A Tennessee Assignment of Overriding Royalty Interest with Multiple Leases that are Non Producing with Reservation of the Right to Pool refers to a legal document that transfers the rights to receive royalty payments from multiple leases in Tennessee to a third party, despite the leases not currently being in production. It also includes a provision that reserves the right to combine or "pool" the leased tracts for future production purposes. This type of assignment can be made in various scenarios, such as: 1. Non-Producing Leases: This assignment may be applicable when leases in Tennessee are not currently in production, meaning no oil, gas, or mineral extraction is taking place. Despite the leases not generating immediate income, there may still be an interest in transferring the associated royalties to another party. 2. Assignment of Overriding Royalty Interest: The assignment covers the overriding royalty interest, which is a specific portion of the total royalty interest reserved by the lessor (the landowner) when leasing their property for oil, gas, or mineral exploration. The overriding royalty interest is usually a percentage of the gross production proceeds, separate from the regular royalty payments. 3. Multiple Leases: The assignment encompasses multiple leases held by the assignor (the original owner of the overriding royalty interest). These leases might cover different tracts of land in Tennessee, potentially situated in different locations or owned by different individuals or entities. 4. Reservation of the Right to Pool: This clause ensures that the assignor retains the right to combine, or pool, the leased tracts for future production activities. Pooling allows for the consolidation of smaller tracts into larger units, which can enhance production efficiency and reduce costs. It is important to consult with legal professionals experienced in oil, gas, and mineral rights in Tennessee when drafting or reviewing such assignments to ensure compliance with state laws and regulations. The specifics of the assignment, including the parties involved, royalty interests, lease details, and any additional terms, should be clearly outlined in the document.
Tennessee Assignment of Overriding Royalty Interest with Multiple Leases that are Non Producing with Reservation of the Right to Pool
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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.
Overriding Royalty Interests To calculate the ORRI, multiply the gross production revenue by the ORRI interest percentage, and the figure gotten is what the ORRI owner is entitled to.
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.
Overriding Royalty Interest Conveyance means an assignment, in the form attached hereto as Exhibit F, pursuant to which Subsidiary Borrower grants to Lender a cost-free overriding royalty interest equal to a percentage determined pursuant to Section 8.5 of the Hydrocarbons and other minerals attributable to Subsidiary ...
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.
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.
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.
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.
