overriding royalty

Definition of "overriding royalty"
  1. A right to earnings from the oil, gas, or minerals drawn from someone else's property, which is deducted from the share of the individual or company extracting these resources and does not rely on the cost of extraction
How to use "overriding royalty" in a sentence
  1. The landowner signed a contract with an oil company, including an overriding royalty clause that ensured she would receive a portion of the profits from the oil extracted from her land.
  2. The overriding royalty payment was processed every month, based on the volume of natural gas extracted from the property.
  3. The inclusion of an overriding royalty agreement within the lease enabled them to profit from the minerals extracted from the land without incurring any of the extraction costs.

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