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.
Delaware Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that outlines the terms and conditions related to the distribution of nonparticipating royalties in Delaware's oil and gas industry. This agreement defines the rights and obligations of both the nonparticipating royalty owner and the operator of the leased properties. Key provisions within the Delaware Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease typically include: 1. Definition of Segregated Tracts: The agreement clearly defines the specific areas or tracts of land that are subject to the nonparticipating royalty obligations. These tracts may be divided based on geographic boundaries or other established parameters. 2. Identification of Parties: The agreement identifies the parties involved, including the nonparticipating royalty owner(s) and the operator or lessee. It may also specify any other pertinent parties, such as overriding royalty interest owners. 3. Royalty Payment Calculation: The agreement outlines the method for calculating and distributing nonparticipating royalties. It may specify a percentage or a fixed amount, depending on the language of the lease and any applicable state laws or regulations. 4. Auditing and Reporting: The agreement may include provisions for auditing the operator's records to ensure accurate and timely royalty payments. It may also stipulate the frequency and format of royalty reporting. 5. Obligations and Duties: The agreement outlines the responsibilities and liabilities of both parties. This may include requirements for maintaining accurate records, providing notice of ownership transfers, and allowing the nonparticipating royalty owner access to certain information. 6. Dispute Resolution: The agreement may specify the procedures for resolving disputes related to royalty obligations, such as mediation, arbitration, or litigation. Different types of Delaware Agreements Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease may include variations in terms, conditions, and rights based on the specific lease terms, contractual agreements, or state-specific regulations. Some examples include: 1. Delaware Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease with Variable Royalty Rate: This type of agreement may incorporate a sliding scale or variable formula for calculating the nonparticipating royalty, based on factors such as production volumes, commodity prices, or lease-specific provisions. 2. Delaware Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease with Overriding Royalty Interest: In this scenario, the agreement would encompass both nonparticipating royalty owners and overriding royalty interest owners, defining the respective rights and obligations of each party. 3. Delaware Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease with Escalation Clause: This type of agreement may include provisions for increasing the nonparticipating royalty rate over time, to account for inflation, change in market conditions, or other predetermined factors. It is important to consult with legal professionals experienced in Delaware's oil and gas industry to ensure the accuracy and appropriateness of any Delaware Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease, as the specific terms and requirements may vary based on the unique circumstances of each lease arrangement.
