It is an annual, quarterly or monthly rental payment that is paid to the Lessor (mineral owner) in order to maintain the validity of an Oil & Gas Lease, pursuant to the terms and conditions of the Oil & Gas Lease. Rental payments maintain an Oil & Gas Lease in lieu of drilling activities or production.
Rental Payment Information
It is an annual payment that is paid to the Lessor (mineral owner) in lieu of a monthly royalty payment. If a producing well is “shut-in” (temporarily not producing) for a certain period of time as determined by the Oil & Gas Lease, then a shut-in royalty payment is made to maintain and keep the Oil & Gas Lease valid while a well is not producing.
It is a payment to the Surface Owner for the use of land for road easements, tank battery or compressor sites, pipeline rights-of-ways, etc., created by a separate Surface Use or Right-of-Way Agreement.