Minimium Royalty Clause in Oil and Gas Leases

A Lessee should have a minimum royalty clause in their lease to prevent a company from “HBP” to hold your lease. It should be a minimum fee/net. mineral acre based upon a monthly, or annual basis. I have had that in most of recent leases. This goes along with pugh clauses also.

Getting that clause can be challenging depending upon the state your are in. “Producing in economic quantities” can hold a lease as HBP in many states. No post production charges is what I care about.

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