How is NRI calculated?

If you know the decimal interest in your mineral tract and you have the legal description, you can calculate the Net Acres owned. Here's an Example: Net Revenue Interest Net Mineral Acres / Drilling Spacing Unit Acres Royalty Rate. So, our NRI 17.78 / 1280 0.15 0.0020835.

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Assignment of Overriding Royalty Interest with Proportionate...

Philadelphia Pennsylvania Assignment of Overriding Royalty Interest with Proportionate Reduction

Name: Philadelphia Pennsylvania Assignment of Overriding Royalty Interest with Proportionate Reduction
Brand: US Legal Forms
Rating: 4.81 (447 reviews)

Category:

Oil Gas and Minerals - Assignments

State:

Multi-State

County:

Philadelphia

Control #:

US-OG-282

Format:

Instant download

Description

This form is used by the Assignor to transfer, assign, and convey to Assignee an overriding royalty interest in a lease which may be proportionately reduced.

How to fill out Philadelphia Pennsylvania Assignment Of Overriding Royalty Interest With Proportionate Reduction?

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1. n. Oil and Gas Business Ownership in a percentage of production or production revenues, free of the cost of production, created by the lessee, company and/or working interest owner and paid by the lessee, company and/or working interest owner out of revenue from the well.

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.

If a prepetition overriding royalty interest transaction is characterized as a transfer of real property (i.e., a sale), then the interest has effectively been transferred from the debtor's ownership and is not part of the bankruptcy estate.

Overriding Royalty Interest (ORRI) A royalty in excess of the royalty provided in the Oil & Gas Lease. Usually, an override is added during an intervening assignment. ORRIs are created out of the working interest in a property and do not affect mineral owners.

An overriding royalty interest (ORRI) is similar to a royalty interest in that it is also a portion of the proceeds from the sale of production. However, it is not retained under the terms of the oil and gas lease. An ORRI is granted, assigned and created under the terms of a separate document.

ORRI is a non-possessory burden against the NRI. If the working interest owner carves out a 5% ORRI from its 75% NRI, without proportionate reduction, the calculation is (SNRI ORRI = NRI), meaning the working interest owner is left with 70% NRI.

If you know the decimal interest in your mineral tract and you have the legal description, you can calculate the Net Acres owned. Here's an Example: Net Revenue Interest = Net Mineral Acres / Drilling Spacing Unit Acres Royalty Rate. So, our NRI = 17.78 / 1280 0.15 = 0.0020835.

Overriding royalty interests are an important financing tool for oil and gas companies involved in the exploration and development of oil gas and mineral interests. For investors, they provide an opportunity to participate in mineral production without incurring the costs.

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Interests are set forth in Exhibit "A.

Philadelphia Pennsylvania Assignment of Overriding Royalty Interest with Proportionate Reduction

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How to fill out Philadelphia Pennsylvania Assignment Of Overriding Royalty Interest With Proportionate Reduction?

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FAQ

What is an overriding royalty interest?

What is an assignment of overriding royalty interest?

Is an overriding royalty interest real property?

What is an Orri?

What is the difference between royalty interest and overriding royalty interest?

How do you calculate Orri?

What is the difference between overriding royalty interest and royalty interest?

How is NRI calculated?

What are overriding royalties typically used for?

Interesting Questions

What is an assignment of overriding royalty interest?

What does proportionate reduction mean in relation to Assignment of Overriding Royalty Interest?

Can you explain the concept of overriding royalty interest in simple terms?

Why would someone want to assign their overriding royalty interest to someone else?

How does Philadelphia Assignment of Overriding Royalty Interest with Proportionate Reduction work?

Is an assignment of overriding royalty interest a permanent transfer?

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