04/08/2013 09:00 AM Senate FINANCE

SENATE BILL NO. 96                                                                                                            
                                                                                                                                
     "An Act  relating to the  primary period of an  oil and                                                                    
     gas or  gas only  lease and the  extension of  a lease;                                                                    
     relating to terms  to be included in an oil  and gas or                                                                    
     gas only lease;  relating to rental for an  oil and gas                                                                    
     or  gas  only lease;  and  providing  for an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
10:32:45 AM                                                                                                                   
                                                                                                                                
SENATOR PETER  MICCICHE introduced SB 96.  He explained that                                                                    
SB 96 proposed  changes to the oil and  gas leasing statutes                                                                    
to  provide the  commissioner  of DNR  with  the ability  to                                                                    
grant a  one-time extension  to the primary  term of  an oil                                                                    
and gas or gas-only lease, up to 10 years.                                                                                      
                                                                                                                                
10:33:26 AM                                                                                                                   
                                                                                                                                
LARRY  SEMMENS,  STAFF,  SENATOR PETER  MICCICHE  introduced                                                                    
himself. He  provided a brief  overview of  the legislation.                                                                    
He  stated that  the department  and the  industry supported                                                                    
the bill.  He pointed out  that the  bill had a  zero fiscal                                                                    
note  with an  indeterminate  revenue  impact. He  explained                                                                    
that the bill  corrected an issue with  short-term leases of                                                                    
five  to  seven years.  He  mentioned  situations where  the                                                                    
short-term leases should be extended  to the normal ten-year                                                                    
lease  term.  He  mentioned that  gas-only  leases  did  not                                                                    
expire  as long  as production  occurred from  the lease  or                                                                    
unitization of the lease.                                                                                                       
                                                                                                                                
Mr.  Semmens continued  that SB  96  provided the  statutory                                                                    
authorization  to extend  the lease  if it  was in  the best                                                                    
interest of the state to do so.                                                                                                 
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
SB  96  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.