The Houston, Texas Assignment of Overriding Royalty Interests (Orris) of a Percentage of Assignor's Net Revenue Interest, after Deductions of Certain Costs — effectively a Net Profits arrangement, is a contractual agreement unique to the oil and gas industry. This type of assignment allows the assignee to receive a portion of the assignor's revenue interest from an oil and gas lease, after deducting certain expenses. In this agreement, the assignor (usually the owner of the oil and gas lease) transfers a fixed percentage or fraction of their net revenue interest to the assignee. Net revenue interest refers to the proportionate share of revenue received from the sale of oil and gas after deducting expenses such as production costs, operating expenses, and taxes. The Houston, Texas Assignment of Overriding Royalty Interests is commonly used in royalty and leasing transactions, allowing the assignee to bypass the burdensome costs associated with exploration, drilling, and production. By acquiring an overriding royalty interest, the assignee can benefit from the production revenue without bearing the risk and costs of operation. There are various types of Houston, Texas Assignment of Overriding Royalty Interests, depending on the specific terms and conditions agreed upon by the assignor and assignee. Some variations include: 1. Flat Percentage ORRIS: In this type, the assignor transfers a fixed percentage of their net revenue interest, regardless of the production volume. This arrangement provides a steady income stream to the assignee. 2. Sliding Scale ORRIS: Here, the assignor assigns a varying percentage of net revenue interest based on production volume or oil and gas prices. The percentage may increase or decrease depending on predefined thresholds. 3. Term ORRIS: This type of assignment has a specific time limit. The assignee receives a percentage of the net revenue interest for a specified period, after which the assignment terminates. 4. Geographic ORRIS: In this arrangement, the assignee only receives a percentage of the net revenue interest from a particular geographical area or lease. It allows for a more targeted investment strategy. 5. Assignment of Temporary ORRIS: This type of assignment grants the assignee the right to a percentage of the net revenue interest for a temporary period, usually during a specific project or phase of production. The Houston, Texas Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, after Deductions of Certain Costs, provides an opportunity for both the assignor and assignee to optimize their involvement in the oil and gas industry. This arrangement allows the assignor to monetize their lease interests while the assignee benefits from the potential profits without assuming the risks and costs associated with operations.
Houston Texas Assignment of Overriding Royalty Interests of a Percentage of Assignor's Net Revenue Interest, After Deductions of Certain Costs - Effectively A Net Profits
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