Rules, Regulations, Policies, and Statutes Governing Bentonite Leasing

Board of Land Commissioners' Rules and Regulations,Chapter 22

WS 36-6-101

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

Policy: Surface Impact Payments During Reclamation

Leasing Procedures

Bentonite leases are acquired by lessees through the "Hard Rock" application process. Bentonite leases that are available for leasing, are available to be leased by the first qualified applicant. Applications need to be submitted to OSLI, along with the application fee. Applications will then be submitted to the SBLC for approval.

Board of Land Commissioners' Rules and Regulations, Chapter 22, Section 5

Hard Rock Appliction Form

Hard Rock Application Instructions

Bentonite Sample Lease Form

Mineral Leasing Reference Sheet

Lease Stipulations Guide

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. The rental schedule for Bentonite leases are as follows: $1 per acre for the first five years of the lease, $2 per acre for the second five years of the lease. If the lease is renewed after the initial 10 year lease, the rental stays at $2 per acre. The third 10 year renewal rental is $3 per acre, and the fourth renewal at $4 per acre. For more information regarding Bentonite lease rent, please refer to Board of Land Commissioners' Rules and Regulations, Chapter 22, 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 Hard Rock Lease Assignment Form, links to the instructions and form are listed below. For further information on transferring interest in an Bentonite lease, please refer to Board of Land Commissioners' Rules and Regulations,Chapter 22, Section 9 and Section 10.

Hard Rock Lease Assignment Form

Hard Rock Lease Assignment Instructions

Bonding

Bentonite leases are required to have lease bonding in place when operations (including exploration) commence on the leased area. Bonds may be either individual (in the form of corporate surety bond, cash bond, certified cashiers check, certificate of deposit, or non-revocable letter of credit) or a “Blanket Bond” covering all of the lessees coal leases with OSLI. Blanket bonds must be in the form of a corporate surety bond and be in the sum of no less than one hundred thousand dollars. For more information regarding Bentonite lease bonding, refer to Board of Land Commissioners' Rules and Regulations, Chapter 22, Section 12.

Office of State Lands Bonding Guide

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

Renewals

The primary lease term for a Bentonite lease is ten years. Leases must be renewed at the end of the primary term if production is on going or if the lessee is intending to retain the lease for future development. In order to renew a Bentonite lease, the application and application fee are due before the lease expires. Renewal applications are approved by the SBLC.

Board of Land Commissioners' Rules and Regulations, Chapter 22, Section 8.

Hard Rock Renewal Application Form

Hard Rock Renewal Application Instructions

Additional Required Permitting

Surface Impact Payment

Although State Bentonite 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 a 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 Bentonite development disturbance. Surface impact payments are required to be negotiated prior 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


Special Use Leasing and Temporary Use Permit

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: Board of Land Commissioners' Rules and Reguations, Chapter 5

Special Use Lease Application

Sample Special Use Lease Form

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


Easement

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 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 SBLC 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

Bentonite leases are required 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.

Bentonite 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 22, Section 11

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