Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1933-02-25
w ar1li11g State Senate
Lease LdlU Amendment
Might Make Trouble


given TO House Bill No 225 group of Independents
returning from Helena got to counting who
responsible for the which appears be aimed
clipping the wings of the state land board and possibly
Juring the state school fund in years to
Its not mine said each operator when the buck
passed to the other All had supposed the made
legal for operator to have several state leases under
to be absolutely fair with the State land board believe that
the legislature should be cognizant of these facts
The general effect of the bill win be:
To all legislative restrictions upon the mo-
nopozaton of oil and in state lands through the Op
To tie the hands Of the State Board Of Land Com.
nisioners far Interfering with the Operating Agree
ment' system is concerned.
To establish system Of perpetual leasing despite
definite terms required to be fixed original leases, by
granting preference rights essees to release at the highest
competitive bid etc. and granting the State Board power
exercise its discretion about approving such leases
Here the provisions of the various sections and
section CCaper IOs Laws Of 1927 No oil or gas lease
issued more hundred
by the United States
than hundred (04Ol
lease association, municipality quail
fled to hold an oil or lease on state lands receive fro
the assign.
wil Judgment
the operation Of law more than one Oh and gas aease 20 state
lands, subject limitations
number OF SUCH
Gives State Board right to determine number Of
and to be held by any single lessee (ths amounts
to delegation Of Legislative power that probably not
the Montana Constituton.)
All leases hereunder shall be granted for period not ez
ceedng coo thereafter during the
fifteen 5) with the Of such lease or
leases oil Of commercial quality and in commercial
quantity land PRO
vDED that all drilling rental and other obligations are
fully kept and performed by the lessee
Changes the present limitation of FIVE YEARS
primary oil and gas leases TEN YEARS
There appears to be advantage to the State State
school fund in allowing lessee than five years
complete test well on land under state lease
PERSONS associations firms corporations
or drilling and other operations on the
until filed with Secretary Of the State Board Of
Commissioners the Board such drill
operating shall in affect the obligation
# individual holder the State.
This removes all restrictions operating drilling
agreements etc. granted by essees Of the state and ties
the hands Of the Board regard to imposing any regua
tons restrictions long its approval of
such requested With the law in such
shape it hard to why holder or an agreement
under state lease would whether not the Board
had approved it. Apparently person corporation
could legally hold all oil and gas rights all lands
ed by the State by taking agreements from all of the
states ssees and the State Board would be unable to
Nothing herein contained or in Chapter
1897 elsewhere, shall
construed prevent the State Board OF Land commi
the pooling
equitable modifying existing
delay delay
and such unit plans Of operation provided however
shall change the percentages Of royalties
paid the State from the percentages fixed in leases
Gives the State Board unlimited power to modify
existing and future leases in any and all particulars
cept to reduce royalties /,
Section (Chapter 1920. In each and every
gas the State there shall be reserved
70 Commissioners full and
borty to declare termination Of the upon Of
well the leased premises not less
(s) diameter to the depth Of at least
(OoO unless oil in commercial quantity
quality shall be encountered at halIower
ph tko after the date Of the lease; provided
oil commercial quantities is not found
the depth Of 10000 less then that
ent drilling with diligence such
ph may make reasonable test for oil or
may It's discretion safacory showing
the lessee compile
~ Of such drilling obligation exceed
contnu Ca p