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Oil/Gas/Converting woking interest into ORRI or NRI

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Question
I have a 15% working interest in a small tract of land,and someone has offered to buy it. I want to participate in any upside, but not risk any capital.
Should I ask for for an ORRI or an NRI, and how much?

Answer
You will want to convert to an ORRI (Overriding Royalty Interest)

Royalty means that you will not incur liabilities during any phase.

A NRI (Net Revenue Interest) means that there is a gross and expenses are subtracted (You are still liable for them if they exceed revenue) and you are left with a "Net" Revenue Interest.

I would ask for a 5% ORRI and see how much they are willing to give you.

Thanks,

Oil/Gas

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Cliff Williams

Expertise

I will try to answer any question you have. Even if I reject a question, I still will give a shot at what I would do in your position. The only questions I will not take a shot at would be a highly technical engineering or geological question. I am beginning to see quite a few questions from land men and other oil companies and that doesn't matter to me either. I will attempt to help.

Experience

I am an oil and gas attorney that has been in the business for more than 20 years. I have held a series 22 and 63 securities license, been in oil and gas operations, land man, division order analyst all prior to obtaining my law degree. Today, I typically write title opinions verifying ownership of oil and gas minerals, assist landowners in negotiations on oil, gas and mineral leases, easements and conveyances. I also assist oil and gas companies with the sale of working interest ownership as well as common business law issues.

Organizations
State Bar of Texas, Member of the Tarrant County Bar and the Dallas County Bar Associations.

Publications
Multiple oil and gas topical columns on ezine.com.

Education/Credentials
I have a B.S. degree which I rely upon more than my Business Mgmt degree or Law degree...

Awards and Honors
Husband and father of 26 years

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