Texas 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. Texas Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal provision specific to the state of Texas that outlines the terms and conditions related to the payment of nonparticipating royalty owners (Pros) for oil and gas extraction activities on segregated tracts covered by a single lease agreement. This stipulation ensures fair treatment and compensation for Pros who may not have actively participated in the lease negotiation or drilling operations. The primary purpose of this stipulation is to establish a framework that governs the calculation, payment, and distribution of nonparticipating royalty payments among different tracts covered by a single oil and gas lease. By segregating the tracts, each is treated independently, taking into account their geological characteristics, production potential, acreage, and rights of the nonparticipating royalty owners. Different types of Texas Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease may include: 1. Segregation by Acreage: In this type, the tracts are segregated based on the total acreage under each nonparticipating royalty owner's ownership. The stipulation defines the proportionate share of royalty payments each PRO is entitled to, taking into consideration their acreage relative to the total leasehold. 2. Segregation by Production: This type focuses on segregating tracts based on their production potential. Tracts with higher production rates or proven reserves may receive a larger portion of the total royalty payments. The stipulation establishes a formula or methodology for calculating the distribution of payments, considering each tract's production contribution. 3. Segregation by Geological Characteristics: In this scenario, tracts are segregated based on their geological characteristics, such as formation type, rock permeability, or reservoir quality. Different geological zones within a lease can be allocated specific percentages of royalty payments, reflecting their distinct production potential. 4. Segregation by Rights: This type of segregation considers the rights and interests of nonparticipating royalty owners. It ensures that each PRO receives a just and equitable share of the total royalty payments based on their specific rights and entitlements as outlined in the lease agreement. It is crucial to note that specific stipulations and their variations may exist, depending on the lease, parties involved, and any state-specific legal requirements. Nonparticipating royalty owners and lessees are advised to consult with legal experts and review the lease agreement thoroughly to understand the precise terms and conditions governing the payment of royalties under segregated tracts covered by one oil and gas lease.

Texas Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal provision specific to the state of Texas that outlines the terms and conditions related to the payment of nonparticipating royalty owners (Pros) for oil and gas extraction activities on segregated tracts covered by a single lease agreement. This stipulation ensures fair treatment and compensation for Pros who may not have actively participated in the lease negotiation or drilling operations. The primary purpose of this stipulation is to establish a framework that governs the calculation, payment, and distribution of nonparticipating royalty payments among different tracts covered by a single oil and gas lease. By segregating the tracts, each is treated independently, taking into account their geological characteristics, production potential, acreage, and rights of the nonparticipating royalty owners. Different types of Texas Stipulation Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease may include: 1. Segregation by Acreage: In this type, the tracts are segregated based on the total acreage under each nonparticipating royalty owner's ownership. The stipulation defines the proportionate share of royalty payments each PRO is entitled to, taking into consideration their acreage relative to the total leasehold. 2. Segregation by Production: This type focuses on segregating tracts based on their production potential. Tracts with higher production rates or proven reserves may receive a larger portion of the total royalty payments. The stipulation establishes a formula or methodology for calculating the distribution of payments, considering each tract's production contribution. 3. Segregation by Geological Characteristics: In this scenario, tracts are segregated based on their geological characteristics, such as formation type, rock permeability, or reservoir quality. Different geological zones within a lease can be allocated specific percentages of royalty payments, reflecting their distinct production potential. 4. Segregation by Rights: This type of segregation considers the rights and interests of nonparticipating royalty owners. It ensures that each PRO receives a just and equitable share of the total royalty payments based on their specific rights and entitlements as outlined in the lease agreement. It is crucial to note that specific stipulations and their variations may exist, depending on the lease, parties involved, and any state-specific legal requirements. Nonparticipating royalty owners and lessees are advised to consult with legal experts and review the lease agreement thoroughly to understand the precise terms and conditions governing the payment of royalties under segregated tracts covered by one oil and gas lease.