Code of Federal Regulations Title 43. Public Lands:  Interior § 43.3211.21 When do I owe minimum royalty?

(1) Leases issued on or after August 8, 2005 (other than for leases issued in response to applications that were pending on that date for which no election is made under § 3200.8(b)(1));  and

(2) Leases issued before August 8, 2005, for which an election is made under § 3200.7(a)(2).

(1) You have not begun actual production following the BLM's determination that you have a well capable of commercial production;  or

(2) The value of actual production is so low that royalty you would pay under the scheduled rate is less than $2.00 per acre (this applies to situations of no production, as long as the lease remains in effect).