Arkansas Administrative Code
Agency 002 - Game and Fish Commission
Rule 002.00.06-005 - Oil & Gas Policy & Procedures on Commission Lands
Universal Citation: AR Admin Rules 002.00.06-005
Current through Register Vol. 49, No. 2, February 2024
I. GENERAL PROVISIONS AND POLICY
1.
Authority. Under the
provisions of Amendment 35 to the Constitution of the State of Arkansas, the
Arkansas State Game and Fish Commission is responsible for the control
management, restoration, conservation and regulation of all property owned by
the Commission for fish and wildlife management. The provisions of Act 524 of
1975, as amended by Act 684 of 1981, Act 691 of 1983, and Act 537 of 1991,
recognize that the Arkansas State Game and Fish Commission is responsible for
mineral leasing on Commission-owned lands and managing those land and mineral
resources to ensure protection and enhancement of the public trust. This
regulation provides the framework for prudent management of mineral exploration
and production activities, including leasing and development of oil, gas, and
other mineral resources, on Commission-owned lands.
2.
Policy. It shall be the
policy of the Arkansas State Game and Fish Commission (hereinafter the
Commission) to provide for the recovery of oil, gas, and other mineral
resources on Commission-owned lands only when such recovery will be consistent
with applicable Federal and State law, including Commission regulations, and in
the best interest of the people of the State of Arkansas as demonstrated by an
abiding commitment to the paramount protection of land and wildlife resources
and habitat values, while allowing prudent compatible natural resource
development that could potentially provide substantial economic support for
Commission lands and programs.
It is the policy of the Commission that management of oil, gas and other mineral resources recovery and associated activities on Commission-owned lands be compatible with the conservation, protection, and management of fish and wildlife resources, ecological diversity, and habitat values. Commission-owned lands represent the full spectrum of ecological regions and biotic diversity in the State of Arkansas and, to the fullest extent reasonably possible, the unique and valuable character of Commission-owned lands shall be protected.
3.
Terms and Conditions, Permits,
Agreements, and Lease Forms. The
Commission shall establish guidelines for minimum fees and royalties, as well as the terms and conditions for various types of permits, surface use agreements, and leases for Commission-owned lands, including such activities as geophysical exploration, production, construction of roads and pipelines, and other associated activities and infrastructure. The Commission may delegate responsibility for development and approval of such guidelines, permits, agreements, and lease forms to an Oil and Gas
Committee composed of three Commissioners appointed from time to time by the Chairman. All guidelines, standard terms and conditions, and form agreements, leases and permits shall be available to the public and provided to interested parties upon request.
4.
Initiation of the Leasing
Process.
A. Any person, firm, company,
corporation or association may apply in writing to the Commission to request
that specified Commission-owned lands be offered for leasing. In such instance,
the applicant shall be responsible for conducting title searches to determine
net mineral ownership, subject to Commission review. The Commission may by
regulation establish a standard processing fee to be paid by each applicant
when requesting Commission lands be offered for leasing. The Commission need
not process an application which does not fully conform to the requirements
specified in Commission regulations or on forms adopted by the
agency.
B. The Commission may, on
its own initiative, identify certain Commission-owned lands to be offered for
leasing. In such instance, the Commission may request written proposals from
qualified applicants and impose such restrictions and requirements as the
Commission shall determine are necessary or advisable to protect the land and
wildlife resources on Commission-owned lands.
5.
Schedules of Terms and Conditions.
The Commission may establish a schedule of minimum fees and royalties,
as well as the terms and conditions for various types of permits, surface use
agreements, and leases for Commission-owned lands, which schedules may be
amended from time to time as necessary or advisable, including modification to
fit the needs and requirements of proposed oil, gas, and/or other mineral
resources development on the particular Commission-owned property under
consideration. Any such schedule, agreement, or lease form intended for general
application by the Commission shall be available to the public and provided to
interested parties upon request.
6.
Applications to Initiate the Leasing Process.
A. Any person interested in securing a lease
for oil, gas, or other mineral resources on Commission lands shall file a
written application made upon forms prescribed by the Commission
staff.
B. The application shall be
filed with the Arkansas State Game and Fish Commission, #2 Natural Resources
Drive, Little Rock, Arkansas. 72205. AH applications must be completed in
conformance with the Rules and Regulations of the Commission before the
application will be accepted.
C.
The applicant shall submit an application fee sufficient to cover the cost of
application review by Commission staff, and which shall be determined by
Commission staff from time to time, subject to final approval by the
Commission. The application fee shall be a minimum of $500.00 and shall be
non-refundable.
D. The Commission
shall determine if other state or federal agencies have or may have an interest
in the area for which an application to lease has been received. If directed to
do so by the Commission, the description of the property in question shall be
submitted by the applicant to all such agencies that may have an interest in
the lands described in the application for review and comment by such other
agencies. Federal agencies shall be allowed such time to respond as required by
federal law, rule, regulation, or the nature of the federal interest in the
land, and the Commission may allow such additional time for review and comment
by any other agencies as necessary or advisable given the circumstances of the
application. The Commission may allow such longer or shorter period for review
and comment based on the particular circumstances under consideration, so long
as such period complies with all applicable state and federal laws and
regulations.
E. The Commission
shall consider all of the facts and circumstances involving the particular
application and determine whether proceeding to offer the land for leasing of
the oil, gas, and/or other mineral resources is in the best interest of the
Commission and the citizens and wildlife resources of Arkansas. If the
Commission decides to proceed with offering the Commission-owned land for
mineral leasing, any proposed lease for the subject property shall be presented
to the Commission, with notification to the public and an opportunity for
public comment, prior to final approval and execution by the
Commission.
7.
Initiation by the Commission.
A. The Commission may initiate an offer to
lease Commission-owned lands for oil, gas, and/or other mineral resources
development at any time on its own initiative or upon the recommendation of
Commission staff.
