Overriding Royalty Interest (ORRI)
A cost-free royalty carved out of the working interest under a lease. It pays during production but ends when the lease terminates.
An overriding royalty interest, or ORRI, is a cost-free share of production carved out of the working interest rather than the mineral estate. Like a lease royalty, it bears none of the cost to drill or operate. Landmen, geologists, and brokers often take an ORRI as compensation for putting a deal together.
The key difference from a mineral royalty is duration. An ORRI is tied to the specific lease it came from. When that lease terminates or expires, the override ends — it does not revert to the mineral owner. That makes an ORRI worth less than an equal royalty interest over a long horizon.
ORRIs trade on the secondary market and show up in title chains, so buyers should confirm what they are actually acquiring during a title search.