Title: Understanding the Nassau New York Amendment to Oil and Gas Lease to Add a Shut-In Provision for Oil Wells Introduction: The Nassau New York Amendment to Oil and Gas Lease to Add a Shut-In Provision for Oil Wells is an important legal document that allows oil and gas leaseholders in Nassau County, New York, to include a provision regarding the temporary cessation of production from oil wells. This comprehensive guide will provide a detailed description of the amendment, its purpose, benefits, and potential types that may exist within Nassau County. What Does the Amendment to Oil and Gas Lease Entail? The Nassau New York Amendment to Oil and Gas Lease adds a shut-in provision for oil wells, which allows leaseholders to temporarily halt production while still maintaining the lease. This provision can be exercised when it is not economically viable to continue production due to fluctuating oil prices, regulatory changes, equipment repairs, or other unforeseen reasons. The amendment safeguards the lease and provides flexibility for leaseholders in managing their operations effectively. Benefits of a Shut-In Provision: 1. Economic Protection: The shut-in provision protects leaseholders' investments by allowing them to temporarily suspend production during periods of financial uncertainty or market volatility. 2. Maintain Leasehold: By adding a shut-in provision, leaseholders can continue to hold and retain their lease, preserving their rights and minimizing the chances of lease termination. 3. Efficient Resource Management: The provision enables leaseholders to manage their oil wells strategically, avoiding wastage of valuable resources and ensuring their prudent utilization. Potential Types of Nassau New York Amendments to Oil and Gas Lease: 1. Standard Shut-In Provision: This type of amendment allows leaseholders to temporarily halt oil well production, typically for a fixed period, and ensures ongoing lease compliance during suspension. 2. Conditional Shut-In Provision: In certain scenarios, a shut-in provision may be contingent on specific conditions being met, such as proven economic or technical justifications for suspending production. 3. Extended Shut-In Provision: Some amendments may grant leaseholders the option to extend the shut-in period beyond the initial agreed-upon time, which can provide additional flexibility during unforeseen circumstances. Conclusion: The Nassau New York Amendment to Oil and Gas Lease to Add a Shut-In Provision for Oil Wells grants leaseholders in Nassau County the ability to safeguard their investments and efficiently manage their oil well operations. By temporarily suspending production during challenging times, leaseholders can adapt to market conditions while maintaining lease compliance. These shut-in provisions are crucial tools for safeguarding the interests of both leaseholders and the natural resources being extracted.
Nassau New York Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells
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Essentially, the shut-in royalty provision allows a lessee to temporarily cease production (i.e., shut-in a well) and pay a shut-in royalty to the lessor in place of the royalty on production that is not occurring during the shut-in period.
A payment stipulated in the oil and gas lease, which royalty owners receive in lieu of actual production, when a gas well is shut-in due to lack of a suitable market, a lack of facilities to produce the product, or other cases defined within the shut-in provisions contained in the oil and gas lease.
The temporary shutting in of wells is the one thing that oil companies are trying to avoid at all costs. That's because restarting production is expensive and wells are not guaranteed to return to their flow rate.
In the petroleum industry, shutting-in is the implementation of a production cap set lower than the available output of a specific site. This may be part of an attempt to constrict the oil supply or a necessary precaution when crews are evacuated ahead of a natural disaster.
HOUSTON (Bloomberg) -- Shutting an oil well in 2020 is relatively easy, and can even be done with a few taps on an iPhone in some cases. Figuring out which to shut, and for how long, is the hard part.
Essentially, the shut-in royalty provision allows a lessee to temporarily cease production (i.e., shut-in a well) and pay a shut-in royalty to the lessor in place of the royalty on production that is not occurring during the shut-in period.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
In such circumstances where a gas well has been completed but no market exists for the gas, the shut-in clause enables a lessee to keep the non-producing lease in force by the payment of the shut-in royalty.
Definition of 'shut in a well' The company had to shut in a well that began producing water in order to prevent contamination of the dry oil from other wells when production was commingled. To shut in a well is to close off a well so that it stops producing.
Shut in a well in the Oil and Gas Industry To shut in a well is to close off a well so that it stops producing. well. Related wordsTo cap a well also means to seal a well off and to kill a well is to stop it from flowing by the use of mud or water to stop the pressure.
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1.2 PGE Program. Mandatory petroleum allocation procedures; special rule No. 19 regarding crude oil allocation program. 30225. 25 day of December 2012 5.1.1 Natural Gas Transportation Program. 50 day of December 2005. 5.1.2 Natural Gas Infrastructure Projects. 50 days of December 2005. 5.2 Transportation and Transmission. 15 day of December 2006. 5.2.1 Air Liquid Transportation Program. 45 days of December 2005. 5.2.2 Gas Pipeline Service. 15 day of December 2006. 5.3 Other Facilities. 50 day of December 2005. 5.3.1 Oil Tanker Service. 45 days of December 2005. 5.3.2 Transportation and Shipping Facilities. 45 days of December 2005. 5.3.3 Railroad. 15 day of December 2006. 5.4 Air Liquid Distribution Facility. Mandatory petroleum allocation and price procedures; special rule No. 25 concerning crude oil allocation program. 30225. 5.4.1 Air Liquid Oil Tanker Terminals. Mandatory Petroleum Price Reg. Louisiana. 30 day of December 2013. 5.4.2 Air Liquid Oil Pipeline Terminals.
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