When any such agreement has been approved by the commissioner, he may, with the approval of the lessee evidenced by the lessee's execution of such agreement or otherwise, amend any oil or gas lease embracing state lands within the area included in such agreement so that the provisions of such lease so far as they apply to lands within such area will conform to the provisions of such agreement and so that the length of the secondary term as to lands within such area will be extended, insofar as necessary, to coincide with the term of such agreement, and the approval of such agreement by the commissioner and the lessee, as aforesaid, shall without further action of the commissioner or the lessee be effective to conform the provisions and extend the term of such lease as to lands within such area, to the provisions and terms of such agreement; or the commissioner may permit the holder of any such lease of state lands within such area to surrender such lease, so far as it embraces lands within such area, with the preference right to a new lease for the lands surrendered, containing such provisions and for such a term as will conform to the provisions and term of such agreement. The commissioner is authorized to issue such new lease under regulations prescribed by him. No law applicable to restricted districts and the making of oil and gas leases therein, or providing for a minimum rental within restricted districts, shall be applicable to any lease conformed or issued hereunder.

If any such agreement provides for extensions of the term thereof, any such extension pursuant to the provisions of such agreement shall, with the approval of the commissioner, be effective also to extend the term of such lease, so far as it applies to lands within such area, to coincide with the extended term of such agreement.

History: 1941 Comp., § 8-1140, enacted by Laws 1943, ch. 88, § 3; 1951, ch. 162, § 1; 1953 Comp., § 7-11-41.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Saving clauses. — Laws 1951, ch. 162, § 2, provided that all cooperative or unit agreements approved by the commissioner of public lands, all approved amendments of oil and gas leases covering state lands to conform to such approved agreements, and all new oil and gas leases issued on state lands by said commissioner to conform to such approved agreements, prior to the effective date of the act, which have not expired or been canceled for nonperformance with the terms thereof, are declared to be valid and existing contracts with the state of New Mexico according to their terms.

Commissioner's powers limited. — The commissioner of public lands of New Mexico is merely an agent of the state, with such powers, and only such, as have been conferred upon him by the constitution and laws of the state, as limited by the Enabling Act. Hickman v. Mylander, 1961-NMSC-068, 68 N.M. 340, 362 P.2d 500.

Commissioner properly refused to extend terms of oil and gas leases as to lands partly within unit area except as to land included within unit area. Hickman v. Mylander, 1961-NMSC-068, 68 N.M. 340, 362 P.2d 500.

Effect of discovery without production prior to expiration. — Where there is no evidence that gas in paying quantities was produced from a gas well from the time the gas well was completed to the expiration dates provided in the lease, the mere discovery of oil or gas cannot validate or extend a lease providing oil or gas must be produced. Hickman v. Mylander, 1961-NMSC-068, 68 N.M. 340, 362 P.2d 500.

Rights of assignee. — Where a lessee had 10 years within which to produce oil and gas in paying quantities, upon so producing oil and gas, the lease continued in force so long as oil and gas in paying quantities were so produced, and an assignee of a portion of the lease succeeded to all of the rights of the original lessee, subject to the continued payment of the specified rentals and subject to the implied covenant to develop with reasonable diligence the undeveloped portion of the leased land. Hickman v. Mylander, 1961-NMSC-068, 68 N.M. 340, 362 P.2d 500.

Lease terms to apply separately. — Where the unit agreement specifically provides that the portions within the unit area shall be segregated from the portions outside the unit area, the terms of the lease shall apply separately to such segregated portions. 1953 Op. Att'y Gen. No. 53-5806.