Common use of Payment Reductions Clause in Contracts

Payment Reductions. If Lessor owns a lesser interest in the oil or gas than the entire undivided fee simple estate, then the rentals (except for Delay Rental payments as set forth above), royalties and shut-in royalties hereunder shall be paid to Lessor only in the proportion which Lessor’s interest bears to the whole and undivided fee.

Payment Reductions. If Lessor owns a lesser interest in the oil or gas than the entire undivided fee simple estate, then the rentals (except for Delay Rental payments as set forth above), royalties and royalties, shut-in royalties and other payments hereunder shall be paid to Lessor only in the proportion which Lessor’s interest bears to the whole and undivided fee.