§226–1 Extension of noncompetitive oil or gas lease issued before September 2, 1960

Summary

Gives the official lease owner one extension after the first five-year term for noncompetitive oil or gas leases issued before September 2, 1960, if the lease was kept under the rules. The extension only applies to land that is not withdrawn from leasing on the lease’s expiration. A land withdrawal does not stop an extension if actual drilling started before the withdrawal took effect and was being actively worked on when the lease expired. A withdrawal only counts 90 days after notice is sent by registered or certified mail to the affected leaseholder. If the land is outside the known geologic structure of a producing field, the extension is five years and then stays in effect as long as oil or gas is produced in paying quantities. If the land is inside the known structure, the extension is two years and then continues while production pays. To get an extension, the official owner or an assignee/operator whose paperwork is on file must apply within the 90 days before the lease ends. Any pre-September 2, 1960 lease where drilling began before the primary term ended and was being actively pursued is extended two years and then as long as it produces in paying quantities.