Rhode Island Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells is an important legal document that outlines changes made to the original lease agreement between a landowner (lessor) and an oil and gas company (lessee) in Rhode Island, specifically regarding the inclusion of a shut-in provision for oil wells. This amendment gives the lessee the authority to temporarily cease oil production without terminating the lease agreement. The shut-in provision serves as a protective measure for the lessee in situations where it becomes unprofitable or impractical to continue oil production due to various factors such as low oil prices, market conditions, or unforeseen technical issues with the wells. By adding this provision, the lessee is allowed to temporarily shut down the wells while still maintaining rights to the leased premises. This Rhode Island Amendment to Oil and Gas Lease may come in various types depending on the specific terms and conditions agreed upon between the lessor and lessee. Some possible variations of this amendment include: 1. Full Shut-In Provision: This type of amendment allows the lessee to completely shut down all oil wells on the leased premises for a specified period. During this shut-in period, the lessee is not obligated to pay any royalties to the lessor. 2. Partial Shut-In Provision: In some cases, the amendment may allow the lessee to shut down only specific oil wells or a certain percentage of production. The lessor and lessee mutually agree on the details of which wells will be shut-in and for how long. 3. Temporary Shut-In Provision: This type of amendment permits the lessee to temporarily cease oil production for a limited period, after which they must resume operations or terminate the lease agreement. The duration of the shut-in period is typically specified within the amendment. 4. Renewable Shut-In Provision: This variation allows the lessee to repeatedly extend the shut-in period by mutual consent with the lessor. The lessee can request multiple renewals of the shut-in provision, subject to negotiation and agreement on updated terms. The Rhode Island Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells is a crucial component of lease agreements in the oil and gas industry. It provides flexibility and protection for both parties involved, allowing the lessee to temporarily halt production when necessary, while ensuring the lessor's rights and access to potential oil reserves on their property.
Rhode Island Amendment to Oil and Gas Lease to Add Shut-In Provision For Oil Wells
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FAQ
Negotiating an oil and gas lease will require some research upfront. If you're a landowner interested in working with an oil and gas company, you should explore their history and experience. You'll want to work with a reputable company that works in your best interests, holds a high standard, and maintains insurance.
Surrender Clause A clause commonly found in an oil and gas lease authorizing a lessee to release its rights to all or any portion of the leased premises at any time and be relieved of further obligations relating to the acreage surrendered.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
What is the granting clause? The granting clause is the clause under which the owner of the oil and gas rights leases the oil and gas rights to the oil and gas company along with the right to develop the oil and gas on a specifically described piece of real estate.
A clause in an oil & gas lease that provides that if the leased land is later owned by separate parties, such as in a sale of part of the property, the lessee can continue to operate, develop, and treat the lease as a whole and pay royalties to each owner based on its percentage of ownership of the entire area.
A Pugh Clause is enforced to ensure that a lessee can be prevented from declaring all lands under an oil and gas lease as being held by production. This remains true even when production only takes place on a fraction of the property.
?Unless? Lease An oil and gas lease with a delay- rental clause structured as a special limitation to the primary term. The lease automatically terminates, though the lessee has no liability for its failure to perform, ?unless? the lessee pays delay rentals or commences drilling operations.