After having been burned in the past, these represent the changes that I normally request. The really significant part involves Shut-Down provisions. These provisions have generally been acceptable to the Lessees, although some of them have just not responded. However, I am still learning after a lot of years now, and as I now live far out of state, I do not have ready access to a good attorney. Any additional items or assistance would be appreciated.
EXHIBIT A
G. The "amount realized" (as referred to in Paragraph 3.A. and elsewhere hereof) shall be computed at the point of sale without deduction for transportation or marketing costs, including, but not limited to compression or dehydration.
H. Lessee shall notify Lessor when drilling operations commence and progress thereafter.
I. Payment of lease bonus shall be made within 40 days of signing of the lease or Lessor has the option of terminating the lease.
J. Not withstanding any other provisions contained in this lease, it is expressly understood and agreed that, after the primary term, this lease cannot be maintained in force solely by the payment of shut-in royalties for any continuous period of non-production in excess of two (2) consecutive years and following such period, the lease shall terminate as to all lands not included in a producing unit. If wells are shut-in or production is ceased, the Lessee is required to notify Lessor within 30 days of said action. If, for a period of 90 consecutive days such well or wells are shut-in or production therefrom is not being sold by Lessee, then Lessee shall pay an aggregate shut-in royalty of $1,000.00 per acre then covered by this lease, such payment to be made to Lessor on or before the end of said 90-day period and thereafter on or before each anniversary of the end of said 90-day period while the well or wells are shut in or production therefrom is not being sold by Lessee; provided that if this lease is otherwise being maintained by operations, or if production is being sold by Lessee from another well or wells on the leased premises or lands pooled therewith, no shut-in royalty shall be due until the end of the 90-day period next following cessation of such operations or production.
K. In the event Lessee pools the leased premises with any other lands to form a pooled unit, then all the lands described in this lease will be included in such pooled unit. Any unit so formed
shall consist of no more than 640 gross acres, including all of the lands described in this lease.
L. If Lessee fails to properly or timely make shut-in payments to Lessor, Lessor shall thereafter provide Lessee with written notice to Lessee of such event and Lessee shall have within 90 days after actual receipt of Lessor's written notice to make the relevant shut in payment(s) or the lease shall terminate. Lessee shall be obligated to pay to Lessor interest on the delinquent amounts at the rate of Twelve percent (12%) per annum, or the highest rate then permitted by law, whichever is lesser, calculated from the date such payment is due and continuing until such delinquent amount is paid.