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.
The Alaska Shut-In Oil Royalty is a unique program implemented by the state government of Alaska to support the production and development of oil resources within its jurisdiction. This initiative aims to incentivize oil companies to keep their oil wells temporarily inactive or "shut-in" during periods of low oil prices or market oversupply. By offering financial benefits to producers, the Alaska Shut-In Oil Royalty program contributes to stabilizing the state's oil industry and protecting its long-term economic interests. Through the program, oil producers receive royalty relief from paying royalties on oil that remains underground and untapped. The relief is granted in the form of reduced royalty rates, which vary depending on the type of oil production and specific conditions. The Alaska Department of Natural Resources closely monitors and approves the eligibility criteria for shut-in royalty relief, ensuring compliance with state regulations. Different types of Alaska Shut-In Oil Royalty include: 1. Temporary Shut-In Royalty Relief: This type of relief allows oil companies to temporarily cease production when market conditions are unfavorable. It helps prevent excessive production and oversupply, which can lead to oil price fluctuations and economic uncertainties. 2. Long-Term Shut-In Royalty Relief: Some oil fields may require longer periods of inactivity due to specific operational or technical reasons. The long-term shut-in royalty relief enables operators to maintain the viability and sustainability of their fields by temporarily halting production while avoiding unnecessary financial burdens. 3. Emergency Shut-In Royalty Relief: In cases of unexpected emergencies, such as natural disasters or infrastructure failures, oil producers can apply for emergency shut-in royalty relief. This provision assists in managing unforeseen circumstances and allows companies to prioritize safety and repair operations rather than oil extraction. Overall, the Alaska Shut-In Oil Royalty is a crucial tool for the state's oil industry, encouraging responsible management and long-term strategic planning. By supporting oil companies during challenging market conditions, this program safeguards Alaska's oil resources while maintaining a stable and sustainable industry.
