§ 11-34-120 — Mortgages taken by board; control and disposition of property

(a) All mortgages and accompanying promissory note or
notes taken by the board for monies loaned shall run to state
loan and investment board as mortgagee or payee, and all titles
to property taken by the board shall run to the board as
grantee. The board may control, manage, lease and dispose of the
property, subject to the following:
(i) The board may lease any or all property for oil
and gas for a primary term up to ten (10) years and as long
thereafter as oil or gas is produced in paying quantities and
extend the term of existing oil and gas leases in good standing
for as long as oil or gas is produced in paying quantities and
for coal and other mineral purposes for terms not exceeding ten
(10) years, with the preferential right in each coal or other
mineral lessee to renew the lease for successive periods of ten
(10) years each;
(ii) The board may make and establish rules and
regulations governing the issuance of mineral leases and
covering the conduct of development and mining operations to be
carried on thereunder;
(iii) Mineral leases may be issued upon monthly or
annual minimum rental payment basis as fixed by the board, with
payments annually applied against any royalty as shall accrue
for the same lease year by the terms of the lease, which
royalty, as to lands leased for oil or gas shall not be less
than five percent (5%) of all oil and gas produced and saved
from and not used in operations on the lands under the lease,
and royalty of not less than five cents ($.05) per ton on coal
produced from the lands under any lease for coal purposes, the
royalty to be paid on mine run of coal.
(b) No mineral lease is assignable or transferable except
with written consent of the board. It shall require the lessee's
full compliance with all rules and regulations adopted by the
board and compliance with all terms of the lease. All mineral
leases shall be separate and distinct from each lease of the
land for grazing or agricultural purposes. Rules and regulations
adopted by the board shall provide for joint use of the lands
for grazing and agricultural or mineral purposes without undue
interference by the lessees under any class of leases with
lessees under any other class. The board, on behalf of the state
and its lessee in any mineral lease may join in the interest of
conservation and greater ultimate recovery of oil and gas, in
fair and equitable cooperative or unit plans of development or
operation of oil and gas pools, with the United States
government and its lessees or permittees, or others, and the
board may modify and change any terms and conditions of any oil
and gas lease as mutually agreed by the lessor and lessee to
conform to the terms of any lease to the cooperative or unit
plan and to effectuate proper operations thereunder. The changes
may include extension of the term of years applicable to any
lease for the full period of time during which the cooperative
or unit plan may remain in effect.
(c) When a cooperative or unit agreement is terminated or
ceases to be effective as to lands upon which there is no
production of oil or gas, the lease covering the lands shall
remain in effect for two (2) years from the date the lands
ceased to be subject to the agreement, or for the remaining
length of the term of the original lease, whichever is greater,
and so long thereafter as oil or gas is produced from the lands
in accordance with the requirements of the original lease.
(d) The terms of any lease issued under this section for
land on which actual drilling operations were commenced prior to
the end of its primary term and are being diligently prosecuted
at that time shall be extended for one (1) year and so long
thereafter as oil or gas is produced in paying quantities.
(e) If land acquired by the board and upon which
improvements for mineral operations and other improvements have
been made, are sold as to both surface and mineral rights, or if
the lands are leased for minerals to other than the owner of the
mineral improvements, the purchaser or new lessee shall pay the
owner of the improvements the fair value thereof at a mutually
agreed price. If agreement cannot be promptly reached the price
shall be fixed by appraisement under the direction of the board.
As used in this subsection "improvements" means improvements
which are used or useful and necessary for subsequent operation
of the land for mineral purposes and the price shall include the
fair value of the work previously done in the development of the
property if it is of practical use in future mineral operation.
No well drilled on the land for oil or gas which does not
produce either in commercial quantities, and no shaft, tunnel or
drift from which coal or other minerals have been substantially
exhausted shall be considered improvements for the purposes of
this subsection.
(f) The board may sell or otherwise dispose of property at
a price not less than seventy-five percent (75%) of the
appraised value and upon terms determined by the board which
shall adopt rules and regulations governing such sales. When
land is sold which was acquired by the board through the
foreclosure of any farm loan mortgage provided for by this act,
the board shall not reserve any part of, or interest in, the
mineral estate. When land otherwise acquired by the board is
sold, the board may reserve all or any part of the mineral
content of the land and the right to use so much of the surface
of the land as it considers convenient or necessary in
connection with mineral operations thereon, together with all
needed rights of ingress and egress, but the board in each case
shall appropriately provide for indemnification of the surface
owner against all surface damages caused by mineral operations
on the land.
(g) The board may lease for agricultural and grazing
purposes any lands acquired by it on such terms and conditions
as it prescribes and adopt rules and regulations it considers
necessary in facilitating the leases.
(h) Revenue received by the board under this section from
agricultural, grazing and mineral leases of lands acquired by
foreclosure shall be credited to the loss reserve account as
provided by W.S. 11-34-202(e).