There is a gas well that we own 1/2 of the royalties. There has been no production for over a year because the operator says that the pipe line has leaks and is not being repaired. What is the effect on the operator and our royalties?
The lessee/operator? usually has the right to hold the lease by paying Shut in Royalties for a specific and limited amount of time. Check the lease terms. Also, read the Force Majeur portion of the lease. If the operator chooses to use that provision to hold the lease, get some technical help to determine if the lease is being held unfairly and, if so, take some legal action to break the lease if your land is in an area where horizontal drilling in a near term possibility.
Gary L Hutchinson
Minerals Managment