Hello, This is my first post and I have a thousands questions but will start with one issue. I have inherited some mineral rights and have been getting some Division Orders. (My brother is the executor of the will and I have very little understanding of what’s going on.)
One Division Order shows my mother’s division of interest at 0.03 OR but then shows me and my brother’s share at 0.015 RI. (I have a hand written list perhaps made from a well log that also shows the 0.03 interest)
Why would this order change the OR listed for my mom but use RI for Division Order?
I’ve search the property description on TexasFile and found a “Reformation of Pooled Unit” that combined two lease from 1970 into a single pool unit in 1993. My dad executed this document and a man he did business with is named in the two lease descriptions. I see other Assignment of ORI documents where my dad is given 3% of gross production of the leases.
Does that 3% correlate with the 0.03 OR that the Division Order says my mom had?
I already signed this Division Order and then noticed the OR to RI. So now I’m nervous to sign more without knowing what I’m doing. I’m told there are no deeds for any of the rights we have.
This is in Scurry County Texas if that matters.
Thanks for reading this and for any suggestions, Tim
Thank PeteR, I was trying to make sure that “division of interest” at 0.03 was the same as 3%, but it seems obvious to me now that it must be.
My main concern or question is about the Division Order listing my mom as an OR owner but then in the transfer to my brother and me it changes us to RI owners.
Should I be concerned with this and does it make any sense?
I’d like to find the deed but can’t locate it on TexasFile.
123Me: In a technical sense, yes there is a difference between a RI (royalty interest) and an OR (overriding royalty interest). As long as the number is correct and it is, you are good to go. I would notify the sender of the Division Order of the discrepancy.
As far as a deed, if the interest is an Overriding Royalty Interest, there will not be one. But the Assignment that you see/found is the granting document. The ORRI is carved out of leasehold and runs continues with the leases. If the leases should expire, the ORRI is extinguished. Whereas minerals (royalty interest when producing) are usually in perpetuity.
If the facts are as you present them (and my assumptions below are correct), everything sounds fine to me.
If your dad received a 3% ORRI in both leases (and both of those leases make up 100% of the leasehold), then he received a net 3% (0.03) of production. I assume that your father is deceased and that he left everything to your mother. And I further assume that your mother left everything to you and your brother in equal shares, leaving each of you with a 0.015 interest.
It’s odd that the operator changed your payment code from OR to RI, but I’m not sure it’s a big deal. (Someone else please correct me if I’m wrong.) Whoever set up the transfer likely wasn’t paying attention to the payment codes.
So an OR has no deed but should have an assignment ? (I assume OR is the same as ORRI) But an RI would have a deed? Or could an RI have an assignment as well? This issue would be extreme helpful for me to understand as I do my searching.
I know nothing about this world. I picked this one case to start fumbling around with in this forum.
Yes, the OR shown on the DO is representing an Overriding Royalty Interest and is conveyed via an Assignment. [quote=“123Me, post:1, topic:76395”]
I see other Assignment of ORI documents where my dad is given 3% of gross production of the leases
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That document is how your father acquired the ORRI.
Some folks use an Assignment or Conveyance to transfer mineral rights. The language in the document is what controls what is being conveyed, not the title or heading of the document. But generally speaking, “Deeds” convey minerals. Minerals are tangible property. When those become producing, they can and are usually referred to as royalty. Hence the RI designation on the Division Order.
That all sounds right to me but to to be clear, I saw other Assignment of ORI documents where my dad is given 3% of gross production of the leases but nothing specific to these two pooled leases.
I did find a “Reformation of Pooled Unit” that combined two leases from 1970 into a single pool unit in 1993. My dad executed this document and a man he did business with is named in the two lease descriptions. There were no percentages in the document, so I’m left having to trust that the 3% is correct. It has been paying that rate historically.
I assume there’s no reason not to inform the sender of the division order of the change from OR to RI, as Todd_M_Baker suggested.
I believe in the your last sentence you meant to have them change the interest type from RI (what you say the DO says) to OR representing the correct type of interest owned.