Ohio Assignment of Overriding Royalty Interest Out of Working Interest with Multiple Leases and Limited Warranty — Long Form: Explained An Ohio Assignment of Overriding Royalty Interest Out of Working Interest with Multiple Leases and Limited Warranty — Long Form is a legal document used in the state of Ohio to transfer the rights of an overriding royalty interest (ORRIS) from the working interest owner to another party. This assignment is comprehensive and offers a limited warranty, ensuring the assignee receives the agreed-upon royalty interest without any encumbrances or prior claims. The assignment typically involves multiple leases, meaning that the working interest owner holds interests in several lease agreements. The ORRIS represents a share of profits generated from the production of oil, gas, or other minerals from the leased properties, and this assignment allows a third party to acquire those rights. This long-form assignment is important for documenting the transfer of the ORRIS and protecting the interests of both the assignor (working interest owner) and the assignee (new ORRIS owner). It includes detailed provisions and stipulations related to the assignment, such as: 1. Parties: The assignment names the assignor and assignee as well as any other relevant parties involved in the transaction. 2. Recitals: The recitals set forth the background information, including the lease agreements, the percentage of the ORRIS being assigned, and any specific terms negotiated between the parties. 3. Assignment and Conveyance: This section outlines the transfer of the ORRIS and specifies the leases and leasehold interests being conveyed. It also provides details on the percentage of the ORRIS being assigned and any limitations or conditions associated with the transfer. 4. Warranty: The limited warranty provisions ensure that the assignor has the legal authority to transfer the ORRIS and that it is free from any undisclosed liens, encumbrances, or claims. However, the warranty is limited, meaning that the assignor does not guarantee the validity of the underlying lease agreements or the production potential. 5. Indemnification: The assignment may include indemnification clauses to protect the assignee from any losses or claims arising from the ORRIS or leases. 6. Governing Law and Amendments: This section identifies the governing law of the assignment, typically Ohio law, and outlines the procedures for making amendments or modifications to the agreement. Different variations or specific forms of the Ohio Assignment of Overriding Royalty Interest Out of Working Interest with Multiple Leases and Limited Warranty — Long Form may exist depending on individual circumstances, negotiation terms, or additional provisions required by the parties involved. In summary, an Ohio Assignment of Overriding Royalty Interest Out of Working Interest with Multiple Leases and Limited Warranty — Long Form is a legally binding document that allows for the transfer of an ORRIS from the working interest owner to another party. It provides comprehensive protection and limited warranty assurances, ensuring a smooth and lawful transfer of rights in the oil, gas, or other mineral production.
Ohio Assignment of Overriding Royalty Interest Out of Working Interest with Multiple Leases and Limited Warranty - Long Form
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FAQ
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.
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.
Several factors determine the value of an overriding royalty interest in a working lease. They include: Location ? A mineral interest in high producing shale basins will be more valuable. Producing Wells ? Producing wells are valued higher than non-producing wells.
Like Royalty Interest (RI), an ORRI ends when the oil and gas lease ends. ORRI and MI/RI (mineral/royalty) interests in the same tract of land may be valued differently. Unlike the mineral interest, which lasts in perpetuity, overriding royalties expire with the lease.
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.
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.
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.
What Is Working Interest? Working interest is a term for a type of investment in oil and gas drilling operations in which the investor is directly liable for a portion of the ongoing costs associated with exploration, drilling, and production.