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 Guam Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that regulates the payment of nonparticipating royalty for separate parcels of land included in a single oil and gas lease in Guam. This agreement is crucial in ensuring fair compensation for nonparticipating mineral owners while allowing efficient operation and management of oil and gas operations. Under the Guam Agreement, different types of segregated tracts covered by one oil and gas lease may include various categories depending on the specific geological and geographic characteristics of the area. These tracts may be classified as offshore or onshore, and may further be differentiated based on ownership, size, and potential for oil and gas exploration and production. The agreement outlines the terms and conditions pertaining to the payment of nonparticipating royalty to the respective mineral owners of the segregated tracts. Nonparticipating royalty refers to the compensation paid to mineral owners who are not involved in the active production or operation of the oil and gas lease but hold a beneficial interest in the minerals. The Guam Agreement establishes the calculation and payment procedure for the nonparticipating royalty, ensuring transparency, accuracy, and timely payments. The document specifies the royalty percentage, which is often a predetermined portion of the overall oil or gas production, and the frequency of royalty payments, such as monthly, quarterly, or annually. It also outlines the responsibilities of the lease operator in maintaining accurate records of production and revenue, and providing necessary reporting to the mineral owners. Furthermore, the agreement may incorporate provisions related to the duration of the agreement, termination conditions, and dispute resolution mechanisms if conflicts arise regarding royalty payments or interpretation of the agreement. These provisions aim to maintain a fair and equitable relationship between the lease operator and the nonparticipating mineral owners, ensuring compliance with legal, environmental, and regulatory requirements. In conclusion, the Guam Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a vital legal framework that establishes the terms and conditions for the payment of nonparticipating royalty for different types of segregated tracts included in a single oil and gas lease. It ensures fair compensation for nonparticipating mineral owners while facilitating efficient oil and gas operations in Guam.
