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.
Utah Shut-In Gas Royalty refers to the compensation paid to Utah gas royalty owners when their gas wells are temporarily shut-in due to various factors such as low gas prices, pipeline constraints, or unfavorable market conditions. This royalty payment serves as a financial assurance to the gas royalty owners who are unable to produce gas from their wells within the specified time frame. The Shut-In Gas Royalty program in Utah allows gas operators to temporarily halt production from their wells and still pay royalties to the owners. This program helps operators in managing production and reserves during periods of economic downturn or market volatility. There are different types of Utah Shut-In Gas Royalty based on the specific circumstances leading to the well shutdown: 1. Price-Based Shut-In Royalty: When gas prices fall below a certain predetermined threshold, gas operators may choose to shut-in their wells. In such cases, royalty owners are entitled to a shut-in royalty payment. 2. Pipeline Capacity Shut-In Royalty: When the available pipeline capacity is insufficient to transport the gas produced from wells, operators may decide to shut-in some wells to avoid overproduction. Under this scenario, royalty owners will be compensated with a shut-in gas royalty. 3. Market Condition-Based Shut-In Royalty: In situations where the overall market conditions are unfavorable, gas operators may temporarily shut-in their wells until the market recovers. Utah gas royalty owners affected by this type of shut-in will receive a specific shut-in royalty payment. Utah Shut-In Gas Royalty is an essential financial tool that protects both gas operators and royalty owners during periods of low gas prices or constrained infrastructure capacity. By incentivizing operators to temporarily shut-in wells instead of producing at a loss, the shut-in royalty program helps maintain the long-term sustainability of Utah's gas industry.
