2005 Arizona Revised Statutes - Revised Statutes §27-555.01  Extension of lease due to lack of transportation, processing facilities or market

A. When the owner of an oil and gas lease issued pursuant to this chapter has discovered gas on the leased premises or on lands joined therewith in a cooperative or pooled unit, while the lease is in full force and effect, but is unable to produce gas because of lack of transportation or processing facilities or a market for the gas, each lease on which there is a gas well or which is part of the cooperative or pooled unit shall be extended beyond the primary term from year to year, but not to exceed a period of five years, by payment of a shut-in gas royalty of one dollar per acre for the first year, two dollars per acre for the second year and three dollars per acre for the third, fourth and fifth years, payable in advance annually on the anniversary date of the lease. If the payment is made it will be deemed that gas is being procured and produced from the leased premises for such year.

B. The provisions of this section shall apply to existing oil and gas leases in good standing.