Overriding Royalties related to Mineral Rights

I am the beneficiary of some overriding royalties. Are these connected to Mineral Rights?

If they are ORRi’s, they are more likely carved off the royalties associated with a lease. But similar to the royalties associated with minerals you should not be responsible for capital or operating costs.

Yes. You receive royalties as the result of a contract between the owner of mineral rights and the oil/gas company that owns the wells. Division orders will explain your portion of the royalties. You can contact the oil company for a further explanation of what percentage you own (the division orders).

ORRI’s are carved out of the working interest, NOT royalty. They are similar to royalty associated with minerals but are attached to a lease. If the lease expires, the ORR is extinguished.

Thank you for your replies. This is very helpful. I Will be seeking more information once I have done a bit more research and have formulated my questions. What a great forum.

ORRIs are frequently carved out of the working interest as a form of payment to a geologist or landman for their work in putting a deal together. Many of us have inherited these sorts of royalties. In some cases, the geologist or landman might have bought his/her own mineral rights separately, so you do need to keep track if there are different sets of ownership.

Thank you! That is SO helpful to know. My dad must have been the geologist - graduate of Colorado School of Mines. It may appear he had some mineral rights, too.

My grandfather was a geologist and we frequently have to figure out the splits between the royalty interest on his own minerals and the ORRI that he received for his work. Most of the statements have it split out and we have old Division Orders that also split it out. You can contact the Division Order analyst at the operator to help you if you don’t have the old records.

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Whoops, sorry about that!

Thank you for keeping the rules.

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