Dear Mr. Wilson,
Out in West Texas, there are operators that are notorious for reporting 1 bbl per month to the RRC, just to hold a lease. He was finally busted when the valves were rusted shut.
There are two landmark Texas decisions on production in paying quantities. One is Clifton v Koontz and the other is Garcia v King.
Here is the answer per the two cases:
-
Did the lease yield a profit over a reasonable period of time, after deducting operating and marketing costs, and
-
Would a reasonably prudent operator continue to operate the well in such a manner for the purpose of making a profit or merely speculation.
However, the savings clause that Mr. Kennedy pointed out gives me heartburn. My inclination would be to go out to the location and see if the valve is rusted shut.
Don’t know where your minerals are located, but there is your jumping off point.