| (a) Assignments and releases.
(1) After obtaining written approval of the commissioner, a
lease or permit issued under this chapter, except a Relinquishment Act lease
may be assigned in quantities of not less than 40 acres. If, however, less
than 40 acres remain of the tract originally leased, then the entire remaining
acreage may be assigned. Assignments shall be recorded in each county in which
the state tract is located. Relinquishment Act leases are not subject to these
restrictions and may be assigned at any time.
(2) After recordation, lessee or permittee shall obtain a certified
copy from the county clerk of each recorded assignment covering the state
lease or permit. Lessee or permittee shall send such certified copies to GLO
within 90 days of the date of recordation, accompanied by the filing fee prescribed
in §1.3 of this title (relating to Fees).
(3) An assignment of any lease except a Relinquishment Act
lease is not effective until a certified copy of such assignment has been
filed with the GLO. Failure to file a certified copy of an assignment of any
lease, including a Relinquishment Act lease, shall subject the lease to forfeiture.
An assignment shall not have the effect of releasing the assignor from any
liability incurred or claim previously accrued in favor of the state.
(4) The lessee or permittee may release the lease or permit
back to the state at any time. To release a lease or permit, a lessee or permittee
must record the release in each county where the state tract is located and
mail a certified copy of each recorded release to GLO accompanied by the filing
fee prescribed in §1.3 of this title (relating to Fees).
(5) A release is not effective until a certified copy of the
release is filed by the GLO. A release shall not have the effect of releasing
lessee or permittee from any liability incurred or claim previously accrued
in favor of the state.
(b) Reports and payment of royalties.
(1) A log, sample analysis, or other information obtained from
each test drilled on the area covered by the lease or permit shall be filed
with the GLO upon request. Lessee or permittee shall furnish annually on the
anniversary date of the lease or permit a map or plat showing all activities
on the state lease or permit. In addition, an evaluation map or plat shall
be filed in the GLO within 90 days after any drilling program shall have been
completed or abandoned, and the correctness of such map shall be sworn to
by lessee or permittee or his representative. The map or plat shall show geologic
formations penetrated, the depth, thickness, presence of geothermal energy
and related resources, the water-bearing strata, the elevation and location
of all test holes, and other pertinent information.
(2) Unless the lease provides otherwise, on or before the last
day of the month after the month when production started, the lessee shall
file a production and royalty report showing production and royalty for the
calendar month when production started. Subsequently, a production and royalty
report shall be filed before the last day of each month for production from
the preceding calendar month. Such report shall be on a form prescribed and
furnished by the GLO and shall show:
(A) The amount of geothermal energy and related resources produced
during the preceding month;
(B) If any geothermal energy or related resource has been sold
during the preceding month, then:
(i) The amount of geothermal energy and related resource sold;
(ii) The purchaser(s) and if the purchaser(s) is in any way
related to the lessee, the details of such relationship or affiliation;
(iii) The selling price of geothermal energy and related resources
as shown by copies of gas plant receipts, sale receipts, invoices, or other
sale documents attached thereto; and
(iv) The method and figures used by lessee to calculate the
value of each mineral sold as shown by any relevant documents, records, or
schedules;
(C) If any geothermal energy or related resource has been used
as permitted under the terms of the lease during the preceding month, then:
(i) The amount of such geothermal energy and related resources
used; and
(ii) The method and figures used by lessee to calculate the
value of each as shown by any relevant documents, records, or schedules.
(3) Unless otherwise provided by the lease, royalty payments
are to be received in the GLO on or before the last day of the month following
the month in which leased minerals are produced. However, for the purposes
of this paragraph only, "produced" shall mean actually sold or used by lessee.
Upon termination, forfeiture, or release of the lease, unpaid royalty for
any stockpiled leased minerals shall be due and payable within one month of
the effective date of said termination, forfeiture, or release.
(4) Except when royalty is taken in-kind, and subject to subparagraphs
(A)-(F) of this paragraph, relating to electronic funds transfer, lessees
may pay royalties and other monies due by cash or check, money order, or sight
draft made payable to the commissioner. Lessees may also pay by electronic
funds transfer or in any manner that may be lawfully made to the state comptroller.
Information regarding alternative payment methods may be obtained from the
GLO Royalty Management Division. Payors are required to make payments by electronic
funds transfer in compliance with Title 34, Chapter 15 of this code in the
following circumstances:
(A) For leases executed or amended after May 11, 1989, but
before September 1, 1991, payors that have made over $500,000 in a category
of payments, defined in subparagraph (D) of this paragraph, to the GLO during
the preceding state fiscal year shall make payments of $10,000 or more in
the current fiscal year for those leases and in that category by electronic
funds transfer.
(B) For leases executed or amended after August 30, 1991, but
before June 9, 1995, payors that have made over $250,000 in a category of
payments, defined in subparagraph (D) of this paragraph, to the GLO during
the preceding state fiscal year shall make payments of $10,000 or more in
the current fiscal year for those leases and in that category by electronic
funds transfer.
(C) For leases executed or amended on or after June 9, 1995,
payors that have made over $25,000 in a category of payments, defined in subparagraph
(D) of this paragraph, to the GLO during the preceding state fiscal year shall
make all payments in the current fiscal year for those leases and in that
category by electronic funds transfer.
(D) For purposes of subparagraphs (A)-(C) of this paragraph,
each of the following is a separate category of payments:
(i) Royalties (including shut-in and minimum royalties);
(ii) Penalties;
(iii) Other payments to the state agency, excluding interest
and extraordinary payments such as payments made in settlement of litigation.
(E) The GLO anticipates that those payors that have exceeded
the threshold sums set out in subparagraphs (A)-(C) of this paragraph in the
preceding state fiscal year will also exceed those sums in the current state
fiscal year. The application of subparagraphs (A)-(C) to a specific payor
may be waived at the commissioner's discretion to the extent allowed by law,
upon a showing that a payor will not exceed the threshold sums set out in
subparagraphs (A)-(C) in the current fiscal year, or for other good cause.
(F) The GLO will notify each payor to whom this paragraph applies
in compliance with Title 34, Chapter 15 of this code.
(c) Inspections.
(1) The books, accounts, records, contracts, and other documents
pertaining to production, transportation, sale, and marketing of geothermal
energy and related resources leased shall at all times be subject to inspection
and examination by the commissioner, or his authorized representative, and
copies of such records shall be furnished to the commissioner upon request.
(2) All exploration, development, and processing operations
shall be subject at any time to inspection by the commissioner or his authorized
representative and copies of records or other documents pertaining to these
operations shall be furnished to the commissioner upon written request.
(d) Forfeiture and reinstatement.
(1) If the owner of a lease or permit shall fail or refuse
to make payment of any sum due, or if the owner or his authorized agent should
knowingly make any false return or false report concerning the lease or permit,
or if the owner or his agent should refuse the commissioner or his authorized
representative access to the records or other data pertaining to operations
under the lease or permit, or if any of the material terms of the lease or
permit should be violated, the lease or permit shall be subject to forfeiture
by the commissioner.
(2) A lease or permit shall be considered forfeited when it
has been endorsed "forfeited" and the endorsement signed by the commissioner.
Cont'd... |
