This form is used to resolve any question as to how royalty is to be paid to the Parties in the event of production, under the Lease, on any part of the Lands. The Parties are entering into this Agreement to stipulate and agree to the ownership of each Party's respective share of the royalty reserved in the Lease payable for production attributable to their Interests from a well located anywhere on the Lands.
The Arizona Agreement Governing Payment of Nonparticipating Royalty under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that establishes the terms and conditions for the payment of royalties to nonparticipating owners in oil and gas leases within Arizona. This agreement is specifically designed to address situations where multiple tracts of land are covered by a single lease. In Arizona, there are several types of agreements governing the payment of nonparticipating royalties under segregated tracts covered by one oil and gas lease. These agreements include: 1. Nonparticipating Royalty Interest (NPR) Agreement — This type of agreement outlines the terms and conditions for the payment of royalties to nonparticipating owners who hold a specific percentage of the overall royalty interest in the oil and gas lease. The NPR agreement typically includes provisions for the calculation and distribution of royalties based on the production from each segregated tract. 2. Segregation and Allocation Agreement — This agreement defines the process of segregating the different tracts covered by the oil and gas lease and allocating the royalties accordingly. It establishes the criteria for determining the share of royalties attributable to each segregated tract and outlines any potential adjustments or revisions to the allocation as necessary. 3. Payment and Distribution Agreement — This agreement details the procedures for the collection and distribution of royalties to the nonparticipating owners. It specifies the payment schedule, the methods of payment, and any applicable deductions or expenses that may be subtracted from the royalty payments. 4. Lease Operating Agreement — Although not specifically focused on nonparticipating royalties, a lease operating agreement often contains provisions related to the payment and distribution of royalties to both participating and nonparticipating owners. It outlines the responsibilities and obligations of the operator and the various owners, including provisions for accounting, auditing, and reporting of royalty payments. These different types of Arizona agreements govern the payment of nonparticipating royalties under segregated tracts covered by one oil and gas lease. Each agreement serves a specific purpose and ensures that the rights and interests of the nonparticipating owners are protected and properly compensated for their share of the oil and gas production.
