The people's voice. [volume] (Helena, Mont.) 1939-1969, 1953-04-03
Olsen Rules NeU Oil Leasing
CONTINUED from page one)

"(2) All leases Issued hereunder
shall be granted for a primary
term or period of ten (10) years,
and as long thereafter as oil OF
gas in paying quantities shall be
produced hereunder; provided,
however, that all drilling, rental
and other obligations are fully
kept and performed by the lessee;
and provided, further, that moth
ing herein contained shall be con-
strued as amending or repeating
sections S1-1703 or S1-1706, Re-
vised Codes of Montana, 1947.
If oil or gas is not being pro-
duced from the leased premises at
the expiration of the primary term
of the lease but the owner of the
lease is then engaged in drilling on
said premises for oil or gas, then
the<lease shall continue in force
so long as such drilling operations
are being diligently prosecuted.
If oil or gas shall be recovered
from any such well drilled or be-
ing drilled at or after the eXpira-
ton of the primary term of the
lease, the lease shall continue in
force so long as oil or gas in pay
ing quantities shall be produced
from the leased premises"
Another change is Section 3 of the
act seeking to amend Section 81
1908, R. C. NJ, 1947, to read as fol-
lows:
Amendment of Existing Leases.
The owner or owners of any eX-
listing state oil and gas lease shall
have the right to exchange it for
an amended lease containing the
same provisions as to the term of
said lease as are then provided by
law for state oil and gas leases,
upon filing a written application
therefor, and upon payment of a
sum which is the full market value
of the exchange, as determined by
the state board of land commits
sioners; but which amended lease
shall be subject to all other pro-
visions, including rents and royal
ties, contained in the original
lease; and shall bear the same
commencement date as the original
lease"
In substance the amendment of
Section 81-1702, supra, extends the
Term for which oil and gas leases may
be made from the present maximum
term of twenty years to a term in
perpetuity if oil or gas is discovered
on the leased premises during the
primary term of ten years. The {
amendment to Section 81-1708, SUI
pra, grants the right to any present +
holder of a Montana state oil and +
gas lease to exchange his present !
lease for one embodying the changes c
dictated by the amendments to Sec V
ton 81-1702, supra. t
Practically all of the state. lands il
were granted to the State of Montana
as school lands by Section II of our a
Enabling Act, approved by the act i
Of Congress February %, 1882, 25 e
Stat. 676. The grant was accepted a
by Ordinance l, Section VII of the
Montana Constitution. The grant of 4
lands to the State of Montana by the +,
Enabling Act, as accepted by the h
state, constitutes a compact between o
the state and the United States. See II
70 C. j. S., Public Lands, Section SO, 6
p. 727; State ex rel. Galen VS. Dis N
trict Court, AZ Mon. los, 112 Pac. v
706; Texas Pacific Coal and Oil Com d
pany VS.. State, -- Mont. - q
234 Pac. (2d) ASP. An Ordinance to /
the Constitution has the same force ri
and effect as a Constitutional pro- o,
vision. (Thompson VS.. Kenney, 9 II
Mont 223). II
The Enabling Act was amended ri
by Public Law 480 of the 8Oth Con- Il
gress, and accepted by our Legislature re
by Chapter Is Of the Session Laws of 81
1949. The portion of the Enabling
Act dealing with the leasing Of public II
lands, as amended by the above cited 81
acts, is as follows: te
e.. Leases for the production al
of minerals, including leases for Ia
exploration for oil, gas, and other ir
hydrocarbons and the extraction a.
thereof, shall be for such term Of p
wears and on such conditions as st