What happens if one does not sign a Lease Obligation Deposit Receipt on a Shut-In Royalty? (The amount on the one I received recently is very low. And is there a way to negotiate the payment?)
The amount was most likely negotiated in your original lease. Many of them are $1/acre unless negotiated for more at the time the lease was signed. Many of the old ones do not have a time limit on then either which can be a big problem.
Martha, good day. Thank you for your reply. I am Van’s sister and owner of the same mineral rights. What happens if we do not sign and return the receipt? Or if we do not cash the check? It had been a pretty good oil producing well. The last two months of production were less, and then it got shut-in August 2020. By the way, the lease does state a dollar an acre for shut in and it does not list any time frame.
If you don’t cash it, then you don’t get the money. It is part of your lease agreement. Not cashing it does not negate the agreement. I am stuck with several of those, so just hope that they will drill something new, fix the well if it had mechanical difficulties, etc. That is why it is important to get a time limit on shut in when you sign the original lease. I have some very old lease that have no time limit and I have gotten a tiny shut in payment every year for a long time.
Thank you, Martha. We greatly appreciate your insight!! 
. I guess, if we wanted to, we could hire an attorney because our checks got issued after the lease anniversary date. And the lease itself states that the shut-in payment must be made on or before anniversary date. It is a technicality, but perhaps one that could be leveraged.?
In some cases, late payment of shut in royalties can result in lease termination. It’s going to depend on the facts on the ground and other language in your lease. If you are going to see an attorney about your rights, do not cash those checks. In many cases, cashing the check means you waive your right (if any) to lease termination.
Ah, important point. If they were issued after the lease anniversary date, then do not cash them as Aimee said. And if you do not like the lease you have, then you can demand a release of lease because the lease expired under its own terms since the check was late or contact an attorney if they do not provide one. Some companies may claim “covid”, so read your lease and see if you have any clause relating to Force Majeure or a 90 day extension to pay or anything like that.
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