B. In the event
that the Commission initiates an offer to lease Commission-owned lands,
Commission staff shall prepare a proposal containing restrictions or
limitations desired by the Commission to ensure the paramount protection of
land and wildlife resources on the particular property, consistent with any
applicable management plan, while allowing prudent compatible natural resource
development. Any such proposal shall include a statement, based on a reasoned
consideration of all facts and circumstances, that Commission staff has
determined the property is in a location prospective of oil, gas, and/or other
mineral resources which may be produced in commercial quantities, and that such
production may provide significant economic return for the benefit of the
citizens and wildlife resources of the State.
C. The Commission shall consider all of the
facts and circumstances involving the particular staff proposal and such other
information brought to the attention of the Commission to determine whether
proceeding to offer the land for mineral leasing is in the best interest of the
Commission and the citizens and wildlife resources of Arkansas. If the
Commission decides to proceed with offering the Commission-owned land for
leasing of oil, gas, and/or other mineral resources, any proposed lease for the
subject property shall be presented to the Commission in regular or special
session, with notification to the public and an opportunity for public comment,
prior to final approval and execution by the Commission.
8. Penalties.
A. Any person removing any mineral resource,
including, but not limited to sand, gravel, oil, natural gas, casinghead gas,
coal, or other valuable minerals, or any timber from Commission-owned lands
without first obtaining a lease or permit to do so from the Commission shall be
deemed guilty of a misdemeanor and, upon conviction by a court of competent
jurisdiction, shall be punished by a fine of not less than one thousand dollars
($1,000.00) and not more than five thousand dollars ($5,000.00), and each day
of unauthorized taking shall constitute a separate offense.
B. The Commission, or the Attorney General
upon request from the Commission, may bring suit to enjoin any activity in
violation of Commission regulations or other State law, and may bring suit to
recover the full value of any mineral resources or timber illegally removed, as
well as all severance taxes and royalties due as a result of such
removal.
II. MINERAL LEASE. PERMIT. AND SURFACE USE PROCEDURES
1. Scope. These rules and regulations shall
apply to all lands or interest in lands owned by the Arkansas State Game and
Fish Commission.
2. Definitions.
Unless the context specifically requires otherwise, the following words shall
have the meaning prescribed below:
A.
"Commission" shall mean the Arkansas State Game and Fish Commission.
B. "Applicant" shall mean any person, firm,
company, corporation, association, or other legal entity submitting a written
application for a lease, permit, surface use agreement, or other authorization
described in these rules.
C.
"Commercial Production" shall mean the physical extraction or severance of oil,
gas, or other mineral resources for marketing purposes.
D. "Director" shall mean the Director of the
Arkansas State Game and Fish Commission.
E. "Geophysical Activities" shall mean
seismic or other survey or investigation procedures of whatsoever nature
conducted to discover, evaluate, or locate oil, gas, or other mineral
resources.
F. "Mineral Resources"
shall mean oil, gas, and related hydrocarbons, sand, gravel, coal, as well as
any other mineral substance that may be available in commercial quantities, but
shall not include timber, water or agricultural crops.
G. "Mineral Recovery Activities" shall mean
all oil, gas, or other mineral resources recovery and associated activities
including, without limitation, drilling wells, construction of roads,
pipelines, and other related infrastructure.
H. "Oil and Gas" shall mean and include oil,
gas, casinghead gas, related hydrocarbons, and all other substances of
whatsoever kind in a liquid or gaseous state that may be produced through a
wellbore.
I. "Operator" shall mean
the holder of a surface use agreement or lease for mineral recovery activities
on Commission-owned land.
J.
"Person" shall mean any individual, firm, company, corporation, association, or
other legal entity.
K. "Project
purposes" shall mean the purpose(s) sought to be accomplished by the Commission
in owning and managing a particular wildlife management area (WMA) or other
Commission lands; any existing management plan and other pertinent Commission
management and planning documents for the area may be relied upon as an
expression of the project purposes.
L. "Surface use agreement" shall mean a
binding agreement between the operator and the Commission detailing the
provisions and restrictions regulating surface use of the relevant
Commission-owned lands.
3.
Review of Lands Considered for
Leasing
A. All lands considered for
mineral recovery activities, whether initiated by an applicant or on the
Commission's own initiative, shall be thoroughly reviewed by the Commission to
determine whether issuing a lease would be in the best interest of the State
and the Commission.
B. Upon
initiation of the review process, the Commission staff shall undertake a review
of any applicable area management plan, in light of the proposed activity, to
determine if mineral recovery activities would be compatible and to identify
areas of special concern. Commission staff shall identify all
areas of special environmental or natural resources concerns including,
but not limited to:
(1) the presence of
wetlands,
(2) rare and endangered
species and their habitats,
(3)
historical or archaeological features, and
(4) any other unique or extraordinary value
or feature of the area that deserves special consideration.
C. Notification will be given by
the applicant (or, when deemed necessary, by the Commission) to other
appropriate state and federal agencies which have or may have a particular
interest in the area proposed for mineral recovery activities, as necessary or
advisable.
D. The Commission shall
conduct or contract for limited title searches, as necessary, to confirm net
mineral ownership for the area under review.
E. The conclusions and recommendations of the
Commission staff shall be based on an evaluation of the effects that mineral
recovery activities would have on current and future uses of Commission lands.
Commission staff shall make reasonable inquiry into the potential of the land
under review for production of oil, gas, or other mineral resources in
commercial quantities, and include such information in the final report. Staff
recommendations shall include specific lease and/or surface use agreement
provisions necessary for maintaining project purposes and environmental
protection, including identification of any areas that are unsuitable for
surface activities. Staff recommendations, reports, comments received from
other state and federal agencies, and other pertinent information forming the
basis of staff recommendations shall be summarized for and made available to
the Commission for a final determination.
F. Upon approval by the Commission, the
Director or his delegate shall be authorized to take such steps, as necessary,
to implement the Commission's decision, including executing such documents and
recordable instruments as required.
4.
Federal Aid Project Lands
A. Consultation with the U.S. Fish and
Wildlife Service shall be conducted before Commission lands acquired with
Federal Aid participation may be leased for mineral recovery activities.
Commission staff shall make a determination after such consultation as to any
restrictions or special provisions which may apply to mineral recovery
activities on such lands by operation of federal law or pursuant to the terms
and conditions of contracts between the Commission and the United States. All
federal requirements regarding such lands shall be strictly complied
with.
