Utah Admin. Code R652-20-2800 - Bonding
1. Prior to
commencement of any operations on a state mineral lease, the lessee or
designated operator shall post with the division a bond in the form and amount
as may be determined by the division to assure compliance with all terms and
conditions of the lease.
2. The
bond required for an oil and gas, geothermal, or minerals exploration project
shall be:
(a) a statewide blanket bond in the
minimum amount of $80,000 covering exploration operations on all state of Utah
mineral leases held by lessee which shall be in an amount at least equal to the
accumulative amount of individual project bonds as set forth below;
or
(b) a project bond covering an
individual exploration project involving one or more state of Utah mineral
leases. The amount of the project bond will be determined by the division at
the time lessee gives notice of proposed operations. This bond will not be less
than $5,000 per acre of surface disturbance, or in the case of an oil and gas
or geothermal well:
|
TABLE |
|
|
WELL DEPTH |
BOND AMOUNT |
|
0- 3,000 ft. |
$10,000 |
|
3,000-10,000 ft. |
20,000 |
|
Greater than 10,000 ft. |
40,000 |
3. The bond required for construction and
operation of a mine or minerals production plant shall be determined by the
division on basis of an approved mining and reclamation plan or plan of
development and operations. This bond may be posted with the Division of Oil,
Gas and Mining providing written consent is first obtained from the Division of
Forestry, Fire and State Lands. Existing project bonds on the same lease(s) may
be incorporated into this mine or minerals production plant bond.
4. All bonds posted on mineral leases may be
used for payment of all monies, rentals, and royalties, due the state as
lessor; including:
(a) costs of reclamation,
damages to the surface and improvements thereon, and any other costs which
arise by operation of the lease and accrue to the lessor.
(b) lessee's compliance with all other terms
and conditions of the lease, and rules, and policies relating thereto of the
Board of State Lands and Forestry, Division of Forestry, Fire and State Lands,
Board of Oil, Gas, and Mining, and Division of Oil, Gas, and Mining.
This bond shall be in effect even if the lessee or designated operator has conveyed all or part of the leasehold interest to a sublessee(s), assignee(s), or subsequent operator(s), until the bond may be released by the state as lessor, or until the lessee or designated operator fully satisfies the above-described obligations, or until the bond is replaced with a new bond posted by a sublessee, assignee, or new designated operator.
5. Bonds may be accepted in any of
the following forms:
(a) Surety bond with an
approved corporate surety registered in Utah.
(b) Cash deposit. The state will not be
responsible for any investment returns on cash deposits.
(c) Certificate of deposit in the name of
"Utah Division of Forestry, Fire and State Lands and lessee, c/o lessee's
address", with an approved state or federally insured banking institution
registered in Utah. The certificate of deposit must have a maturity date no
greater than 12 months, be automatically renewable, and be deposited with the
division. The lessee will be entitled to and receive the interest payments. All
certificates of deposit must be endorsed by the lessee prior to acceptance by
the director.
(d) Other forms of
surety as may be acceptable to the Utah Division of Forestry, Fire and State
Lands.
6. Any lessee or
designated operator forfeiting a bond is denied approval of any future
exploration or mining on state lands, except by compensating the state for
previous defaults and posting the full bond amount estimated for reclamation or
lease performance and reclamation on subsequent operations.
7. Bonds may be increased at any time in
reasonable amounts as the Division of Forestry, Fire and State Lands may order,
providing lessor first gives lessee 30 days written notice stating the increase
and the reason for the increase.
8.
The division shall waive the filing of a bond for any period during which a
bond meeting the requirements of this section is on file with another
agency.
Notes
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