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.
Pennsylvania Division Orders are legal documents that establish the terms and conditions for the distribution of proceeds from oil and gas production in Pennsylvania. Division Orders serve as an agreement between the mineral owner or interest holder and the operator or producer of the oil or gas well. These documents play a pivotal role in ensuring a fair and accurate distribution of revenue generated from the extraction of oil and gas resources in Pennsylvania. They outline the rights and obligations of both parties involved, outlining the specific details of interest ownership, revenue distribution, royalty calculations, and payment procedures. Pennsylvania Division Orders typically contain various key elements, such as: 1. Legal Description: A detailed description of the property or tract of land involved in the oil and gas production, including sections, townships, and ranges. 2. Interest Owner Information: The names and contact details of all the mineral interest owners, including their respective ownership percentages or decimal interests. 3. Royalty Percentage: The agreed-upon percentage of revenue that the interest owner is entitled to as their royalty interest. This can range from 12.5% to negotiations commonly seen at 18.75% or 20%. 4. Deductions and Costs: The division orders often specify any permitted deductions or costs that may be deducted by the operator before calculating and distributing the royalty payments. 5. Payment Terms: They define the payment frequency, method (check or direct deposit), and the timeframe within which the operator must remit the royalty payments. 6. Production Detail: Information related to the oil or gas wells, such as the well name, identification numbers, reporting procedures, and any production limitations or curtailments. Types of Pennsylvania Division Orders: 1. Standard Division Order: The most common type used in Pennsylvania, covering the typical terms and provisions for royalty distribution. 2. Overriding Royalty Interest (ORRIS) Division Order: Specifically addresses the distribution of proceeds to a party that holds a percentage of revenue interest in addition to the standard royalty interest. 3. Joint Interest Division Order: This type of division order is used when multiple interest owners share the same well or lease. It outlines their respective ownership percentages and royalty calculations. In conclusion, Pennsylvania Division Orders are crucial legal documents in the oil and gas industry that establish the terms for distributing proceeds from oil and gas production in the state. They ensure fair compensation for mineral interest owners and provide clear guidelines for royalty calculations and payment procedures.
