Issue Date:
Revised Date: 2018-03-07

Legal Cites

Object Type

Cash — Natural Resources

Origin Date

1931 by the 42nd Leg.


(1) Land owned by or held in trust for the use and benefit of a department, board or agency may be leased by the appropriate board to any person under the provisions of this chapter for the purpose of prospecting or exploring for, producing, storing, caring for, transporting, preserving, selling and disposing of oil and gas.

A bid shall not be accepted which offers:

  • a royalty of less than one-eighth of the gross production of oil or gas; or
  • a cash bonus of less than $10 an acre.

The minimum royalty and bonus may be increased at the discretion of the board.

A bid shall contain an obligation to pay at least $1 an acre annual rental beginning with the second year of the lease, with the amount to be set by the board in advance of the advertisement.

At the expiration of the 5-year primary term without actual production, lease extensions may be obtained for 30-day periods. If the tract is 640 acres or less, the fee is $3,000. If more than 640 acres, the fee is $6,000.

If the lease was assigned to the owner of the soil without the advance approval of the commissioner and the owner of the soil subsequently assigns the lease, the owner of the soil must pay the state two times the entire consideration that he received upon subsequent assignment of the lease.

When an assignment to an owner of the soil has the commissioner's advance approval and the owner of the soil subsequently assigns the lease, the owner of the soil must pay the state one-half of his profit on the subsequent assignment. His profit is the difference between what he paid for his assignment and what he received for the subsequent assignment.
(2) The rental for university lands is subject to the payment of an annual rental after the first year of not less than 10 cents per acre, payable each year in advance, unless the royalties received from the land during the preceding year equal or exceed the amount of the annual rental payment. (§ 66.65)

Due Date

Annually in advance beginning with the second year of the lease.

Collecting Agencies

Deposit Funds


 Amended by H.B. 2143, 70th Leg., R.S.

USAS Values

Appropriation Year 24
Receipt Category 08 – Natural Resources
Receipt Type 80 – Land Income
Object Group 30 – Revenues
USAS Status A
Rev/Exp Category 04 – LAND INCOME