This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
Alaska Minimum Royalty Payments, also known as Amps, are a vital component of the state's oil and gas industry. These payments are set by the Alaska Department of Natural Resources (DNR) to ensure that the state receives a minimum amount of revenue from oil and gas leases on state-owned lands. The purpose of the Alaska Minimum Royalty Payments is to safeguard the state's interests by guaranteeing a certain level of income, regardless of fluctuations in oil and gas prices. It helps to ensure a stable source of revenue for the development of public infrastructure, education, and various services provided to Alaskan residents. There are two primary types of Alaska Minimum Royalty Payments: 1. Gross Value Minimum Royalty (GMR): This type of minimum royalty applies to oil and gas leases that were issued before the implementation of the Alaska Clear and Equitable Share (ACES) tax system in 2007. GMR ensures that the state receives a minimum royalty payment based on the gross value of the oil and gas produced from the lease. 2. Production Value Minimum Royalty (PMR): PMR applies to oil and gas leases issued after the ACES tax system was enacted. Instead of being based on the gross value, this minimum royalty is calculated based on the production value of the oil and gas. It takes into account factors such as transportation costs, lease operating expenses, and specific contract terms. In addition to these primary types, there are certain variations and modifications of Alaska Minimum Royalty Payments that may be applicable in specific cases. These can include adjustments for gas processing allowances, tariffs, and other relevant factors, aimed to ensure fair compensations for all involved parties. It's worth noting that Alaska Minimum Royalty Payments are subject to periodic review and adjustment by the Alaska DNR. This is done to maintain fair and equitable royalty rates that align with the prevailing economic landscape in the oil and gas industry. Overall, Alaska Minimum Royalty Payments form a crucial element in safeguarding the state's fiscal stability and ensuring that the extraction of its valuable natural resources benefits the Alaskan people and their future generations.
