Texas Comptroller Manual of Accounts - Fiscal 2025
Revenue Object 3320 – Oil Royalties from Lands Owned by Educational Institutions – Unsold Public School Land, Gulf Lands, Riverbeds

Lease of Public School and Gulf Lands

The board may lease to any person for the production of oil and natural gas: islands, saltwater lakes, bays, inlets, marshes and reefs owned by the state within tidewater limits; the portion of the Gulf of Mexico within the jurisdiction of the state; and all unsold surveyed and unsurveyed public school land. Oil and gas shall only be leased together and shall be leased separately from other minerals. In addition to the cash amount bid for a lease, the area included in the lease shall be leased for not less than 1/8 of the gross production of oil produced and saved, or its value and not less than 1/8 of the gross production of gas produced and sold off the area or its value, plus an amount determined by the board, until production is secured. Permanent School Fund gets amounts received from unsurveyed school land and 2/3 of the amount received from other areas. General Revenue gets the remaining 1/3 of the payments from the other areas.
 
Lease of Riverbeds and Channels

The riverbeds and channels belonging to the state are subject to development by the state and to lease or contract for recovery of oil and gas. In addition to the cash amount bid for a lease, the board shall lease the area for not less than 1/8 of the gross production of oil produced and saved or its value and not less than 1/8 of the gross production of gas produced and sold off the area or its value plus an amount determined by the board until production is secured. Shut-in oil royalty is charged on wells capable of production but where oil is not being produced for lack of suitable production facilities or market, in an amount equal to twice the annual rental provided on the lease but not less than $1,200 a year for each well capable of producing in paying quantities.

On or before the 5th day of the second month succeeding the month of production.

Amended by H.B. 1691, 67th Leg., R.S.