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.
The Beaumont Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision is a crucial clause in oil and gas leases that protects both the lessor and the lessee in certain circumstances. This provision is specifically designed to address the pooling and shut-in of rental payments during periods of temporary well closure or reduced production. Here is a detailed explanation of this provision, along with its significance and various types if applicable. The Beaumont Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision allows for the consolidation of multiple contiguous leases into one unit, commonly referred to as pooling or unitization. Pooling helps operators efficiently exploit hydrocarbon reserves by combining smaller tracts into a single productive unit. Combining these tracts allows the operator to optimize drilling locations and utilize resources effectively. In situations where oil or gas wells become temporarily shut-in due to various reasons, such as mechanical failures, pipeline issues, market conditions, or force majeure events, the Rental Lease Pooling Shut-In Royalty Provision comes into effect. During these shut-in periods, lessees may not be able to produce the anticipated quantities of oil or gas, thereby affecting the rental payments usually associated with production. Under this provision, the lessee is allowed to suspend rental payments during the shut-in period, securing financial relief during these temporary disruptions. This provision provides a fair and equitable solution to both the lessor and the lessee, as the lessor's royalty interest is also impacted due to the reduced or halted production. Different types or variations of the Beaumont Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision may exist depending on specific lease agreements. These variations might include certain conditions, timeframes, or calculations for determining when the shut-in provision can be utilized. It is important to carefully review the terms of each lease to fully understand the provisions applicable to a particular agreement. In summary, the Beaumont Texas Producers 88 (8/99) Rental Lease Pooling Shut-In Royalty Provision is a critical component of oil and gas leases in Beaumont, Texas. It allows for the pooling of multiple leases to optimize production, while also providing a mechanism to mitigate financial burdens during periods of temporary well shutdowns. Understanding the provisions within this clause is essential for both lessors and lessees to ensure a fair and mutually beneficial arrangement.
