Sec. 66.74. LEASE EXTENSION OR SUSPENSION. (a) At the expiration of the primary term of a lease, if production of oil or gas has not been obtained on the leased premises, but drilling operations are being conducted in good faith and in a good and workmanlike manner, the lessee may apply in writing to extend the lease for a period of 30 days. The application shall be filed with the board of regents on or before the expiration of the primary term.

(b) The applicant shall submit with the application a fee in an amount set by the board of not less than $7.50 for each acre in the lease requested to be extended.

(c) If the commissioner determines that the conditions of this section have been met, the commissioner, or a designee appointed by the commissioner, shall execute a written extension as provided by this section.

(d) As long as drilling operations are being conducted in good faith and in a good and workmanlike manner, additional extensions of 30 days each may be granted up to an aggregate of 360 days. The lessee must submit a written application and payment on or before the last day of the extended primary term. The payment for each additional 30-day extension shall be in an amount set by the board of not less than $7.50 for each acre in the lease.

(e) The board may elect to suspend a lease and all of the conditions and covenants contained in the lease if there is a legitimate dispute regarding the validity of the lease. The board may rescind the suspension at any time, in which event the lease shall resume as of the date the suspension is rescinded and shall continue for the remainder of the period specified in the lease as the primary term, or, if the primary term ended prior to the suspension, the lessee shall have 60 days to commence production or drilling and reworking operations.

Amended by Acts 1997, 75th Leg., ch. 1324, Sec. 1, eff. Jan. 1, 1998.