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.
Arkansas Offset Well Protection and Payment of Compensatory Royalty are important concepts in the oil and gas industry. These terms refer to specific regulations and requirements that aim to ensure fair compensation for landowners and protect their interests when drilling operations take place near their property. Arkansas Offset Well Protection: Arkansas Offset Well Protection refers to the measures and regulations put in place to safeguard the interests of landowners whose properties are adjacent to or in proximity to oil and gas wells. When a drilling company plans to drill a new well or perform well maintenance activities near existing wells, it is required to provide offset well protection to nearby landowners. The goal of offset well protection is to prevent negative impacts on existing wells and protect the landowners' financial interests. The Arkansas Oil and Gas Commission, which oversees the state's oil and gas operations, establishes specific rules to guide this process. These regulations aim to ensure that drilling activities do not cause harm, such as well damage or reduced production, to neighboring properties. Payment of Compensatory Royalty: In addition to offset well protection, landowners in Arkansas are entitled to receive compensatory royalty payments. Compensatory royalty refers to a financial compensation offered to landowners to mitigate any adverse effects caused by drilling near their property. These payments aim to compensate for potential losses in production or damages caused by oil and gas operations. The amount of compensatory royalty is determined by various factors, including the extent of the impact on nearby wells, the production levels, and the overall economic value of the affected resources. The Arkansas Oil and Gas Commission takes these factors into consideration when determining the appropriate compensatory royalty to be paid to the landowner. Types of Arkansas Offset Well Protection and Payment of Compensatory Royalty: There are different types of offset well protection and compensatory royalty in Arkansas, including: 1. Vertical Offset Well Protection: This type of protection ensures that drilling activities or maintenance near existing vertical wells are conducted in a manner that minimizes any negative impacts on neighboring wells. 2. Horizontal Offset Well Protection: Horizontal drilling techniques have become more prevalent in recent years. This type of protection aims to safeguard the interests of landowners by regulating the drilling and completion of horizontal wells near existing vertical or horizontal wells. 3. Enhanced Royalty Compensation: In certain cases, landowners may be entitled to enhanced royalty compensation if oil and gas operations significantly impact their wells or their ability to extract resources from their property. Enhanced royalty compensation provides additional financial compensation to mitigate such impacts. Overall, Arkansas Offset Well Protection and Payment of Compensatory Royalty are crucial aspects of oil and gas operations in the state. These measures ensure fair treatment and compensation for landowners while facilitating responsible drilling practices that minimize negative impacts on neighboring wells.
