The form is used when the Assignor transfers, assigns, and conveys to Assignee an overriding royalty interest in the Leases and all of the oil, gas and other minerals produced, saved and marketed from the Lease equal to a pecentage of 8/8 (the Override ).
Texas Assignment of Overriding Royalty Interest in Overriding Royalty Interest Owner, No Proportionate Reduction In the oil and gas industry, Assignment of Overriding Royalty Interest plays a significant role in the ownership and management of mineral rights. Specifically focusing on Texas, this article aims to provide a detailed description of the Texas Assignment of Overriding Royalty Interest in Overriding Royalty Interest Owner without any Proportionate Reduction. An Overriding Royalty Interest (ORRIS) is a non-operating interest in an oil or gas lease. It is a percentage share of production, free of the expenses of drilling and production. These interests are commonly created when the mineral rights' owner seeks to lease their property to an operator who will explore and develop the resources. The Texas Assignment of Overriding Royalty Interest denotes the transfer of this ORRIS from the current owner, known as the Overriding Royalty Interest Owner (OHIO), to another party. This transfer is facilitated through a legally binding document known as an Assignment. The assignment process allows the OHIO to transfer their rights, benefits, and responsibilities associated with the ORRIS to the assignee. This can include receiving a portion of the generated revenue from the lease, participation in decision-making processes, and the right to inspect and audit records related to the lease operations. However, when the Assignment of Overriding Royalty Interest includes the condition of "No Proportionate Reduction," it signifies that the OHIO is not obligated to proportionately reduce their ORRIS share with any future assignments or changes in the ownership structure. In simpler terms, the OHIO can transfer their entire ORRIS without dividing it among multiple assignees. It is important to note that there can be various types of Texas Assignments of Overriding Royalty Interest, each with unique specifications based on the parties involved and the agreed terms. Apart from the Assignment of Overriding Royalty Interest in Overriding Royalty Interest Owner with No Proportionate Reduction, other types may include: 1. Assignment with Proportionate Reduction: In this type, the OHIO agrees to proportionately reduce their ORRIS share with each subsequent assignment, ensuring that the overall ORRIS is divided fairly among multiple assignees. 2. Partial Assignment: A partial assignment involves the transfer of only a portion of the ORRIS. This allows the OHIO to retain a percentage of the ORRIS while transferring the remaining percentage to the assignee. 3. Absolute Assignment: An absolute assignment is a complete transfer of the ORRIS, giving the assignee full ownership and control over the interest without any rights retained by the OHIO. In summary, the Texas Assignment of Overriding Royalty Interest in Overriding Royalty Interest Owner, No Proportionate Reduction, enables the transfer of the entire ORRIS without any division among future assignees. This assignment type provides flexibility to the OHIO in determining the overall ownership structure and allows for the potential consolidation of the ORRIS into the hands of a single party. Understanding the various types of assignments in Texas are crucial for both mineral rights owners and potential assignees to navigate the complexities of the oil and gas industry.
