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.
South Dakota Shut-In Gas Royalty is a type of royalty payment received by South Dakota mineral rights owners when their natural gas wells are temporarily shut-in due to various reasons such as low gas prices or lack of market demand. In this scenario, the operator of the well is prevented from producing and selling natural gas. The purpose of shut-in gas royalty is to provide compensation to the mineral rights' owner for the potential loss of revenue during the shut-in period. The South Dakota Shut-In Gas Royalty program applies to both onshore and offshore gas wells within the state. It ensures that mineral rights owners receive a fair share of the potential revenue that could have been generated from the production and sale of natural gas if the well had not been shut-in. There are a few types of South Dakota Shut-In Gas Royalty: 1. Voluntary Shut-In: This type occurs when the operator voluntarily shuts down production due to low gas prices or insufficient demand in the market. The operator makes a strategic decision to cease production temporarily until the gas prices improve or the demand increases. In such cases, the mineral rights' owner is entitled to receive shut-in gas royalty. 2. Mandatory Shut-In: This type occurs when regulatory authorities require the operator to shut-in the well for reasons such as safety concerns, environmental issues, or regulatory compliance. In these situations, the mineral rights' owner is still entitled to receive shut-in gas royalty. 3. Force Mature Shut-In: This type occurs when unforeseen circumstances, such as natural disasters, fires, or equipment failure, force the operator to shut down production temporarily. Force majeure events are beyond the control of the operator, and the mineral rights' owner is eligible to receive shut-in gas royalty in such cases. The South Dakota Shut-In Gas Royalty program ensures that the mineral rights owners are fairly compensated for the loss of potential revenue during the shut-in period. It acts as a safeguard to protect the rights and interests of the mineral rights owners and encourages responsible and sustainable management of natural gas resources in South Dakota.
