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Minnesota Shut-In Gas Royalty

Category:
Oil Gas and Minerals - Lease Riders
State:
Multi-State
Control #:
US-OG-824
Format:
Word; 
Rich Text
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Description

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.

Minnesota Shut-In Gas Royalty refers to the compensation received by gas lease owners or mineral rights holders when their gas production in Minnesota is shut-in or temporarily halted due to economic or operational reasons. Shut-in gas royalty acts as a form of protection for the lease owners, ensuring they still receive fair compensation during periods of non-production. The shut-in process may occur when gas prices drop significantly, making it uneconomical for gas lease operators to continue production. Alternatively, it may be necessary to shut-in the production due to technical issues, maintenance, or low demand for natural gas in the market. Keywords: Minnesota, shut-in gas royalty, gas lease owners, mineral rights holders, compensation, gas production, shut-in, temporarily halted, economic reasons, operational reasons, protection, fair compensation, non-production, gas prices, gas lease operators, production, technical issues, maintenance, low demand, natural gas market. Types of Minnesota Shut-In Gas Royalty: 1. Economic-Based Shut-In Gas Royalty: This type of shut-in occurs when the current market price for natural gas drops below a certain threshold, making it financially unviable for lease operators to continue production. In such cases, the lease owner is entitled to receive shut-in gas royalty payments. 2. Operational-Based Shut-In Gas Royalty: This type of shut-in happens when there are technical issues or maintenance requirements that hinder the smooth operation of the gas production facility. Temporary shut-in is necessary to address these operational concerns and ensure the safety and efficiency of the operation. During this period, the lease owners receive shut-in gas royalty payments. 3. Demand-Based Shut-In Gas Royalty: In some instances, gas production may be shut-in due to low demand for natural gas in the market. When demand decreases significantly, operators may choose to temporarily halt production until market conditions improve. During this halt in production, lease owners receive shut-in gas royalty as agreed upon in their lease agreements. Overall, Minnesota Shut-In Gas Royalty provides a mechanism to safeguard the interests of gas lease owners and mineral rights holders by ensuring they receive compensation even when production is temporarily halted for economic or operational reasons.

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FAQ

A phrase (usually contained in a Pugh clause in an oil & gas lease) that terminates the lease after the primary term as to all formations below a particular depth typically defined as the stratigraphic equivalent of the base of the deepest producing formation in the unit.

If there is production sufficient to preserve all or part of the lease at that one moment, the acreage is retained and not evaluated again. Conversely, under ?rolling? Pugh clauses, ?rolling determinations? following the primary term are to be made whenever any operations or production ceases.

A clause in an oil & gas lease that allows a lessee to keep the lease in effect past the primary term by substituting payment of shut-in royalty for actual production.

In the petroleum industry, shutting-in is the implementation of a production cap set lower than the available output of a specific site. This may be part of an attempt to constrict the oil supply or a necessary precaution when crews are evacuated ahead of a natural disaster.

An example of a Surface Area Pugh Clause: ?Production from or operations on a pooled unit or units including a portion or portions of the leased premises will maintain this Lease in force only as to the acreage included in the unit or units.

What is the Pugh clause in an oil and gas lease? 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.

The Pugh Clause ? A clause in the Oil and Gas Lease which modifies usual pooling language to provide that drilling operations on or production from a pooled unit will not preserve the whole lease.

Oil and gas royalties refer to the payments made to the owner of the mineral rights, which are the rights to extract oil and gas from the land. These royalties are typically a percentage of the revenue generated from the production and sale of the oil and gas extracted from the land.

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The shut-in royalty clause is a necessary and integral component of any oil/gas lease ... It must make some effort to market the gas after completing the well. Aug 14, 2015 — Essentially, the shut-in royalty provision allows a lessee to temporarily cease production (i.e., shut-in a well) and pay a shut-in royalty to ...A Shut-in Royalty Provision within an oil & gas lease is a provision that allows the lessee to halt production (i.e., shut in a well) and pay a Shut-in Royalty ... A shut-in clause (or shut-in royalty clause) traditionally allows the lessee to maintain the lease by making shut-in payments on a well capable of producing oil ... Oil Gas and Minerals. Get access to the largest catalogue of fillable and printable forms. Subscribe to US Legal Forms to download state-specific document ... The royalty to be paid to the state by the lessee for the ... complete closure and stabilization of the exploration site to the satisfaction of the commissioner. d) Shut-In Gas Royalty - Where there is on the leased premises a well or ... properly complete or abandon the well, conducted with good faith and due ... For information regarding the reporting of oil and gas royalties on step- and sliding-scale royalty rate leases, contact ONRR's Royalty Valuation group at ... extract all of the Oil and/or Gas in, on, or under the land described below, together with the right to pipe, store, and remove Oil and. Mar 28, 2018 — I've recently received a gas lease offer in Pennsylvania. Small plot of land, less than 10 acres. Active horizontal drilling and pad building in ...

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