The New York Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells is an important agreement for oil and gas operators within the state. This amendment aims to provide a provision that allows operators to temporarily halt production or shut-in oil wells under certain circumstances. With the constantly evolving oil and gas industry, it is crucial for operators to have flexibility in managing well production. The Shut-In Provision allows operators to temporarily cease production without risking the termination of their lease agreement. There are different types of New York Amendments to Oil and Gas Lease to Add Shut-In Provision For Oil Wells, each designed to address specific aspects and scenarios. Some common types include: 1. Standard Shut-In Provision: This type of amendment enables operators to temporarily shut-in oil wells due to unforeseen circumstances, such as equipment failure or low oil prices. It allows them to suspend production while maintaining their lease rights. 2. Financial Hardship Shut-In Provision: This type of amendment is intended to assist operators who are facing financial difficulties that prevent them from proper well maintenance or operations. It allows them to shut-in the well temporarily until they can overcome the financial obstacles. 3. Environmental or Regulatory Compliance Shut-In Provision: This kind of amendment allows operators to shut-in oil wells to comply with environmental regulations or resolve any non-compliance issues. It ensures that operators can take necessary actions to address environmental concerns while protecting their lease rights. 4. Force Mature Shut-In Provision: This amendment acknowledges that certain events beyond the control of operators may force them to shut-in oil wells temporarily. Events like natural disasters, wars, or government actions can trigger the provision, giving operators the right to temporarily suspend production. In conclusion, the New York Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells provides essential flexibility for operators in managing oil well production. By implementing the appropriate type of shut-in provision, operators can safeguard their lease rights while addressing various circumstances that may arise during the course of oil well operations.
New York Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells
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FAQ
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.
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.
With a Pugh Clause, if they don't have that other 50 acres pooled into a unit within that five-year term, then they have to pay you to extend the undeveloped 50 acres for five more years. Without a Pugh Clause, they could say those 50 acres are HBP and they wouldn't have to pay you.
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.
Royalty Payment Clauses A royalty is agreed upon as a percentage of the lease, minus what was reasonably used in the lessee's production costs. This is stipulated in a Royalty Clause. The royalty is paid by the lessee to the owner of the mineral rights, the lessor in the lease.
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.
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.
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.