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.
Mississippi Minimum Royalty Payments, also known as Minimum Royalty Laws, are a set of regulations and provisions that ensure a minimum amount of royalty payments are made to landowners or mineral rights owners in Mississippi. These laws are primarily associated with oil and gas leases and aim to protect the interests of landowners by guaranteeing a certain level of compensation for the extraction and production of oil and gas resources on their property. The Mississippi Minimum Royalty Payments vary depending on the specific lease agreement, terms, and market conditions. Landowners or mineral rights owners typically negotiate these payments with the lessee (often an energy company) during the lease agreement process. The purpose of these payments is to provide a reliable income stream to the landowners, even if the production levels or market prices fluctuate significantly. The two main types of Mississippi Minimum Royalty Payments are: 1. Fractional Royalty: This type of payment ensures a fixed percentage of the gross proceeds from the sale of oil and gas produced from the leased property. For example, if the agreed fractional royalty payment is set at 1/8 (12.5%), the landowner will receive one-eighth of the total revenue generated from the sale. 2. Minimum Barrel/Unit Royalty: This payment type guarantees a minimum payment based on a predetermined amount per barrel of oil or per unit of natural gas produced, irrespective of the actual market price. Even if the market price falls significantly, the landowner will still receive the minimum barrel or unit royalty payment. The Mississippi Minimum Royalty Payments play a crucial role in providing landowners with a measure of financial security and stability, as they ensure a minimum income from the extraction of oil and gas resources on their property. These payments serve as an incentive for landowners to lease their land for energy exploration and production activities while protecting them from the risks associated with price volatility and fluctuating production levels. It is important for landowners to fully understand the terms and conditions of the lease agreement, including the agreed-upon minimum royalty payments. Seeking legal advice or assistance from experts in oil and gas leasing can help landowners negotiate favorable terms and ensure their rights are protected throughout the leasing process.
