The Kansas Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells is a legal document designed to modify existing oil and gas leases in the state of Kansas. This amendment specifically focuses on the inclusion of a shut-in provision for oil wells, which allows operators to temporarily cease production without forfeiting their lease rights. The shut-in provision is a crucial component of the amendment as it addresses situations where continued production from an oil well becomes economically unviable or impractical. By including this provision, lessees have the flexibility to temporarily stop production while preserving their lease rights and preventing the lease from expiring due to non-production. This Kansas amendment helps protect the interests of both the operators and the lessors by providing a mechanism to temporarily halt production during periods of low oil prices, declining reserves, equipment failure, or other unforeseen circumstances. It ensures that operators can resume production when conditions become more favorable, without the risk of losing their lease rights or facing financial penalties. There are several types of Kansas Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells: 1. Standard Shut-In Provision: This type of amendment incorporates a standard shut-in provision into the existing oil and gas lease. It outlines the specific conditions under which the operator can invoke the shut-in provision and the duration for which the well can remain shut-in. 2. Modified Shut-In Provision: This amendment modifies the existing shut-in provision in the lease agreement to better suit the specific needs of the operator and lessor. It may include additional clauses or specific conditions that both parties have negotiated to ensure fairness and protection of their respective interests. 3. Model Clause Addition: Some operators may choose to add a model clause specifically designed for shut-in provisions into their existing oil and gas lease. This type of amendment incorporates a redrafted, standardized clause that has been widely accepted and used in the industry. 4. Shut-In Provision Renewal: In cases where the original shut-in provision in the lease has expired or requires renewal, this amendment adds a provision to extend or update the shut-in provision. It ensures that operators can continue to benefit from the shut-in provision without any disruption, as long as the lessor agrees to the extension. In conclusion, the Kansas Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells is a valuable legal tool that enables operators to temporarily cease production from oil wells without jeopardizing their lease rights. It provides flexibility and protection for both operators and lessors, ensuring the continued viability of oil and gas operations in Kansas.
Kansas Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells
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A clause in an oil & gas lease that provides that if the leased land is later owned by separate parties, such as in a sale of part of the property, the lessee can continue to operate, develop, and treat the lease as a whole and pay royalties to each owner based on its percentage of ownership of the entire area.
Surrender Clause A clause commonly found in an oil and gas lease authorizing a lessee to release its rights to all or any portion of the leased premises at any time and be relieved of further obligations relating to the acreage surrendered.
A Pugh Clause is enforced to ensure that a lessee can be prevented from declaring all lands under an oil and gas lease as being held by production. This remains true even when production only takes place on a fraction of the property.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
By way of background, a ?free use? clause is a provision in an oil/gas lease which gives the lessee the right to use gas produced from the leasehold.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
What is the granting clause? The granting clause is the clause under which the owner of the oil and gas rights leases the oil and gas rights to the oil and gas company along with the right to develop the oil and gas on a specifically described piece of real estate.