Legal Question in Real Estate Law in New Mexico

Re: Oil and Gas Lease

Paid-up means that the consideration for the lease -- the per acre bonus and delay rentals, if any -- are paid to the mineral owner at the time the lease is taken. Shut-in royaolty is the amount the lessee must pay the mineral owner for the right to shut-in a gas well on the property, rather than produce from it; typically operators shut-in gas wells in anticipation of a better price or until a pipeline serving the well is constructed. As a landowner, it's important to limit the time which the operator can shut-in a gas well by negotiating for a short shut-in period at the time the lease is made. It's almost always worth paying a lawyer to review and help negotiate an oil and gas lease.