Mecklenburg North Carolina Shut-In Oil Royalty

Name: Mecklenburg North Carolina Shut-In Oil Royalty
Brand: US Legal Forms
Rating: 4.88 (466 reviews)

Category:

Oil Gas and Minerals - Lease Riders

State:

Multi-State

County:

Mecklenburg

Control #:

US-OG-825

Format:

Instant download

Description

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.

Mecklenburg North Carolina Shut-In Oil Royalty is a unique concept in the oil and gas industry. When an oil well is deemed unprofitable due to low market prices or technical issues, it may be temporarily shut-in. During this period, the owner of the well, usually the mineral rights' owner, can still earn income through the shut-in royalty payments. This provides them with a stable financial return while the well is not producing oil. Mecklenburg County, located in the state of North Carolina, is known for its potential in oil and gas resources. The Shut-In Oil Royalty program offers an opportunity for mineral rights owners in Mecklenburg County to earn income and maximize the value of their assets, even during temporary periods of low production. The Mecklenburg North Carolina Shut-In Oil Royalty program has several types that cater to the specific needs of mineral rights owners: 1. Standard Shut-In Royalty: This is the basic type where the well is temporarily shut down due to various reasons such as low oil prices, equipment maintenance, or inability to access the market. The owner continues to receive royalty payments during this period. 2. Price-Based Shut-In Royalty: When the market oil prices drop significantly below the threshold set by the program, the well can be shut-in. Mineral rights owners can still earn royalty payments based on the prevailing market prices, ensuring a fair income despite low market conditions. 3. Technical-Difficulty Shut-In Royalty: In case of technical difficulties, such as a malfunctioning pump, well bore restrictions, or lithology issues, the well may need to be shut-in temporarily. The shut-in royalty payments help the mineral rights owners cover the cost of repairs and maintenance while ensuring continuous revenue flow. Overall, the Mecklenburg North Carolina Shut-In Oil Royalty program provides a win-win situation for mineral rights owners in Mecklenburg County. It allows them to mitigate risks during periods of market turbulence or technical difficulties, while still enjoying steady income from their oil and gas assets.

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FAQ

Shut in a well in the Oil and Gas Industry (0283028ct 026an 0259 w025bl) phrase. (Extractive engineering: Field development, Drilling) To shut in a well is to close off a well so that it stops producing. An emergency shutdown valve was installed on the wellhead to shut in the well at any time.

For a producing well, royalties could easily be 10 to 20 times the bonus payment in the first year of production alone. Private landowners are normally offered the standard royalty of 1/8 share of production.

Most states and many private landowners require companies to pay royalty rates higher than 12.5%, with some states charging 20% or more, according to federal officials. The royalty rate for oil produced from federal reserves in deep waters in the Gulf of Mexico is 18.75%.

A royalty is the portion of production the landowner receives. A royalty clause in the oil or gas title process will typically give a percentage of the lease that the company pays to the owner of the mineral rights, minus production costs. Royalties are free from costs and charges, other than taxes.

As a mineral owner, your primary goal is to sell oil and gas royalties for the highest amount possible. You want to put as many dollars in your pocket as you can when you sell oil royalties. To maximize value when you sell royalties, the key is to get your property in front of a large audience of mineral rights buyers.

Oil and gas royalties are a wonderful investment for small investors. Partly because the 12% 30% returns that can be made, and partly because small one man investment shops can get into the business if they have the know-how and the financial backing.

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.

More info

Pooling) (Oklahoma) (Paid-Up). 00 per lease per year or the amount of the annual lease rentals, whichever is greater.Amber Oil and Gas v. Bratton, 711 S.W.2d 741, 743 (Tex.App. History of oil and gas exploration in North Carolina . Plant to be closed for up to a year. No copyright in the United States (NoC-US). Contributor(s). Refuel fill up with. Pipes and valves of a heating system.

Mecklenburg North Carolina Shut-In Oil Royalty

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