Juneau, Alaska – The Alaska House of Representatives today passed a bill granting the Commissioner of the Department of Natural Resources the ability to offer one-time lease extensions to oil and gas or gas-only lease holders provided they meet certain benchmarks.

House Bill 198, sponsored by the House Labor & Commerce Committee, says the commissioner may offer the extension for a period of up to five years, though the lease can total no longer than ten years, provided the extension is “in the best interest of the state.”

The commissioner, in granting the extension, may impose minimum work commitments, which could include a detailed description of the type and amount of work to be completed, estimate of dollars to be expended, or requiring a lessee to post a performance bond. The rent on each acre covered under the lease would increase up to $250 per year for the last three years, with the commissioner having the discretion to reduce the rate based on the lease-holders diligence in exploring and developing.

“House Bill 198 offers a new approach to the DNR Commissioner, hopefully to keep the new explorers in the state, and attract even more to the state,” House Labor & Commerce Committee Chair Kurt Olson, R-Soldotna/Kenai, said. “Reasonable and prudent extensions would be a valuable tool for companies who need the added time and ability to prove up their tracts and hopefully get to production.”

HB 198, which passed unanimously, now moves to the Alaska Senate for consideration.