Shut in and Minimum Royalties. (a) In the event that production of oil, gas, or their constituents is interrupted and not marketed for a period of twelve (12) months, and there is no producing well on the leasehold or lands pooled/unitized therewith, Lessee shall thereafter, as royalty for constructive production, pay an annual shut-in royalty in the amount of Twenty Dollars ($20) per net mineral acre until such time as production is reestablished (or Lessee surrenders the Lease) and this Lease shall remain in full force and effect. During shut-in, Lessee shall have the right to rework, stimulate, or deepen and well on the leasehold or to drill a new well on the leasehold in an effort to re-establish production, whether from an original producing formation or from a different formation. In the event that the production from the only producing well on the leasehold is interrupted for a period of less than twelve (12) months, this Lease shall remain in full force and effect without payment of royalty or shut-in royalty.
Shut in and Minimum Royalties. (a) If there shall be a well on the leased premises capable of producing gas or gas and condensate in paying quantities, but from which neither gas nor condensate is sold or used off the leased premises for lack of a satisfactory market (which well is herein sometimes called a "shut-in" gas well), Lessee may pay or tender to Lessor, as shut-in gas well royalty, for each shut-in well, a yearly sum equal to twenty and No/100 Dollars ($20.00), indexed to the Consumer Price Index (CPI) as published for January 01, 2010, and recalculated every five (5) years thereafter, multiplied by the number of acres subject to this Lease at the time such payment is made. The first such payment of shut-in gas well royalty is to be made on or before sixty (60) days after the day on which (a) such well was shut in, or (b) this Lease ceases to be in force by any other provision hereof, whichever is later. Succeeding payments may be made annually thereafter on or before the anniversary of the due date of such payment; and if such shut-in gas well royalty shall be paid or tendered as above provided, it shall be considered for purposes of this Lease that such well is producing gas in paying quantities for a period of one (1) year from the due date of such payment, and for like annual periods thereafter; provided, however, that the payment of shut-in gas well royalty shall not prevent the termination of this Lease as to portions of acreage covered hereby, in accordance with the provisions of paragraph 8 hereof. Notwithstanding the making of such shut-in gas well royalty payments, Lessee shall be and remain under the continuing obligation to (a) use all reasonable efforts to find a market for said gas and to commence or resume marketing same when a market is available, (b) reasonably develop the lands then subject to this Lease, and (c) drill all such xxxxx on the lands then subject to this Lease as may be reasonably necessary to protect same from drainage by xxxxx on adjoining or adjacent lands. All payments or tenders provided for in this paragraph shall be made to Lessor personally or to the depository bank provided for elsewhere in this Lease.
Shut in and Minimum Royalties
