This form is used 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 Agreement to stipulate and agree to the ownership of each Party's respective share of the royalty reserved in the Lease payable for production attributable to their Interests from a well located anywhere on the Lands.
The Tennessee Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that outlines the terms and conditions for the payment of nonparticipating royalty for oil and gas extracted from segregated tracts covered by a single lease in Tennessee. This agreement is crucial for ensuring fair compensation to nonparticipating royalty owners who do not have a direct working interest in the lease but still have a financial stake in the production. Under this agreement, the key parties involved include the lease operator and the nonparticipating royalty owners. The lease operator is responsible for extracting oil and gas from the segregated tracts covered by the lease, while the nonparticipating royalty owners hold the rights to a portion of the revenue generated from the production. The agreement defines the specific terms for calculating and disbursing nonparticipating royalty payments. These terms may include the size of the royalty interest and the method of calculating royalty payments based on production volumes or revenues generated. The agreement may also specify the frequency of payments, payment deadlines, and any applicable interest on late payments. To ensure transparency and accountability, the agreement may require the lease operator to provide regular statements or reports regarding production volumes, revenues, and the calculation of nonparticipating royalty payments. This allows the nonparticipating royalty owners to verify the accuracy of their payments and resolve any potential disputes. In Tennessee, there may be different types of agreements governing the payment of nonparticipating royalty under segregated tracts covered by one oil and gas lease. These variations may arise from different circumstances or negotiation points, such as specific provisions related to the extraction process, pricing formulae, or royalty payment structures. It is important for both parties to carefully review the agreement and seek legal counsel to ensure their rights and obligations are adequately addressed. Keywords: Tennessee, nonparticipating royalty, segregated tracts, oil and gas lease, agreement, payment, compensation, lease operator, nonparticipating royalty owners, revenue, production, terms, calculation, disbursement, transparency, accountability, statements, reports, disputes.
