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.
Michigan Minimum Royalty Payments are legal requirements set by the state of Michigan to ensure fair compensation for landowners who lease their mineral rights for oil, gas, or other natural resource extraction. These payments are designed to protect landowners from unnecessarily low royalties and to promote equitable distribution of profits from such activities. The Michigan Department of Natural Resources (DNR) establishes these minimum royalty payments, which are determined based on various factors such as market prices, extraction methods, and lease terms. The purpose is to establish a baseline payment that landowners are entitled to receive, regardless of the negotiated terms in their leases. There are two primary types of Michigan Minimum Royalty Payments: 1. Minimum Royalty as a Percentage: This type of minimum payment ensures that landowners receive no less than a specific percentage of the total value of the resources extracted from their property. For instance, if the minimum royalty is set at 12.5%, the landowner would be guaranteed to receive at least that percentage of the total value of the extracted resources. 2. Minimum Royalty in Dollars per Acre: In this case, landowners are guaranteed a specific dollar amount per acre of the leased land, regardless of the actual resources extracted. For example, if the minimum royalty is set at $30 per acre, the landowner would receive a payment of $30 for each acre of their land that is subject to the lease agreement, regardless of the quantity or value of the resources extracted. It is important to note that these minimum royalty payments only establish a baseline. Landowners are encouraged to negotiate higher royalty rates, especially if the market value of the extracted resources is higher than the minimum established by the state. Michigan Minimum Royalty Payments are an essential mechanism to protect landowners and ensure they receive a fair share of the profits generated through resource extraction activities. By setting minimum requirements, the state aims to prevent exploitation and guarantee a reasonable compensation to all parties involved.
