In regard to “in lieu of cash bonus, what ‘s the meaning of “an excess royalty or overriding royalty in addition to the nomal 1/8th royalty” This wording is a in an option election of 1/5th royalty in lieu of a cash bonus on a pooling order in Roer Mills county, OK. Please explain.
This is antiquated OGL language. Ask the Lessee to provide an OGL with clear royalty terms that do not offer ORRI language.
Is this from a lease or from force pooling language? Sounds like a pooling.
Any excess royalty in addition to the normal 1/8th simply refers to the additional royalty above and beyond the statutory 1/8th royalty established in the statutes [OK 52 O.S. § 87.1(e)]. So if you are electing a 1/5 royalty in the pooling order, the excess royalty, or orri, is the amount between 1/8th and 1/5th royalty.
In lieu is saying, instead of paying you a cash bonus for your rights and a 1/8th royalty to production, you can elect additional royalty (3/16ths or 1/5, or other) up to whatever the royalty the fair market value of the unit allowed to be offered in the Pooling.
This is how I understand it.
Hope this helps
Thank you. So if it says 1/5th you can not get a larger percentage of royalty than that base on the pooling order. Correct?