Paid-Up Lease
An oil and gas lease whose upfront bonus prepays all delay rentals through the primary term, so no annual rental payments are owed.
A paid-up lease is an oil and gas lease in which the upfront bonus is treated as prepaying all delay rentals for the entire primary term. The lessee owes no separate annual rental payments to keep the lease alive during that term, and the lessor cannot lose the lease's benefit simply because the operator delays drilling.
This is now the dominant form. The older alternative was a delay-rental (or "unless") lease, where the lessee had to either commence a well or pay a yearly rental each anniversary, and missing a payment could terminate the lease automatically. The paid-up form eliminates that annual payment obligation — and the recordkeeping headaches and accidental terminations that came with it.
For a mineral owner, "paid-up" affects timing of cash flow, not the underlying deal economics: you still receive your bonus and, once a well produces, your royalty. The lease still expires at the end of the primary term unless it is held by production or another savings clause keeps it alive.