Alaska Statutes Title 38. Public Land § 38.05.177. Nonconventional gas leases

(1) shall be automatically extended if and for so long thereafter as gas is produced in paying quantities from the lease and the lessee continues to meet all requirements of the lease; a lease issued under this section covering land on which there is a well capable of producing gas in paying quantities does not expire because the lessee fails to produce gas unless the lessee is allowed reasonable time to place the well on a producing status; if drilling has commenced on the expiration date of the primary term of the lease and is continued with reasonable diligence, including such operations as redrilling, sidetracking, or other means necessary to reach the originally proposed bottom hole location, the lease is extended for one year and for so long thereafter as gas is produced in paying quantities; a gas lease issued under this section that is subject to termination by reason of cessation of production does not terminate if, within 90 days after production ceases or a longer period determined at the discretion of the director, reworking or drilling operations are commenced on the land under lease and are thereafter conducted with reasonable diligence during the period of nonproduction; on application by the lessee, the director may extend the lease issued under this section for a period of not more than 10 years if the gas produced from the lease is to be used by the lessee solely for its mining operations;

(2) issued under former (c) of this section before January 1, 2004, may be extended at the discretion of the director; a lease may be extended under this paragraph upon application by the lessee; the director may once extend the lease for a period of not more than three years; in exercising discretion to extend a lease under this paragraph, the director may not extend the lease unless the director considers