Oil, Gas, and Other Natural Resources - Leases

C.R.S. tit. 38, art. 43

in effect

C.R.S. § 38-43-101 Appointment of trustee to make oil, gas, or other mineral lease where contingent future interests are involved

38-43-101. Appointment of trustee to make oil, gas, or other mineral lease where contingent future interests are involved. (1) Where lands in this state, or any estate or interest therein, are subject to contingent future interests, legal or equitable, whether arising by way of remainder, reversion, possibility of reverter, executory devise, upon the happening of a condition subsequent, or otherwise, created by deed, will, or other instrument, and whether a trust is involved or not, and it is made to appear that it will be advantageous to the present and ultimate owners of said lands or any estate or interest therein that such lands, estate, or interest be leased for the production of minerals, including oil, gas, and other natural resources, or any of them, upon the filing of a complaint by any person having a vested, contingent, or possible interest in said lands, or any estate or interest therein, or by any trustee holding title to any such property in trust, the district or probate court which is administering such lands or any estate or interest therein under a testamentary trust shall have the concurrent power and jurisdiction, pending the happening of any contingency and the vesting of such future interest, to appoint a trustee for such lands, or any estate or interest therein, and to authorize and direct such trustee to sell, execute, and deliver a valid lease covering the minerals, oil, gas, and other natural resources, or any of them, in, on, or under said lands, or any estate or interest therein. (2) Where the instrument appointing any executor, trustee, or other fiduciary confers the power on such fiduciary to execute leases for the production of minerals, oil, gas, and other natural resources from the lands, or interest therein, which is subject to any such contingent future interest, then no other person except such executor, trustee, or other fiduciary shall have the right to file a complaint as provided in this article. (3) Any lease executed under this article shall not affect or cover any undivided interest in any such lands, title to which is then vested in fee simple and is not subject to any contingent future interest, but shall cover only such undivided interest therein or the entire interest therein which is subject to some contingent future interest.

C.R.S. § 38-43-102 Parties - representation of minors, persons of unsound mind, and persons not in being

38-43-102. Parties - representation of minors, persons of unsound mind, and persons not in being. All persons in being having a vested, contingent, or possible interest in the lands or estate or interest sought to be leased shall be made parties to such proceedings, and all persons unknown and all persons not in being, who may have or become entitled to a vested, contingent, or possible interest in such lands, may also be made parties to such proceedings by the general description of unknown persons. Such proceedings shall be in the nature of an action in rem, and the process, practice, and procedure shall be in compliance with the Colorado rules of civil procedure then in effect. The court shall appoint a guardian ad litem to represent any such parties who may be minors or persons of unsound mind, unless they are represented by their statutory guardians or conservators. If the court specifically finds that the welfare or interest of any person not in being requires special representation, the court may appoint a guardian ad litem to represent such unknown party not in being, and such guardian ad litem shall file such pleadings or answer and take such steps as he deems proper, and such unknown person not in being will be fully bound by the proceedings under this article, and same shall be conclusive on any such person. Otherwise, and in the absence of such findings by the court, it shall not be necessary to make parties any persons not in being, but the persons in being who are parties shall stand for and represent the full title and whole interest in said lands, or estate or interest therein, and all parties not in being who might have some contingent or future interest therein, and all persons, whether in being or not in being, having any interest, present, future, or contingent, in the property sought to be leased will be fully bound by the proceedings under this article, and same shall be conclusive on all such persons.

C.R.S. § 38-43-103 Contents of complaint

38-43-103. Contents of complaint. The complaint shall describe the property sought to be leased with reasonable certainty and, insofar as it is known to the plaintiff or as can be ascertained with reasonable diligence, shall set forth the names of all persons interested in such property together with their respective estates or interests, either vested, contingent, or executory; whether said land is proven or unproven as to its oil, gas, or other mineral content; its distance from producing or drilling wells or producing mines; and the reasons why it is necessary, desirable, or beneficial that the property be leased for the production of minerals, including oil, gas, and other natural resources, or any of them. If a bona fide offer to lease has been obtained, the complaint shall also set forth the name of the proposed lessee, the true consideration for said lease, and a general statement as to the provisions of said proposed lease, or a copy of the proposed form of such lease setting forth the terms and conditions thereof may be attached to the complaint.

C.R.S. § 38-43-104 Private or public sale of lease

38-43-104. Private or public sale of lease. The court, after a hearing, may thereupon by order approve the leasing of said property by private contract with the proposed lessee and shall appoint a trustee, as provided in this article, and direct such trustee to execute such lease on the form proposed or such form as is satisfactory to the court, and such lease so executed shall be valid and binding and conclusive on all parties. The court, in its discretion, may order the leasing of said property to be conducted at public sale upon such notice and in such manner as the court shall direct. In the event of a public sale, such sale shall be reported back to the court and no lease shall be executed and delivered by the trustee until and unless the sale of said lease is approved by the court.

