Administrative Rules of Montana › Department 36 - NATURAL RESOURCES AND CONSERVATION › Chapter 36.25 - STATE LAND LEASING › Subchapter 36.25.2 - Rules Governing the Issuance of Oil and Gas Leases on State Lands › Rule 36.25.212 - ASSIGNMENTS AND TRANSFERS

Current through Register Vol. 13, July 5, 2024
(1) The assignment
				of any lease, either in whole or as to subdivision of land embracing not less
				than 40 acres covered thereby, made to an assignee qualified as provided under
				the law and these regulations is permitted. Such assignment is not, however,
				binding upon the state until filed with the department, accompanied by the
				required fees, together with proof of qualifications of the assignee as a
				lessee, and until the assignment is approved by the department. For the
				purposes of this rule, any lot, according to the governmental survey, shall be
				deemed to be a legal subdivision of land embracing not less than 40 acres. The
				approval of any assignment so filed and supported may not be withheld in any
				case where the rights or interests of the state in the premises assigned will
				not, in the judgment of the department, be prejudiced thereby. Until such an
				assignment is approved, the lessee of record shall continue fully liable and
				responsible for all of the requirements and obligations of the lease. In the
				case of a partial assignment, i.e., assignment of a full interest in only a
				portion of the leased premises, a new lease is issued for the assigned acreage,
				with the same expiration date as the original lease. A new ledger sheet is
				written and the original lease is adjusted accordingly. The original lessee and
				the assignee assume full liability for their respective leases.
(2) The assignment of any oil and gas lease,
				either in whole or in part, to more than one assignee will be permitted if the
				proposed assignment is otherwise in compliance with the foregoing requirements;
				however, any such assignment will not be approved until one of the assignees is
				designated to act as agent for the purpose of receiving any and all notices
				from the department given in connection with the lease and meeting all
				requirements and obligations under the lease.
(3) Assignment of undivided, fractional
				interests in any lease, either as to the whole of the leased premises, or as to
				any portion thereof, is arranged by having the lessee assign title to the
				acreage in question to himself and the assignee. The assignment may show the
				respective shares of interest but the transaction is approved as a transfer of
				title only and without recognition of the respective interests.
(4) All other assignments of oil and gas
				leases or interests therein are subject to the approval by the department, and
				are binding upon the state in the discretion of the department.
(5) Assignments involving overriding
				royalties or containing certain reservations by the assignee are approved as
				transfers of title only and without recognition of such overriding royalties or
				special terms and conditions.
(6)
				An assignment or transfer on the form currently approved by the board will be
				acceptable. Evidence of transfers by operation of law should be in the form of
				a certified copy of the appropriate court order or decree or similar document,
				such as letters of administration to executor or administrator, decree of
				distribution, executor's deed or sheriff's deed.
(7) Any transfer, by operation of law, to an
				unqualified lessee will be recognized by the department for a period of time in
				no event longer than one year, and only for the purpose of the further transfer
				of the interest to a qualified lessee.
(8) The department shall notify the parties
				to any assignment or other transfer submitted for approval of the approval or
				non-approval thereof.
(9) As to
				development and production, the lease is regarded as indivisible so that
				drilling or securing production on any part of the severally assigned tract
				will inure to the benefit of all segregated parts of the original
				lease.
77-3-402, MCA; IMP,
					 77-3-438,
					 MCA;