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The Mineral Rights Podcast: Mineral Rights | Royalties | Oil and Gas | Matt Sands

May 20, 2020

Today Justin and I talk about reasons that operators may shut-in producing wells. From low oil prices to preventing issues like frac interference (we explain what this is and why this is a concern), this is topic that affects all royalty owners at some time. We also talk about some of the things to know about the shut-in royalty clause in most oil and gas leases.

We recorded this episode in December 2019 before the crash in crude oil prices.  That said, these concepts are relevant regardless of the reason for shutting in production. In fact, this topic may be even more relevant today with the current price environment of $20-30/bbl for WTI crude oil, given many operators have shut-in production that is not economic to produce at these prices. 

Also, in case you missed it, we also covered shut-in royalty payments in our recent conversation with Spencer Cox who is an attorney with Burns Charest, LLP.  You can find that discussion in Episode 53 of the Mineral Rights Podcast.  In that episode, we talk about negative royalties and also dive a bit deeper into some of the legal considerations around shut-in royalty payments in the current price environment.

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