36.25.212 ASSIGNMENTS AND TRANSFERS
(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.
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
(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.
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.
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.
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.
History: 77-3-402, MCA; IMP, 77-3-438, MCA; NEW, Eff. 12/5/75; TRANS, 1996 MAR p. 2384.