Wyoming Administrative Code › Agency 060 - Lands and Investments, Office of › Sub-Agency 0002 - Land Commissioners, Board of › Chapter 18 - LEASING OF OIL AND GAS › Section 18-18 - Multiple Use

Current through July 13, 2024
(a) The Board may
				issue separate leases for different minerals on the same tract of land. If all
				mineral leases under a tract of land are non-producing leases, each lessee has
				an equal right to conduct exploratory operations on the land, and each shall
				conduct such operations in a manner which does not prevent or unduly interfere
				with the operations of the other.
(b) The first lessee to commence actual
				production operations so that his lease becomes an operating lease shall have
				the right to continue operations without substantial interference from any
				other mineral lessee so long as the lease remains in effect. The lessee may not
				be deprived of this right in whole or in part without compensation equal to the
				value of the rights lost as per Subsection (d)(iii) of this section.
(c) If a lessee desires to commence
				operations on the same tract upon which one or more lessees are already
				conducting operations, and the lessees can agree that the operations can be
				conducted at the same time without materially reducing the amount or value of
				the resources which will be produced under each lease, and without unduly
				interfering with or raising the cost of operations of the prior lessee(s),
				unless he is adequately compensated therefor, the lessees may agree upon a plan
				of operations and assessment of costs under which the operations may be carried
				out concurrently. Any such agreement shall be submitted to and be subject to
				the approval of the Board.
(d) If,
				under the circumstances set out in Subsection (c) of this section, the lessees
				either agree that the operations cannot be carried out concurrently or cannot
				agree upon a plan of operations and assessment of costs, the Director may
				resolve the conflict.
(i) If the Director
				determines that the operations can be carried out concurrently without
				materially reducing the quantity or value of the oil and gas which will be
				produced, and either that the costs of operation of any prior lessee(s) will
				not be increased significantly, or that if they are, such costs are capable of
				determination and if paid by the subsequent lessee will not constitute an
				unreasonable burden on the operation, he shall enter his decision approving a
				plan of operation and assessment of cost under which operations may be carried
				out concurrently.
(ii) If the
				Director determines that the proposed operations cannot be carried out
				concurrently and that the value which will be realized by the beneficiaries
				from the existing operation is such that the proposed operation should be
				deferred, he shall enter his decision deferring the development obligations
				under the lease of the proposing lessee. The lease will be placed in operating
				status and remain in effect subject to the requirement that annual rentals will
				be paid and to the condition that if development is deferred more than five (5)
				years, the lease may be amended to conform to the lease form in effect upon
				commencement of production operations for the class of subsurface resource to
				be produced.
(iii) If the Director
				determines that the proposed operations cannot be carried out concurrently and
				that the benefit which would be realized by the beneficiaries from initiating
				the proposed operation so far exceeds that which would be realized from the
				existing operation that it is clearly more beneficial to the beneficiaries that
				the existing operation be terminated or deferred and the proposed operation
				commenced, he shall enter his decision terminating the existing operation and
				allowing the commencement of the proposed operation, conditioned upon the
				payment by the lessee proposing the operation to the lessee whose operations
				are terminated of an amount equal to the value of the rights lost by that
				lessee determined in the same manner as if the right were being condemned in
				eminent domain proceedings.
(iv) A
				lease upon which operations are terminated as above provided shall, upon
				payment to the lessee of the value of the right lost, be assigned to the lessee
				making the payment, who shall be entitled to hold it subject to the same terms
				and conditions applicable to a lease upon which operations were deferred under
				Paragraph (ii) of this section.
(v)
				If the proposing lessee disagrees with the Director's or the Board's
				determination, he may refuse to commence the proposed operation. His refusal to
				do so shall not constitute a violation of the covenants for lease development,
				unless the amounts he would be required to pay to the prior lessee constitute
				such an insubstantial addition to the cost of operation that a reasonable,
				prudent lessee would assume them.