Shut in well and lease termination

We have royalty in a well that is listed with the State of Louisiana as "SHUT-IN PRODUCTIVE-FUTURE UTILITY" and is producing less than an average of 1 barrel of oil a month. At that rate $110 per month would not be in "paying quantities," but does the shut-in desgination allow the oil company to hang on to the lease even with such low production? Seem like company reports a barrel of oil about once every two or three months. Any help with how long we should wait before trying to get the lease terminated would be appreciated.

Columbia 1:

The answer to your lies within the terms of the lease. Either you or an oil/gas attorney must read the lease and make this determination if you can even terminate the lease. The oil company seems to be conducted business in this manner in order not to lose the lease. I am guessing that the oil company knows what they have to do to maintain this lease. Good luck in that you find a loophole in the lease that will free your up.

Your lease is probably on a bath-o-gram form, which I have not read in years. Do you yourself a favor and read your lease. 90 times out of 100, shut in only applies to natural gas.

However, if you are receiving a royalty payment, the well is not shut in.

Is the well actually producing that barrel of oil or are they just saying it is and paying you royalty on a ficticious barrel of oil to maintain the lease ? I wonder if the valves are rusted shut ?

Shut-in designation does not keep a lease in effect.

If you have a company interested in leasing your land, give them a copy of your lease, tell them your situation and they will know what you need to do, if anything.

Current operator COULD BE PAYING shut-in royalties, if they are provided for in your lease.

Not familiar with LA but, the "-FUTURE UTILITY" reference COULD mean the operator is planning to convert this well to either an injection or disposal well?

Thanks to everyone that replied with some really good suggestions. Will follow up on them as I can and update this forum with any new information. If there are other suggestions out there, I am still willing to listen.