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.
