This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
Oklahoma Minimum Royalty Payments, also known as minimum royalty provisions or minimum royalty rates, refer to the legally mandated minimum payment per acre or per well that mineral owners or lessors are entitled to receive from oil and gas production on their land in the state of Oklahoma. These minimum royalty payments act as a safeguard to ensure that oil and gas producers or lessees compensate mineral owners with a fair amount, regardless of the actual production or market prices. These provisions aim to protect the interests of landowners and prevent unfair exploitation. There are different types of Oklahoma Minimum Royalty Payments that can vary depending on the terms negotiated in the lease agreement or set by law: 1. State-mandated minimum royalty rate: Oklahoma law establishes a minimum royalty rate that operators must pay to lessors based on the type of minerals being produced. For example, the minimum rate for oil might differ from that for natural gas. 2. Percentage-based minimum royalties: Some lease agreements in Oklahoma may define a specific percentage of the gross income, typically 12.5% to 20%, as the minimum royalty payment. This means that regardless of the production levels or prices, the lessor is guaranteed to receive at least this percentage of the revenue. 3. Fixed-sum minimum royalty payments: In certain cases, lease agreements may stipulate a fixed-dollar amount per acre or per well as the minimum royalty payment. This fixed-sum can be negotiated between the lessor and lessee, and it remains constant regardless of fluctuations in production or market prices. 4. Combination provisions: Often, a lease agreement may include a combination of percentage-based and fixed-sum minimum royalty payments. This allows the lessor to receive a minimum amount per acre or well, along with a certain percentage of the gross revenue, ensuring added protection and flexibility. The purpose of these different types of Oklahoma Minimum Royalty Payments is to establish a baseline compensation that mineral owners are entitled to, irrespective of the market conditions. It ensures a fair and consistent income stream for the lessor, acting as a check against potential underpayment or manipulation by oil and gas operators.
