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A royalty interest is a non-possessory real property interest in oil and gas production free of production and operating expenses, which may be created by grant or by reservation or exception.
The holders of the term ORRI interests moved for summary judgment on the characterization issue, arguing that as a matter of Louisiana state law, a term ORRI is an absolute conveyance of a real property interest.
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.
An override provision allows for ongoing royalty payment on future albums, sometimes including those not produced by the original producer. This will ensure our man (or woman) gets at least something for his troubles.
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.
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Generally, a pooling clause will allow the leased premises to be combined with other lands to form a drilling unit, wherein proceeds from production anywhere on the drilling unit are allocated according to the percentage of the acreage of each tract divided by the total acreage of the drilling unit.
Pooling is the combination of all or portions of multiple oil and gas leases to form a unit for the drilling of a single oil and/or gas well.
Overriding Royalty Interest (ORRI) a percentage share of production, or the value derived from production, which is free of all costs of drilling and producing, and is created by the lessee or working interest owner and paid by the lessee or working interest owner.
To ratify a lease means that the landowner and oil gas producer, as current lessor and lessee of the land, agree (or re-agree) to the terms of the existing lease.
To ratify a lease means that the landowner and oil gas producer, as current lessor and lessee of the land, agree (or re-agree) to the terms of the existing lease.

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