In a Lessor’s lease exhibit requiring shut-in royalties payments to maintain the lease, what is the standard and the reasonably negotiable amount monthly or annually to be paid to lessor when production under a lease is shut-in by the operator?
Hello. Our last Reeves County lease provided the following amounts for shut in wells not held by the primary term: “lease provides that the operator must pay $20 per acre for every 90 days of shut-in.’
Hope this helps.
Good question. Older leases often have a low end of $1-10/acre per year. Would be curious to see what other newer ones have. It really depends on how much leverage you had when you negotiated the lease (so would make sense that @Rick5 in Reeves would have great terms! Thanks for sharing, Rick!)
Thanks to both of you.
I’m asking for $100 per acre every 3 months and no more than 2yr shut in or release of lease