South Dakota Assignment of Overriding Royalty Interests in Multiple Leases is a legal document that allows the transfer of overriding royalty interests (ORI's) from one party to another in relation to multiple oil and gas leases in South Dakota. An ORI is a contractual right that entitles the holder to a certain percentage of the revenue generated from the production and sale of oil and gas from a specific lease. This form of interest is typically given to a third party, known as the Assignee, by the original owner or lessee, called the Assignor. In South Dakota, there may be different types of Assignment of Overriding Royalty Interests in Multiple Leases, tailored to specific circumstances. These variations might include: 1. Specific Lease Assignments: This type of assignment applies to a particular lease or set of leases in South Dakota. It outlines the terms and conditions under which the Assignee acquires the overriding royalty interests from the Assignor exclusively for those leases specified. 2. Blanket Lease Assignments: This type of assignment covers multiple leases held by the Assignor in South Dakota. It consolidates the overriding royalty interests into a single agreement, simplifying the administrative process for the Assignor and Assignee. 3. Partial Assignment: In some cases, the Assignor may choose to transfer only a portion or percentage of their overriding royalty interests in multiple leases. This allows the Assignor to retain some benefits while still benefiting monetarily from the assigned portion. 4. Proportional Assignment: This type of assignment involves the transfer of overriding royalty interests in multiple leases in proportion to the Assignor's ownership or working interest in each lease. It ensures fair distribution of the assigned interests based on the Assignor's existing stake. In South Dakota, the Assignment of Overriding Royalty Interests in Multiple Leases typically includes essential components such as the effective date of the assignment, names and addresses of both the Assignor and Assignee, detailed description of the overriding royalty interests being assigned, consideration or compensation exchanged, and any relevant terms and conditions. It is crucial for all parties involved to carefully review and negotiate the terms of the assignment to ensure a fair and mutually beneficial agreement. Seeking legal advice or assistance from experienced professionals well-versed in South Dakota oil and gas laws is highly recommended navigating the complexities of this type of assignment effectively.
South Dakota Assignment of Overriding Royalty Interests for Multiple Leases
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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 ...
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, ...
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.
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.