Assignment of Overriding Royalty

In order to understand what an Assignment of Overriding Royalty Interest conveys, it’s first important to define what constitutes an overriding royalty interest. Overriding royalty interests are fractional interests that entitle owners to receive revenue from the production tied to an oil and gas lease covering a specific tract of land. Unlike royalty or mineral interest owners, an overriding royalty interest owner does not own any interest in the minerals. Additionally, an overriding royalty interest owner only owns their interest during the lifetime of the lease. This means that once the terms of the lease have expired, the owner is no longer entitled to any interest in the minerals.

An Assignment of Overriding Royalty Interest is the legal conveyance that conveys an overriding royalty interest. In the Assignment, the Assignor will convey to the Assignee a fractional interest that grants the Assignee the right to receive revenue from the oil and gas sold. The sold production is tied to a lease which is why the Assignment should contain lease references that list exactly what lease from which the owner is receiving their interest. The lease reference should include the recording information of the leases so that the owner may obtain copies of the leases in order to determine the terms of the lease.

It’s important to note that these documents are only legally binding conveyances once they’ve been filed of record in the county courthouse in which the lease is located. Legally filing these conveyances creates a chain of title that shows the successive ownership of the overriding royalty interest. Recording the Assignment of Overriding Royalty Interest furthers this chain from the person selling the interest.

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