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.
Texas Minimum Royalty Payments are a crucial aspect of the oil and gas industry in the state of Texas. These payments refer to the minimum amount that an oil or gas company must pay to the mineral rights owner based on a set percentage of production. In Texas, there are two main types of Minimum Royalty Payments: statutory minimum royalty and contractual minimum royalty. Statutory Minimum Royalty: The statutory minimum royalty is the minimum amount set by the state law that a mineral rights owner is entitled to receive regardless of the terms negotiated in the lease agreement. As per the Texas Natural Resources Code, the statutory minimum royalty percentage is generally 1/8th or 12.5% of the value of production. However, for certain types of leases, such as School Land Board leases, the minimum royalty may be higher. Contractual Minimum Royalty: Contractual minimum royalty, on the other hand, is the minimum amount agreed upon by the parties involved in the lease contract. This type of minimum royalty is negotiated between the mineral rights owner and the oil or gas company. The contractual minimum royalty is often higher than the statutory minimum and can range from 3/16th (18.75%) to 1/4th (25%) or even more, depending on various factors such as the negotiation power of the mineral rights' owner, the lease terms, and market conditions. Both statutory and contractual minimum royalty payments are critical in ensuring that mineral rights owners receive a fair share of the revenue generated from oil and gas production. These payments provide a financial safeguard, guaranteeing a minimum income for the owners, even if the market prices fluctuate or production volumes fluctuate. It is important for mineral rights owners to thoroughly review their lease agreements and understand the provisions related to minimum royalty payments. By doing so, they can ensure that they are receiving the full royalties they are entitled to based on the specific terms outlined in the agreement. In conclusion, Texas Minimum Royalty Payments play a vital role in the oil and gas industry by protecting the rights and interests of mineral rights owners. By establishing a minimum guaranteed income, both statutory and contractual minimum royalties provide stability and ensure a fair distribution of revenue between the parties involved in oil and gas production in the state of Texas.Texas Minimum Royalty Payments are a crucial aspect of the oil and gas industry in the state of Texas. These payments refer to the minimum amount that an oil or gas company must pay to the mineral rights owner based on a set percentage of production. In Texas, there are two main types of Minimum Royalty Payments: statutory minimum royalty and contractual minimum royalty. Statutory Minimum Royalty: The statutory minimum royalty is the minimum amount set by the state law that a mineral rights owner is entitled to receive regardless of the terms negotiated in the lease agreement. As per the Texas Natural Resources Code, the statutory minimum royalty percentage is generally 1/8th or 12.5% of the value of production. However, for certain types of leases, such as School Land Board leases, the minimum royalty may be higher. Contractual Minimum Royalty: Contractual minimum royalty, on the other hand, is the minimum amount agreed upon by the parties involved in the lease contract. This type of minimum royalty is negotiated between the mineral rights owner and the oil or gas company. The contractual minimum royalty is often higher than the statutory minimum and can range from 3/16th (18.75%) to 1/4th (25%) or even more, depending on various factors such as the negotiation power of the mineral rights' owner, the lease terms, and market conditions. Both statutory and contractual minimum royalty payments are critical in ensuring that mineral rights owners receive a fair share of the revenue generated from oil and gas production. These payments provide a financial safeguard, guaranteeing a minimum income for the owners, even if the market prices fluctuate or production volumes fluctuate. It is important for mineral rights owners to thoroughly review their lease agreements and understand the provisions related to minimum royalty payments. By doing so, they can ensure that they are receiving the full royalties they are entitled to based on the specific terms outlined in the agreement. In conclusion, Texas Minimum Royalty Payments play a vital role in the oil and gas industry by protecting the rights and interests of mineral rights owners. By establishing a minimum guaranteed income, both statutory and contractual minimum royalties provide stability and ensure a fair distribution of revenue between the parties involved in oil and gas production in the state of Texas.
