Does someone have good example favourable to MO of a shut in clause and is it just for gas or gas and oil. Lease term = 3yrs.
I am adding a Shut In Clause that's in one of my leases. It may need some cleanup; but, on the surface, I thought it was O.K. at the time.
Shut-In Provision: If at the expiration of the primary term or at any time or times thereafter, there is any well on said land or on lands with which said land or any portion thereof has been pooled, capable of producing oil or gas or other substances covered hereby in paying quantities, but all such wells are shut-in, this lease shall, nevertheless, continue in force as though operations were being conducted on said land for so long as said wells are shut-in, and thereafter this lease may be continued in force as if no shut-in had occurred for the purpose of maintaining this Lease. Lessee covenants and agrees to use reasonable diligence to produce, utilize, or market the minerals capable of being produced from said wells, but in the exercise of such diligence, lessee shall not be obligated to install or furnish facilities other than well facilities and ordinary lease facilities of flow line, separator, and lease tank. If, at any time or times after the expiration of the primary term, all such wells are shut-in for a period of sixty (60) consecutive days, and during such time there are no operations on said land, then at or before the expiration of said sixty (60) day period, Lessee shall pay or tender, by check, as royalty, a sum equal to Twenty Five Dollars ($25.00) for each acre of land then covered hereby. Lessee shall make like payments or tenders at or before the end of each anniversary of the expiration of said sixty (60) day period if upon such anniversary this lease is being continued in force solely by reason of the provisions of this paragraph. Each such payment or tender shall be made to the parties who at the time of payment would be entitled to receive the royalties which would be paid under this lease if the wells were producing, and may be deposited or paid directly to Lessor or their successors, which shall continue as the depositories, regardless of changes in the ownership of shut-in royalty. It is expressly agreed and provided that this lease cannot be held, maintained, nor extended under and by virtue of the shut-in oil/gas well provision of this lease for a longer term beyond the primary term than two (2) consecutive years immediately thereafter, or for shorter terms at various intervals not to exceed in the aggregate two (2) years in all.