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Illinois Offset Well Protection and Payment of Compensatory Royalty

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US-OG-810
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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.

Illinois Offset Well Protection and Payment of Compensatory Royalty ensures fair compensation for landowners and operators in the event of drilling activities near an existing well. This regulatory measure safeguards against any adverse effects caused by offset drilling operations. In Illinois, the Offset Well Protection regulation is designed to protect the integrity and productivity of existing wells during offset drilling. This means that before any new drilling activities can commence near an existing well, certain precautions must be taken to prevent any potential damage or disruption to the existing well. One type of Illinois Offset Well Protection is the requirement for operators to submit an Offset Well Protection Plan before commencing any drilling activities near an existing well. This plan outlines the measures and procedures the operator will implement to minimize any adverse effects on the nearby wells. The plan may include actions such as directional drilling techniques to avoid intersecting the existing well, using appropriate casing and cementing procedures, and monitoring the pressure differentials to ensure stability. Payment of Compensatory Royalties is another crucial aspect of Illinois Offset Well Protection. It ensures that landowners with existing wells are fairly compensated for any reduction in production or potential damages caused by nearby offset drilling activities. These compensatory royalties act as a form of financial compensation for the landowners, mitigating any financial losses incurred due to decreased productivity or damages to their well. Different types of compensatory royalties may include surface damages payments, which compensate landowners for any physical damage to their property caused by the drilling operations, or royalty adjustments, which compensate landowners for any reduction in production due to offset drilling activities. Overall, the Illinois Offset Well Protection and Payment of Compensatory Royalty regulations work in tandem to ensure the harmonious coexistence of new drilling activities and existing wells. These regulations aim to protect the rights and interests of both operators and landowners, ensuring fair compensation for potential damages and maintaining the integrity of the state's oil and gas resources.

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FAQ

What is the difference between working interest and royalty interest? Working interests are oil and gas investments that give owners the right to exploit the resources on a property. Royalty interests are the rights belonging to the landowner who leased out the property to the working interest owner.

An overriding royalty interest (ORRI) is an interest carved out of a working interest. It is: A percentage of gross production that is not charged with any expenses of exploring, developing, producing, and operating a well.

Compensatory royalty A royalty paid in lieu of drilling a well that would otherwise be required under the covenants of a lease, express or implied. compensatory royalty agreement An agreement developed for unleased Federal or Indian land being drained by a well located on adjacent land.

Royalty interest in the oil and gas industry refers to ownership of a portion of a resource or the revenue it produces. A company or person that owns a royalty interest does not bear any operational costs needed to produce the resource, yet they still own a portion of the resource or revenue it produces.

Royalties are an important source of income for landowners who have mineral rights. They can provide a steady stream of income over many years, as oil and gas production can last for decades.

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When the Offset Well Protection and Payment of Compensatory Royalty is downloaded you are able to fill out, print and sign it in any editor or by hand. Get ... Sep 21, 2015 — drill a protective well, pay compensatory royalty, enter into an agreement (e.g., communitization agreement, participating area agreement ...The compensatory royalty shall be based upon the estimated drainage, as determined by the board, and shall be paid on a monthly basis unless circumstances ... by BM Kramer · 1995 · Cited by 12 — a well on an adjacent tract and that co=unitization, the drilling of an offset well, or the payment of compensatory royalties was required."8. Ms. Ptasynski ... Lessor Oil and Gas Lease Form and Geophysical Option Agreements - The Royalty Owner Forms Program provides lease forms that are intended for use by a mineral ... by HR Williams · 1961 · Cited by 2 — ... well or wells to protect lessor's interest or to pay compensatory or offset royalty as hereinabove provided shall cause termination and cancellation of this ... In the face of such “deemed” drainage, the lessee has a choice: drill an offset well, provide geological or technical evidence that no drainage is occurring, ... FOSTER APPEAL (a) Failure to drill offset well. The Fosters claim compensatory royalties because of Atlantic's failure to drill a west offset well to Fair No. This handbook establishes procedures for each action necessary to accomplish management ofthe Fluid Mineral estate. The Fluid Mineral estate consists ofthe. ... in gas well royalty payment shall extend the term of this lease for a period ... payment by the Lessee of compensatory royalty, at the royalty rate provided for.

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Illinois Offset Well Protection and Payment of Compensatory Royalty