I would appreciate any information regarding the Shut-in Rental clause in a lease we have been offered. Can anyone give me an idea of the going rate per net mineral acre per year? Thank you. Sandra

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Hi Sandra, there is lots of good info on the site using the search bar. I think you will find this helpful

http://www.gohaynesvilleshale.com/group/shelbycounty/forum/topics/q...

Keith, is there any way to sort the results by the date posted?

Mr. Mauck, I cannot thank you enough for your reply. You are a great publisher of a site for which I am very thankful. 

Sandra

Sandra,

More than the rental amount for shut-in rentals, the important issue with a shut-in clause is limiting the amount of time the lease can be maintained by shut-in payments.

Thank you, Andrew. I read some of the information recommended by Mr. Mauck, and saw that you are correct about the time limitation. The proposed lease lists 2 years. I presume that is acceptable???

I appreciate your reply.

Sandra

I think 2 years is reasonable to request, and it certainly seems to be the most common period used in leases I've seen that have such a limitation.

The State of LA only leases for three years. No option to renewal clauses. Why should it be any different for private parties?

It's also curious to note that the State gets a lease bonus the first year, and 1/2 of that amount for the second and third year rentals.

Do they think we're stupid out here?

Don't answer that, please.

Actually, the first year, the state gets a rental and a bonus equal to the rental....and then just rentals for the rest of the primary term...or the lease is terminated and released.  So you're sort of correct, but not.

Thank you, Andrew. I appreciate your knowledge and information. This site is wonderful! I feel like I have neighbors who care!

Sandra

Just make sure it is not two consecutive years, but a total of 24 months, not necessarily running consecutively.  Otherwise, they company could shut you in for 23 months, turn the well back on, and then shut you in for another 23 months.

Hello Henry,

Oh goodness. Thank you so much. I never thought of that! You are so wise. I appreciate your information and will check that before I sign or will ask for it to be changed. I am so thankful for this site!

Sandra

Henry and others,

I just got off the phone with the land man, and they are unwilling to change to 24 months. They basically have the same idea in mind as you mentioned in your reply. They want to keep the lease going. He said if they shut in for 3 months then went back to production for 8 months of a year, then the same thing the next year, etc., in 8 years, the lease would be up (3 months x 8 years = 24 months). He was adamant about not changing it. My sister just signed her lease (I told her to sign it 2 days ago and then got info on 2 years today), and she sent it back to the landman; my 2 aunts (who also own this property with my sister and I) signed when the lease was first offered in March or something like that. What does this mean? Can they go ahead without my signing and drill on the property? I got a lawyer in the beginning, to go over the proposed lease, but he didn't even catch this 2 consecutive years clause, so I'm not sure I want to go back to him. He is part of the firm recommended in the site, Davidson, Jones & Summers. Any advice will be appreciated. Thanks. Sandra

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