The New York Lessor's Notice of Election to Take Royalty in Kind is a legal document that provides the lessor with the option to receive royalty payments in the form of goods or products, instead of cash, from the lessee for the lease of their property. This notice is typically used in the context of oil and gas leases, where the lessor may choose to receive their share of the produced oil or gas directly, rather than receiving monetary compensation. By exercising the option to take royalty in kind, the lessor becomes entitled to receive a percentage of the oil or gas produced from the leased property. This arrangement allows the lessor to potentially benefit from the market value of the natural resources, which can fluctuate over time. It can also offer certain advantages, such as bypassing potential complications that arise with monetary royalty payments, such as delays, disputes, or market uncertainties. The New York Lessor's Notice of Election to Take Royalty in Kind should contain specific details regarding the lessor's decision to opt for product-based compensation. It typically includes information such as the lessor's name, contact information, lease agreement details, effective date of the election, and the percentage of the royalty interest being elected for in-kind payment. It is worth noting that different types of New York Lessor's Notice of Election to Take Royalty in Kind may exist depending on the specific terms and conditions of the lease agreement. Variations may arise in relation to the percentage of in-kind royalty sought by the lessor, the commodities eligible for in-kind transfers, contractual obligations, and other relevant clauses. Therefore, it is essential for both the lessor and lessee to thoroughly review their lease agreement and consult legal counsel before drafting or filling out the notice. In conclusion, the New York Lessor's Notice of Election to Take Royalty in Kind provides an avenue for lessors to receive their portion of oil or gas royalties in the form of physical products rather than cash. This legal document plays a crucial role in clarifying the lessor's intent and helping to establish a transparent agreement between both parties involved in the lease.
New York Lessor's Notice of Election to Take Royalty in Kind
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FAQ
The Pugh Clause ? A clause in the Oil and Gas Lease which modifies usual pooling language to provide that drilling operations on or production from a pooled unit will not preserve the whole lease.
23. In general terms, the Pugh Clause provides that production from a unitized or pooled area located on or including a portion of the leased lands will not be sufficient to extend the primary term for the entire leasehold.
Royalty Clause There are two types of royalties, a net and a gross royalty. Normally, the oil and gas lease contains a net royalty. If the lease provides for a net royalty, this means that post-production deductions will be taken from the royalty.
The point of a retained-acreage provision is to be able to seek a new opportunity to lease unworked land to a different lessee, one who might do something productive with it. A Pugh clause is a negotiated provision in favor of the lessor. Pugh clauses modify pooling/unitization rights.
?Many land professionals are confused about what is a vertical and what is a horizontal pugh clause. LEGALLY ? a vertical pugh clause is one where all acreage outside of the well/unit boundaries must be released. LEGALLY ? a horizontal pugh clause is one where you must release acreage below a certain depth.
A phrase (usually contained in a Pugh clause in an oil & gas lease) that terminates the lease after the primary term as to all formations below a particular depth typically defined as the stratigraphic equivalent of the base of the deepest producing formation in the unit.
