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RULE §9.33Delay Rental Payments

(a) Effect of payment/non-payment of delay rentals. When delay rentals are properly paid on or before a lease anniversary date, lessee shall retain the rights granted under the lease and may postpone the commencement of drilling operations or production of oil or gas for a period of one year from such anniversary date. During the primary term, a lease shall terminate automatically on a lease anniversary date unless lessee either properly pays delay rentals or maintains the lease in force and effect under other lease provisions.

(b) Full payment of delay rental. Each lease specifically sets the amount of the delay rental. The delay rental payment is indivisible and may not be reduced for any reason unless a lease, or a pooling agreement covering a lease, expressly allows its proportionate reduction. If a lease has several working interest owners and any of such owners fails to pay timely its share of the full delay rental amount set in the lease, then the entire lease will terminate. The full delay rental amount must be timely paid to all proper delay rental payees to maintain the lease.

(c) Timeliness of delay rental payment to the state.

  (1) For a lessee to maintain a lease by paying delay rentals, the GLO must receive such payments on or before each lease anniversary date during the primary term.

  (2) If a lessee has temporarily held a lease during the primary term by other means, then see §9.34(b) of this title, (relating to Drilling and Reworking Operations) or §9.35(c)(1)(2) of this title, (relating to Producing the State Lease) to determine on which lease anniversary date delay rental payments may be resumed to hold a lease.

  (3) If a lease anniversary date should fall on a Saturday, Sunday or a legal state or federal holiday, delay rentals may be timely received on the next calendar day which is not a Saturday, Sunday or such a holiday.

  (4) Under the standard business practices and/or procedures of the GLO, the date that the GLO stamps, punches, or otherwise marks on the delay rental payment, check, draft, stub, or envelope establishes the date of actual receipt by the GLO.

  (5) Payment of a delay rental to the GLO shall be considered timely, irrespective of the date of actual receipt, if lessee notifies the GLO in writing of its claim that its lease has been maintained under this subparagraph and then establishes that:

    (A) payment was dispatched to the address found in §9.32(c)(3)(A) of this title, (relating to General Responsibilities of State Lessees) by certified or registered mail or equivalent proof;

    (B) an acceptance form was initialed by an employee of the United States Post Office, a common carrier, or its equivalent and the date stamped by the United States Post Office, a common carrier, or its equivalent (not including private postal meters) showing the letter was received and accepted at least 14 days before the lease anniversary date;

    (C) payment is actually received by the GLO no later than 30 days after the lease anniversary date; and

    (D) no intervening third party has acquired any of the oil and gas interests originally leased by lessee.

(d) No ratification or revivor. If a lessee fails to pay or improperly pays delay rentals, no action by any delay rental payee, including the state or an owner of the soil on Relinquishment Act property, may ratify, re-grant or revive the terminated lease or may estop the state from asserting lease termination.

Source Note: The provisions of this §9.33 adopted to be effective January 7, 1999, 24 TexReg 146

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