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.
North Dakota Shut-In Gas Royalty refers to a financial arrangement in the oil and gas industry where a gas well in North Dakota is temporarily suspended from production due to market conditions or operational issues. During this shut-in period, the well does not produce gas but still remains under the ownership of the mineral rights' holder. In return for temporarily halting production, the mineral rights' owner receives compensation, known as shut-in gas royalty, from the operator of the well. This type of royalty serves as a financial safeguard for mineral rights owners, allowing them to receive income even when the well is not actively producing. Shut-in gas royalty ensures that owners do not lose out on potential earnings during periods of low demand or when production is halted for maintenance, construction, equipment upgrades, or any other necessary operational reasons. Keywords: North Dakota, Shut-In Gas Royalty, gas well, production, market conditions, operational issues, mineral rights' holder, compensation, halt production, shut-in gas royalty, safeguard, income, low demand, maintenance, construction, equipment upgrades, operational reasons. Different types of North Dakota Shut-In Gas Royalty: 1. Economic Shut-In: This type of shut-in occurs when the cost of producing natural gas from a particular well exceeds its market value due to low gas prices or unfavorable economic conditions. Operators may choose to temporarily shut down such wells until prices improve to a profitable level. 2. Operational Shut-In: In some cases, gas wells are shut in temporarily due to operational issues such as equipment failures, well bore integrity concerns, or safety-related reasons. These shut-ins are aimed at rectifying the issues and ensuring the efficient and safe operation of the well before resuming production. 3. Environmental Shut-In: Gas wells may be shut in if environmental regulations or permits are violated or if extraordinary circumstances pose potential environmental risks. Environmental shut-ins are initiated to address and rectify any violations or risks protecting the surrounding ecosystem and maintain compliance with environmental standards. 4. Regulatory Shut-In: Regulatory agencies may require the temporary shut-in of gas wells for various reasons, such as conducting inspections, gathering data for compliance, or addressing regulatory concerns. These shut-ins are enforced to ensure adherence to industry regulations and guidelines. 5. Force Mature Shut-In: In rare cases, unforeseen events like natural disasters, civil unrest, or unforeseen emergencies may force gas wells to be shut in temporarily. Operators typically halt production to protect personnel, infrastructure, and mitigate risks associated with the unpredictable circumstances. Keywords: Economic Shut-In, Operational Shut-In, Environmental Shut-In, Regulatory Shut-In, Force Mature Shut-In.
