This form is used to resolve any question as to how royalty is to be paid to the Parties in the event of production, under the Lease, on any part of the Lands. The Parties are entering into this Agreement to stipulate and agree to the ownership of each Party's respective share of the royalty reserved in the Lease payable for production attributable to their Interests from a well located anywhere on the Lands.
Title: Exploring the New Mexico Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by One Oil and Gas Lease Introduction: The New Mexico Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by One Oil and Gas Lease is an essential legal instrument that ensures fair compensation for nonparticipating royalty owners in the state. This agreement regulates the distribution of royalties among individuals or entities who do not have working interests in oil and gas leases within segregated tracts. Types of New Mexico Agreements Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by One Oil and Gas Lease: 1. Standard Agreement: The standard agreement is the primary framework established by the state of New Mexico to regulate the payment of nonparticipating royalties. It provides a comprehensive set of guidelines, clauses, and obligations for both the operator and royalty owners. 2. Customized Agreements: In some cases, parties may negotiate customized agreements tailored to their specific circumstances. These agreements may include specific provisions, adjustments, or concessions that differ from the standard agreement. Important Keywords: 1. Nonparticipating Royalty: Refers to the share of revenue obtained from oil and gas leases granted to individuals or entities who do not hold working interests. Nonparticipating royalty owners typically have no decision-making authority over the operation and development of the leased land. 2. Segregated Tracts: These are distinct sections of land within a larger area, characterized by separate ownership or specific lease provisions. Segregated tracts allow for different treatment of royalties, lease terms, or other aspects to accurately reflect the interests and rights of individual owners. 3. Oil and Gas Lease: A contractual agreement between the mineral rights' owner (lessor) and an oil and gas exploration or production company (lessee), permitting the lessee to explore, develop, and extract hydrocarbon resources from the lessor's land. 4. Operator: The company or entity responsible for operating and developing oil and gas assets. The operator manages drilling operations, production, marketing, and overall field management while distributing royalties among participating and nonparticipating royalty owners. 5. Royalty Distribution: The process of allocating revenue derived from oil and gas production to royalty interest owners. This distribution is usually based on the percentage or fraction calculated in lease agreements, considering factors such as production volume, pricing, and terms outlined in the New Mexico Agreement Governing Payment of Nonparticipating Royalty. Conclusion: The New Mexico Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by One Oil and Gas Lease establishes a fair and transparent mechanism for compensating nonparticipating royalty owners. By understanding the key aspects and keywords associated with this agreement, landowners and operators can navigate the complexities of royalty distribution, ensuring compliance with the state's regulations.
