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 Washington Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that sets out the terms and conditions for the distribution of royalty payments on oil and gas leases in Washington state. This agreement ensures fair and equitable compensation for nonparticipating royalty owners who own sub-surface rights but are not actively involved in the exploration or production activities. Under this agreement, nonparticipating royalty owners are entitled to a percentage of the total amount of sales or production derived from the segregated tracts covered by the lease. The agreement specifies the calculation methods to determine the royalty share, which may vary depending on the type of mineral extracted (oil or gas) and the wellhead price at the time of production. Different types of Washington Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease include: 1. Gas Lease Agreement: This type of agreement pertains specifically to tracts where natural gas is being extracted. It outlines the terms, conditions, and payment calculations specific to gas production. 2. Oil Lease Agreement: Focusing on tracts where crude oil is being extracted, this type of agreement addresses the unique aspects of oil production, including pricing and royalty calculations based on barrels of oil produced. The Washington Agreement aims to provide transparency and prevent disputes between participating and nonparticipating royalty owners. It ensures that these nonparticipating owners receive their rightful share of revenue generated by oil and gas activities on the leased tracts. The document helps maintain a fair and efficient system for royalty payments, giving all parties involved confidence in the management of the lease and encouraging further investment in the exploration and production of oil and gas resources in Washington state.
