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.
Alaska Shut-In Gas Royalty refers to a specific type of royalty payment that the State of Alaska receives from oil and gas companies for natural gas that is "shut-in" or not produced due to a variety of reasons. This detailed description will provide essential information about Alaska Shut-In Gas Royalty and its various types. In Alaska, shut-in gas royalty is an arrangement where the State, as the owner of mineral rights, earns a compensatory payment from oil and gas operators when they are unable to extract and sell natural gas from their reservoirs. This situation may arise due to market conditions, infrastructure constraints, unavailability of buyers, or other factors that make gas production economically nonviable. The purpose of Alaska Shut-In Gas Royalty is to provide the State with revenue for its natural resources, even when gas is not actively being produced. Although the State encourages gas production for economic growth and energy needs, the shut-in royalty helps offset any losses in revenue that may occur during periods of no production. There are a few different types of Alaska Shut-In Gas Royalty: 1. Seasonal Shut-In Gas Royalty: This type of royalty is levied when natural gas production is temporarily halted during certain seasons, such as winter, when demand for natural gas may be surging or when the infrastructure is not equipped to handle increased production. Operators are compensated accordingly. 2. Economic Shut-In Gas Royalty: This type of royalty is applicable when market conditions make gas production unprofitable for operators. Factors such as low gas prices, limited pipeline capacity, or lack of demand can trigger the economic shut-in scenario. Compensation is provided to cover the opportunity cost during this period. 3. Infrastructure Shut-In Gas Royalty: Infrastructure limitations, such as bottlenecks in pipelines or processing facilities, can prevent operators from producing natural gas. In these cases, the State receives shut-in royalty payments compensating for the inability to extract and sell the gas. These different types of Alaska Shut-In Gas Royalty help ensure that the State continues to receive a fair share of revenue from its natural resources, even when gas production faces obstacles. It incentivizes operators to explore alternatives, such as investing in infrastructure development or finding new markets, that could lead to increased production in the future. Keywords: Alaska, shut-in gas royalty, natural gas, compensation, State of Alaska, revenue, oil and gas, shut-in royalty, market conditions, infrastructure constraints, gas production, economically nonviable, seasonal shut-in, economic shut-in, infrastructure shut-in, opportunity cost, natural resources, pipeline capacity, processing facilities.
