Statute 55-1308: Existing rights, rights in unleased land,
and royalties and
lease burdens.
Property rights, leases, contracts, and other rights or obligations
shall be regarded as amended and modified only to the extent necessary to
conform to the provisions and requirements of this act and to any valid
order of the commission providing for the unit operation of a pool or a
part thereof, but otherwise shall remain in full force and effect. For the
purpose of this act the owner, or owners, of oil and gas rights in and
under an unleased tract of land shall be regarded as a working interest
owner to the extent of a 7/8 interest in and
to such rights
and a royalty owner to the extent of the remaining
1/8
interest therein, except that, if the commission finds that, under the
prevailing industry practice in the area where the unit is located, oil and gas
leases contain a higher amount of royalty than 1/8 royalty
interest, then the owner or owners shall be regarded as a royalty interest
owner to the extent of the royalty interest determined by the commission to be
in accordance with prevailing industry practice and a working interest owner as
to
the remainder of the owner's or owners' interest in such tract of
land.
A 1/8 part of the production allocated to each
tract under
an order providing for the unit operation of a pool or a part thereof,
shall in all events be and remain free and clear of any cost or expense of
developing or operating the unit and of any lien therefor as an
unencumbered source from which to pay the royalties or other cost free
obligations due or payable with respect to the production from such tract.
If a lease or other contract pertaining to a tract or interest stipulates a
royalty, overriding royalty, production payment or other obligation in
excess of 1/8 of the production or proceeds
therefrom, then
the
working interest owner subject to such excess payment or other obligation
shall bear and pay the same.
History: L. 1967, ch. 299, § 8;
L. 2000, ch. 15, § 3; Mar. 30.