This form is used to resolve any question as to how royalty is to be paid to the Parties in the event of production, under the Lease, on any part of the Lands. The Parties are entering into this Agreement to stipulate and agree to the ownership of each Party's respective share of the royalty reserved in the Lease payable for production attributable to their Interests from a well located anywhere on the Lands.
North Carolina Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease is a legal document that outlines the terms and conditions for the distribution of royalty payments from a single lease agreement covering multiple segregated tracts in North Carolina. This agreement governs the payment of nonparticipating royalty interests to individuals or entities who do not own an interest in the oil and gas lease but have a right to receive a portion of the royalty payments. The purpose of this agreement is to ensure that the distribution of royalty payments is fair and in accordance with the terms set forth in the lease agreement. It establishes the responsibilities and obligations of the parties involved, including the mineral rights' owner, the lessee (oil and gas company), and the nonparticipating royalty interest holders. Under this agreement, the nonparticipating royalty interest holders are entitled to a portion of the royalty payments generated by the oil and gas production on the segregated tracts covered by the lease. The exact percentage or amount of the nonparticipating royalty is determined based on the terms negotiated between the parties or as specified by state laws. There may be different types or variations of the North Carolina Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease, depending on specific provisions, adjustments, or restrictions. For example: 1. Fixed Royalty Percentage Agreement: This type of agreement stipulates a specific percentage of the gross proceeds from oil and gas production as the nonparticipating royalty, which remains constant throughout the lease term. 2. Sliding Scale Royalty Agreement: In this agreement, the nonparticipating royalty percentage may vary based on factors such as production volume, price of oil and gas, or other predetermined metrics. The percentage may increase or decrease based on predetermined thresholds or formulas. 3. Minimum Royalty Agreement: This variant establishes a minimum royalty payment regardless of the production rates or prices. It guarantees a certain amount to nonparticipating interest holders to ensure a steady income even during periods of low production or market fluctuations. 4. Adjusted Market Royalty Agreement: This type of agreement allows for adjustments to the nonparticipating royalty based on the prevailing market conditions, allowing the interest holders to benefit from better market conditions while protecting their interests during periods of market downturns. It is important for all parties involved to carefully review and understand the terms and provisions of the North Carolina Agreement Governing Payment of Nonparticipating Royalty Under Segregated Tracts Covered by one Oil and Gas Lease, as it plays a vital role in ensuring fair compensation and minimizing potential disputes related to royalty payments.
