Section 410 – Shut-in gas wells.

• (1) Under a mineral lease for oil and gas, gas is considered to be produced in paying quantities from a shut-in gas well if the shut-in gas well is capable of producing gas in paying quantities, but the gas cannot be marketed at a reasonable price due to existing marketing or transportation conditions.

• (2)
  • (a) The director shall make rules establishing:
    • (i) a minimum rental or minimum royalty for a shut-in gas well that is considered to be producing gas in paying quantities; and
    • (ii) the basis upon which the minimum rental or minimum royalty shall be paid.
  • (b) The minimum rental or minimum royalty may not be less than twice the annual lease rental.

Enacted by Chapter 294, 1994 General Session