Rules, Regulations, Policies, and Statutes Governing Oil and Gas Leasing

Board of Land Commissioners' Rules and Regulations, Chapter 18

WS 36-6-101

Policy: Units, Communitization Agreements, and Off-Lease Production Activities

Policy: Transfer Ownership of Oil and Gas Infrastructure to a Surface Lessee

Policy: Surface Impact Payments During Reclamation

Policy: Management Plans for Coal Bed Natural Gas Produced Water

Policy: Idle Well Bonding Per Foot of Well Bore

Policy: Allowance of Freshwater Frac Pits

Auction and Over the Counter Leasing

As defined by Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 4; a qualified lessee of an oil and gas lease must be authorized to transact business in the State of Wyoming by the Secretary of State.


Oil and gas leases can be acquired through two methods (Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 5). Parcels that are available for lease will be auctioned at competitive bid through OSLI's Oil and Gas Lease Auction.


If a parcel is not successfully bid upon it may be offered at a second auction, and if again it is not bid upon may become available "Over the counter". For more information about lease available over the counter, please refer to the links below.

Leases available OTC

Oil and Gas Lease Application


Mineral Leasing Reference Sheet

Rental Information

Rentals are due on leases in two situations: if the lease is not producing, the entire rental is due; if the lease is producing, the rental due is the difference between minimum annual royalty and royalties paid or the full rental amount, whichever is smaller. Oil and gas lessees are required to pay annual rental on leases they hold. Rent for non-producing leases is generally $1 per acre. When a lease is developed, rent generally raises to $2 per acre for the remained or the lease. For more information regarding oil and gas lease rental, refer to Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 6.

Lease Interest Assignment Information

Assignment of any interest within a lease must be approved by the Director of OSLI. The parties transferring interest in a lease are required to use the Oil and Gas Lease Assignment Form, links to the instructions and form are listed below. For further information on transferring interest in an oil and gas lease, please refer to Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 10 and Section 11.

Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 10 and Section 11

Oil and Gas Lease Assignment Form

Oil and Gas Lease Assignment Instructions

Bonding

OSLI requires bonding, in various situations, to protext the financial liability of an oil and gas lease. Please refer to the link below for more information on bonding.

Office of State Lands Bonding Guide

Lease Term Extension

Extensions serve to extend the term on an undeveloped lease to allow the operator to pursue development of that lease. lease extensions must be requested by the lessee and approved by the SBLC. A variety of reasons exist as to why a lease may be extended. The circumstances for both approving or rejecting a lease extension are listed in Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 8 (b)

Suspension of Operations

Suspensions may be applied for lease which is capable of production but must be shut-in for a period of more than 90 days due to economic reason or immediate business concern. Suspension applications are approved by the Board of Land Commisioners. Please refer to the Suspension of Operations Policy below for more information.

Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 8 (c)

Suspension of Operations Policy

Each suspension application must have the following documents submitted:

Property Information Request

Certification of No Adverse Drainage

If the suspension being applied for is the 6th or more suspension for the lease the 'Show Cause Suspension Application Form' also needs to be submitted in addition to the Property Information Request Form and Certification of No Adverse Drainage Form:

Show Cause Suspension Application Form

If the suspensino being applied for is due to economic constraints of the lease, the Profit & Loss Statement must also be submitted with the application.

Profit & Loss Statement

Royalty Reporting

The Royalty Compliance Section assures timely and accurate payment of royalties in return for the removal of minerals from Trust Lands. In addition, this section serves over 400 oil, gas, coal, sand & gravel, and hard mineral companies by providing them with information for State reporting guidelines. The Section processes royalty and production reports to ensure the trust receives full and fair value for the mienrals that are extracted from State Trust Land.

More Royalty Compliance Section Information.

The Office of State Lands and Investments is happy to announce the availability of our eRMA2 Test Environment. This environment will allow reporters to submit reports to this test environment prior to submission to the Live Environment. If you would like to request access to the eRMA2 Test Environment, or have any questions, please contact Billie Hunter at billie.hunter@wyo.gov

eRMA2 Login

eRMA2 Policy and Procedure

eRMA2 Agreement

Additional Required Permitting

Although the State oil and gas leases give the right of ingress and egress related to the leased property; and, allow use of the surface as needed for operations, all mineral lessees are required to pay the Surface Impact Payments (SIP). SIPs are intended ot re-compensate the grazing lessee of the stat surface as well as OSLI for the loss of forage associated with oil and gas development disturbance. Surface impact payments are required propr to exploration and development on any State mineral lease.

