A South Dakota Assignment of Overriding Royalty Interest (ORRIS) for a term of years is a legal document that transfers the rights to receive a portion of the royalties from an oil or gas lease in South Dakota for a specified period of time. This ORRIS is often used in the oil and gas industry to compensate the assignee for property rights and income derived from the production of oil and gas on a specific lease. The primary purpose of a South Dakota Assignment of ORRIS is to enable the assignee to benefit from the production of oil and gas within a designated area for a fixed number of years. This agreement outlines the terms and conditions under which the assignee will receive a percentage of the gross revenue generated from the lease's production, without assuming the operational or financial responsibilities associated with the lease. There are different types of South Dakota Assignment of ORRIS for a term of years, including: 1. Fixed-Term Assignment: This type of assignment grants the assignee the overriding royalty interest for a specific number of years, after which the interest returns to the assignor. 2. Extendable-Term Assignment: This assignment allows the assignee to extend the term of the ORRIS by meeting certain conditions or paying a fee. This ensures that the assignee continues to benefit from the production for an extended period. 3. Renewable-Term Assignment: A renewable-term assignment gives the assignee the option to renew the ORRIS for additional terms of the same duration. This type of assignment provides flexibility and security for the assignee. 4. Non-Renewable Term: Unlike the renewable-term assignment, a non-renewable term assignment does not allow the assignee to extend or renew the term. Once the specified term ends, the ORRIS reverts to the assignor. In order to create a valid South Dakota Assignment of ORRIS, certain elements must be included. These may include detailed descriptions of the leased premises, the term of assignment, the percentage of overriding royalty interest being assigned, the obligations of both parties, and any conditions or restrictions associated with the assignment. Overall, a South Dakota Assignment of Overriding Royalty Interest for a term of years provides a legal framework for the transfer of ownership and rights to receive royalties from oil and gas production. This document allows parties to derive financial benefits from the production for a fixed period, offering flexibility and potential income to the assignee.
South Dakota Assignment of Overriding Royalty Interest For A Term of Years
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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.
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.
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: 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.
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, ...
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.
