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 C - MAINTAINING A STATE OIL AND GAS LEASE › Section 9.33 - Delay Rental Payments

Current through Reg. 49, No. 28; July 12, 2024
(a) Effect of
				  payment/non-payment of delay rentals. When delay rentals are properly paid on
				  or before a lease anniversary date, lessee shall retain the rights granted
				  under the lease and may postpone the commencement of drilling operations or
				  production of oil or gas for a period of one year from such anniversary date.
				  During the primary term, a lease shall terminate automatically on a lease
				  anniversary date unless lessee either properly pays delay rentals or maintains
				  the lease in force and effect under other lease provisions.
(b) Full payment of delay rental. Each lease
				  specifically sets the amount of the delay rental. The delay rental payment is
				  indivisible and may not be reduced for any reason unless a lease, or a pooling
				  agreement covering a lease, expressly allows its proportionate reduction. If a
				  lease has several working interest owners and any of such owners fails to pay
				  timely its share of the full delay rental amount set in the lease, then the
				  entire lease will terminate. The full delay rental amount must be timely paid
				  to all proper delay rental payees to maintain the lease.
(c) Timeliness of delay rental payment to the
				  state.
(1) For a lessee to maintain a lease by
				  paying delay rentals, the GLO must receive such payments on or before each
				  lease anniversary date during the primary term.
(2) If a lessee has temporarily held a lease
				  during the primary term by other means, then see §
											9.34(b)
				  of this title, (relating to Drilling and Reworking Operations) or §
											9.35(c)(1)(2)
				  of this title, (relating to Producing the State Lease) to determine on which
				  lease anniversary date delay rental payments may be resumed to hold a
				  lease.
(3) If a lease anniversary
				  date should fall on a Saturday, Sunday or a legal state or federal holiday,
				  delay rentals may be timely received on the next calendar day which is not a
				  Saturday, Sunday or such a holiday.
(4) Under the standard business practices
				  and/or procedures of the GLO, the date that the GLO stamps, punches, or
				  otherwise marks on the delay rental payment, check, draft, stub, or envelope
				  establishes the date of actual receipt by the GLO.
(5) Payment of a delay rental to the GLO
				  shall be considered timely, irrespective of the date of actual receipt, if
				  lessee notifies the GLO in writing of its claim that its lease has been
				  maintained under this subparagraph and then establishes that:
(A) payment was dispatched to the address
				  found in §
												9.32(c)(3)(A)
				  of this title, (relating to General Responsibilities of State Lessees) by
				  certified or registered mail or equivalent proof;
(B) an acceptance form was initialed by an
				  employee of the United States Post Office, a common carrier, or its equivalent
				  and the date stamped by the United States Post Office, a common carrier, or its
				  equivalent (not including private postal meters) showing the letter was
				  received and accepted at least 14 days before the lease anniversary
				  date;
(C) payment is actually
				  received by the GLO no later than 30 days after the lease anniversary date;
				  and
(D) no intervening third party
				  has acquired any of the oil and gas interests originally leased by
				  lessee.