You are here:

Oil/Gas/Well Capping?


Hi - My wife is in the process of reviewing a lease renewal for her mother. I've suggested we find a legal expert to review as well. Do you know of anyone in Utah near SLC? or could this be done another way?

Basically it is a family lease among I think 6 members, for exploration in eastern colorado. I think it is a 5 year term and has been ongoing for several years. One item that stood out is if they find a product, oil or natural gas they can just cap the well and let it sit for however long they chose. They would pay $1 per acre per year and that would be it. Seems to me like they should be required to produce? Another item is that the family would have to pay the trucking costs and any royalties would be after that which also seems unreasonable. Anyhow that is just a couple of the red flags. Thanks!

I don't have a representative out in the Utah area, so I am unable to refer you to anyone out there, but I can address the two questions you point out in your question to me.

First, usually an Operator is allowed to keep a well -shut-in' for no more than two (2) consecutive years without making a 'shut-in payment'.  What they pay per year, on an acre basis, is anywhere from $1.00 to $200/acre/year, depending on where the property is, what the market will bear, etc.  But the two (2) year term is quite standard.

As for deductions from your royalty of marketing, transporting, commpression, etc., these are also standard deductions in the industry because the way the Operator sees it, is they are incurring these costs from the point of the wellhead to the point of market - so that a better price can be made at the sales point.  Whether the costs are incurred due to processing the product, or enhancement, in some manner or getting the product to a market point of higher sales.

You didn't mention what the royalty term was that you had been offered in the 5-year lease, but this is certainly an important factor and I suggest you check with the other landowners in the immediate vicinity to see what terms they have been offered and agreed to before you sign anything.

Best of luck.  


All Answers

Answers by Expert:

Ask Experts


Laura M. FitzGerald, CPL


PLEASE READ CAREFULLY BEFORE SUBMITTING A QUESTION. I can answer all questions related to oil and gas ownership, mineral interests and working interests concerning the leasing and selling of your minerals, any questions concerning pipeline ROW's, units with the Louisiana Department of Conservation; pooling provisions, depth limitations, vertical or horizontal pugh clauses; and oil and gas terminology. I can offer assistance in negotiating for leasing your property, assisting in locating owners of suspended funds or to receive the best offer for your oil and gas interests, should you desire to sell. I am only able to answer questions regarding oil and gas leases, minerals, royalties, or offers to purchase mineral/royalty interests if I have complete information. Please provide a full legal description for your interest(s). If the question pertains to a lease, please include all terms of any current (or desired) lease offers, including lease bonus amount, royalty and lease term. If the question is regarding a mineral or royalty interest offer to purchase, please provide the offer amount, date of offer, other offer terms, and further details on the mineral/royalty interest, such as lease terms, and if producing, the average monthly income. Since I receive numerous inquiries daily, I am only able to answer your questions efficiently and effectively if I have complete information. I must decline any questions submitted with incomplete information. If your question is non-technical in nature and you simply need assistance understanding an oil and gas matter, please submit your question with as much information and detail as possible. Any background information that has led to your question is also very helpful.


I have over 34 years experience as an Independent Petroleum Landman. I became a Landman after working as a paralegal for Oil & Gas Attorneys for 8 years. My first 2 years were spent specializing in Well History and Research with the Louisiana Department of Conservation, then moving into clearing title defects and handling title curative for oil and gas properties for the next 6 years. Subsequent thereto, I handled title issues, buying oil and gas leases and settling surface damages. I also acquired acreage for drilling prospects in excess of 10,000 acres. I also became a mineral/royalty owner commencing in 2004 and have found that I can help many people when they have reached the point in their lives they feel converting their minerals or royalties into a cash asset benefits them.

American Association for Professional Landmen, ArkLaTex Assoc. of Professional Landmen, and Dallas Association of Professional Landmen (DAPL), Certified by the Women's Business Enterprise National Council (WBENC)- South. This certification is one of the most widely recognized and respected certifications in the nation. This designation is reserved for only those women-led businesses that exemplify the characteristics of integrity and professionalism to which the WBENC adheres to so strictly.

Attended LSU, became a Certified Professional Landman in 1994; Notary Public with dual authority in multiple parishes in North Louisiana; Bilingual in English and Greek

Awards and Honors
Expert Oil & Gas Professional assisting attorneys representing landowners. Involved in 2 lawsuits and both suits were awarded to the landowner. Ilios Resources, Inc. has been awarded the Best of Shreveport Oil and Gas Mineral Buyer Award for 2016, 2015, 2014, 2013 and 2012.

Past/Present Clients
Consultant Landman for Texas Oil & Gas (TXO Production Corp.), Anadarko Petroleum, Comstock Resources,Independent Geologists, Pipeline ROW Clients, and Oil & Gas Attorneys. For the past 5 years my practice is primarily an advocacy for the landowner. I also assist royalty owners recover suspended payments or incorrect royalty payments, or sell their mineral or royalty interest.

©2017 All rights reserved.