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.
Tennessee Offset Well Protection and Payment of Compensatory Royalty is a legal provision in Tennessee's oil and gas industry that aims to protect existing wells from the adverse effects of new drilling activities. This measure ensures that compensation is provided to well owners when their wells are negatively impacted by nearby drilling operations. In Tennessee, there are two distinct types of Offset Well Protection and Payment of Compensatory Royalty: 1. Offset Well Protection: This aspect of the provision guarantees that any proposed drilling operations near an existing well must comply with certain setback requirements. These requirements are in place to prevent interference or detrimental effects on the production of nearby wells. The setback distance varies depending on the specific characteristics of the existing well. 2. Payment of Compensatory Royalty: In cases where drilling operations result in a reduction in production or interference with an existing well, the operator of the new well is required to pay a compensatory royalty to the owner of the impacted well. This royalty serves as fair compensation for any loss in production or damages suffered by the existing well owner due to the new drilling activity. Keywords: Tennessee oil and gas industry, Offset Well Protection, Compensatory Royalty, drilling activities, setback requirements, interference, production, damages.Tennessee Offset Well Protection and Payment of Compensatory Royalty is a legal provision in Tennessee's oil and gas industry that aims to protect existing wells from the adverse effects of new drilling activities. This measure ensures that compensation is provided to well owners when their wells are negatively impacted by nearby drilling operations. In Tennessee, there are two distinct types of Offset Well Protection and Payment of Compensatory Royalty: 1. Offset Well Protection: This aspect of the provision guarantees that any proposed drilling operations near an existing well must comply with certain setback requirements. These requirements are in place to prevent interference or detrimental effects on the production of nearby wells. The setback distance varies depending on the specific characteristics of the existing well. 2. Payment of Compensatory Royalty: In cases where drilling operations result in a reduction in production or interference with an existing well, the operator of the new well is required to pay a compensatory royalty to the owner of the impacted well. This royalty serves as fair compensation for any loss in production or damages suffered by the existing well owner due to the new drilling activity. Keywords: Tennessee oil and gas industry, Offset Well Protection, Compensatory Royalty, drilling activities, setback requirements, interference, production, damages.