B. On Federal Aid Project
Lands, compliance and approval requirements may include, as applicable,
submission of:
(1) documentation of
compatibility with project purposes,
(2) a formal NEPA Environmental Assessment
(EA) or Environmental Impact Statement (EIS),
(3) a copy of the lease as
proposed,
(4) an estimate of fair
market value of the mineral lease, and (5) a plan for disposition of Program
Income expected.
C. Any
costs or expenses of complying with such requirements on Federal Aid Project
Lands shall be bo me solely by the applicant or operator, and payment or
reimbursement of such costs and expenses by the applicant or operator shall be
made a condition to any lease or surface use agreement with the
Commission.
5.
Commission Authorization
The Commission shall meet in regular or special meeting, with notice to the public and interested parties, to consider staff recommendations regarding lease applications. Commission staff shall provide all reports and recommendations to the Oil and Gas Committee prior to the Commission meeting to enable the Committee to present its recommendation to the Commission. The Commission may deny an application or may authorize a lease or surface use agreement subject to such conditions and requirements as the Commission deems necessary to properly protect the interests of the State and Commission.
6.
Application Content Requirements.
An application to lease Commission-owned lands (where the Commission owns all or part of the mineral interests) for mineral recovery activities shall contain, at a minimum, the following documentation and information:
A. A description and plat
of the Commission-owned lands sought to be offered for permit or
lease;
B. A complete description of
the activity sought to be conducted on Commission-owned lands by the
applicant;
C. The applicant's
determination of net mineral ownership held by the Commission, including
documentation in support thereof. The applicant shall be responsible for
conducting title searches to determine net mineral ownership on the particular
Commission-owned property;
D. The
names, addresses, telephone numbers, federal and state tax identification
numbers (and/or social security numbers) of the applicant and the company or
association represented, plus any other identification or background
information as deemed necessary and prescribed by Commission staff;
E. A resume of past experience of the
applicant in operating for oil, gas, and/or other mineral resources on state or
federal lands, along with such other evidence sufficient to demonstrate the
applicant's qualifications, integrity, financial assurance, and ability to
produce mineral resources on Commission-owned lands in a manner compatible with
conservation and management of lands and wildlife resources, consistent with
the Commission's responsibilities under Amendment 35 to the Constitution of the
State of Arkansas; and
F. A
statement that the applicant is willing to use its best efforts to insure that
the proposed activities will comply with all applicable laws and regulations,
and that the applicant is willing to conduct the proposed activity in a manner
compatible with the conservation, protection, and management offish and
wildlife resources, ecological diversity, and habitat values on
Commission-owned land.
7. Minerals Owned by Others on
Commission-Owned Lands
A. Any person who owns
oil, gas, and/or other mineral resources in, on, or under Commission-owned
surface lands, or the lessee of such person, may make application to the
Commission for development as set forth in the preceding section. In addition,
the applicant mineral resources owner/lessee shall provide documentation of any
leases currently in force.
B. If
the applicant mineral resources owner/lessee owns or controls 100% of the
mineral interest, the applicant shall enter into negotiations with the
Commission for a suitable surface use agreement, consistent with, and with due
regard for, the current use of the property by the Commission and the
Commission's responsibilities under Amendment 35 to the Constitution of the
State of Arkansas. No development of the surface shall occur prior to execution
of a surface use agreement sufficient to protect the fish and wildlife
resources and habitat values of the subject property.
C. Within ninety (90) days of application for
a surface use permit by an applicant mineral resources owner/lessee who owns or
controls 100% of the mineral interest on the subject property, the Commission
shall enter into a suitable surface use agreement in the most favorable form
that can be achieved through negotiation.
D. In the event that the Commission and the
applicant mineral resources owner/lessee cannot negotiate a surface use
agreement sufficient to protect the land and wildlife resources consistent with
project purposes, the Commission may deny the application and take any of the
following actions deemed appropriate by the Commission:
(1) exercise the Commission's power of
eminent domain to take ownership of the mineral resources interest involved;
(2) take such legal action as
necessary to prevent any surface use inconsistent with project purposes or
found to be otherwise unreasonably damaging to land and wildlife resources held
in trust by the Commission; or
(3)
take such other legally allowable steps the Commission deems necessary or
advisable to carry out the Commission's trust responsibilities.
E. If the applicant mineral
resources owner/lessee owns or controls less than 100% of the mineral estate,
all other mineral resources owners may be notified and invited to participate
in the negotiation process for any surface use agreement.
F. If the Commission and the applicant each
own or control some portion of the mineral estate, the Commission may enter
into negotiations with the applicant or such other person as the Commission
deems advisable, for leasing or developing the oil, gas, or other mineral
resources to maximize the benefit to the citizens of Arkansas, with due regard
for the fish and wildlife resources, ecological diversity, and habitat values
of the property under consideration.
8.
Qualified Operator
Requirement
Only qualified operators will be allowed to conduct mineral resources recovery activities on Commission-owned land. Any person desiring to be qualified as an operator for such activities shall submit a resume of past experience in operating for oil, gas, or other mineral resources on state or federal lands, along with such other evidence sufficient to demonstrate the applicant's qualifications, integrity, financial assurance, and ability to produce minerals on Commission-owned lands in a manner compatible with conservation and management of lands and wildlife resources, consistent with the Commission's Constitutional responsibilities. The Commission staff shall develop such forms and guidelines as it deems useful in obtaining the necessary information to determine the qualification of applicants to become operators. An applicant requesting operator qualification shall submit information on forms prescribed by Commission staff. The Commission shall maintain a list of operators that have been qualified by the Commission.
9.
Lease Proposals by Qualified
Operators
A. Upon receipt of an
application to lease, or upon identification of potential lease lands by the
Commission, the Commission may contact known qualified operators and/or may
contact other mineral operators known to be leasing in the general vicinity and
invite such operators to submit a request for qualification. The Commission
also may, through publication of notice of a lease application, invite other
persons to submit a request for operator qualification and/or a competing lease
proposal.
