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.
Louisiana Shut-In Oil Royalty refers to the royalty payment received by oil and gas lease owners in the state of Louisiana when their production of oil is temporarily halted or shut-in due to various reasons. Shut-in status occurs when oil or natural gas production is temporarily suspended typically due to a decline in market demand, adverse weather conditions, lack of infrastructure, or safety concerns. In such cases, the lease owners still continue to hold the lease and can receive Louisiana Shut-In Oil Royalty. There are different types of Louisiana Shut-In Oil Royalty, including: 1. Economic Shut-In Royalty: This type of Louisiana Shut-In Oil Royalty occurs when the revenue generated from selling the oil or natural gas falls below the operating costs associated with production. When the selling price drops significantly, it becomes more economically feasible for lease owners to shut-in their production rather than sustaining losses. 2. Force Mature Shut-In Royalty: Force majeure events, such as hurricanes, floods, or other natural disasters, can cause oil and gas production activities to shut down temporarily. In these instances, the lease owners are entitled to Louisiana Shut-In Oil Royalty as a compensation for the lost production during the force majeure event. 3. Market-Related Shut-In Royalty: When market conditions cause a significant drop in oil prices or demand, lease owners may decide to shut-in their production temporarily. This type of Louisiana Shut-In Oil Royalty is aimed at maintaining balance in the supply-demand dynamics of the oil market and mitigating potential losses that might arise from selling oil or natural gas at lower prices. 4. Regulatory Shut-In Royalty: In certain cases, regulatory authorities may order the shut-in of oil and gas production due to safety concerns or compliance issues. Lease owners are then eligible to receive Louisiana Shut-In Oil Royalty as a result of the government-mandated temporary cessation. 5. Infrastructure-Related Shut-In Royalty: Lack of infrastructure, such as pipelines or storage facilities, can lead to shut-ins of oil and gas production. This can occur when there is limited capacity to transport or store the produced oil or gas. Lease owners are entitled to Louisiana Shut-In Oil Royalty in these situations to compensate for the inability to deliver or sell the produced resources. In conclusion, Louisiana Shut-In Oil Royalty refers to the royalty payments received by lease owners when their oil production is temporarily halted or shut-in due to various factors. The different types of Louisiana Shut-In Oil Royalty include economic shut-ins, force majeure shut-ins, market-related shut-ins, regulatory shut-ins, and infrastructure-related shut-ins.
