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Simple English definitions for legal terms

shut-in royalty clause

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A quick definition of shut-in royalty clause:

A shut-in royalty clause is a part of an agreement between a person who owns land and someone who wants to extract oil or gas from it. This clause allows the person who wants to extract oil or gas to keep the agreement in place even if they are not currently producing anything. Instead of paying the landowner for the oil or gas they extract, they pay a shut-in royalty fee to keep the agreement in place. This fee is paid in lieu of production.

A more thorough explanation:

Definition: A shut-in royalty clause is a provision in an oil-and-gas lease that allows the lessee to maintain the lease even when there is no production from the property because wells capable of production are shut in. In this case, the lessee pays the lessor a shut-in royalty in lieu of production.

Example: Let's say a company has leased a piece of land for oil and gas exploration. However, due to some technical issues, the wells on the property are shut in, and no production is possible. In this case, the company can still maintain the lease by paying the lessor a shut-in royalty. This royalty is usually a fixed amount per year and is paid to the lessor until the wells are reopened for production.

Another example: Suppose a company has leased a piece of land for oil and gas exploration, and the wells on the property are producing oil and gas. However, due to a drop in oil prices, the company decides to shut in the wells temporarily. In this case, the company can still maintain the lease by paying the lessor a shut-in royalty. This royalty is usually a percentage of the actual royalty paid to the lessor when the wells are producing oil and gas.

The above examples illustrate how a shut-in royalty clause works in an oil-and-gas lease. It allows the lessee to maintain the lease even when there is no production from the property, and the lessor receives compensation in the form of a shut-in royalty.

shut-in royalty | shuttle diplomacy

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[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
WorthlessAttractiveZombie
7:44
My berkeley paragraph finally disappeared. I definitely think it is just an indicator that they are actively reviewing files, and does not mean anything about A, WL, or Rs
WorthlessAttractiveZombie
7:46
Also has anyone's date disappeared for W&L? Mine did last night
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