Can anyone tell me the lease royalty reserve for the wells listed above?
How are you using the “lease royalty reserve” term? Do you actually mean the royalty amount for leases? Leases will vary depending upon who signs them. The working interest companies generally like to have 75-85% of the royalties while the mineral owners have 15-25% of the royalties-roughly.
My understanding is that individuals such as Ted Weiner (1950 time frame) would buy mineral rights that were segregated from the property owner, aggregate these properties and then lease them to a company for drilling and production. When they did this, they would sometimes reserve a percentage of the future production as overriding royalty interests or non-participating royalty interests. These rights were sold separately. He then might sell the minerals to someone else to lease, while retaining the overriding amount. They are paid from the owners royalty amount. I thought the correct term was lease royalty reserve because of the terminology used in a 1950 royalty deed. If I am using incorrect terminology, I apologize. I am looking for the percentage of royalties being kept by (or paid to) the current mineral owners. My royalty deed stipulates at least 1/8 royalty and I know it is subject to the amount currently received by the owners.
The current terminology is OverRiding Royalty Interest or ORRI. It is taken out of the working interest partners share and is cost free and is separate from the other royalty owners. My grandfather did the same thing back in the 1920s-1960s. If your interest says 1/8th royalty, then you will have 12.5% royalty on the proceeds of the wells based upon the net acres, drilling spacing unit or allocation. If you have a complex sentence that has a long equation about an ORRI, then that is a bit more complicated. My grandfather often had an override since he was the geologist that helped put a deal together and he also bought minerals, so we sometimes have a complicated set of wording to work through with both and ORRI and RI (royalty interest).
I appreciate your comment and I recognize your preference for the term ORRI. It is my opinion that neither the oil and gas industry nor the legal field control the english language. There are rules about how multiple words used in conjunction get written - initially with a dash (over-riding) and then become a single word with the dash dropped and how to properly format an acronym (first letter of each word). The best reference I know of is the New York Times Manual of Style and Usage. In my research, I have found both ORI and ORRI in use and the word overriding is a single, all lower case word as far back as the 1993 Websters Dictionary. For those reasons I will continue using the term ORI. I just posted a new post you might find of interest and be able to shed some light on.
Also, thank you for clarifying that the ORI comes out of the working interest partners.