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.
Kansas Taking Or Marketing Royalty Oil and Gas in Kind: In the state of Kansas, the taking or marketing of royalty oil and gas in kind refers to the practice of extracting resources from underground reserves and distributing them to royalty interest owners as a form of payment. This process involves various steps, including production, measurement, transportation, marketing, and revenue distribution. Kansas, being an oil and gas-rich region, has different types of arrangements and classifications when it comes to taking or marketing royalty oil and gas in kind. 1. Overall Process: The process starts with oil and gas production from wells located in Kansas. These wells are typically owned and operated by oil and gas companies. Once the resources are extracted, they move on to the next stages of measurement, transportation, and marketing. 2. Measurement: Accurate measurement of the extracted oil and gas is crucial for ensuring fair royalty distribution. Various methods are used to measure the quantity and quality of the produced resources. These may include tank measurements, flow meters, and gauges, which help determine the volume and composition of the oil and gas. 3. Transportation: After measurement, the resources are transported from the well site to facilities where they can be processed and prepared for market distribution. Pipelines or trucks are commonly used for this purpose. Transportation plays a significant role in ensuring the safe and efficient delivery of oil and gas to the appropriate marketing points. 4. Marketing: Once the extracted oil and gas reach the marketing points, they are sold to purchasers, such as refineries or energy trading companies. Marketing involves negotiating contracts, determining prices, and finding suitable buyers for the resources. The marketing process ensures the revenue generated from the sale of the oil and gas is maximized. 5. Revenue Distribution: Revenue generated from the marketing of royalty oil and gas in kind is distributed among the royalty interest owners. These owners may include individuals, landowners, or even government entities. The distribution is typically based on the royalty agreements or leases signed between the resource owners and the extracting companies. Types of Kansas Taking Or Marketing Royalty Oil and Gas in Kind: — Conventional Oil and Gas: This refers to the extraction and marketing of traditional oil and gas resources found in conventional reservoirs, such as shale formations or sandstones. Conventional methods of production and marketing are employed in this category. — Unconventional Oil and Gas: Kansas has also seen a rise in unconventional oil and gas production, such as shale gas or tight oil. This type of production requires advanced drilling techniques like hydraulic fracturing. Marketing strategies for unconventional resources may differ due to the specific challenges involved. — Natural Gas LiquidsGLSLs): Apart from oil and gas, Kansas also produces natural gas liquids, including ethane, propane, butane, and pentanes-plus. These GLS have their own market and marketing strategies, as they are often used as feedstock in the petrochemical industry or as alternative fuels. In conclusion, the taking or marketing of royalty oil and gas in kind in Kansas involves various processes such as production, measurement, transportation, marketing, and revenue distribution. While conventional and unconventional oil and gas are the primary focus, the presence of natural gas liquids further expands the range of resources being produced and marketed.
