuracy and validity of any South Carolina Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest document, as specific details and requirements may vary based on individual circumstances.
South Carolina Assignment of Partial Interest in Oil and Gas Lease Reserving An Overriding Royalty Interest
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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 ...
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.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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.
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.
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. The exact details of an override are dependent on the language.
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.
