SECTION 385:15-1-9. Performance fee, bond and bonus deadline

(a)   All successful bidders of oil and gas leases subsequent to May 11, 1998 shall be required to pay a Performance Fee in an amount equal to .007 of the lease bonus but not to exceed an amount equal to $2.00 per net mineral acre. Said fee shall be placed in the Land Office's Performance Fee Escrow Account with interest accrued.

(1)   The lessee shall have thirty (30) days from the date of award of the lease to do the following:

(A)   Pay the Performance fee;

(B)   Execute the oil and gas lease and return it to the CLO;

(C)   Pay the balance of the bonus and delay rental due;

(D)   Pay any actual advertising costs that are in excess of the advertising deposit.

(2)   The Lessee may have a longer period of time to complete (a) above if an extension is granted in writing by the Director of the Minerals Management Division or his or her designee.

(b)   All Lessees holding an interest in oil and gas leases executed prior to May 11, 1998, may terminate their bonding requirement pursuant to 385:15-1-20 upon the payment of a one-time Performance Fee in accordance with the following schedule:

(1)   1 to 5 leases owned: $300.00

(2)   6 to 10 leases owned: $325.00

(3)   11 to 15 leases owned: $350.00

(4)   15 to 20 leases owned: $400.00

(5)   21 to 60 leases owned: $450.00

(6)   61 to 180 leases owned: $500.00

(7)   181 or more leases owned: $550.00

(c)   Said fee shall be placed in the Performance Fee Escrow Account. The payment of the Performance Fee shall cover all leases that were formerly covered under the Lessee bond, including the interest(s) of Lessee(s) added by virtue of an Appointment of Lease Operator form or the current Bond Appointment form. Bonded lessees electing not to pay said Performance Fee will be required to maintain their bond pursuant to 385:15-1-20 herein.

(d)   The Performance Fee Escrow Account shall be used to insure that the lessee faithfully operates the lease premises and complies with all lease terms and provisions and Land Office's oil and gas rules and regulations. This may include but is not limited to the payment of uncollectible royalty payments, plugging wells, cleaning up well sites, tank battery sites and pipelines, and the reclamation of soil and vegetation, ponds and water ways. Said fee shall not minimize or relieve the lessee of any liability or obligation that exists or may arise from the operations of the lease, nor limit in any manner the Land Office's remedies at law.

(e)   Said Performance Fee shall be maintained until such time that the Performance Fee Escrow Account exceeds $250,000.00, at which time the performance fee will be discontinued until such time that it falls below $200,000.00, at which time the Performance Fee will be reinstated. The Secretary of the Land Office will provide notice of any such discontinuance or reinstatement of said Performance Fee through the Notice of Oil and Gas Lease Sale that is published.

(f)   Claims against the Performance Fee Escrow Account will be paid only upon the recommendation of the Director of the Mineral Management Division and the approval of the Secretary of the CLO. Said Director will insure that all other sources of payment of any claim, have been considered and/or exhausted before recommending payment from the fund. Said Director will also consider the primary purpose of creating said fund which is to preserve and protect the assets of the School Land Trust when no other source is available. The payment of any one claim shall not exceed 20% of the then existing Performance Fee Escrow Account.

(g)   The appointment of Lease Operator (for bonding purposes) form, created pursuant to 385:15-1-12 has been terminated. Therefore, all Lessees holding an interest in oil and gas leases executed prior to May 11, 1998, whose bond requirement is not satisfied will be required to comply with one of the following:

(1)   Pay the one-time Performance Fee based upon number of leases owned;

(2)   Pay $1.00 per net acre owned with a minimum of $25.00 per lease owned;

(3)   Post a Surety Performance Bond in an amount prescribed by the Commissioners pursuant to 385:15-1-20.

[Source: Amended at 14 Ok Reg 3171, eff 7-25-97; Amended at 15 Ok Reg 1745, eff 5-12-98; Amended at 21 Ok Reg 633, eff 12-19-03 (emergency); Amended at 21 Ok Reg 1043, eff 5-13-04; Amended at 29 Ok Reg 1299, eff 6-25-12]