Are overriding royalty interests (ORRI’s) assessed Ad Valorem taxes just as producing minerals are in the State of TX?
OR are considered real property in Texas and are subject to property taxes. The operator will submit the list of all royalty and overriding royalty owners, including addresses and decimal interest, and all interests are valued by the appraiser. All of the taxes on the working interests are assessed to the operator. The appraisal district requires that the total decimal interest add up to 100% and the OR are part of that. Otherwise the operator would be assessed the taxes on the OR as they are carved out of the leasehold interest. This is for producing wells.