Nebraska Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells Nebraska is known for its thriving oil and gas industry, and several amendments to the state's oil and gas leases have been made to ensure efficient and sustainable operations. One notable amendment is the addition of a shut-in provision for oil wells, which plays a crucial role in maximizing production and mitigating potential risks. The shut-in provision allows oil and gas companies to temporarily suspend production from a well without breaching their lease obligations. This provision becomes essential in situations where a well's production is temporarily unprofitable due to fluctuating market prices, equipment maintenance or repair, or any other unforeseen circumstances that could hinder profitability. By implementing a shut-in provision, a lessee can effectively halt production while still preserving their rights to the leased property. This feature provides significant flexibility for operators, enabling them to manage wells strategically and respond to market fluctuations or technical challenges efficiently. Nebraska Amendment to Oil and Gas Lease to Add Shut-In Provision for Oil Wells can be further classified into different types based on the specific conditions and terms outlined in the amendment. Here are a few examples: 1. Temporary Shut-In: This type of amendment allows the lessee to suspend production for a specific period, typically ranging from a few months to a year. It provides flexibility for the operator to react to short-term market fluctuations or deal with minor equipment issues without terminating the lease. 2. Extended Shut-In: An extended shut-in amendment grants the lessee the right to suspend production for an extended period beyond the initial temporary shut-in provision. This type of amendment is usually applicable in cases where more significant repairs, technical advancements, or long-term market conditions necessitate a longer period without production. 3. Shut-In Royalty Relief: Some Nebraska amendments to oil and gas leases with shut-in provisions also address royalty payments during a shut-in period. These amendments may offer lessees reduced or no royalty payments while the production is temporarily suspended. Such provisions ease the financial burden on operators and encourage continued investment in the leased property. 4. Well Stimulation Exception: In certain cases, an amendment may include an exception to allow for temporary shut-in provisions without well stimulation requirements. This benefits operators by reducing expenses and streamlining operational processes during shut-in periods. In summary, Nebraska Amendment to Oil and Gas Lease to Add Shut-In Provision for Oil Wells enhances the flexibility and sustainability of oil and gas operations. It serves as a valuable tool for lessees to manage fluctuating market conditions, equipment maintenance, or unforeseen challenges. Different types of shut-in provisions exist, including temporary, extended, shut-in royalty relief, and well stimulation exceptions, each tailored to address specific circumstances while maintaining the long-term viability of oil wells within the state.
Nebraska Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells
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FAQ
Surrender Clause A clause commonly found in an oil and gas lease authorizing a lessee to release its rights to all or any portion of the leased premises at any time and be relieved of further obligations relating to the acreage surrendered.
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.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
What is the granting clause? The granting clause is the clause under which the owner of the oil and gas rights leases the oil and gas rights to the oil and gas company along with the right to develop the oil and gas on a specifically described piece of real estate.
What is the granting clause? The granting clause is the clause under which the owner of the oil and gas rights leases the oil and gas rights to the oil and gas company along with the right to develop the oil and gas on a specifically described piece of real estate.
By way of background, a ?free use? clause is a provision in an oil/gas lease which gives the lessee the right to use gas produced from the leasehold.
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.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.