Dear Mr. Gaines,
I negotiated two such leases in South Texas, both of which close this week. Liquidated damages were $400 per acre for not satisfying the drilling requirement.
The language looks like:
“2.2 On or before expiration of XXX months from the date hereof, Lessee must have commenced actual drilling, completion, or reworking operations in accordance with the terms of this Lease and must prosecute the same with reasonable diligence or without further notice from or action by Lessor, Lessee will tender to Lessor, in the form of liquidated damages, the sum of $XXX.XX per net mineral acre as recited in Provision 1.2 hereinabove.”
Play with this language at your own risk.