Fill and Sign the Royalty Payments Form

ROYALTY PAYMENTS Form 1. Within ____ days following the date of the first sale of oil and gas produced from the lease premises, Lessee, or the purchaser of production, shall pay Lessor for royalties due unde r this Lease. Royalties shall be paid monthly thereafter without the necessity of Lessor signing a division order or transfer order. If Lessee or purchaser fails to make timely payments of royal ty, Lessor may give Lessee written notice specifying the day of the month on which all royalties must be paid for all production sold or delivered off the lease premises through the end of the month preceding the specified date of payment. If payment is not made by the date spec ified by Lessor, this Lease shall automatically terminate. Upon termination, Lessee sha ll furnish Lessor a fully executed and acknowledged release of this Lease. Form 2. Lessee is obligated to furnish, or cause to be furnished, to Lessor, within ____ days from the date of first sales of oil and/or gas produced from the lease premises, a division order reflecting Lessor’s interest in production. Within ____ days of receipt of Lessor’s executed division order, Lessee, or the purchaser of production, shall furnish Lessor with an accounting and a check in payment of royalties accruing from the period of first sale of production to the last day of the preceding month. Thereafter, all accountings and payments shall be made or tendered on or before the ____ day of the second calendar month following the calendar month in which production occurs. Lessee’s failure to pay or tender to Lessor any royalties within the spec ified time period shall result in the accrual of interest on all unpaid royalties at the rate of ____%, plus the prime rate established by Lessor’s bank, but in no instance shall the interest be less than ____%. Lessor’s acceptance of royalty payments which are past due shall not act as a wa iver or estoppel of Lessor’s rights to receive or recover any and all interest due on unpaid royalt ies unless Lessor expressly waives, in writing, the right to receive the interest. Lessee shall pay all reasonable attorneys’ fees incurred by Lessor in connection with any successful lawsuit filed by Lessor as a result of Lessee’s failure to pay royalties or interest. Form 3. Lessee must pay or cause to be paid all royalties on production from the lease premise s under the terms of this Lease which are due and owing to Lessor within ____ days after the date of first sales of production. Successive payments of royalty to Lessor shall be made on a monthly basis commencing on or before one month following the initial payment of royalty. Should the initial payment of royalty, or the monthly payment of royalty, not be made in a timely manner, in addition to the royalty due and owing to Lessor, Lessee is obligated to pay L essor interest on the unpaid royalty amounts. Interest shall be computed by adding ____% to the prime rate quoted by ____ bank, or any successor bank, on a daily basis. Form 4. Lessee shall deliver or pay all royalty within ____ days of the last day of the month i n which oil and/or gas are produced, if delivered in kind, or sold if paid in cash. If Lessee fails to deliver or pay royalty within the ____ day period, Lessor shall give Lessee written noti ce by registered mail, return receipt requested, of the failure. Lessee, if in default , shall have ____ days after receipt of Lessor’s notice to pay or deliver the royalty in the manner provided in the Lease. If Lessee fails to pay or deliver the royalty within ____ days, Lessor, at its option, may ultimately terminate this Lease by giving Lessee written notice by registered mail, return receipt requested. If the failure to deliver or pay royalty to Lessor results from a bona fide tit le dispute or a question of royalty entitlement or should any other circumstances reasonably prevent Lessee from paying or delivering royalty to the rightful owner, Lessee may, within the ____ day period, deliver or pay by bill of interpleader the royalty into the District Court having jurisdic tion, or Lessee may pay or deliver the royalty to a trustee selected by Lessor and Lesse e. The royalty delivered to the District Court or the trustee shall be retained until the tit le question or other circumstances have been resolved. While the royalty is retained by the Court or truste e, it shall be invested in an interest bearing account and the interest shall belong and be pa id to the rightful owner of the royalty upon resolution of the title question or circumstances. Form 5. All payments made to Lessor under the terms of this Lease (including royalties, rental s, and damages) shall be accompanied by Lessee’s statement describing the matter or m atters relating to the payment and indicating the portion of each payment attributable to each matter. For royalty payments, the statement shall identify the well or wells and the volum e and type of production from each well to which the payment relates and the portion of the payment attributable to each well. Lessee shall pay Lessor interest on the amount or va lue of any unpaid royalty at an annual rate equal to the prime rate charged from time to tim e by ____ Bank, or its successor bank, plus ____%, not to exceed the highest rate of interest permitted by applicable law, from the due date of any royalty payment or until the actual payment or delive ry of royalty to Lessor. Form 6. Lessee shall make the first payment for Lessor’s royalty within ____ days from the date of first sale of oil and/or gas from the lease premises or from any pooled unit containing pa rt of the lease premises. Thereafter, payment for Lessor’s royalty shall be made on or before the ____ day of each month following the month of production. Lessee’s failure to comply with this provision within ____ days after receipt of Lessor’s written notice, by registered mail, return receipt requested, giving Lessee notice of the breach of this provision, shall cause t he automatic termination of this Lease as to the lease premises. Form 7. If Lessor’s royalty payments are suspended for any reason, Lessee shall be liable for interest on the suspended royalty amounts at the maximum legal rate during the period of suspension. Form 8. Lessee shall be responsible and liable for the payment of all royalty due under the terms of this Lease. Initial payments of royalty shall be made within ____ days of the date of first sales of oil and/or gas. For succeeding payments, royalty on oil shall be due and payable on or before the ____ day of the month following the month of production. Royalty on gas shall be due and payable on or before the ____ day of the second month following the month of production. All royalty payments shall be accompanied by a statement reflecting the gross amount and disposition of all oil and/or gas produced and the market value of the oil and/or gas. If a payment is not received by Lessor by the dates specified, this Lease shall automatically terminate. The royalty owners shall have a first lien on all oil and/or gas produced from the lease premises to secure the payment of all unpaid royalty and other sums of money that mi ght become due under the terms of this Lease. Form 9. In the event this Lease becomes owned by more than one working interest owner, a well capable of producing gas is completed on the lease premises, and an owner does not t ake or sell its share of the gas producer, as may be permitted by any agreement governing the operations of the Lease, an owner’s failure or election not to take or market gas shall not rel ieve any owner of an undivided interest in the Lease from its obligation to pay royalty on gas produced from the lease premises. Under no circumstances is, or shall, Lessor, or Lessors royalty interest be deemed to be subject to any gas balancing arrangement or agreement between owners of the Lease. Form 10. On condensate and all other products separated, extracted, or manufactured from gas produced from the leased premises by any extraction, absorption, pressuring or other plant belonging wholly or in part to Lessee or any affiliated or subsidiary company, _____ of the value of all the condensate and other products so separated, extracted, or manufactured, or, at Le ssor’s option, _____of the condensate and other products in kind shall be delivered to Lessor at the plant outlet. In the event of the blending of any part of the condensate or other products wi th chemical additives for making any product, the royalty on the products, whether paid i n kind or at value, shall be calculated at the plant outlet on the resulting blended product, less Lessor’s proportionate share of the direct cost of the chemical additives.