Washington Administrative Code › Title 332 - Natural Resources, Board and Department of (See also Title 222) › Chapter 332-12 - Oil and gas leases › Section 332-12-370 - Assignments

Current through Register Vol. 24-14, July 15, 2024
(1) Any
			 lease may be assigned, mortgaged, sublet, or otherwise transferred as
			 to a divided or undivided interest therein to any qualified applicant
			 subject to the approval of the department. The lessee shall execute
			 an assignment approved by the commissioner. A transfer of a separate
			 zone or deposit under any lease or a part of a legal subdivision
			 shall be considered an assignment and is subject to the approval of
			 the department. All approved assignments shall take effect as of the
			 first day of the lease month following the date of approval. A
			 separate assignment fee is required for each separate lease in which
			 an interest is assigned.
(2) Assignments of undivided
			 interests in a lease or changes in controlling lease interest shall
			 not create new leases or new obligations and shall be subject to the
			 approval of the department. The approval of these assignments, a
			 designation of a single agent or a power of attorney executed by all
			 lessees shall be filed with the department and an acceptable
			 agreement adequate to protect the state's interest including a
			 designation of the lessee shall be executed and filed with the
			 department.
(3) Any
			 divided interest or partial assignment of a geographically distinct
			 subdivision of a lease shall segregate the assigned and retained
			 portions thereof and upon approval of such assignment by the
			 commissioner, create a new lease as to the assigned lands. The rights
			 and obligations of the lessees under the retained portion and the
			 assigned portion of the original lease are separate and distinct but
			 are identical as to terms and conditions. Execution of the assignment
			 shall release or discharge the assignor from all obligations
			 thereafter accruing with respect to the assigned lands. Such
			 segregated leases shall continue in full force and effect for the
			 primary term of the original lease.
(4) Owners of cost-free interests
			 such as overriding royalties, where authorized by the department,
			 shall not be considered lessees and shall be subject to the rights of
			 the department against the lessee. All state assignment documents
			 shall contain provisions which subject any cost-free interests
			 created by an assignment to the authority of the commissioner to
			 require the proper parties to suspend or modify such overriding
			 royalties or payments out of production in such a manner as may be
			 reasonable when and during such periods of time as they may
			 constitute an undue economic burden upon the reasonable development
			 and operations of such lease.
(5) The approval of any assignment
			 shall not waive compliance with any terms and conditions of the
			 original lease. The department may subject the assignment to special
			 requirements or conditions to correct any noncompliance with the
			 original lease. Upon approval of any assignment, the assignee or
			 sublessee shall be bound by the terms of the original lease to the
			 same extent as if such assignee or sublessee were the original
			 lessee.
Statutory Authority:
				  RCW 79.14.120. 82-23-053
				  (Order 387), § 332-12-370, filed
				  11/16/82.