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 Utah 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 and distribution of nonparticipating royalty in Utah. This agreement applies specifically to oil and gas leases that involve segregated tracts within the state. Under this agreement, nonparticipating royalty refers to the royalty interest owned by a party who does not have a working interest in the oil and gas lease but is entitled to receive a portion of the revenue generated from the production of oil and gas on the leased tracts. The purpose of this agreement is to establish a framework for determining the payment and distribution of nonparticipating royalty between the parties involved, ensuring a fair and equitable distribution of the proceeds from oil and gas production. Key provisions and clauses within the Utah Agreement Governing Payment of Nonparticipating Royalty may include: 1. Definitions: This section defines key terms used throughout the agreement, such as "nonparticipating royalty interest," "segregated tracts," and "working interest." 2. Calculation of Nonparticipating Royalty: This clause outlines the method for calculating the nonparticipating royalty based on the production and sale of oil and gas from the covered segregated tracts. It may include details on the royalty percentage, pricing mechanism, and adjustments for relevant costs. 3. Payment and Distribution: This section specifies the frequency and manner in which nonparticipating royalty payments will be made. It may address the accounting procedures, allocation of costs, deductions, and set-off rights of the parties involved. 4. Auditing and Reporting: This clause may require the operator of the oil and gas lease to provide regular reports and accounting to the nonparticipating royalty interest owner. It may also allow for periodic audits to ensure compliance with the terms of the agreement. 5. Dispute Resolution: This section establishes a mechanism for resolving any disputes or disagreements arising from the interpretation or implementation of the agreement. It may include provisions for mediation, arbitration, or litigation. Different types of Utah Agreements Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease may exist, depending on the specific circumstances and parties involved. For example, there might be variations based on the size and location of the segregated tracts, the ownership structure of the nonparticipating royalty interest, or the applicable regulatory requirements. However, the core purpose of these agreements remains consistent: to govern the payment and distribution of nonparticipating royalty in relation to oil and gas production on segregated tracts covered by a single lease in Utah.
