Ohio 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.

Ohio Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal agreement that outlines the payment terms and conditions for nonparticipating royalty owners in Ohio who own segregated tracts covered by a single oil and gas lease. This stipulation provides clarity and guidelines for the distribution of royalty payments to multiple owners who have interests in different portions or tracts of the same leasehold. In Ohio, there are two main types of stipulations governing the payment of nonparticipating royalty under segregated tracts covered by one oil and gas lease: 1. Unitization Stipulation: This stipulation applies when multiple tracts are merged into a single unit. A unit is a consolidated area where the production is treated as if it is coming from a single tract. The unitization stipulation governs the distribution of royalty payments to nonparticipating owners based on their ownership interests in the consolidated unit. 2. Pooling Stipulation: This stipulation comes into play when there is a need to pool together small or irregularly shaped tracts of land under a single lease to maximize the efficiency of oil and gas extraction. The pooling stipulation outlines how the nonparticipating royalty owners will be compensated for their interests in the pooled area. The Ohio Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease typically includes the following key provisions: 1. Ownership Ratios: The stipulation specifies the percentage of ownership for each nonparticipating royalty owner in the segregated tracts covered by the lease. 2. Royalty Payment Calculation: It details the formula or method used to calculate the royalty payments owed to each nonparticipating royalty owner based on their ownership ratios. This formula may take into account factors such as production volumes, prices, and deductions. 3. Disbursement Schedule: The stipulation outlines the frequency and timing of royalty payments to nonparticipating royalty owners, ensuring they receive their fair share of the proceeds in a timely manner. 4. Auditing Rights: It may grant the nonparticipating royalty owners the right to audit the books and records of the lessee to verify the accuracy of the royalty payments made. 5. Dispute Resolution Mechanisms: The stipulation may lay out the procedures for resolving any disputes or disagreements related to the payment of nonparticipating royalty, including mediation, arbitration, or litigation. 6. Maintenance of Records: The stipulation often requires the lessee to maintain adequate records and provide regular reports to the nonparticipating royalty owners, ensuring transparency and accountability in the payment process. Overall, the Ohio Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease ensures that nonparticipating royalty owners receive their rightful share of the proceeds generated from the oil and gas production in a fair and consistent manner in accordance with the terms of the lease agreement and relevant Ohio state laws.