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.
Florida Shut-In Oil Royalty refers to the revenue earned by landowners in Florida when oil wells on their property are temporarily shut down or not producing oil due to unforeseen circumstances. This type of royalty can be a significant income source for landowners in Florida who own mineral rights and have oil wells on their property. When oil wells become unproductive or need to be temporarily shut down for various reasons such as equipment breakdown, maintenance, or market conditions, oil companies are required to compensate landowners for the loss of potential revenue. The Florida Shut-In Oil Royalty is the compensation received by landowners during these periods of non-production. The amount of Florida Shut-In Oil Royalty is typically calculated based on the agreed royalty percentage in the lease agreement between the landowner and the oil company, multiplied by the standard market price of oil. The royalty percentage varies depending on factors such as the size of the oil well and the location of the property. There are different types of Florida Shut-In Oil Royalty that landowners can receive based on the terms of their lease agreements. These include: 1. Temporary Shut-In Royalty: This is the compensation received when the oil well is temporarily shut down for a short duration due to operational issues or market conditions. Landowners are paid based on the agreed-upon royalty percentage during this period. 2. Emergency Shut-In Royalty: In the case of sudden emergencies, such as an equipment failure or natural disaster, oil wells might be forced to shut down immediately. Landowners are entitled to emergency shut-in royalty payments during this unforeseen period of non-production. 3. Scheduled Shut-In Royalty: Sometimes, oil wells are intentionally shut down for scheduled maintenance, repairs, or upgrades. In such cases, landowners may receive scheduled shut-in royalties to compensate for the planned non-production period. 4. Force Mature Shut-In Royalty: Force majeure events, such as wars, pandemics, or government regulations, can lead to the temporary closure of oil wells. Landowners may receive force majeure shut-in royalties to offset the loss of potential revenue during these extraordinary circumstances. 5. Shut-In Royalty Buyout: In certain cases, where the economic viability of an oil well is questionable, oil companies may offer a one-time buyout to the landowner, giving up their right to future Florida Shut-In Oil Royalties. This buyout provides immediate compensation for potential losses due to non-production. Overall, Florida Shut-In Oil Royalty serves as a crucial financial safety net for landowners in Florida, ensuring they are compensated during periods when their oil wells are not actively producing.
