Mont. Admin. R. 36.25.409 - OVERRIDING ROYALTY INTERESTS
(1) If an
overriding royalty interest is created which is not shown in the instrument of
assignment or transfer, a statement must be filed with the director describing
the interest. Any such assignment will be deemed valid if accompanied by a
statement over the assignee's signature that the assignee is a person as
defined in the rules. All assignments of overriding royalty interests without a
working interest and otherwise not contemplated by ARM
36.25.408, must be filed for
record in the office of the department in Helena within 90 days from the date
of execution. Such interests will not receive formal approval and will be
recognized as a transfer of title only without recognition of the overriding
royalty interests.
(2) No
overriding royalty on the production of geothermal resources created by an
assignment contemplated by ARM
36.25.408 or otherwise shall
exceed 5% nor shall an overriding royalty, when added to overriding royalties
previously created exceed 5%.
(3)
The creation of an overriding royalty interest that does not conform to the
requirements of this rule shall be deemed a violation of the lease terms,
unless the agreement creating overriding royalties provides for a prorated
reduction of all overriding royalties so that the aggregate rate of overriding
royalties does not exceed 5%.
(4)
In addition to the foregoing limitations, any agreement to create or any
assignment creating royalties or payments out of production from the leased
lands shall be subject to the authority of the board , after notice and hearing,
to require the proper parties thereto to suspend or modify such royalties or
payments out of production in such manner as may be reasonable when and during
such periods of time as they may constitute an undue economic burden upon the
reasonable operations of such lease.
Notes
77-4-103, MCA;
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