Ahk-a- il. -a 

WXLL. WILSON 

AX-l-G- GENX!XXAL truly 11, 1960 

Honorable Bill Allcorn Opinion NO. W-878 

Commissioner 

General Land Office Re: Authority under 

Austin 14, Texas Article 6008b, V.C.S., 

for the extension of 

term leases by entering into a secondary 

Dear Mr. Allcorn: recovery program. 

You have requested the opinion of this office with 

respect to the authority of the Commissioner of the General 

Land Office and the School Land Board to extend a State mineral. 

lease beyond its principal term of 25 years by the execution and 

approval 0f.a unitization agreement under the provisions of Article 6008b, V.C.S. 

The lease In question was executed in 1940, pursuant 

to the Sales Act then In force, for "a period of five years and 

as long thereafter as any minerals ;, . . are produced therefrom 

not to exceed 25 years . . . . 

ieks'legally were 

The primary and principal 

sus ended from 1941 to 1947 and its explration date is December isi , 1971. The lessee asserts the advlsability of the institution of a water flood operation In the field 

as a means of conservation and increasing the ultimate recovery 

and proposes unitization under Article 6008b with other tracts 

composing the field. Apparently, the expenditure of substantial 

sums will be necessary to carry out the proposed secondary recovery program and It is estimated that field depletion will not 

occur until 1981, or some ten years after the expiration of the 

principal term of the lease in question. 

Supposedly, the program will not be instituted unless 

the proposed unitization agreement legally can extend the prlncipal term of the lease to the duration of production. It is 

contended that the Act wherein'lt states that unitization agreements for secondary recovery programs may provide "for the extension of leases covering any part of lands committed to the 

unit . so long as production of oil or gas In paying quantities is'hid from any part of the lands or leases committed there- 

&:s: 

.", supplies the requisite authority. Art. 6008b, Sec. 1, 
Honorable Bill Allcorn, page 2 (WW-878) 

This Department In ~~-185 rendered the opinion that 

& lease Gould not be extended beyond its principal term by the 

execution and approval of a unitization agreement 'pursuant to 

the provisions of'Atit. 5382c, despite the fact that this statute 

authorized such &n agreement to contain a ~provlslon that the 

lease "with respect to the lnteiest~of the State, shall remain 

in force'as ldnn as oil or zas . . . is vroduced from the unit 

In paying quantities and royalties paid to the State thereon." 

(Article 5382c, Sec. 2(s).) 

' Without deciding, because unnecessary, whether this 

statute, passed in 1951, supersedes the pertinent provlslons 

of Article 6008b, It is to be noted that the portion of the 

latter statute, quoted above, Is not substantially different from 

Its cdunterpart in Article 5382~. 

"extension"' 

The statutory provision for 

of a lease for so long as production obtains is, In 

our opinion, simply another way of saying that the lease shall 

"remain in force'.for such productive period. Neither is it of 

piirticular Import, as we view the matter, that Article 6008b relates to secondary recovery operations, while Article 5382~ presiunably Qertalns to primary or initial mineral development. The 

fact remains that in both instances, If the statutes are given 

the effect contended for, and assuming that production will continue beyond the principal tern'of the lease, the State, without 

having received a bonus or other direct consideration therefor, 

till1 have disposed of at least a,Bnt.ial portion of Its reversionary interest rather than committing to the unit merely Its 

royalty Interest as authorized by the unitization statutes. 

We therefore believe, aid you are so advised, that for 

the reasons therein set forth, the answer to the present question 

Is controlled by our former Opinion No. ~~-185. Although the 

Commissioner and the School Land Board are authorized to enter 

into and approve a unltlzation agreement for secondary recovery 

operations, they cannot thereby legally extend the lease beyond 

Its principal term of 25 years. 

SUMMARY 

Under present law the State cannot, by entering 

into a unitization agreement under Article 6008b, 

V.C.S., extend a term mineral lease beyond lts'prlncipal term of 25 years. 

Yours very truly, 

JHR:bh 

WILL WILSON 
Honorable Bill Allcorn, page 3 (W-878) 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Leon F. Pesek 

Virgil R. Pulliam 

John C. Steinberger 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: 

Leonard Passmore