A Texas Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option is a legal document used in the oil and gas industry. This agreement allows the assignee to convert their overriding royalty interest (ORRIS) into a working interest if they choose to do so. It provides the assignee with the flexibility to participate in the operations and profits of the underlying oil and gas lease. The assignment typically states that the overriding royalty interest held by the assignee can be converted to a working interest in the oil and gas lease. This means that the assignee has the option to become a joint owner in the lease and take on the associated costs, risks, and potential rewards of drilling and producing the oil and gas. There are different types of Texas Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option, including: 1. Full Convertible Assignment: This type of assignment allows the assignee to convert their entire overriding royalty interest into a working interest. They will assume a percentage of ownership in the lease and will be responsible for their proportionate share of costs and royalty payments. 2. Partial Convertible Assignment: With a partial convertible assignment, the assignee can choose to convert only a portion of their overriding royalty interest into a working interest. This allows them to maintain some passive income from the remaining ORRIS while also participating in the lease operations to a limited extent. 3. Limited-Term Convertible Assignment: In some cases, an assignee may have the option to convert their overriding royalty interest to a working interest for a specified period. This allows them to evaluate the lease's performance for a limited time before committing to long-term involvement. After the predetermined period, the assignment could revert to its original terms, or the assignee may have the option to extend or convert it further. When entering into a Texas Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option, it is essential to consider various factors, such as the financial implications, risks, and potential benefits of conversion. It is advisable to seek legal counsel to ensure that the agreement is drafted accurately, protecting the interests of both the assignor and assignee.
Texas Assignment of Overriding Royalty Interest Convertible to A Working Interest At Assignee's Option
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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 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, ...
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
Overriding Royalty Interest (ORRI) 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.
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.