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The main risk is that it’s based on the actual production. If the well isn’t producing, or if prices drop, your income could dry up. It’s a gamble, just like rolling the dice in a game of chance!
The phrase 'reserves right to pool' means that the production from the lease can be combined with other leases to maximize efficiency. Imagine gathering all your friends for a group dinner to share the bill—it’s much easier that way!
A single lease refers to a specific contract for oil and gas rights. You can think of it like a rental agreement for an apartment, allowing exploration and production of resources on a defined parcel of land.
'Non-producing' means that there's no oil or gas being extracted from the lease right now. It’s like having a plot of land you’re planning to farm, but you haven’t planted the seeds yet!
While a regular royalty interest is tied to land ownership, an ORI stands apart because it comes from the lease itself, even for those who don’t own the mineral rights. It’s like getting a piece of the action without being the owner of the lot!
An Overriding Royalty Interest, or ORI, is a share of the production revenue from an oil or gas lease that is not tied to the ownership of the land. Think of it as a slice of the pie that doesn’t require you to own the entire bakery!
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Orlando Florida Assignment of Overriding Royalty Interest (Non-Producing, Single Lease, Reserves Right to Pool)