RI generally means you own mineral rights and have signed a lease under which production is occurring. An ORRI means you carved out a royalty from the lease itself. Here’s an example:
Mineral Owner owns 10 NMA in a 640-acre tract and leases at 20% royalty to Company A. The royalty would be mostly cost-free, but that is determined by the exact lease language (sometimes certain costs are deducted, again it just depends on the lease language). The royalty interest from production would be (10/640 * 0.2) = 0.003125 RI. Now, let’s assume the lessee (Company A) sells the lease to Company B, but reserves the difference between the existing lease royalty and 25%. So, Company A is reserving an override of 5% in that lease, so their ORRI is (10/640 * 0.05) = 0.00078125. This ORRI is likely cost-free in every sense, but the lease assignment document language would need to be reviewed. Lastly, the operator’s net revenue interest is (10/640 * 0.75) = 0.01171875.
As a rule of thumb, RI and ORRI are considered “cost free,” with some minor exceptions (cost to bring to market and the like) depending on document language.
Hope that helps!