This form is used to resolve any question as to how royalty is to be paid to the Parties in the event of production, under the Lease, on any part of the Lands. The Parties are entering into this Agreement to stipulate and agree to the ownership of each Party's respective share of the royalty reserved in the Lease payable for production attributable to their Interests from a well located anywhere on the Lands.
Maine Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease In Maine, the Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that outlines the terms and conditions regarding the payment of nonparticipating royalties for segregated tracts covered by a single oil and gas lease. Under the agreement, parties involved, including the leaseholder and nonparticipating royalty owners, establish guidelines for the calculation and distribution of royalty payments. This ensures fair and equitable distribution of revenues derived from the production of oil and gas on the segregated tracts. The agreement addresses various key aspects to ensure transparency and accuracy in royalty payments, including: 1. Segregated Tracts: The agreement specifies the delineation of segregated tracts within the leased area. These tracts are defined based on geographical, geological, or operational considerations. 2. Nonparticipating Royalty Interest: Nonparticipating royalty interest (NPR) refers to the ownership of a fractional share of the oil and gas production on the segregated tracts without the rights to actively engage in the lease operations. The agreement outlines the rights, responsibilities, and entitlements of NPR owners. 3. Royalty Calculation: The agreement establishes a clear methodology to calculate the royalty payments owed to the NPR owners. This typically involves a percentage of the production value or a predefined fixed amount per unit of production. 4. Payment Schedule: The agreement sets out the frequency and timing of royalty payments. Parties may agree on monthly, quarterly, or annual payments, depending on the specific terms negotiated within the agreement. 5. Audit Rights: To ensure accuracy and compliance, the agreement may grant the NPR owners the right to audit the leaseholder's records pertaining to production volumes, sale prices, and associated expenses. This provision safeguards against potential underreporting or miscalculations. 6. Remedies and Dispute Resolution: The agreement may outline the remedies available to the NPR owners in cases of breach or non-compliance. It may also include provisions for dispute resolution, such as mediation or arbitration, to address any disagreements that may arise between the parties. Different types of Maine Agreements Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease may be differentiated by specific terms and conditions tailored to meet the unique requirements of individual leases. These agreements may vary in factors such as royalty percentage, payment frequency, audit provisions, and dispute resolution mechanisms, depending on the negotiations between the leaseholder and NPR owners. In summary, the Maine Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a comprehensive legal document designed to establish fair and transparent guidelines for the distribution of nonparticipating royalties among owners of segregated tracts. These agreements play a vital role in ensuring the proper and equitable payment of royalties in the oil and gas industry in Maine.
