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.
Title: Understanding Oregon Shut-In Gas Royalty: Types and Detailed Explanation Meta Description: Explore the concept of Oregon Shut-In Gas Royalty and its various types. Learn about the definition, purpose, and utilization of this royalty framework in the energy industry. Find relevant keywords and information surrounding this topic. Keywords: Oregon Shut-In Gas Royalty, types of royalties, energy industry, gas production, state regulations, royalty framework, financial compensation, market downturn, temporary shutdown, lease agreements, well closure. Introduction: Oregon Shut-In Gas Royalty refers to a system established by the state of Oregon to compensate gas producers or leaseholders for the temporary suspension or shutdown of gas wells due to unfavorable market conditions. This detailed description will delve into the definition, purpose, and different types of Oregon Shut-In Gas Royalty, shedding light on how it supports the energy industry during challenging periods. 1. Types of Oregon Shut-In Gas Royalty: a. Economic Hardship Royalty Relief: This type of Oregon Shut-In Gas Royalty is triggered when well operators or leaseholders face severe economic challenges, such as low gas prices or high operational costs. Under this relief, the state grants temporary royalty relief to alleviate financial strain, enabling the operator to continue operations. b. Force Mature Royalty Relief: When uncontrollable events such as natural disasters, pipeline disruptions, or government actions beyond the operator's control occur, the state may provide relief through this type of shut-in gas royalty. It aims to minimize losses for gas producers during unexpected, unavoidable circumstances. c. Market-Downturn Royalty Relief: This category of Oregon Shut-In Gas Royalty is specifically designed to address the adverse effects of market downturns on gas production. When gas prices drop significantly below a predetermined threshold, operators may be eligible for royalty exemptions or reduced royalties to sustain their operations until market conditions improve. 2. Purpose and Utilization: The Oregon Shut-In Gas Royalty system serves several purposes and benefits all stakeholders involved in gas production within the state: a. Support during Market Volatility: By providing royalty relief, the system cushions operators from sudden market fluctuations, reducing the risk of financial losses and enabling them to maintain essential operations during challenging times. b. Preservation of Economic Activity: Shut-in gas royalties encourage operators to keep wells active, preventing complete closures. This helps preserve local jobs, maintains supply chains, and sustains economic activity associated with the gas industry. c. Encouraging Investment: The availability of shut-in gas royalty relief can attract more investors to the Oregon gas sector. It instills confidence in operators and facilitates more productive exploration and development of gas resources. d. Regulatory Compliance: The system ensures that operators adhere to the state's regulations and lease agreements while responding to economic hardships. It promotes responsible and transparent management of gas resources within Oregon. Conclusion: Oregon Shut-In Gas Royalty is a crucial framework that provides operators with financial relief during temporary gas well closures resulting from economic hardships, market downturns, and unforeseen events. The various types of royalties cater to different scenarios under which operators may be eligible for relief, ensuring the sustainability of gas production and associated economic activities within the state. By understanding and utilizing this royalty framework, the Oregon gas industry continues to contribute to the region's energy needs and economic stability.
