I own royalty in Oklahoma under a gas lease which is subject to an old standard lease (Form 88 from 1969). In other words, the lessee is allowed to pay $1 per year per net mineral acre shut-in royalty, with no apparent limitations. The royalty is 1/8.
Two years ago, the lease was shut-in with minimal production of about 5MCF per day. It has not produced since.
There is clearly a case to be made that this well is not producing in paying quantities. However, because of the shut-in clause, are they allowed to continue to do this indefinitely?
It has become an issue because this lease overlays a very productive, deeper shale gas zone which has only become apparent in the last 3 years.
Clearly, I would like the re-lease the property on much more favorable terms.
Can someone tell me if there is hope of breaking the lease here, or if the shut-in clause prevents that in this situation?