§226–1 Extension of Noncompetitive Oil or Gas Lease Issued Before September 2, 1960

Summary

If a noncompetitive oil or gas lease was issued before September 2, 1960, and it finished its first five-year term while following the rules, the person shown as the owner can get one extension for the parts of the land that are still open to leasing when the five years end. A land withdrawal does not block the extension if actual drilling on that land started before the withdrawal took effect and was being actively worked on when the lease expired. A withdrawal does not count as effective until 90 days after a registered or certified mail notice is sent to each affected lessee. How long the extension lasts depends on the land. If the land is not inside the known geologic structure of a producing field, the lease is extended five years and then for as long as oil or gas is produced in paying quantities. If the land is inside that known structure, the extension is two years and then for as long as oil or gas is produced in paying quantities. The extension follows the rules in force at the end of the first five-year term. To get an extension, the owner, an assignee whose transfer has been filed for approval, or an operator whose operating agreement has been filed for approval must file an application within the 90 days before the lease expires. Leases where drilling (or drilling under an approved unit or cooperative plan) began before the primary term ended and was being actively worked then get a two-year extension and then continue while production pays.