Are bonuses recoupable?

The large bonus payments that people have been getting--are they recoupable against future royalty payments?  In other words, if we assume that a well is drilled, will the first royalty payments be lessened by the amount already paid as a signing bonus?  Is this usually the case?  Sometimes?  Never?

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Permalink Reply by Sylvester Deal on December 7, 2010 at 9:27am
Lease language has precedence. General industry practices are bonus money is paid to lessor as enticement to acquire the lease, delay rentals are paid to lessor to maintain lease through the primary term (before drilling), royalty is paid in the secondary term (held by production) on the production established by drilling a successful well. Royalty payments are not reduced to allow the lessee to "recoup" bonus money.

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