North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout, With Payout Based on Volume of Oil Produced

• Category: Oil Gas and Minerals - Assignments
• State: Multi-State
• Control #: US-OG-283
• Format: Word; Rich Text

Description

This form is used by the Assignor to transfer, assign, and convey to Assignee an overriding royalty interest in a Lease, to be effective at payout. North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout, With Payout Based on Volume of Oil Produced In North Dakota, an Assignment of Overriding Royalty Interest (ORRIS) refers to the transfer of a portion of the royalty interest associated with an oil or gas lease. This assignment becomes effective at payout, which means the assignee starts receiving royalty payouts only when the assigned well achieves a certain level of production or revenue. The payout for this type of assignment is primarily based on the volume of oil produced from the assigned well. As the volume increases, the assigned party is entitled to a corresponding percentage of the generated royalties. This mechanism ensures that the assignee's revenue is directly related to the productivity and success of the well. Types of North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout: 1. Fixed-Percentage Assignment: In this type, a specific fixed percentage of the overriding royalty interest is assigned to the assignee. For example, if the assignment is 10%, the assignee will receive 10% of the total royalty payments once the well reaches payout. 2. Tiered Assignment: Under a tiered assignment, the payout structure is divided into multiple tiers based on the volume of oil produced. Each tier has a different assigned percentage, allowing higher percentages as production increases. For instance, the assignee may receive 5% of royalties until 50,000 barrels are produced, and then 10% for any barrels produced beyond that threshold. 3. Graduated Assignment: A graduated assignment involves increasing the assigned percentage gradually as the production reaches certain milestones. This type is often used to incentivize rapid production growth. For example, an assignee might receive 5% of royalties until 20,000 barrels, then 7.5% until 50,000 barrels, and 10% for any production above that. 4. Sliding Scale Assignment: A sliding scale assignment adjusts the assigned percentage based on oil price fluctuations. If the price per barrel exceeds a predetermined threshold, the assignee may receive a higher percentage. This type helps align the assignee's payout with market conditions. 5. Customized Assignment: Various other assignment structures can be customized based on specific agreements between the parties involved. These assignments may include complex calculations, multiple factors influencing the assigned percentage, or unique payout triggers. In summary, a North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout, With Payout Based on Volume of Oil Produced offers a flexible and performance-based arrangement for assigning royalty interests. The specific type of assignment can vary, ranging from fixed-percentage to customized structures, ensuring that assignees are appropriately rewarded based on the oil well's production success.

North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout, With Payout Based on Volume of Oil Produced In North Dakota, an Assignment of Overriding Royalty Interest (ORRIS) refers to the transfer of a portion of the royalty interest associated with an oil or gas lease. This assignment becomes effective at payout, which means the assignee starts receiving royalty payouts only when the assigned well achieves a certain level of production or revenue. The payout for this type of assignment is primarily based on the volume of oil produced from the assigned well. As the volume increases, the assigned party is entitled to a corresponding percentage of the generated royalties. This mechanism ensures that the assignee's revenue is directly related to the productivity and success of the well. Types of North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout: 1. Fixed-Percentage Assignment: In this type, a specific fixed percentage of the overriding royalty interest is assigned to the assignee. For example, if the assignment is 10%, the assignee will receive 10% of the total royalty payments once the well reaches payout. 2. Tiered Assignment: Under a tiered assignment, the payout structure is divided into multiple tiers based on the volume of oil produced. Each tier has a different assigned percentage, allowing higher percentages as production increases. For instance, the assignee may receive 5% of royalties until 50,000 barrels are produced, and then 10% for any barrels produced beyond that threshold. 3. Graduated Assignment: A graduated assignment involves increasing the assigned percentage gradually as the production reaches certain milestones. This type is often used to incentivize rapid production growth. For example, an assignee might receive 5% of royalties until 20,000 barrels, then 7.5% until 50,000 barrels, and 10% for any production above that. 4. Sliding Scale Assignment: A sliding scale assignment adjusts the assigned percentage based on oil price fluctuations. If the price per barrel exceeds a predetermined threshold, the assignee may receive a higher percentage. This type helps align the assignee's payout with market conditions. 5. Customized Assignment: Various other assignment structures can be customized based on specific agreements between the parties involved. These assignments may include complex calculations, multiple factors influencing the assigned percentage, or unique payout triggers. In summary, a North Dakota Assignment of Overriding Royalty Interest to Become Effective At Payout, With Payout Based on Volume of Oil Produced offers a flexible and performance-based arrangement for assigning royalty interests. The specific type of assignment can vary, ranging from fixed-percentage to customized structures, ensuring that assignees are appropriately rewarded based on the oil well's production success.