In December 2013, Falcon entered into an agreement with TOG Group to acquire 7% (seven-eighths) of its private ORRI of 8% on exploration permits in the Beetaloo sub-basin. Falcon made a US$5 million payment to the TOG Group to acquire 5% (five-eighths) of its ORRI following the conclusion of a beetaloo farm-out transaction. ToG Group granted Falcon and Origin Energy B2 Pty Ltd. (“Origin”) a five-year call option over their holdings to acquire an additional 2% (two-eighths) of its ORRI for a $15 million payment. The TOG Group retains a 1% ORRI. The appeal option expires on August 22, 2019. The extension granted to Falcon does not alter Origin`s rights or obligations under the original appeal options agreement. Royalty interest (ORRI) contracts are terminated at the end of oil and gas. This is not an interest in the mineral, but part of the production.
If the well or well becomes unprofitable, the lease is released, which terminates both royalties and royalty interest. ORIS generally have no permanent interest in mineral rights. As a general rule, they are structured to have royalty fees for the duration of the rental period. On the other hand, royalty interest generally has mineral properties, even after a lease has expired. The main difference between the interests of the licence and those of ORRI is therefore that the royalty shares are related to the ownership of the mineral rights below the surface and that the ORRIs are bound by the lease and no longer existed at the expiry of the lease agreement. Over the past four years, crude oil and gas prices have fluctuated sharply. While this causes considerable volatility on the E-P side of the sector, both operationally and in terms of investment decisions, many see Royalty`s trust funds as a way to get around the complexity of an operational E-P and to try to “play the game” of the price of oil and gas. Based on this hypothesis, we will analyze the changes that PBT has undergone over the past four years. A royalty that goes beyond the free licence fee of the Oil and Gas Lease.
Normally, a set-aside is added during an intermediate allocation. When evaluating a licence rate or an ORRI, it is worth noting a few points: ORRIs are created from the interest of work for a property and have no influence on the owners. A predominant licensing fee (ORRI) is often awarded to a geologist, compatriot, broker or unit that has been able to reserve an interest in real estate. The PBT is at its lowest yield in the last four years. While the price was lower at the end of 2015, the dividend as a percentage of the price in 2015 was higher than in 2016. The graph above shows the impact (1) of oil and gas prices; as well as (2) changes in production levels. Both of these areas are directly related to the dividend per share. However, the price is directly related to the movement of buyers and sellers of PBT securities.