B. The Commission may
seek or accept lease proposals from any qualified operator in an effort to
obtain the most favorable lease for the subject property.
C. The Commission may select one or more
qualified operators who have submitted the best lease proposal(s) to negotiate
a proposed final lease agreement, including all appropriate surface use
agreements and restrictions.
D.
Upon negotiating a lease agreement with a qualified operator, the Commission
staff may submit the lease proposal to the Commission for review and approval
in regular or special meeting, with notification to the public and an
opportunity for public comment.
E.
Prior to the Commission meeting, any other qualified operator may, in response
to public notice by the Commission, submit a competing lease proposal for
consideration by the Commission. If the Commission determines that the
competing lease proposal may potentially be more beneficial to the State and
Commission, it may defer consideration of the issue to allow for publication of
the competing proposal for action at a subsequent Commission meeting.
F. The value of benefits provided by any
lease proposal to the Commission and the citizens of the State shall be judged
based upon a totality of the lease provisions, including the bonus, rentals,
and royalty provisions, and all other provisions and limitations of the lease
proposal that would provide a benefit, whether economic or otherwise.
G. The Commission may approve, approve with
modifications, or deny any lease proposal after consideration of all relevant
facts and circumstances. If the Commission approves a lease proposal with
modifications, the lease shall become final if the qualified operator accepts
the lease as modified by the Commission.
10.
Standard Lease Provisions.
The following requirements and provisions shall be applicable to all
leases on lands owned by the Commission, unless the Commission approves an
alternative provision based on substantial justification, which justification
must be stated in the minute order approving the lease:
A. The primary term shall not exceed five (5)
years;
B. Royalties shall be no
less than fair market value, but in no event less than fifteen percent (15%);
no post-production expenses shall be deducted prior to calculation of
royalty;
C. Bonus, rental, and any
other such payments due under the lease shall be no less than fair market
value;
D. The operator shall save,
hold harmless, defend, and indemnify the State of Arkansas and the Commission,
including its commissioners, director, employees and agents, for any losses,
damages, judgments, and expenses on account of bodily injury, death, or
property damage, and any claims or causes of action whatsoever, arising out of
or related to the activities of the operator, the operator's agents, employees,
contractors, and subcontractors on Commission-owned land.
E. The operator shall be required to post a
performance bond in an amount of not less than One Million Dollars
($1,000,000.00) per each activity site, or not less than Five Million Dollars
($5,000,000.00) for a universal bond for all activity sites, prior to beginning
mineral recovery. If bond is posted per activity site, it shall be in an amount
determined by the Commission to be sufficient to pay a third-party contractor
to restore the site to its pre-activity condition in the event of the
worst-case accident or occurrence. The bond requirement may also be satisfied
by suitable insurance coverage, irrevocable letter of credit, or such other
commercially reasonable form of financial assurance approved in advance by the
Commission.
F. The operator shall
enter into a surface use agreement with the Commission consistent with project
purposes.
G. The operator shall use
the best technology currently available so as to minimize unavoidable
disturbances and any adverse impacts upon wildlife, wildlife habitat, and
related environmental values, and shall achieve enhancement of such resources
where practicable.
H. No mineral
recovery activities shall be conducted which are likely to jeopardize the
continued existence of any endangered or threatened species of wildlife or
plants listed by the United States Secretary of Interior or Secretary of
Commerce, or which is likely to result in the destruction or
adverse modification of designated critical habitats of such species in
violation of the Endangered Species Act of 1973, as amended,
16U.S.C.
§
1531 etseq.
11. Lease Assignment
No assignment shall be valid without written consent of the Director as authorized by the Commission. All proposals for assignments of leases or interest therein shall be submitted to the Director for the Commission's final approval. The Commission may by regulation establish a processing fee for an assignment of a lease or interest therein.
12.
Surface Use
Agreements
A surface use agreement consistent with project purposes shall be required for all mineral recovery activities on Commission-owned lands. The surface use agreement shall be negotiated on a case-by-case basis to meet the parties' requirements and to insure the protection of land and wildlife resources, consistent with project purposes. A suggested form of surface use agreement (for oil and gas development) is appended to these regulations as Schedule I for illustrative purposes only, and such agreement may be modified by the Commission staff as necessary to provide consistency with, or carry the intent of, the requirements of these regulations and other applicable laws.
13.
Geophysical Permits
No person may undertake a seismic survey or other geophysical activity upon Commission-owned lands without first obtaining a geophysical permit from the Commission staff. The geophysical permit shall be negotiated on a case-by-case basis, but shall be substantially in the form appended to these regulations as Schedule II.
14.
Monitoring of Production
A. The Commission shall monitor the
operations of lessees to assure compliance with all state and federal
environmental laws and regulations; compliance with provisions of the lease;
receipt of appropriate fees and royalty payments; and any other matter related
to compliance.
B. The Commission
will study and update methods of monitoring production on Commission leases to
assure that the Commission is continuing to receive fair compensation for the
mineral resources.
C. Throughout
the term of a lease, permit, or surface use agreement, the holder or operator
shall submit an annual report to the Commission by April 1 regarding the
production and royalty payments to the Commission during the preceding year for
each lease, itemized by producing well or mineral resource site.
15.
Oil, Gas, and Mineral
Resources Leasing Program -Annual Report
A. Commission staff shall evaluate and review
the oil, gas, and mineral resources leasing program annually.
B. The assessments by Commission staff will
be for the purpose of continued improvement in the leasing method and the
overall leasing program on Commission-owned lands to:
(1) assure that Commission leases are
competitive,
(2) acquire and
maintain expertise in the management of mineral development, and
(3) provide for changing conditions to be
reflected in the overall oil, gas, and mineral resources leasing
program.
C. The
Commission staff shall issue an annual report of the complete Commission
leasing program activities for the preceding annual period which shall include,
but not be limited to:
(1) the number of
leases granted,
(2) a summary of
the revenue generated and their ultimate disposition,
(3) a summary of active leases for the
current year, and
(4) a summary and
assessment of any identified problems and any recommendation for changes in the
leasing program.
