This form of release is used when Lessor releases, relinquishes, and quit claims to the present owners of the Lease all of a Production Payment interest. From and after the Effective Date, the Production Payment interest in the Lease is deemed to have terminated and is no longer a burden on the leasehold estate created by the Lease.
A detailed description of the Arkansas Release of Production Payment by Lessor: The Arkansas Release of Production Payment by Lessor is a legal document that grants the lessor the right to receive a share of production revenues from a lease or royalty agreement in the state of Arkansas. This release allows the lessor to receive payments based on a percentage of the total production value of oil, gas, minerals, or other substances extracted from the leased property. In Arkansas, there are two main types of Release of Production Payment by Lessor: 1. Fixed Percentage Release of Production Payment: This type of release specifies a fixed percentage of production revenues that the lessor is entitled to receive. The specific percentage is determined and agreed upon in the lease or royalty agreement. For example, if the agreement states a 10% fixed percentage release, the lessor will receive 10% of the total production value. 2. Sliding Scale Percentage Release of Production Payment: Unlike the fixed percentage release, this type of release is based on a sliding scale that varies according to the volume of production. The sliding scale may set lower percentage rates for higher production volumes or vice versa, depending on the terms agreed upon in the lease or royalty agreement. For instance, if the sliding scale specifies a 5% release for the first 1,000 barrels of oil and a 7% release for every additional 1,000 barrels, the lessor's payment will fluctuate based on the production volume. The Arkansas Release of Production Payment by Lessor is essential in protecting the rights and interests of the lessor by ensuring their fair compensation for the use of their property's resources. It provides a legal framework for calculating and distributing production revenues between the lessor and the lessee (the party extracting the resources). The specific terms and conditions of the release of production payment can vary based on the lease or royalty agreement, reflecting the negotiated agreement between the parties involved. Keywords: Arkansas, Release of Production Payment by Lessor, production revenues, lease agreement, royalty agreement, fixed percentage, sliding scale, lessor compensation, oil, gas, minerals, resources, fair compensation, lessee, terms, conditions, negotiated agreement.
