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This form is used by the Assignor to transfer, assign, and convey to Assignee an overriding royalty interest in a Lease and all oil, gas and other minerals produced, saved and sold from the Lease and Land.
If production levels change after the assignment, the ORRI holder's share based on the stated percentage will still apply. So, if the production spikes, they’ll be happy as a lark—but a drop means they might not be so chipper!
Yes, assigning ORRIs is quite common! Many working interest owners assign their interests as part of business strategy, similar to liquidating assets in a financial portfolio when it makes sense.
Once the ORRI is assigned, it's usually a done deal. It's like giving away the keys to your car; you can't just take them back whenever you feel like it—unless there's a special arrangement!
The 'stated percentage' refers to the specific portion of profits that the new owner of the ORRI will receive from production. It’s like a recipe—everyone gets their share based on how much they brought to the table.
A single lease is a legal agreement for the exploration and production of oil or gas on one specific piece of land. Think of it as a rental agreement for just one property, not a portfolio!
An owner can assign their overriding royalty interest by drafting a legal document that transfers their rights to someone else. It’s like passing the baton in a relay race, allowing the new owner to enjoy the benefits.