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.
Maryland Shut-In Oil Royalty refers to a specific type of royalty payment associated with oil wells in the state of Maryland that have been temporarily ceased from production. When an oil well is shut-in, it means that the well is closed or stopped from extracting oil due to various reasons, such as low oil prices, lack of demand, or technical issues. In such cases, oil companies may still be required to make royalty payments to the property owner or the oil well leaseholder, known as shut-in oil royalties. The Maryland Shut-In Oil Royalty provides compensation to the owners of oil wells for the temporary halt in production. This royalty payment helps offset the potential loss of income during the shut-in period. The amount of shut-in oil royalty paid is typically a percentage of the total value of oil extracted from the well or a fixed amount agreed upon in the lease agreement. There are different types of Maryland Shut-In Oil Royalty that can be categorized based on the terms of the lease agreement. These include: 1. Fixed Percentage Royalty: In this type of shut-in royalty, the owner or leaseholder agrees upon a fixed percentage of the oil's value that will be paid as royalty during the shut-in period. For example, if the agreed percentage is 10% and the well produces 1,000 barrels of oil during the shut-in period, the royalty payment would be calculated as 10% of the total value of those 1,000 barrels. 2. Fixed Amount Royalty: Instead of a percentage, this type of shut-in oil royalty involves a fixed monetary amount that is paid during the shut-in period. The agreed-upon amount is typically based on the anticipated production levels and market conditions. 3. Time-Based Royalty: Some shut-in royalty agreements may be based on time rather than production. In this case, the leaseholder is obligated to pay a predetermined amount for each month or year that the well remains shut-in, regardless of the actual production levels. Maryland Shut-In Oil Royalty plays a crucial role in providing financial stability to owners and leaseholders of oil wells during periods of halted production. It ensures that they continue to receive compensation for their resources even when extraction is temporarily ceased.
