Hawaii Administrative Rules › Title 13 - DEPARTMENT OF LAND AND NATURAL RESOURCES › Subtitle 7 - WATER RESOURCES › Chapter 183 - RULES ON LEASING AND DRILLING OF GEOTHERMAL RESOURCES › Subchapter 3 - LEASES GENERALLY › Section 13-183-33 - Unit or cooperative plans

Current through June, 2024
(a) For the purpose
				  of more properly conserving the natural resources of any geothermal pool,
				  field, or like area, lessees under leases issued by the board, may, with the
				  written consent of the board, utilize the state lands under a unit,
				  cooperative, or other plan of development or operation with other state,
				  federal, or privately owned lands. Applications shall be filed with the board
				  which shall certify whether the plan is necessary or advisable in the public
				  interest. The board may require whatever documents or data it deems necessary
				  to make its determination. The board may, with the consent of its lessees
				  modify and change any and all terms of leases issued by it which are committed
				  to the unit, cooperative, or other plans of development or
				  operations.
(b) The unit agreement
				  shall describe the separate tracts comprising the unit, disclose the
				  apportionment of the production or royalties and costs to the several parties
				  and the name of the operator, and shall contain adequate provisions for the
				  protection of the interests of all parties, including the State. The unit
				  agreement shall be signed by or in behalf of all necessary parties before being
				  submitted to the board. It shall be effective only after approval by the board.
				  The unit operator shall be a person as defined by these rules and approved by
				  the board.
(c) The owners of any
				  right, title, or interest in the geothermal resources to be developed or
				  operated under an agreement are regarded as proper parties to a proposed
				  agreement. All the owners shall be invited to join as parties to the agreement.
				  If any owner fails or refuses to join the agreement, the proponent of the
				  agreement shall declare this to the board and shall submit evidence of efforts
				  made to obtain joinder of the owner and the reasons for nonjoinder.
(d) In lieu of separate bonds required for
				  each lease committed to a unit agreement, the unit operator may furnish and
				  maintain a collective corporate surety bond or a personal bond conditioned upon
				  faithful performance of the duties and obligations of the agreement and the
				  terms of the leases subject thereto and these rules. Personal bonds shall be
				  accompanied by a deposit of negotiable federal securities in a sum equal in
				  value to the amount of the bond and by a proper conveyance to the board with
				  full authority to sell the securities in case of default in the performance of
				  the obligations assumed. The liability under the bond shall be for the amount
				  as the board shall determine to be adequate to protect the interests of the
				  State. Additional bond coverage may be required whenever deemed necessary by
				  the board. In case of changes of unit operator, a new bond shall be filed or a
				  consent of surety to the change in principal under the existing bond shall be
				  filed with the board.
(e) Any
				  modification of an approved agreement will require approval of the board under
				  procedures cited in subsection (a) herein.
(f) The term of all leases included in any
				  cooperative or unit plan of development or operation shall be continued
				  automatically for the term of the unit or cooperative agreement, but in no
				  event beyond that time provided in § 13-183-29. Rentals or royalties on
				  leases so extended shall be at the rate specified in the lease.
(g) Any lease which is to be eliminated from
				  any cooperative or unit plan of development or operation, or any lease which
				  shall be in effect at the termination of any cooperative or unit plan of
				  development or operation, unless relinquished, shall continue in effect for the
				  term of the lease or for one year after its elimination from the plan or
				  agreement or the termination thereof, whichever is longer, and so long
				  thereafter as lessee engages in diligent and continuous drilling as provided in
				  § 13-183-61, or so long thereafter as geothermal resources are produced in
				  commercial quantities, but in no event beyond the time provided in §
				  13-183-29(a).
(h) Before issuance
				  of a lease for lands within an approved unit agreement, the lease applicant or
				  successful bidder shall be required to file evidence that an agreement has been
				  entered into with the unit operator for the development and operation of the
				  lands in a lease if issued to the unit operator under and pursuant to the terms
				  and provisions of the approved unit agreement, or a statement giving
				  satisfactory reasons for the failure to enter into agreement. If the statement
				  is acceptable, the unit operator will be permitted to operate independently,
				  but will be required to perform operations in a manner which the board deems to
				  be consistent with the unit operations.