New Jersey Assignment of Overriding Royalty Interest in Working Interest Owner, Single Lease, Stated Percentage is a legal document that allows a working interest owner to transfer their overriding royalty interest in an oil, gas, or mineral lease to another party. This assignment is commonly used in the energy industry to efficiently manage and distribute ownership and interest rights. Keywords: 1. New Jersey: This document is specific to the state of New Jersey, and it adheres to the state's laws and regulations regarding oil, gas, and mineral leases. 2. Assignment: This refers to the act of transferring or assigning ownership rights and interests from one party to another. 3. Overriding Royalty Interest: It is an interest in the production of oil, gas, or minerals that is separate from the usual working interest. This interest is typically based on a percentage of the gross production and is often free of the costs of drilling and operating the well. 4. Working Interest Owner: This refers to the individual or entity that holds a working interest in an oil, gas, or mineral lease. They are responsible for contributing to the costs of drilling, maintaining, and operating the well, and they also have the right to a share of the production. 5. Single Lease: This signifies that the overriding royalty interest being assigned is associated with a single lease. It means that the assignment specifically relates to the rights and interests in that particular lease for a specific duration. 6. Stated Percentage: This denotes the exact percentage of the overriding royalty interest being assigned by the working interest owner. It signifies the share of the production that will be received by the assignee. Types of Assignments: 1. New Jersey Assignment of Overriding Royalty Interest in Working Interest Owner, Single Lease, Stated Percentage with Cash Consideration: This type of assignment involves the transfer of the overriding royalty interest in exchange for a monetary payment or cash consideration. 2. New Jersey Assignment of Overriding Royalty Interest in Working Interest Owner, Single Lease, Stated Percentage without Cash Consideration: In this scenario, the transfer of the overriding royalty interest takes place without any financial compensation. It could occur through a gift, inheritance, or as part of a larger business transaction. 3. New Jersey Assignment of Overriding Royalty Interest in Working Interest Owner, Multiple Leases, Stated Percentage: This type of assignment involves the transfer of overriding royalty interest across multiple leases, indicating that the assignee will receive a share of production from multiple oil, gas, or mineral leases simultaneously.
New Jersey Assignment of Overriding Royalty Interest by Working Interest Owner, Single Lease, Stated Percentage
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FAQ
Overriding Royalty Interest (ORRI) 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.
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.
To calculate the NMA, you need the gross number of acres and the percentage of your mineral interest. To complete the calculation, simply multiply the gross acreage by your mineral interest. For example, if you owned 25% interest on the minerals under a 400-acre tract of land, you would have 100 NMA.
To calculate the number of net royalty acres I'm selling, I use this formula: [acres in tract] X [% of minerals owned] X 8 X [royalty interest reserved in lease] X [fraction of royalty interest being sold]. 640 acres X 25% X 8 X 1/4 X 1/2 = 160 net royalty acres.
How to calculate the overriding royalty interest? ORRI = NRI * 5 percent. $750,000 * 0.005 = $3,750.
NRA = 40.00 net mineral acres x ([1/5] Lease Royalty Rate / [1/8] Standard Royalty Rate) NRA = 40.00 x (0.20 / 0.125) NRA = 40.00 x 1.60 NRA = 64.00 Net Royalty Acres This mathematical concept can also be used inversely to calculate your net mineral acres in a parcel based on the Net Revenue Interest (NRI) you are ...
If there is an NPRI that exists, you would have to determine the # of net royalty acres by taking your royalty rate and subtracting the NPRI from it and then dividing by 12.5%.
