5-7-24. Royalty provisions in oil and gas leases--Annual rental.

All such leases shall provide for delivery to the state in the pipeline to which the lessee may connect the wells of a royalty of not less than one-eighth of the oil and gas produced, saved, and marketed from the leased lands, or the equivalent proportion of the market value of such oil and gas in the field at the time of production; provided, however, that no royalties shall be payable upon oil or gas used in operations on the land for the development and production of oil or gas therefrom.

All such leases shall provide for the payment of a reasonable annual rental, as fixed by the rules and regulations of the commissioner of school and public lands, but in no event to be less than ten cents per acre per annum.

Source: SL 1931, ch 203, § 2 (6); SL 1937, ch 213, § 1; SDC 1939, §§ 15.0509, 15.0510; SL 1941, ch 53, § 1; SL 1976, ch 57.



SDLRC - Codified Law 5-7-24 - Royalty provisions in oil and gas leases--Annual rental.

5-7-24.1. Royalty provisions in geothermal leases--Renegotiation--Annual rental.

All geothermal leases shall provide for the payments of royalty to the state. The royalty payments shall consist of:

(1)    Not less than ten percent of the gross revenue, exclusive of charges, approved by the commissioner of school and public lands, that were made or incurred with respect to transmission or other services or processes, received from the sale of steam, brines, from which no minerals have been extracted, and associated gases at the point of delivery to the purchaser; and

(2)    A royalty of five percent of the gross revenue, exclusive of charges, approved by the commissioner, that were made or incurred with respect to transmission or other services or processes, received from the sale of mineral products or chemical compounds recovered from geothermal fluids or chemical compounds.

All royalties shall be subject to renegotiation after ten years from the effective date of the lease and at ten-year intervals thereafter.

All geothermal leases shall provide for the payment of a reasonable annual rental, as fixed by the rules and regulations of the commissioner of school and public lands, but in no event to be less than one dollar per acre per year.

Source: SL 1980, ch 40, § 9.