2005 Idaho Code - 47-809 — CANCELLATION OF OIL AND GAS LEASES FOR NONCOMPLIANCE WITH CONDITIONS -- PROCEDURE -- TERMINATION OF LEASE BY LESSEE

                                  TITLE  47
                               MINES AND MINING
                                  CHAPTER 8
                            OIL AND GAS LEASES ON
                            STATE AND SCHOOL LANDS
    47-809.  CANCELLATION OF OIL AND GAS LEASES FOR NONCOMPLIANCE WITH
CONDITIONS -- PROCEDURE -- TERMINATION OF LEASE BY LESSEE. (a) The state board
of land commissioners shall reserve and may exercise the authority to cancel
any oil and gas lease upon failure by the lessee to exercise due diligence and
care in the prosecution of his operations in accordance with the terms and
conditions stated in said lease and with all laws of the state of Idaho, and
shall insert in every such lease appropriate provisions for its cancellation
by the board in the event of noncompliance upon the part of the lessee;
provided, however, that except in the instance of nonpayment of rentals or
royalties, no such lease shall be cancelled by the board other than for a
substantial violation of the terms thereof and unless it shall notify the
lessee in writing of the existence and exact nature of the cause of
cancellation and unless the lessee thereafter, and within ninety (90) days
from the mailing of such notice by registered mail, shall fail to remedy such
cause for cancellation; and provided further that no default by the lessee in
the performance of any of the conditions or provisions of such lease as to any
well or wells on any legal subdivision of the land covered by such lease shall
affect the right of the lessee to continue the lessee's possession or
operation of any other well or wells, situated upon any other legal
subdivision of said land. The term "legal subdivision" as herein used shall
mean a subdivision as established by the United States Land Survey which most
nearly approximates in size the area allocated to one well under any approved
well spacing program; provided that if no special program has been approved,
said term "legal subdivision" shall mean the parcel upon which such well shall
be located, but in any event not less than forty (40) acres surrounding such
well.
    (b)  The lessee of any such oil and gas lease may surrender and terminate
the lease as to all or any part of the lands covered by the same upon payment
of the rentals then accrued and upon giving notice in writing, not less than
thirty (30) days prior to such surrender or termination, to the state board of
land commissioners and thereupon lessee shall be relieved from liability for
rental and all other obligations as to the acreage so surrendered; provided,
however, that such surrender shall not thereby relieve the lessee of any
liabilities which may have accrued in connection with the lease prior to the
surrender of such acreage. In the event of a partial surrender of the lands
covered by such lease, the annual rental thereafter payable shall be reduced
proportionately.