C.R.S. § 38-43-105 Terms of lease: Pooling and unitization

38-43-105. Terms of lease: Pooling and unitization. Any lease which covers minerals or natural resources other than oil or gas or related hydrocarbons shall be for such term and contain such provisions as may be approved by the court. A lease which specifically covers oil and gas and which may also cover other minerals may be for a primary term not exceeding ten years and as long thereafter as oil, or gas, or other minerals may be produced from the premises embraced in such lease or as long as drilling operations are diligently continued. Such oil and gas lease may provide for pooling, unitization, or consolidation of the leased premises, or any part thereof, with other lands in the same general area to establish a cooperative or unit plan of development or operation and for the apportionment of royalties on production from any such unitized area on an acreage basis. The trustee appointed under this article, or any successor trustee, shall have the power at any time while such trust continues, with the approval of the court, to enter into any agreement providing for such pooling or unitization of all or any part of the leased premises and to bind thereby the said property and all owners thereof having any interest therein whether present, future, or contingent.

C.R.S. § 38-43-106 Trustees - control of court, removal or resignation, successor, bond, compensation

38-43-106. Trustees - control of court, removal or resignation, successor, bond, compensation. Any suitable person, bank, or trust company may be appointed trustee under this article, and if a trust is in existence and there is a trustee serving under the trust, the trustee appointed by the court under this section may, in the court's discretion, be the same trustee as is serving under the existing trust, even though he is not a resident of this state, and may be acting under the control of any other court in the United States. The trustee shall be under the continuing control of the court and may be removed by the court at will. Upon such removal or upon the death or resignation of the trustee or any of them, the court may appoint a successor. The court may in its sole discretion, at any time it may be deemed advisable, require such trustee to give a bond in favor of the owners of the property which is to be or has been leased, and shall fix the amount of such bond and may from time to time require a bond in additional amounts. Said trustee shall be allowed as compensation for his services such sums as the court from time to time may fix, to be paid from moneys collected by him.

C.R.S. § 38-43-107 Title of purchaser

38-43-107. Title of purchaser. Where any lease has been executed under the provisions of this article, the title of the lessee under such lease shall be indefeasible by any party to the suit, or by any person who was virtually represented therein by any party to the suit, or by any person who was not in being at the time the suit was commenced. If the decree or order under which such lease was executed is afterwards reversed or set aside for any reason, except for fraud, collusion, or other misconduct of the purchaser or lessee, the title of such purchaser or lessee shall not be affected thereby; but all subsequent orders and decrees shall affect only the proceeds of sale or the reversion subject to such lease, together with the proceeds, rentals, and royalties payable under the terms of the lease.

C.R.S. § 38-43-108 Disposition of proceeds

38-43-108. Disposition of proceeds. The proceeds of sale, and the reversion subject to any such lease for the development of minerals, including oil, gas, and other natural resources, or any of them, together with the proceeds, rentals, and royalties accruing from any such lease, shall, in all respects, be substituted for and stand in place of the property so leased, as regards the ownership and enjoyment thereof, and all persons shall have the same estates or interests, vested, contingent, or executory in such proceeds of sale, or in the reversion subject to any such lease, together with the proceeds, rentals, and royalties accruing from any such lease as they had or would have had in the property so leased. The proceeds of sale or bonus and rentals payable under the terms of such lease coming into the hands of the trustee may be paid, under proper order of court, to the life tenant or other person entitled thereto. Under proper order of court, the trustee shall be authorized to invest and reinvest funds and income from royalties coming into his hands in such securities as fiduciaries are authorized to invest the moneys in their custody, which investments shall remain intact until the ultimate taker is determined and shall then be paid over to such ultimate taker as ordered by the court and the trust closed. Income from investments shall be paid to the life tenant or other person entitled thereto under proper order of court. The court shall make all proper orders and decrees for the faithful application of the funds and for the management and preservation of any property or securities in which the same may be invested for the protection of the rights of all persons having any estate or interest in the leased property, whether vested, contingent, or executory.

C.R.S. § 38-43-109 Remedies herein provided cumulative, contracts and options

38-43-109. Remedies herein provided cumulative, contracts and options. The rights, powers, authorities, and remedies provided for in this article shall be cumulative and in addition to other existing rights, powers, authorities, and remedies. Any executor, trustee, or other fiduciary or attorney-in-fact having express or implied powers to execute leases for the production of oil, gas, or other minerals may freely do so under the provisions of the instrument appointing them without the necessity of proceeding as provided in this article. The powers of trustees appointed under this article to execute leases includes the power, under proper order of court, to enter into, execute, and deliver valid contracts and option agreements relating to the future execution or delivery of such leases and contracts granting exclusive rights to enter such lands to make geophysical and geological surveys, explorations, and tests including core drilling.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-38.docxFetched: 10/6/2026