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 Shut-In Oil Royalty refers to a particular type of oil royalty that applies to oil producers in Oklahoma who had to shut down their oil wells due to economic factors. This concept became particularly relevant during the global COVID-19 pandemic and the subsequent drop in oil prices, forcing many oil companies to halt production temporarily. The term "shut-in" in the Oklahoma Shut-In Oil Royalty refers to the action of closing or suspending oil wells for an indefinite period while awaiting better market conditions. This decision is an attempt to minimize losses when the oil prices are unprofitable for continued production. By shutting-in wells, producers save the cost of operation and maintenance, as well as avoid selling oil at a low price. Oklahoma Shut-In Oil Royalty allows these oil producers to receive royalties even when production is temporarily stopped, alleviating some financial burdens. These royalties compensate for the inability to generate income during the shut-in period. The specific terms and conditions of these royalties are usually negotiated in lease agreements between oil producers and mineral rights owners. While the basic notion of Oklahoma Shut-In Oil Royalty remains the same, there may be variations or types of this royalty arrangement depending on individual lease agreements or legal frameworks. Some potential types of Oklahoma Shut-In Oil Royalty include: 1. Percentage-Based Shut-In Royalty: Under this arrangement, the royalty payments during the shut-in period are calculated based on a percentage of the original production royalty. For example, if the production royalty was 20%, the shut-in royalty might be a reduced percentage, such as 10%. 2. Fixed Shut-In Royalty: In this type, a fixed amount is determined for shut-in royalties, which remains constant irrespective of previous production rates or changes in oil prices. This provides stability to both the oil producer and the mineral rights' owner. 3. Time-Limited Shut-In Royalty: This category of Oklahoma Shut-In Oil Royalty specifies a predefined period during which the shut-in royalty applies. Once this period elapses, regular royalty payments resume, and the well must resume production or face potential lease termination. It's essential to consult legal professionals or industry experts for accurate information on the types and specific details of Oklahoma Shut-In Oil Royalty, as they may vary depending on the circumstances, lease agreements, and regulatory framework in effect.
