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.
Montana Shut-In Gas Royalty refers to a type of royalty payment that gas operators must pay to the state of Montana for any shut-in gas wells. When gas wells are shut-in, it means they are temporarily closed or not producing gas due to various reasons, such as low gas prices, environmental concerns, or operational issues. The purpose of Montana Shut-In Gas Royalty is to compensate the state for its potential loss of revenue from the gas that could have been produced and sold. This royalty payment helps ensure that the state continues to receive income even when gas wells are not actively producing. There are two types of Montana Shut-In Gas Royalty: 1. Shut-In Royalty: Shut-In Royalties are applied when gas wells are temporarily closed due to low gas prices. In such cases, operators may decide to shut-in wells to avoid operating at a loss. To compensate for this temporary shutdown, operators are required to pay a reduced royalty rate to the state of Montana. 2. Conservation Shut-In Royalty: Conservation Shut-In Royalties come into effect when gas wells are temporarily closed due to environmental or operational concerns. These concerns may arise from the need to protect nearby water sources, wildlife, or to conduct maintenance or repairs. Operators are obligated to pay a reduced royalty rate during the shut-in period to fulfill their conservation obligations. The Montana Shut-In Gas Royalty is an important mechanism that allows the state to maintain a continuous revenue stream while also ensuring responsible gas production practices. By imposing this royalty requirement, Montana encourages operators to carefully consider gas production decisions and minimize any potential negative impacts on the environment or the economy.
