Section 85-06-01-10 - Breach of oil and gas lease1. Other than as provided in subsection 7, an oil and gas lease may be canceled for: a. Nonpayment of any sum due under the oil and gas lease;b. Breach of any oil and gas lease terms or conditions; orc. A violation of applicable laws, rules, or board policies.2. Before an oil and gas lease is canceled, the department shall send a notice of intention to cancel the lease specifying the reason for cancellation to the lessee listed in the records of the department by mail requiring a signed receipt to the lessee's address as shown in the records of the department. 3. A lessee may file with the commissioner a request for a waiver, or a request for the commissioner to review the notice of intention to cancel the oil and gas lease, which must include a statement of the specific grounds for the request. A request must be in writing and filed with the commissioner within thirty days after the date the notice of intention to cancel the oil and gas lease is postmarked. A request for a waiver or review is deemed filed when personally delivered or when received by the department. The commissioner may allow the lessee time to cure the breach, or may waive any breach, except a breach of oil and gas lease terms required under North Dakota Century Code. Any waiver must be limited to the particular breach waived and does not limit the board's right to cancel the oil and gas lease for any other breach. If, after review of the request, the commissioner determines cancellation of the lease is still warranted, the commissioner shall request board approval of the cancellation. An oil and gas lease cancellation under this section is exempt from the requirements of section 85-06-01-11.4. If the lessee has not filed a release of the oil and gas lease with the applicable county recorder's office or requested a waiver or commissioner review within thirty days after the postmark date of a notice of intention to cancel the lease, the commissioner may cancel the lease.5. Release of the oil and gas lease by the lessee or cancellation of the lease does not release the lessee from liability for any sum due to the board or from any damages caused by a breach of the lease.6. Upon cancellation of the oil and gas lease, the department shall file a notice of cancellation of oil and gas lease with the applicable county recorder's office.7. An oil and gas lease automatically terminates for failure to pay the annual delay rental by the date due without further notice by the department or opportunity for the lessee to remedy the default.N.D. Admin Code 85-06-01-10
Adopted by Administrative Rules Supplement 375, January 2020, effective 1/1/2020.Amended by Administrative Rules Supplement 2024-392, April 2024, effective 4/1/2024.General Authority: NDCC 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06
Law Implemented: N.D. Constitution article IX, § 5; NDCC 15-01-02, 15-02-05, 15-05-09, 15-05-10