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.
Colorado Offset Well Protection and Payment of Compensatory Royalty
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US-OG-810
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How to fill out Offset Well Protection And Payment Of Compensatory Royalty?
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FAQ
Royalty Payment Clauses A royalty is agreed upon as a percentage of the lease, minus what was reasonably used in the lessee's production costs. This is stipulated in a Royalty Clause. The royalty is paid by the lessee to the owner of the mineral rights, the lessor in the lease.
Compensatory royalties are often assessed based on the production from the. well deemed to be draining the lease. Some leases base the compensatory royalty on a. percentage of the adjacent wells' production, while others are silent.