Illinois Assignment of Overriding Royalty Interest Limited As to Depth refers to a legal document that enables the transfer of a specified portion or percentage of an overriding royalty interest (ORRIS) in an oil or gas lease. This type of assignment, as the name suggests, is restricted only to a specific depth or formation within the leased property. In Illinois, there are various types of Assignment of Overriding Royalty Interest Limited As to Depth, including: 1. Conventional Oil and Gas Assignment: This type of assignment is commonly used when the ORRIS is limited solely to the conventional oil and gas reservoirs found in the leased property. It allows for the transfer of rights and interests tied to specific depths associated with traditional hydrocarbon extraction. 2. Unconventional Oil and Gas Assignment: In recent years, with the rise in unconventional oil and gas exploration, such as shale gas or tight oil plays, specific assignments have been developed to cater to these specialized resources. This assignment restricts the ORRIS to unconventional formations or zones, such as shale beds or tight reservoirs, within the leased property. 3. Horizontal Drilling Assignment: With the advent of horizontal drilling techniques, which allow drilling in multiple formations horizontally from a single well bore, specific assignments have emerged. This type of assignment limits the ORRIS to the depths where horizontal drilling occurs, allowing for the allocation of royalties based on the length or section of the well bore that penetrates a particular formation. 4. Stratigraphic Assignment: A stratigraphic assignment focuses on a specific stratigraphic layer or formation within the leased property. It allows for the assignment of an ORRIS limited to the depths corresponding to a particular geological marker or formation, irrespective of the type of hydrocarbon reservoir present. The Illinois Assignment of Overriding Royalty Interest Limited As to Depth document includes crucial details such as the assignor (current owner of the ORRIS), the assignee (the party acquiring the ORRIS), the description of the specific depth or formation assigned, the consideration or payment involved, and any additional terms or conditions set forth in the agreement. Assignments of Overriding Royalty Interest Limited As to Depth are essential for facilitating the transfer of interests in oil and gas leases while ensuring clarity and specificity regarding the depth limitations. These agreements provide confidence and security to both parties involved in the transaction, enabling efficient management of royalties within specific depth intervals or formations in Illinois.
Illinois Assignment of Overriding Royalty Interest Limited As to Depth
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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.
Overriding Royalty Interest Example The mineral estate can be severed from the surface, beginning two separate chains of title. The mineral owner has the right to explore and develop the minerals, but the vast majority do not have the finances or knowledge to drill and operate a well.
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.
A gross overriding royalty entitles the owner to a share of the market price of the mined product as at the time they are available to be taken less any costs incurred by the operator to bring the product to the point of sale.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
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.
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.
