Texas Administrative Code
Title 31 - NATURAL RESOURCES AND CONSERVATION
Part 1 - GENERAL LAND OFFICE
Chapter 9 - EXPLORATION AND LEASING OF STATE OIL AND GAS
Subchapter F - DISCONTINUING THE LEASEHOLD RELATIONSHIP
Section 9.95 - Forfeiture
Universal Citation: 31 TX Admin Code § 9.95
Current through Reg. 49, No. 38; September 20, 2024
(a) Forfeiture for failure to drill an offset well.
(1) Duty. See §
9.37
of this title, (relating to Offset Well Obligations & Compensatory
Royalties) for a full discussion of the duty to drill offset wells.
(2) Subject to forfeiture. A lease is subject
to forfeiture if there is a failure or refusal to:
(A) begin the drilling operation required in
§9.37 within the proper time frame set out in that section; or
(B) prosecute this activity as required and
as is necessary to reasonably develop the state land and to protect it against
drainage.
(b) Forfeiture for other breaches. Other circumstances under which a state oil and gas lease may be forfeited are determined by certain provisions in each lease or by the laws of the state.
(c) Procedure.
(1) When sufficiently informed of
facts which subject a lease to forfeiture, it shall be the commissioner's
policy to mail notice that the lease is being considered for forfeiture to
those then shown in GLO records as the current lessee of the lease; and allow
the lessee 30 days in which to present evidence and convince the commissioner
that the commissioner should not forfeit the lease. The commissioner may,
however, forfeit a lease without this prior notice in circumstances where the
commissioner deems such action necessary to protect the best interest of the
state. Failure of the commissioner to send this prior notice, or failure of the
appropriate parties to receive this prior notice, will not in any way affect
the validity of the forfeiture itself. However, upon any forfeiture, the lessee
may request a reinstatement of the lease as set out in subsection (d) of this
section.
(2) When sufficiently
informed of facts which subject a lease to forfeiture, it is within the
commissioner's discretion to forfeit that lease by endorsing the following on
the mineral file:
(A) words declaring the
lease forfeited;
(B) the
commissioner's signature; and
(C)
the date these actions are taken.
(3) Upon such endorsement, the lease and all
rights and payments made thereunder shall be deemed forfeited.
(4) Promptly after forfeiture, the GLO shall
mail notice of this action to those then shown in the GLO records as the
current lessees of the lease and, in the case of Relinquishment Act land, to
the surface owners then shown in the GLO records.
(d) Reinstatement.
(1) Within 30 days of forfeiture for failure
to drill an offset well and upon satisfactory evidence of future compliance
with the applicable laws, the commissioner has the discretion to reinstate the
lease upon the terms required by law and upon any other terms the commissioner
may prescribe.
(2) For forfeitures
due to other breaches, the commissioner has the discretion to reinstate the
lease at any time before the rights of another intervene. Upon satisfactory
evidence of the lessee's future compliance with the applicable laws, and with
any other term the commissioner may prescribe, the lease may be
reinstated.
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