GEOPHYSICAL PERMIT # _______________
This Agreement made and entered into by and between the Arkansas State Game and Fish
Commission, hereinafter called "Commission", and___________________________________
______________________(address), (____)________telephone, hereinafter called "Company."
WITNESSETH
WHEREAS, Commission owns certain land in_________County, Arkansas, known as the_________Wildlife Management Area (hereinafter called WMA or "the Land"), and
WHEREAS, Company desires to conduct a seismic survey thereon, as indicated on the attached map marked "Exhibit A" and tract boundaries marked "Exhibit B" made a part hereof, with geophysical instruments to locate drill sites for oil and gas wells, and Commission is willing to permit the survey upon the terms and conditions hereinafter stated:
NOW, THEREFORE, for the consideration shown below under "Special Conditions,"
Commission grants this permit, beginning on the__________. day of ___________,
20___, to explore the land with seismograph or other geophysical instruments (but not core drilling). No geophysical operations shall be permitted during the period___________________
unless otherwise authorized in writing by the Commission Minerals Manager. This permit expires upon completion of the geophysical survey or___________________________, whichever date comes first.
This permit is issued subject to the following conditions:
GENERAL CONDITIONS
1. All work shall be conducted during hours
and days as designated by the Commission Minerals Manager. Wet weather, water
conditions, and soil conditions may prohibit access to the Land. In the event
of adverse weather or environmental conditions, the Commission Minerals Manager
or the Regional Wildlife Supervisor may temporarily halt all geophysical
operations. Should work be delayed for this reason, the Director may, in
writing, extend the period of the permit as needed; otherwise, any holdover
beyond the period covered by this permit will result in a penalty of Five
Hundred Dollars ($500.00) per day.
2. Cutting, clearing, or other vegetation
disturbances shall be confined within the boundaries of the staked geophysical
lane, to include only line-of-sight clearing unless otherwise authorized by the
Commission Minerals Manager. The width of any clearing shall be authorized by
the Commission Minerals Manager. No tree of any kind equal to or greater than
four (4) inches in diameter (measured twelve (12) inches above ground level)
shall be removed, damaged, or otherwise destroyed except by Commission's
written consent to be given at the discretion of the Commission Minerals
Manager. Company shall off-set around trees four (4) inches or greater in
diameter (measured twelve (12) inches above ground level). Brush clearing, if
authorized, shall be done by hand.
3. Entrance to and travel within Commission
lands shall be over established routes or as authorized by the Commission
Minerals Manager. Geophysical lines shall be accessed by existing roads.
Additional service roads shall not be constructed unless authorized by the
Commission Minerals Manager. All roads used in conjunction with the geophysical
survey shall be regularly maintained by Company throughout operations to ensure
two-wheel drive vehicle accessibility. Any existing roads, bridges, levees,
water channels, culverts, or other physical features damaged shall be restored
to preconstruction site conditions upon completion of the geophysical survey by
Company. The Commission Minerals Manager shall determine conditions and extent
of restoration required. In the case of roads this may include, but shall not
be limited to, gravel purchase and road blading. The Commission Minerals
Manager may require a contour elevation survey at levee crossings to verify
conditions before and after crossing. All restoration costs shall be borne by
Company. All restoration activities shall be satisfactorily completed prior to
the release of the performance bond.
4. Fences must not be cut for any reason.
Existing gates must be used. Gates shall remain closed, unless otherwise
authorized by the Commission Minerals Manager. Where access to the Land is
through a locked gate, Company may use its own lock and shall provide gate
security at all times. Only authorized Company employees or agents shall be
allowed access to the Land. All Company vehicular and employee activities shall
be directly related to the geophysical operation.
5. Water-holding facilities, dams, levees,
water control structures, creeks, sloughs, lakes, ponds or springs must not be
disturbed or altered with any activity.
6. Shot holes must not be drilled nor
explosives used as follows:
(a) within two
hundred (200) feet of any levee, water control structure, bog or spring branch
perimeter;
(b) within seven hundred
fifty (750) feet of any building or water well, and
(c) within one thousand (1000) feet from the
headwaters of a flowing spring. It shall be Company's responsibility to
designate an individual to meet with management area personnel to ensure that
these sensitive areas are avoided. No shot hole shall be less than one hundred
(100) feet in depth and shall be spaced no closer than two hundred twenty (220)
feet. Explosives shall not exceed twelve (12) pounds in any hole.
7. Seismic activity shall not be
conducted at a time that will interfere with public hunting, fishing, use or
other scheduled activities on the Land. Company shall contact the Commission
Minerals Manager and the Regional Wildlife Supervisor, for information about
other scheduled activities, including hunting seasons. Shot holes shall be
discharged only in daylight hours.
8. When seismic activity is completed, shot
holes shall be filled and plugged in accordance with applicable Arkansas Oil
and Gas Commission and Arkansas Department of Environmental Quality regulations
within fifteen (15) days after completion of survey.
9. Company must not travel on the Land or its
roads during wet weather, as determined by the Commission Minerals Manager or
the Regional Wildlife Supervisor.
10. Fishing is permitted only in accordance
with AGFC regulation.
11. Fires are
prohibited in all circumstances.
12. Firearms are prohibited in all
circumstances.
13. Company shall be
directly responsible to the surface lessee and any other holder of a surface
right for any damages caused by operations hereunder to wildlife, livestock,
houses, fences, gates, roads, bridges, tanks, and other improvements and to
timber, pasture, food plots, and growing crops on the land, and this permit is
issued subject to the prior rights of any lessee of the land.
14. Company shall save, hold harmless,
defend, and indemnify the State of Arkansas and the Commission, including its
commissioners, director, employees and agents, for any losses, damages,
judgments, and expenses on account of bodily injury, death, or property damage,
and any claims or causes of action whatsoever, arising out of or related to the
activities of Company, Company's agents, employees, contractors, and
subcontractors during the term of this permit.
15. Nothing in this permit is intended or
should be construed as absolving Company of any legal claim for damages the
Commission may be entitled to assert resulting from Company's negligence or
excessive or wrongful conduct of any agent, employee, contractor, or
subcontractor of Company, and no expressed or implied waiver of any claim is
intended.
