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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.
Even so, while term overriding royalty interests may appear to have many characteristics of a loan, they are generally characterized by state law as transfers of interests in real property that have a limited duration or amount.
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.
An Overriding Royalty Interest IORRI), commonly referred to as an override, is a fractional, undivided interest granting the right to receive proceeds from the sale of oil and gas. It is not an interest in the minerals themselves, but rather in the proceeds of the sale of oil and gas.
A royalty interest is a property interest that entitles the owner to receive a share of the production revenue. An individual or company that owns a royalty interest does not have to pay for any of the operational costs required to produce the resource, but they still own a portion of the revenue produced.
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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.
Even so, while term overriding royalty interests may appear to have many characteristics of a loan, they are generally characterized by state law as transfers of interests in real property that have a limited duration or amount.
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 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.
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.

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