What is an Overriding Royalty Interest (ORRI)?

ORRIs are created out of the working interest (the interest vested in the company that was granted the lease) in a property and do not affect mineral owners. ORRIs burden the lease, above and beyond the royalty rate paid to the mineral owner. An ORRI is often reserved by or assigned to a geologist, landman, oil and gas company, or any entity that was able to reserve an interest in the properties.