This form is a Texas Lease agreement wherein Lessor grants, leases, and lets exclusively to Lessee the lands described within for the purposes of conducting seismic and geophysical operations, exploring, drilling, mining, and operating for, producing and owning oil, gas, sulfur, and all other minerals whether or not similar to those mentioned (collectively the oil or gas ), and the right to make surveys, lay pipelines, establish and utilize facilities for surface or subsurface disposal of salt water, construct roads and bridges, dig canals, build tanks, power stations, power lines, telephone lines, and other structures on the Lands, necessary or useful in Lessee's operations on the Lands or any other land adjacent to the Lands. This lease form also provides for pooling.
Arlington Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision: Explained The Arlington Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision is a critical component of oil and gas leasing contracts in the Arlington, Texas region. This provision serves as a safeguard for the oil and gas producers, providing them with flexibility during periods of reduced or halted production due to unforeseen circumstances. By understanding the various types of this provision, landowners and investors can make informed decisions. 1. Definition and Purpose: The Arlington Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision is a contractual clause specifically designed to handle situations where the production of oil or gas from a lease is interrupted or shut down due to unavoidable events. It provides compensation to the producers to cover their losses during these unforeseen circumstances. 2. Types of Shut-In Royalty Provisions: a) Temporary Shut-In Provision: This provision allows the oil and gas producers to temporarily suspend production due to maintenance, repairs, or market conditions such as low oil prices. During this period, the producers receive a predetermined shut-in royalty payment to offset their financial losses. b) Permanent Shut-In Provision: This provision comes into effect when the lease is permanently shut down due to factors such as depleted reserves, profitability, or regulatory restrictions. In such cases, the producer receives a lump-sum payment or additional compensation based on the remaining value of the lease. c) Pooling Shut-In Provision: A Pooling Shut-In Royalty Provision is applicable when multiple leases are combined or "pooled" together for joint production. If one of the leases within the pool is shut down temporarily or permanently, the provision outlines the compensation arrangements for the affected parties based on their respective lease interests. 3. Benefits for the Producers: The Arlington Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision plays a vital role in attracting oil and gas producers to invest in Arlington. By offering financial protection during interruptions or cessations of production, this provision reduces the risk associated with leasing arrangements. It encourages exploration and production companies to enter into lease agreements, thus promoting economic growth and development in the region. 4. Benefits for Landowners: While the primary purpose of the Provision is to protect the interests of the producers, landowners indirectly benefit from the provision's existence. By attracting more producers to lease land in Arlington, the provision can increase competition among producers, potentially leading to more favorable lease terms, bonuses, and royalties for landowners. In conclusion, the Arlington Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision serves as a significant safeguard for oil and gas producers in Arlington. By understanding the different types of shut-in royalty provisions, investors and landowners can navigate lease agreements more effectively, mitigating risks and maximizing their returns.
