This form is used when an Assignor assigns, transfers, and conveys to Assignee an overriding royalty interest in the Lease and all of the oil and gas produced, saved and marketed from the Lease, out of the interest owned by Assignor, with proportionate reduction (the Override ).
A Collin Texas Assignment of Overriding Royalty Interest for Single Lease — Proportionate reduction refers to the transfer of rights and interests in an overriding royalty interest (ORRIS) for a specific lease in Collin County, Texas. An ORRIS is a percentage share of the gross production from a lease, typically given to a party other than the lessee, such as a working interest owner or landowner. In this scenario, the assignment involves a proportional reduction in the ORRIS for a single lease in Collin County, Texas. This means that the assignor is transferring a portion of their ORRIS to the assignee, who will then receive a percentage share of the gross production from the lease. The Collin Texas Assignment of Overriding Royalty Interest for Single Lease — Proportionate reduction applies in cases where the assignor wants to decrease their ORRIS while still retaining a remaining interest. This reduction can occur due to various reasons, such as the parties involved deciding to adjust their ownership percentages, financial considerations, or a change in business objectives. It is important to note that there can be different types of Collin Texas Assignment of Overriding Royalty Interest for Single Lease — Proportionate reduction, depending on the specific terms and conditions outlined in the agreement. Some possible variations include: 1. Partial Reduction Assignment: This type involves the assignor transferring a portion of their ORRIS to the assignee, resulting in a proportional reduction of the assignor's overall interest. The assignor will still retain a remaining interest in the overriding royalty. 2. One-Time Reduction Assignment: In this case, the assignor and assignee agree to a one-time reduction in the ORRIS for the single lease. This type of assignment may be suitable for a specific situation or to accommodate changes in the ownership structure. 3. Gradual Reduction Assignment: This type involves a step-by-step reduction of the assignor's ORRIS over a certain period. It may be done periodically or based on specific performance milestones defined in the agreement. 4. Percentage-based Reduction Assignment: Here, the reduction in the assignor's ORRIS is determined based on a certain percentage formula agreed upon by both parties. This allows for flexibility and adjustment as the production from the lease changes over time. In summary, a Collin Texas Assignment of Overriding Royalty Interest for Single Lease — Proportionate reduction involves transferring a portion of the assignor's ORRIS to the assignee, resulting in a proportional reduction of the assignor's overall interest in a specific lease. The different types of assignments mentioned above reflect the various ways this reduction can be implemented based on the specific agreement between the parties involved.
