All such leases as described in § 7-31-38 shall provide for the delivery to the said county in the pipeline to which said lessee may connect the wells, of a royalty of one–eighth of the oil or gas produced, saved, and marketed from the leased lands, or the equivalent proportion of the market value of such oil and gas in the field at the time of production, at the option of the said board of county commissioners; provided, however, no royalty shall be payable from oil or gas used in operations on the land for the development of oil or gas therefrom. Provided, further, that of the oil or gas so used, the same shall be in the proportion of seven–eighths belonging to the lessee or assigns, and one–eighth which but for such use would be delivered to the said county lessor.

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Source: SL 1939, ch 165, § 1; SDC Supp 1960, § 42.0801.