Section 6804.

A lease or permit issued under this chapter may be assigned, transferred or sublet as to all or any part of the leased or permitted lands, and as to either a divided or undivided interest therein, or as to any separate and distinct zone or geological horizon or portion thereof, subject to approval by the commission, to any person, association of persons, or corporation, who at the time of the proposed assignment, transfer, or sublease, possesses the qualifications provided in this chapter. Any assignment, transfer or sublease shall take effect as of the first day of the month following the approval by the commission and filing with the commission of an executed counterpart thereof, together with any required bond and proof of the qualification, under this act and the rules and regulations of the commission, of the assignee, transferee or sublessee to take or hold such lease or permit or interest therein. Unless approved by the commission no assignment, transfer or sublease shall be of any effect. Upon approval of any assignment, transfer or sublease the assignee, transferee or sublessee shall be bound by the terms of the lease or permit to the same extent as if such assignee, transferee or sublessee were the original lessee or permittee, any conditions in the assignment, transfer or sublease to the contrary notwithstanding. Any assignment or transfer of a separate portion of any lease or permit or of a separate and distinct zone or geological horizon, or a portion thereof, shall segregate the assigned, transferred or subleased portion thereof from the retained portion thereof, and such approval shall release and discharge the assignor or transferor from all obligations thereafter accruing under said lease or permit with respect to the assigned or transferred lands or zones or horizons, and such segregated leases or permits shall continue in full force and effect for the primary term of the original lease or permit, but, in the case of any lease, for not less than two (2) years after the date of discovery of oil or gas in paying quantities, or commercially valuable deposit of minerals, upon any segregated portion of the lands or zones or horizons originally subject to such lease, and so long thereafter as oil or gas is produced in paying quantities. Assignments or transfers under this section may also be made with the approval of the commission of parts of leases which are in their extended term because of production, and the segregated lease of any undeveloped lands or zones or horizons shall continue in full force and effect for two (2) years and so long thereafter as oil or gas or minerals are produced in paying quantities from the segregated lease lands or zones or horizons.

(Amended by Stats. 1955, Ch. 1724.)