16. Company affirmatively
represents that it is acting on behalf of the mineral owners or their agents,
lessees, or assignees and shall provide written documentation of same to
Commission at the time the permit is executed.
17. This permit does not relieve Company of
its responsibility for obtaining a permit in compliance with Ark. Code Ann.
§
15-71-114
before conducting seismic activities. This requirement cannot be waived by
Commission.
18. The Commission
retains the right to require reasonable alternatives to disturbance in high
resource value areas. All reasonable precautions, including consultation with
the Commission Minerals Manager and Regional Wildlife Supervisor, shall be
taken to avoid disturbance offish, wildlife, or critical plant resources during
geophysical survey operations. The Company shall use the best technology
currently available so as to minimize unavoidable disturbances and any adverse
impacts upon wildlife, wildlife habitat, and related environmental values, and
shall achieve enhancement of such resources where practicable. Particular
caution shall be taken to avoid and protect sensitive habitats, such as
wetlands and bottomland hardwoods. Activities affecting these species and
habitats may require coordination with other state and federal
agencies.
19. Geophysical
vehicles/machinery are prohibited from entering or crossing standing water
sites.
20. Use of surface water on
the Land is strictly prohibited.
21. Company shall post signs at all
appropriate locations, including as designated by the Commission Minerals
Manager, to adequately notify the visiting public of geophysical
operations.
22. Speed limit for
vehicular traffic on the Land shall be twenty (20) miles per hour.
SPECIAL CONDITIONS NOTE: In case of conflict these Special Conditions will prevail over the above General Conditions.
1. The lines of
geophysical operation are shown in detail on the map marked "Exhibit A" and
attached hereto and made a part hereof.
2. The consideration for this permit is a
lump sum payment of not less than _________dollars ($_______) for geophysical
operations on_____acres.
3. Company
shall post one performance bond in the amount of_________dollars
($_______) before beginning the geophysical operation. The bond shall be effective until the requirements of the permit are fulfilled as determined by the Commission Minerals Manager. Other types of security including, but not limited to, certificates of deposit, cash deposits, and letters of credit shall be accepted by Commission.
4. Company must supply Commission with a copy
of archeological clearance letter from the Arkansas Historic Preservation
Program before initiating the project.
5. Company must notify the Commission
Minerals Manager and Regional Wildlife Supervisor in writing at least
forty-eight (48) hours in advance of initiating geophysical or survey
activity.
6. Company must notify
the Commission Minerals Manager and Regional Wildlife Supervisor in writing
upon completion of all activities associated with the geophysical survey. The
Commission Minerals Manager shall inspect the completed operation for
compliance with the terms of this permit prior to release of the performance
bond. The performance bond shall be released upon receipt of written
notification from the Commission Minerals Manager of satisfactory completion of
the project.
7. The Commission
Minerals Manager is_______________, address, telephone. The
Regi onal Wildlife Supervisor is_______________, address, telephone.
DATED this________day of______________________, 20___.
ATTEST: ARKANSAS GAME AND FISH COMMISSION
____________________ By: __________________________________
Director
ATTEST: _____________COMPANY
____________________By: ___________________________________
Title:___________________________________
EXHIBIT A
EXHIBIT B
SURFACE USE AGREEMENT FOR OIL & GAS DEVELOPMENT
This agreement is entered into as of the______day of________________, 20___by and between the Arkansas State Game and Fish Commission, a constitutionally independent agency of the State of Arkansas under Amendment 35 to the Arkansas Constitution, hereinafter called
"Commission," and_________Company, located in_______________________________;
hereinafter called "Company."
WITNESSETH
WHEREAS, the Commission is the surface owner of lands situated in_________
County, Arkansas designated as___________Wildlife Management Area ("WMA"); and
WHEREAS, the Company, as owner of certain oil and gas leases, must use the surface to the extent necessary for the recovery of such minerals;
NOW, THEREFORE, in consideration of the compensation for surface use stipulated in Appendix I and the covenants and conditions described herein, to be kept and performed by Company, the Commission hereby recognizes the right of Company to enter upon a portion of the
WMA for the sole purpose of drilling and operating the_________(the "Well") as hereinafter located and described on Exhibit A.
IT IS UNDERSTOOD AND AGREED that the SURFACE USE granted Company herein is SUBJECT TO the following reservations and/or conditions, the singular to be read as plural as the context requires:
1. The Company shall save,
hold harmless, defend, and indemnify the State of
Arkansas and the Commission, including its commissioners, director, employees, and agents,
and the State of Arkansas, for any losses, damages, judgments and expenses on account of bodily injury, death, or property damage, or claims for bodily injury, death, or property damage of any nature whatsoever, and by whomsoever made, arising out of activities of the Company, the Company's agents, employees, or subcontractors associated with the exploration and or recovery of any and all oil gas or mineral resources made the subject of a surface use agreement with the Commission.
2. Prior to drilling, a performance bond of
not less than__________($_________)
per well shall be posted to ensure proper plugging and surface cleanup at the drilling site should a dry well be obtained.
3. Violation of applicable federal state or
local laws or failure to adhere to provisions of this surface use agreement
(SUA) by the Company or the Company's agents, employees, or subcontractors
shall render the SUA subject to cancellation. The Commission shall notify the
Company of the violation and the Company shall have thirty (30) days in which
to come into compliance. If the Company fails to comply with the terms of this
agreement or fails to pay any money due under the terms of this agreement when
same becomes due, Commission has the right, at its option, to cancel this
agreement and to reenter upon and take possession of said premises, without
prejudice to any claim of payments due.
4. It shall be the sole responsibility of the
Company to insure compliance with all applicable local, state and federal
regulatory authorities, statutes and regulations. The Commission may require
additional public safety measures including, but not limited to, site security
signs, gates and a posted 24-hour emergency response number.
5. The Commission retains the right to make
special provisions to protect sensitive resources or to minimize potentially
adverse impacts including, but not limited to, enhanced erosion control or
containment, biological or cultural monitoring, periodic or post-activity
aerial photography or monitoring, specialized equipment or techniques,
directional drilling and provisions to address aesthetic and noise concerns.
