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.
Virgin Islands Shut-In Oil Royalty refers to a specific type of royalty payment received from oil companies operating in the U.S. Virgin Islands when oil production is temporarily halted due to unfavorable market conditions or other economic factors. This arrangement ensures that the government of the Virgin Islands continues to benefit from oil production even when operations are temporarily suspended. Keywords: Virgin Islands Shut-In Oil Royalty, oil royalty payment, U.S. Virgin Islands, oil production, temporary halt, market conditions, economic factors, government benefit. There are two primary types of the Virgin Islands Shut-In Oil Royalty: 1. Temporary Shut-In Royalty: This type of royalty is applicable when oil production is halted temporarily due to unfavorable market conditions such as low oil prices or oversupply. Oil companies are granted the flexibility to shut down operations temporarily until market conditions improve. During this period, the U.S. Virgin Islands government receives royalty payments based on agreements established prior to the halt. 2. Force Mature Shut-In Royalty: This type of royalty applies when unforeseen circumstances prevent oil production, such as natural disasters, political instability, or infrastructure damage. Force majeure events can disrupt oil operations for an extended period, resulting in a halt in production. Regardless of the cause, oil companies are still obligated to pay the Virgin Islands Shut-In Oil Royalty during the force majeure period. In both cases, the Virgin Islands Shut-In Oil Royalty serves as a crucial revenue stream for the U.S. Virgin Islands government, ensuring a consistent flow of income even during periods of suspended oil production. This allows the government to continue providing essential services, funding infrastructure projects, and promoting economic development within the Virgin Islands. By receiving these royalty payments, the U.S. Virgin Islands maintains a vital stake in its oil industry, encouraging oil companies to resume production as soon as the market stabilizes or the force majeure situation is resolved. The Virgin Islands Shut-In Oil Royalty is an effective mechanism that benefits both the government and oil companies, ensuring financial stability and fostering growth in the region's oil sector. In conclusion, the Virgin Islands Shut-In Oil Royalty is a type of royalty payment collected by the U.S. Virgin Islands government when oil production is temporarily halted due to unfavorable market conditions or unforeseen circumstances. It serves as a crucial source of revenue, enabling the government to continue its operations and support the development of the Virgin Islands.
