Michigan Assignment of Overriding Royalty Interest (No Proportionate Reduction) is a legal document that allows the transfer of an overriding royalty interest (ORRIS) in a Michigan oil and gas lease without proportionate reduction. ORRIS is a non-operating interest in the production of oil and gas, entitling the interest owner to a specified portion of the revenue generated from the production. In a typical Michigan Assignment of Overriding Royalty Interest (No Proportionate Reduction), the assignor, who is the current interest holder, transfers their ORRIS to the assignee. The assignor relinquishes their rights to the ORRIS, including any future revenue or benefits derived from the production, in exchange for consideration or other negotiated terms. This type of assignment is referred to as "No Proportionate Reduction" because it ensures that the percentage or portion of revenue associated with the ORRIS remains fixed and does not decrease over time, regardless of changes made to the lease or production rates. This protects the assignee's interest from dilution that may occur due to adjusting calculations when leasehold interests are bought or sold. It's important to note that there may be variations or specific types of Michigan Assignment of Overriding Royalty Interest (No Proportionate Reduction). These variations could include specific terms related to revenue allocation, conditions of assignment, or considerations unique to the parties involved. Therefore, it is essential to carefully review the specific terms and conditions outlined in each assignment document. Michigan Assignment of Overriding Royalty Interest (No Proportionate Reduction) plays a significant role in oil and gas exploration and production activities in Michigan. It provides the legal framework for assigning ORRIS, allowing for the transfer of interests between parties without risking a reduction in the assignee's portion of the revenue. This type of assignment ensures a secure and predictable income stream for the assignee, making it an attractive option for investors and interest holders in the oil and gas industry. In conclusion, Michigan Assignment of Overriding Royalty Interest (No Proportionate Reduction) is a legal document that facilitates the transfer of ORRIS without proportionate reduction. This type of assignment protects the assignee from potential dilution of their revenue share over time. It is crucial to consult with legal professionals and thoroughly understand the specific terms and conditions outlined in each assignment document to ensure compliance and protection of interests.
Michigan Assignment of Overriding Royalty Interest (No Proportionate Reduction)
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Several things determine what the ORRI value is, including: Mineral interest location. One in a shale basin with high production is worth more. Producing oil and gas wells. Wells currently producing are valued more. ... Production reserves and levels. ... Prices.
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 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, ...
An overriding royalty interest (ORRI) is an undivided interest in a mineral lease giving the holder the right to a proportional share (receive revenue) of the sale of oil and gas produced. The ORRI is carved out of the working interest or lease.
Calculating Overriding Royalty Interest An ORRI is a straight percentage. For example, a 2% override would appear on the royalty statement as 0.02 interest in the proceeds from the sale of the leased hydrocarbons.
Overriding royalty interest: Unlike mineral and royalty interests, an overriding royalty interest runs with a lease and not with the land. Therefore, they only remain in effect for as long as a lease is in effect and they expire when a lease expires.
Transfer by deed: You can sell your mineral rights to another person or company by deed. Transfer by will: You can specify who you want to inherit your mineral rights in your will. Transfer by lease: You can lease mineral rights to a third party through a lease agreement.
An overriding royalty interest (ORRI) is an undivided interest in a mineral lease giving the holder the right to a proportional share (receive revenue) of the sale of oil and gas produced. The ORRI is carved out of the working interest or lease.