Coal leases are acquired by lessees through an application process. Coal leases that are available for leasing are available to be leased by the first qualified applicant. Applications need to be submitted to OSLI, along with the application fee. Applications will then be submitted to the SBLCC for approval.
Rentals are due on leases in two situations: if the lease is not producing, the entire rental is due; if the lease is producing, the rental due is the difference between minimum annual royalty and royalties paid or the full rental amount, whichever is smaller. The rental schedule for Coal leases are as follows: $1 per acre for the first five years of the lease, $2 per acre for the second five years of the lease. If the lease is renewed after the initial 10 year lease, the rental stays at $2 per acre. The third 10 year renewal rental is $3 per acre, and the fourth renewal at $4 per acre. For more information regarding Coal lease rent, please refer to Rules and Regulations of the SBLC Chapter 19, Section 6.
Assignment of any interest within a lease must be approved by the Director of OSLI. The parties transferring interest in a lease are required to use the Coal Lease Assignment Form, links to the instructions and form are listed below. For further information on transferring interest in an oil and gas lease, please refer to Rules and Regulations of the SBLC Chapter 19, Section 10 and Section 11.
Coal leases are not required to have bonding until operations (including exploration) commenced on the leased area. Bonds may be either individual (in the form of corporate surety bond, cash bond, certified cashiers check, certificate of deposit, or non-revocable letter of credit) or a “Blanket Bond” covering all of the lessees coal leases with OSLI. Blanket bonds must be in the form of a corporate surety bond and be in the sum of no less than one hundred thousand dollars. For more information regarding Coal lease bonding, refer to Rules and Regulations of the SLBC Chapter 19, Section 12.
The Royalty Compliance Section assures timely and accurate payment of royalties in return for the removal of minerals from Trust Lands. In addition, this section serves over 400 oil, gas, coal, sand & gravel, and hard mineral companies by providing them with information for State reporting guidelines. The Section processes royalty and production reports to ensure the trust receives full and fair value for the mienrals that are extracted from State Trust Land.
The Office of State Lands and Investments is happy to announce the availability of our eRMA2 Test Environment. This environment will allow reporters to submit reports to this test environment prior to submission to the Live Environment. If you would like to request access to the eRMA2 Test Environment, or have any questions, please contact Billie Hunter at email@example.com
The primary lease term for a Coal lease is ten years. Before the primary term is due, a subsequent renewal needs applied for. The application and application fee are due before the lease expires. Renewal applications are approved by the SBLC.
Coal leases may be admitted into a Cooperative Mining Plan (CMP). The Director of OSLI may require that a CMP be formed or a lease be included into a CMP. Also, a lease may be considered for admittance into a CMP if requested by an interested party.
Although the State oil and gas leases give the right of ingress and egress related to the leased property; and, allow use of the surface as needed for operations, all mineral lessees are required to pay the Surface Impact Payments (SIP). SIPs are intended ot re-compensate the grazing lessee of the stat surface as well as OSLI for the loss of forage associated with oil and gas development disturbance. Surface impact payments are required propr to exploration and development on any State mineral lease.
Furthermore, use of State Land outside the bounds of the mineral lease require additional permitting. This is handled in two manners. For long term additional permitting, a Special Use Lease may be required. Situations requiring a Special Use Lease (SUL) could include disposal wells, on-lease facilities handling off-lease minerals, or communication towers. For short term permits such as roads or CBM reservoirs, Temporary Use Permits (TUP) are issued. Although the mineral lease allows for ingress and egress related to the leased parcel, access routes across parcels that are not within the lease area are subject to TUP permitting. For more information on SUL's and TUP's please refer to the links below.
Easements are used by OSLI to permit permanent infrastructure such as pipelines, powerlines, and other permanent transmission systems. For more information regarding easements, please refer to the links below.
A lessee may relinquish a lease for any various reasons, using the form below. If the lease being relinquished is not developed in anyway, the lease is relinquished effective the day it is received by OSLI. If the lease being relinquished has been developed, the relinquishment will not be effective until the lands leased are reclaimed to an acceptable condition. Relinquishment of a lease does not relieve a lessee of obligations due to that lease. Parcels may be offered for lease after a lease has been relinquished on that parcel.
Termination of lease can be due to a variety of reasons including; no production without suspension of operations, failure to pay annual rental, or default of lease or SBLC Rules and Regulations, etc. The lessee of a terminating lease will receive thirty (30) notice of the lease termination. If no response or remedy is received within that thirty days, the lease will terminate on the appropriate effective date. Parcels may be offered to lease after a lease on that parcel has been terminated.
Expiration of leases occurs when a lease has reached the end of it’s primary term without production or diligent pursuit of production, or without extension or renewal of the primary term. Leases that have reached the end of their primary term without production or extension expire automatically as a function of the lease. Parcels that may be offered for lease after a lease on that parcel has expired.
Coal leases are required to be maintained in a ecologically prudent manner. Furthermore, when a lease is finally disposed of, reclamation of the disturbed areas must take place. Reclamation of the site is required to have vegetative production as good or better than the surrounding rangeland and for the site to be physically stable. Surface compliance and reclamation inspections are performed by the Field Services Division (FSD) of OSLI.
Coal lessees are encourage to contact OSLI when surface compliance issues may arise so that the situation can be handled in a timely manner. Also, reclamation planning with OSLI staff is suggested so that reclamation plans can be tailored to meet the expectations of OSLI, and subsequently expedite the reclamation process. FSD Contact Info is listed below.