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.

History:

[47-809, added 1937, ch. 130, sec. 9, p. 200; am. 1949, ch. 128, sec. 6, p. 226.]