Haw. Code R. § 13-183-33 - Unit or cooperative plans

(a) For the purpose of more properly conserving the natural resources of any geothermal pool, field, or like area, lessees under leases issued by the board, may, with the written consent of the board, utilize the state lands under a unit, cooperative, or other plan of development or operation with other state, federal, or privately owned lands. Applications shall be filed with the board which shall certify whether the plan is necessary or advisable in the public interest. The board may require whatever documents or data it deems necessary to make its determination. The board may, with the consent of its lessees modify and change any and all terms of leases issued by it which are committed to the unit, cooperative, or other plans of development or operations.

(b) The unit agreement shall describe the separate tracts comprising the unit, disclose the apportionment of the production or royalties and costs to the several parties and the name of the operator, and shall contain adequate provisions for the protection of the interests of all parties, including the State. The unit agreement shall be signed by or in behalf of all necessary parties before being submitted to the board. It shall be effective only after approval by the board. The unit operator shall be a person as defined by these rules and approved by the board.

(c) The owners of any right, title, or interest in the geothermal resources to be developed or operated under an agreement are regarded as proper parties to a proposed agreement. All the owners shall be invited to join as parties to the agreement. If any owner fails or refuses to join the agreement, the proponent of the agreement shall declare this to the board and shall submit evidence of efforts made to obtain joinder of the owner and the reasons for nonjoinder.

(d) In lieu of separate bonds required for each lease committed to a unit agreement, the unit operator may furnish and maintain a collective corporate surety bond or a personal bond conditioned upon faithful performance of the duties and obligations of the agreement and the terms of the leases subject thereto and these rules. Personal bonds shall be accompanied by a deposit of negotiable federal securities in a sum equal in value to the amount of the bond and by a proper conveyance to the board with full authority to sell the securities in case of default in the performance of the obligations assumed. The liability under the bond shall be for the amount as the board shall determine to be adequate to protect the interests of the State. Additional bond coverage may be required whenever deemed necessary by the board. In case of changes of unit operator, a new bond shall be filed or a consent of surety to the change in principal under the existing bond shall be filed with the board.

(e) Any modification of an approved agreement will require approval of the board under procedures cited in subsection (a) herein.

(f) The term of all leases included in any cooperative or unit plan of development or operation shall be continued automatically for the term of the unit or cooperative agreement, but in no event beyond that time provided in § 13-183-29. Rentals or royalties on leases so extended shall be at the rate specified in the lease.

(g) Any lease which is to be eliminated from any cooperative or unit plan of development or operation, or any lease which shall be in effect at the termination of any cooperative or unit plan of development or operation, unless relinquished, shall continue in effect for the term of the lease or for one year after its elimination from the plan or agreement or the termination thereof, whichever is longer, and so long thereafter as lessee engages in diligent and continuous drilling as provided in § 13-183-61, or so long thereafter as geothermal resources are produced in commercial quantities, but in no event beyond the time provided in § 13-183-29(a).

(h) Before issuance of a lease for lands within an approved unit agreement, the lease applicant or successful bidder shall be required to file evidence that an agreement has been entered into with the unit operator for the development and operation of the lands in a lease if issued to the unit operator under and pursuant to the terms and provisions of the approved unit agreement, or a statement giving satisfactory reasons for the failure to enter into agreement. If the statement is acceptable, the unit operator will be permitted to operate independently, but will be required to perform operations in a manner which the board deems to be consistent with the unit operations.

Notes

Haw. Code R. § 13-183-33

[Eff. JUN 22 1981] (Auth: HRS § 182-14) (Imp: HRS § 182-9.5)