The Commission further retains the right to require reasonable alternatives to
disturbance in high resource value WMAs.
6. All reasonable precautions, including
consultation with the Commission Minerals Manager and Regional Wildlife
Supervisor, shall be taken to avoid disturbance offish, wildlife, and critical
plant resources during mineral resources recovery operations. The operator
shall use the best technology currently available so as to minimize unavoidable
disturbances and any adverse impacts upon wildlife, wildlife habitat, and
related environmental values, and shall achieve enhancement of such resources
where practicable. Particular caution shall be taken to avoid and protect
sensitive habitats, such as wetlands. Activities affecting wetlands may require
coordination with other state and federal agencies.
7. Company must obtain archeological
clearance from the Arkansas Historic Preservation Program ("AHPP") prior to
commencement of mineral resources recovery activities, including but not
limited to, rights-of-way for road construction and proposed activity sites.
Archeological clearance must be site-specific and shall not be construed to
authorize any other or additional use within the designated rights-of-way or
activity sites. A copy of the archeological clearance shall be submitted to the
Commission before proposed construction activities are initiated. If an
undocumented archeological or cultural site is discovered during mineral
recovery or associated operations, all work in the immediate WMA shall cease
and the site shall be reported to the Commission Minerals Manager, Regional
Wildlife Supervisor and the AHPP.
This report shall be the sole responsibility of the Company. The AHPP and the Commission will then determine whether or not further investigation is necessary prior to proceeding with activities. Work may continue where no archeological deposits are present.
8. Company shall notify the Commission
Minerals Manager and Regional Wildlife Supervisor in writing forty-eight (48)
hours in advance of the initial entry to begin operations. An entry schedule
for drilling operations and routine maintenance shall be developed in
consultation with the Commission Minerals Manager and Regional Wildlife
Supervisor. Entry may be reasonably postponed during peak recreation periods,
special events or public hunts conducted on Commission lands. Entry for
emergency purposes such as fire, explosion, or injury shall not require prior
notice. The Commission Minerals Manager and Regional Wildlife Supervisor shall
be notified as soon as possible after the emergency event. The Commission
Minerals Manager has express authority to represent the Commission for purposes
of inspecting the construction in order to determine on behalf of Commission
that the provisions of this SUA are being complied with by Company.
9. No firearms are permitted on Commission
lands by any agent or employee of the Company or contractors thereof at any
time.
10. A closed drilling system
shall be used for all operations unless otherwise authorized by the Commission
Minerals Manager. Water-based drilling muds shall be used where feasible. All
drilling fluids, cuttings, completion fluids and any other products of drilling
or completion operations shall be contained in steel tanks or lined pits. All
ditches around the rig for the purpose of catching fluids involved in rig
operations shall be lined. These lined ditches will drain into a lined catch
basin. All oil and gas waste materials will be removed to an off-site disposal
facility approved, where applicable, by the Arkansas Oil and Gas Commission
("AOGC") and the Arkansas Department of Environmental Quality ("ADEQ") and the
Company shall notify the Commission Minerals Manager of the facility to be
used. In the event surface mud pits are used, Company will erect and maintain
adequate fencing capable of turning livestock. Upon completion of the drilling
activity, pit residue will be removed to an off-site disposal facility approved
by AOGC and ADEQ, such pits will then be filled and the WMA leveled to its
preexisting plane and re-sodded with appropriate native vegetation to the
satisfaction of the Commission Minerals Manager.
11. Pad size shall be restricted to the
minimum area required to conduct drilling operations, store equipment and
supplies, and contain waste materials. Pad size shall not exceed two (2) acres
unless otherwise authorized in writing beforehand by the Commission Minerals
Manager. Vegetation damage, equipment and supply storage, and removal of fill
materials from outside pad and road boundaries are prohibited unless authorized
in writing beforehand by the Commission Minerals Manager.
12. The Company shall prevent soil erosion in
the activity area and within the rights-of-way, and shall take site-specific
soil conservation measures including, but not limited to, restoration,
mulching, and re-vegetation.
13.
Vehicular activity shall be confined within the boundaries of the road ROW, pad
site, or access routes authorized by the Commission Minerals Manager.
14. If road construction is necessary,
Company shall incorporate design criteria to restrict road width to the minimum
area required for transport of equipment and personnel to the site. Road width
shall be authorized in writing beforehand by the Commission Minerals Manager.
Fill material needed for construction shall be brought from outside the WMA unless otherwise specified in writing beforehand by the Commission Minerals Manager.
15. Entrance to and travel within Commission
lands shall be over established routes or as authorized in writing beforehand
by the Commission Minerals Manager. Additional service roads shall not be
constructed unless authorized in writing beforehand by the Commission Minerals
Manager. All roads used in conjunction with mineral resources recovery
activities shall be regularly maintained by the Company to support designated
Commission uses. Company shall restore all roads to preconstruction conditions,
unless otherwise authorized in writing beforehand by the Commission Minerals
Manager, before securities are released.
16. Gates shall be closed after use, unless
otherwise authorized in writing beforehand by the Commission Minerals Manager.
Where access to the WMA is through a locked gate, Company may use its own lock
and shall provide gate security at all times. Only authorized Company employees
or agents shall be allowed access to the WMA.
17. Existing drainage patterns associated
with the road shall be maintained and shall be uninterrupted by the use of
conduit, culverts, bridges, or applicable techniques as specified and
authorized in writing beforehand by the Commission Minerals Manager. The use of
flashboard risers may be required as mitigation to create or enhance wetland
habitat. Water turnouts on roads may be required as deemed necessary by the
Commission Minerals Manager.
18.
Any flare pit location shall be determined in consultation with the Commission
Minerals Manager prior to construction.
19. If a well will produce hydrogen sulfide
gas, the Company shall implement all appropriate and necessary safety measures
for producing this type of well. The safety measures shall comply with all
federal, state, and local statutes and regulations relating thereto.
