Common use of Overriding Royalty Percentage Clause in Contracts

Overriding Royalty Percentage. The Overriding Royalty Percentage with respect to each of the Subject Interests shall equal five percent (5%), proportionately reduced to a 25% working interest (or such lesser working interest as may be owned by Grantor if less than 25%), subject to the following two sentences. In the event that Grantor owns or subsequently acquires an interest in a Lease or portion thereof with Total Burdens in excess of twenty per cent (20%) but less than thirty per cent (30%), then the Overriding Royalty Percentage shall be determined by taking the lesser of : a) the product of five per cent (5%) times a fraction the numerator of which is Available Net Revenue Interest (as defined below) and the denominator is eighty per cent (80%); and b) Available Net Revenue Interest minus seventy per cent (70%) where Available Net Revenue Interest is equal to one minus Total Burdens, and then proportionately reducing that value by the working interest acquired by Grantor (up to a maximum 25% working interest) in such Lease. In the event that Grantor owns or subsequently acquires an interest in a Lease with Total Burdens of thirty percent (30%) or more, no ORRI shall be granted with respect to such Lease. For purposes of illustration, Exhibit D shows hypothetical calculations of the ORRI on leases with varying working and net revenue interests.

Overriding Royalty Percentage. The Overriding Royalty Percentage with respect to each of the Subject Interests shall equal five percent (5%), proportionately reduced to a 25% working interest (or such lesser working interest as may be owned by Grantor if less than 25%), subject to the following two sentences. In the event that Grantor owns or subsequently acquires an interest in a Lease or portion thereof with Total Burdens in excess of twenty per cent (20%) but less than thirty per cent (30%), then the Overriding Royalty Percentage shall be determined by taking the lesser of of: a) the product of five per cent (5%) times a fraction the numerator of which is Available Net Revenue Interest (as defined below) and the denominator is eighty per cent (80%); and b) Available Net Revenue Interest minus seventy per cent (70%) where Available Net Revenue Interest is equal to one minus Total Burdens, and then proportionately reducing that value by the working interest acquired by Grantor (up to a maximum 25% working interest) in such Lease. In the event that Grantor owns or subsequently acquires an interest in a Lease with Total Burdens of thirty percent (30%) or more, no ORRI shall be granted with respect to such Lease. For purposes of illustration, Exhibit D shows hypothetical calculations of the ORRI on leases with varying working and net revenue interests.