Montana § 77-3-427 - Provision For Offset Wells -- Compensatory Royalties
Full text of Montana Montana Code Annotated § 77-3-427 — Provision For Offset Wells -- Compensatory Royalties, with citation guidance and answers to common questions.
§ 77-3-427. Provision For Offset Wells -- Compensatory Royalties
Provision for offset wells -- compensatory royalties. (1) Oil and gas leases granted by the state shall contain suitable provisions imposing upon all lessees the obligation to drill offset wells wherever and whenever necessary to prevent waste and damage to the property of the state. (2) The board may allow the lessee the following options in lieu of drilling an offset well: (a) releasing the lands in question; or (b) paying a compensatory royalty on a nonproducing lease if the board determines that such compensatory royalty will fully compensate the state for waste and damage to the property of the state. The compensatory royalty shall be based upon the estimated drainage, as determined by the board, and shall be paid on a monthly basis unless circumstances require otherwise. (3) If the board or the lessee terminates the lease, that termination does not impair any implied covenant against drainage or the right of the board to seek damages from the lessee for the lessee's failure to protect the lease from drainage of oil or gas by a well adjacent to the state lease.
Source: official Montana text · Last verified 2026-08-27
Frequently Asked Questions About Montana § 77-3-427
What does Montana Code Annotated § 77-3-427 cover?
Section 77-3-427 ("Provision For Offset Wells -- Compensatory Royalties") is part of the Montana Code Annotated, the codified statutory law of Montana. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Montana § 77-3-427?
A common citation format is "Montana Code Annotated § 77-3-427" (Montana). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Montana law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Montana official source linked on this page or consult a licensed Montana attorney.
How does Montana § 77-3-427 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Montana can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Montana.