20. Company shall grade and level an earthen
levee only when absolutely necessary. Bridges and culverts shall be installed,
maintained, and replaced. Fill material needed for construction shall be
brought from outside the WMA unless otherwise specified in writing beforehand
by the Commission Minerals Manager.
21. All dredge and fill activities must
comply with the regulations promulgated by the U.S. Army Corps of Engineers
under Section 404 of the federal Clean Water Act. The Commission Minerals
Manager and Regional Wildlife Supervisor shall be notified in advance of
dredging and spoiling operations for placement or maintenance of production
equipment. All spoil shall be deposited and contained within a spoil retention
levee. The spoil shall be spread and leveled to the satisfaction of the
Commission Minerals Manager.
22.
Electrical lines shall be routed within existing road ROW or other easement
corridors unless otherwise authorized in writing beforehand by the Commission
Minerals Manager. No permanent overhead utilities shall be allowed. Permanently
buried lines shall be placed using plowshare techniques or other
environmentally sensitive techniques as authorized by the Commission Minerals
Manager.
23. No use of underground
or surface water from the WMA will be permitted without prior written approval
of the Commission.
24. The Company
shall hold all oil and gas wastes, including discarded equipment, materials,
debris, and trash, in a manner and location consistent with the SUA and all
applicable federal, state and local laws and regulations; such items shall be
removed from Commission lands within thirty (30) days of project completion.
Debris may not be burned or disposed of on
Commission lands.
25. All toxic refuse such as gasoline, paint,
oil, and gas wastes shall be containerized and stored for no longer than is
necessary and shall be disposed of off-site and consistent with AOGC and ADEQ
regulations. All oil and gas waste, such as fluid and pit residue, solid waste
and domestic sewage, shall be transported off-site for disposal by an
authorized oil and gas waste hauler within thirty (30) days after generation of
such waste. Company shall notify the Commission Minerals Manager and Regional
Wildlife Supervisor in writing beforehand of the disposal facilities to be
used. Disposal of any refuse on Commission lands is strictly
prohibited.
26. Used or waste solid
materials resulting from production processes or treatment equipment, such as
oil contaminated sand, brine sediments, chemical precipitates, or other
filterable solids, may not be used as fill material on Commission
lands.
27. In the event of adverse
weather conditions, the Commission Minerals Manager or Regional Wildlife
Supervisor may temporarily halt all waste disposal operations. Should work be
delayed for this reason, the Director may, in writing, extend the period of the
SUA, as needed.
28. Inactive rigs
must be removed within thirty (30) days after drilling operations are
completed. Skidding of drilling rigs is strictly prohibited except within the
pad WMA.
29. During site closure
and abandonment, the Company shall conduct all restoration operations in
shallow semi-aquatic areas or on firm marsh substrates by boat or by hand
unless otherwise authorized in writing beforehand by the Commission Minerals
Manager. The use of marsh buggies, draglines, and other similar heavy equipment
in such areas must be authorized in writing beforehand by the Commission
Minerals Manager.
30. Restoration
of the drilling pad shall include the following measures:
reestablishment of former surface contours, restoration of soil structure, restoration of preconstruction drainage patterns, removal of excess fill materials from Commission lands, disking or plowing of compacted soils, fertilization, re-vegetation with site appropriate native species, construction of nesting platforms, denning sites, food plots, or other wildlife habitat improvements to replace natural features lost or altered by mineral recovery activities. Species used in replanting should be a mixture of species indigenous to the site and approved in writing beforehand by the Commission Minerals Manager. Company shall be responsible for an 80% survival rate for the first five (5) years of restoration. Commission shall assume full responsibility for the restoration after that time.
31. Company assumes full responsibility for
any damages which may hereafter occur to the real property or to any
improvements of Commission resulting from any malfunction of Grantee's drilling
equipment or other equipment from whatever cause, and Company agrees to
replace, repair or restore such improvements and/or correct such damage to the
real property to the satisfaction of Commission or, at the election of
Commission, compensate Commission for such damage in an amount necessary to
repair, replace, or restore such improvements.
32. If production is obtained, all surface
equipment, such as separators and tank batteries, will be located at a site to
be designated by Commission and, if applicable, fenced to exclude livestock and
wildlife. No surface equipment installed shall exceed thirty (30) feet in
height. All tank battery locations will be enclosed by revetments sufficient to
contain one hundred twenty-five percent (125%) of maximum storage capacity, and
shall comply with all applicable requirements of AOGC and ADEQ orders and
regulations. Commission will retain the right to determine the location of all
flow lines between the well location and the surface equipment, and all such
lines will be buried, the site leveled to its preexisting plane, and re-sodded
with appropriate native vegetation to the satisfaction of Commission.
33. Upon the completion of the construction,
all equipment, material, markings and supplies previously placed upon the WMA
by Company or its contractor shall be removed and Commission will not be
responsible for the loss of any equipment, supplies, marking or materials used
upon the site during or following the construction.
34. Upon completion of the well, either as
producing well or as a dry hole, Company shall repair any damage done to the
WMA to the satisfaction of the Commission Minerals Manager and Regional
Wildlife Supervisor. Upon ultimate cessation of operation of the drilling site,
all equipment, materials, supplies and debris shall be removed to the
satisfaction of the Commission Minerals Manager and Regional Wildlife
Supervisor. Commission retains the option to require Company to leave the well
casing in place for a deep water well, if production is not achieved. Access
roads shall be left intact unless otherwise authorized by the Commission
Minerals Manager.
35. None of the
rights and privileges herein granted to Company may be assigned, except by
prior written permission of Commission.
36. Should Company abandon its Well, all
rights and privileges hereunder shall automatically terminate.
37. Commission reserves the right to use any
or all of the WMA for any purposes not specifically prohibited.
Dated this__________day of________________________, 20_____.
ATTEST: ARKANSAS GAME AND FISH COMMISSION
___________________ By:_______________________________
Director
ATTEST: ____________COMPANY
___________________ By: ________________________________
Title:________________________________
APPENDIX I
As consideration for surface damages resulting from activities described herein, Company agrees to pay Commission at the rate of_______________per well site.
EXHIBIT A
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