Board of Land Commissioners' Rules and Regulations, Chapter 4, Section 14.

Surface Impact Payment Form

Surface Impact Payment Page


Furthermore, use of State Land outside the bounds of the mineral lease require additional permitting. This is handled in two manners. For long term additional permitting, a Special Use Lease may be required. Situations requiring a Special Use Lease (SUL) could include disposal wells, on-lease facilities handling off-lease minerals, or communication towers. For short term permits such as roads or CBM reservoirs, Temporary Use Permits (TUP) are issued. Although the mineral lease allows for ingress and egress related to the leased parcel, access routes across parcels that are not within the lease area are subject to TUP permitting. For more information on SUL's and TUP's please refer to the links below.

Special Use Leases: Rules and Reguations of the SBLC Chapter 5

Special Use Lease Application

Sample Special Use Lease Document

Special Use Lease Page

Temporary Use Permits: Board of Land Commissioners' Rules and Regulations, Chapter 14

Temporary Use Permit Application

CBM Reservoir Application

TUP-Impact Payment Schedule


Easements are used by OSLI to permit permanent infrastructure such as pipelines, powerlines, and other permanent transmission systems. For more information regarding easements, please refer to the links below.

Easements: Board of Land Commissioners' Rules and Regulations, Chapter 3

Easements Page (With Easement Documents)


Additional Agency Permitting

In addition to required permitting with OSLI, other State and Federal agencies may require further permitting associated with mineral lease development. Please review requirements with all applicable State and Federal Agencies. Below are links to agencies which may have additional permitting requirements associated with mineral development on State Trust Lands.

Wyoming Department of Environmental Quality

Wyoming State Engineer's Office

United States Environmental Protection Agency

United State Bureau of Reclamation

US Army Corps of Engineers

Lease Relinquishment, Termination, and Expiration

Relinquishment

A lessee may relinquish a lease for any various reasons, using the form below. If the lease being relinquished is not developed in anyway, the lease is relinquished effective the day it is received by OSLI. If the lease being relinquished has been developed, the relinquishment will not be effective until the lands leased are reclaimed to an acceptable condition. Relinquishment of a lease does not relieve a lessee of obligations due to that lease. Parcels may be offered for lease after a lease has been relinquished on that parcel.

Surrender and Relinquishment Form

Termination

Termination of lease can be due to a variety of reasons including; no production without suspension of operations, failure to pay annual rental, or default of lease or Board of Land Commissioners' Rules and Regulations, etc. The lessee of a terminating lease will receive thirty (30) notice of the lease termination. If no response or remedy is received within that thirty days, the lease will terminate on the appropriate effective date. Parcels may be offered to lease after a lease on that parcel has been terminated.

Expiration

Expiration of leases occurs when a lease has reached the end of it’s primary term without production or diligent pursuit of production, or without extension or renewal of the primary term. Leases that have reached the end of their primary term without production or extension expire automatically as a function of the lease. Parcels that may be offered for lease after a lease on that parcel has expired.

Surface Integrity and Minimum Reclamation

Trona leases are required to maintained to be maintained in an ecologically prudent manner. Furthermore, when a lease is finally disposed of, reclamation of the disturbed areas must take place. Reclamation of the site is required to have vegetative production as good or better than the surrounding rangeland and for the site to be physically stable. Surface compliance and reclamation inspections are performed by the Field Services Division (FSD) of OSLI.

Trona lessees are encouraged to contact OSLI when surface compliance issues may arise so that the situation can be handled in a timely manner. Also, reclamation planning with OSLI staff is suggested so that reclamation plans can be tailored to meet the expectations of OSLI, and subsequently expedite the reclamation process. FSD contact information can be found on the Contact page.

Board of Land Commissioners' Rules and Regulations, Chapter 18, Section 12; Surface Integrity and Min. Reclamation

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