New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease

• Category: Oil Gas and Minerals - Agreements
• State: Multi-State
• Control #: US-OG-622
• Format: Word; Rich Text

Description

This form is used when the parties own nonparticipating royalty interests in various tracts of land. The Lease covers all of the lands owned by the parties. 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 Stipulation to stipulate and agree to the ownership of each party's respective share of the royalty reserved in the lease. The New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal provision that addresses the payment of royalty to nonparticipating owners in oil and gas production activities conducted on segregated tracts. This stipulation is specifically designed to ensure fair and equitable distribution of royalties among owners and protect the rights and interests of nonparticipating owners. Keywords: New Mexico, Stipulation, Governing, Payment, Nonparticipating Royalty, Segregated Tracts, Oil and Gas Lease There are two main types of New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease: 1. Mandatory Stipulation: As per the New Mexico statutory regulations, a mandatory stipulation may be required in situations where oil and gas production activities are conducted on segregated tracts covered by a single lease. This stipulation ensures that nonparticipating owners receive their rightful share of royalty payments. 2. Optional Stipulation: In some cases, the parties involved, including the lease operator and nonparticipating owners, may choose to include an optional stipulation in the oil and gas lease agreement. This optional stipulation can further outline specific terms and conditions related to the payment of nonparticipating royalty under segregated tracts, providing additional clarity and protection for all parties involved. The New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease addresses various aspects to ensure a fair and transparent process: — Royalty Calculation: The stipulation typically outlines the formula or methodology to calculate the proportionate share of royalty payable to nonparticipating owners based on their ownership percentage in the segregated tracts. — Payment Schedule: It specifies the frequency and timing of royalty payments to nonparticipating owners, which may be monthly, quarterly, or annually, depending on the lease agreement terms. — Audit Rights: Nonparticipating owners are given the right to audit the lease operator's records to verify the accuracy of royalty payments and confirm compliance with the stipulation. — Default Provisions: The stipulation may include provisions that define the consequences of noncompliance, such as penalties or interest for late royalty payments, and the steps to be taken to resolve any disputes or disagreements. — Reporting Requirements: The stipulation may require the lease operator to provide regular reports to the nonparticipating owners, detailing production volumes, sales revenues, and the calculation of royalty payments. — Termination or Amendment: The stipulation may contain provisions allowing for its termination or amendment under certain circumstances, providing flexibility to adapt to changing conditions or legal requirements. By implementing the New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease, the state aims to promote transparency, fairness, and efficient management of oil and gas production activities on segregated tracts, benefiting both participating and nonparticipating owners alike.

The New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal provision that addresses the payment of royalty to nonparticipating owners in oil and gas production activities conducted on segregated tracts. This stipulation is specifically designed to ensure fair and equitable distribution of royalties among owners and protect the rights and interests of nonparticipating owners. Keywords: New Mexico, Stipulation, Governing, Payment, Nonparticipating Royalty, Segregated Tracts, Oil and Gas Lease There are two main types of New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease: 1. Mandatory Stipulation: As per the New Mexico statutory regulations, a mandatory stipulation may be required in situations where oil and gas production activities are conducted on segregated tracts covered by a single lease. This stipulation ensures that nonparticipating owners receive their rightful share of royalty payments. 2. Optional Stipulation: In some cases, the parties involved, including the lease operator and nonparticipating owners, may choose to include an optional stipulation in the oil and gas lease agreement. This optional stipulation can further outline specific terms and conditions related to the payment of nonparticipating royalty under segregated tracts, providing additional clarity and protection for all parties involved. The New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease addresses various aspects to ensure a fair and transparent process: — Royalty Calculation: The stipulation typically outlines the formula or methodology to calculate the proportionate share of royalty payable to nonparticipating owners based on their ownership percentage in the segregated tracts. — Payment Schedule: It specifies the frequency and timing of royalty payments to nonparticipating owners, which may be monthly, quarterly, or annually, depending on the lease agreement terms. — Audit Rights: Nonparticipating owners are given the right to audit the lease operator's records to verify the accuracy of royalty payments and confirm compliance with the stipulation. — Default Provisions: The stipulation may include provisions that define the consequences of noncompliance, such as penalties or interest for late royalty payments, and the steps to be taken to resolve any disputes or disagreements. — Reporting Requirements: The stipulation may require the lease operator to provide regular reports to the nonparticipating owners, detailing production volumes, sales revenues, and the calculation of royalty payments. — Termination or Amendment: The stipulation may contain provisions allowing for its termination or amendment under certain circumstances, providing flexibility to adapt to changing conditions or legal requirements. By implementing the New Mexico Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease, the state aims to promote transparency, fairness, and efficient management of oil and gas production activities on segregated tracts, benefiting both participating and nonparticipating owners alike.