Title: Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease Keywords: Kentucky, amendment, oil and gas lease, paid-up extension, primary term of lease Introduction: The Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease is a legally binding document that allows landowners and oil and gas companies operating in Kentucky to extend the primary term of their existing lease. This extension is granted upon the payment of a lump-sum amount, known as the "paid-up extension," and provides the lessee with extended rights and privileges for further exploration and extraction. Types of Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease: 1. Standard Kentucky Oil and Gas Lease Amendment: This type of amendment applies to the conventional oil and gas operations in Kentucky, allowing lessees to extend the primary term of the lease upon payment of a lump sum. It requires the lessee to go through a formal process to legally extend the lease's primary term and continue the oil and gas activities. 2. Kentucky Shale Gas Lease Amendment: This specific type of amendment caters to the shale gas industry in Kentucky. It provides options for lessees to extend the primary term of shale gas leases to continue exploration, drilling, and extraction activities. The amendment outlines the necessary provisions and requirements specific to the shale gas sector. 3. Conditional Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term: This amendment comes into effect when certain conditions are met, such as prior drilling activities or the discovery of commercially viable oil and gas reserves on the leased property. It allows the lessee to extend the primary term by paying the specified lump-sum amount and fulfilling the specified conditions. 4. Specialized Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term: This type of amendment is customized to address unique circumstances or situations that may arise during the lease term. It addresses additional provisions, restrictions, or specific requirements that may be essential for the extension of the lease's primary term. Key Elements of the Amendment: The Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease typically includes the following elements: 1. Parties involved: — Names and contact information of the lessor (landowner) and lessee (oil and gas company). — Description of the leased property. 2. Extension terms: — Specifies the primary term's original expiration date. — The agreed-upon length of the paid-up extension period. — The lump-sum amount to be paid by the lessee as consideration for the lease extension. 3. Conditions and restrictions: — Any specific conditions that must be met to exercise the extension option. — Adherence to environmental regulations and monitoring. — Compliance with local and state laws regarding oil and gas operations. 4. Rights and obligations: — Clarification of the lessee's expanded rights and privileges during the extended primary term. — Obligations of the lessee, including payment terms, reclamation requirements, and liabilities. Conclusion: The Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease offers an opportunity for landowners and oil and gas companies to extend the primary term of their lease agreement in Kentucky. The type of amendment required depends on factors such as the nature of oil and gas operations, existing conditions, and unique circumstances. It is crucial for both parties to negotiate and execute the amendment in compliance with applicable laws and regulations to ensure a successful extension of the lease.
Kentucky Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease
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A clause in an oil & gas lease that provides that if the leased land is later owned by separate parties, such as in a sale of part of the property, the lessee can continue to operate, develop, and treat the lease as a whole and pay royalties to each owner based on its percentage of ownership of the entire area.
If a lease is a "paid-up" lease, then the lease will remain in effect during the entire primary term with no further payments to the Lessor unless and until actual production of oil or gas is established.
1. n. [Oil and Gas Business] The period of time during which an oil and gas lease will be in effect, in the absence of production, drilling or other operations specified by the lease.
Habendum Clause: Once the Primary Term expires, the habendum clause controls when the lease expires or how long it remains in effect (this lease term after the Primary Term is called the ?secondary term?).
The primary term is the initial period during which a well may be drilled. If a successful well is drilled within the primary term, the lease will extend for as long as the well remains productive. If a well is not drilled within the primary term, the lease will usually expire.
In a few words, a pooling clause is written into a lease. This oil and gas clause allows the leased premises to be combined with other lands to form a single drilling unit. It's not uncommon for there to be a pool of oil or gas under numerous parcels of land.
There are two terms in a gas and oil lease: known as the primary term and the secondary term. Normally, the primary term is for a specific amount of time which lasts between the period of 1, 3, 5, 7 or 10 years.
A Pugh Clause is enforced to ensure that a lessee can be prevented from declaring all lands under an oil and gas lease as being held by production. This remains true even when production only takes place on a fraction of the property.
