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 District of Columbia Shut-In Gas Royalty refers to a specific form of compensation paid to gas leaseholders in the District of Columbia for gas resources that cannot be produced or utilized due to certain restrictions. It primarily applies to cases where gas wells have been temporarily shut-in, meaning they are temporarily taken out of production due to various reasons such as low market demand, infrastructure limitations, seasonal fluctuations, or force majeure events. This royalty concept ensures that gas leaseholders are fairly compensated for the potential gas production they are unable to capture during the shut-in period. It acts as a mechanism to protect the rights and interests of leaseholders while also considering the economic feasibility for operators to resume gas production under certain circumstances. In the District of Columbia, there are potentially two main types of shut-in gas royalties: 1. Temporary Shut-In Royalty: This type of shut-in royalty is applicable in situations where gas wells are temporarily closed due to short-term constraints. Factors like limited demand or maintenance work may necessitate shutting down wells for a specific period. Although the gas resources are available, they cannot be produced during this time, and leaseholders receive compensation for the forgone production. 2. Extended Shut-In Royalty: This type of shut-in royalty comes into play when gas wells remain closed for an extended period beyond the temporary shut-in scenario. Generally, the reasons behind extended shut-ins involve more substantial challenges like infrastructure limitations or regulatory restrictions. Despite the potential availability of gas resources, long-term closures prevent leaseholders from capturing production revenues, warranting fair compensation. It is important to note that the specific terms and conditions of the District of Columbia Shut-In Gas Royalty may vary based on local regulations, lease agreements, and individual circumstances. Proper understanding and negotiation of these terms is vital for gas leaseholders to ensure they receive fair compensation during periods of shut-in gas production.
