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 Taking or Marketing Royalty Oil and Gas in Kind is a process established by the State of Alaska to manage the royalties received from oil and gas production on state-owned lands. This unique program allows the state to take its royalty share of oil and gas production in the form of physical barrels or a thousand cubic feet (MCF) of natural gas, rather than receiving monetary compensation. By taking the resources in-kind, the state can directly market and sell the oil and gas on its own, giving it greater control and potentially maximizing revenues. The Alaska Department of Natural Resources (DNR) administers the program, ensuring that the state's interests are protected and that resources are managed efficiently. When oil or gas is produced from state-owned lands, the lessee or operator must provide a portion of the production as royalty to the state. Instead of accepting money, the state exercises its right to receive a portion of the physical resources extracted. There are different types of Alaska Taking or Marketing Royalty Oil and Gas in Kind programs, including the Royalty-in-Kind (RISK) Oil Program, Royalty-in-Kind Gas Program, and Royalty Production Allocation (RPA) Program. 1. Royalty-in-Kind (RISK) Oil Program: Under this program, the state takes its royalty share in the form of physical barrels of oil. After receiving the oil, the state manages its marketing and sales to various buyers, including refineries and other entities. The objective is to optimize revenues while maintaining price transparency and competitiveness. 2. Royalty-in-Kind Gas Program: The Royalty-in-Kind Gas Program operates similarly to the RISK Oil Program, but focuses on natural gas production. Instead of receiving monetary compensation for gas royalties, the state takes its share in MCF of natural gas. The gas is then marketed and sold directly by the state, ensuring that the resources are utilized effectively and economically. 3. Royalty Production Allocation (RPA) Program: The RPA Program is a variation of royalty taking in-kind where the state allocates its royalty share from multiple producers into a single stream for marketing. Under this program, the state combines the royalty resources received from various operators, allowing for bulk sales and larger contracts. This approach offers operational efficiencies and enhances marketability. In conclusion, Alaska Taking or Marketing Royalty Oil and Gas in Kind is a strategic method utilized by the State of Alaska to manage its royalty share of oil and gas production on state-owned lands. By directly taking and marketing physical barrels of oil and MCF of natural gas, the state can better control its resources and potentially achieve higher revenues. The Royalty-in-Kind Oil Program, Royalty-in-Kind Gas Program, and Royalty Production Allocation Program are different types of programs designed to optimize the management and marketing of these resources.
