§ 22-32-112 — Oil and gas leases

(1) A board of education of a school district
has the power to lease any real property or any interest therein owned by the
district for oil and gas exploration, development, and production purposes, upon
such terms and conditions as may be prescribed and contracted by the board in the
exercise of its best judgment as the board deems to be for the best interests of the
district. Any lease of oil and gas rights shall be for a term not to exceed ten years
and as long thereafter as oil or gas is produced, and shall provide for a royalty of
not less than twelve and one-half percent of all oil and gas produced, saved, and
sold, or the gross production value thereof, which royalty may be reduced
proportionately under appropriate provision in the lease if the interest in the school
district is less than a full interest in the land or oil and gas rights in the land
described in the lease. Whenever in the opinion of the board of education, and
because of the size, shape, or current use of any tract of land owned by the district,
the best interests of the district so require, any lease of such tract may provide that
no drilling shall be conducted on the land covered thereby, in which case such lease
shall be for a term not to exceed ten years and so long thereafter as the district
may share in royalties payable on account of production of oil or gas from lands
adjacent to such tract so leased.

(2) Whenever deemed by the board of education of a school district to be in
the best interests of the district, it may enter into a unit agreement providing for the
pooling, unitization, or consolidation of acreage covered by any oil and gas lease
executed by the district with other acreage for oil and gas exploration,
development, and production purposes, and providing for the apportionment or
allocation of royalties among the separate tracts of land included in the unit or
pooling agreement on an acreage or other equitable basis, and may change, by
such agreement, with the consent of the lessee under the lease, any or all of the
provisions of any lease issued by the district, including the term of years for which
the lease was originally granted, in order to conform such lease to the terms and
provisions of the unit or pooling agreement and to facilitate the efficient and
economic production of oil and gas from the lands subject to such agreement.

(3) The leasing of school district real property or any interest therein under
the provisions of this section shall not be deemed to be a sale of such school
property.

(4) All leases of oil and gas or rights therein and all unit agreements relating
to or dealing with oil and gas and containing provisions similar to those set forth in
this section affecting school district lands heretofore made or entered into by any
school district are hereby confirmed, validated, and declared to be legal and valid in
all respects.

Legislative History

Source: L. 64: p. 583, � 13. C.R.S. 1963: � 123-30-13.