When any state land mentioned in this chapter is known to be within a well defined proven oil and/or gas field, is subject to waste or dissipation, has not been heretofore leased or under contract, is so situated that the production of such oil and/or gas is needed and useful to the state for any of its buildings and/or institutions and can be profitably used because any such state-owned building or institution is situated thereon or in the immediate vicinity thereof, or when the state needs to drill any well or wells to protect its mineral resources, the said commission is authorized and empowered, in its discretion, to make contracts within the limit of appropriations made for such purposes; said contracts to be let, in the manner now provided by law for letting public contracts, for drilling a well or wells on such land or lands mentioned in this section for oil and/or gas, completing the said well or wells as a producer of oil and/or gas, and connecting any such well or wells to any such state-owned property or institution for use of the production therefrom for fuel or other purposes.

The commission is hereby further authorized and empowered in its discretion to proceed to drill under its own direction such well or wells on such state land as it may deem advisable, and to employ such drillers and employees as will be necessary in carrying on such operations; and said commission is further authorized in its discretion to purchase, lease, or hire any machinery, tools, and other equipment necessary for drilling such well or wells, to be paid for by the commission out of any funds appropriated by the legislature for the purpose of carrying out the provisions of this chapter. The said commission may, in its discretion, sell or contract the sale of any surplus oil and/or gas not needed by any state building or institution produced from any such well or wells, or may exchange or dispose of any of same by reciprocal agreement in order to serve any distant state-owned institution, but any oil, gas and/or other mineral so disposed of shall not be so disposed of at any amount or value less than the market price thereof.

Said commission shall determine in all cases whether it would be to the best interest of the state to dispose of said resources by lease or proceed by contract to drill to the actual exploration and exploitation of said resources by the state itself, and shall be governed entirely by a consideration of the best interest of the state.