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.
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Terms Used In Utah Code 65A-6-9
Division: means the Division of Forestry, Fire, and State Lands. See Utah Code 65A-1-1
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
(2)
(a)
The division 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.
