§ 6805 Permit Cancellation Authority

The statute lets the commission cancel a mining or oil/gas permit or lease if the holder doesn't use due diligence, after giving written notice, and it sets out the notice periods and what the holder can keep after cancellation.

Key Takeaways

•The commission can cancel a permit or lease if the holder does not act with due diligence.
•A written notice must be given, and the holder gets either 30 or 90 days to comply, depending on whether a discovery has been made.
•After cancellation, the holder may keep any wells that are not in default and a small surrounding area to finish drilling or producing.

Example

A mining company holds a permit to explore for copper. It fails to do the required exploration work, and after 30 days of written notice it still does nothing, so the permit is cancelled.

Because the company did not show due diligence within the 30‑day notice period, the commission may cancel the permit. If the company later discovers copper, the permit can only be cancelled after a 90‑day notice if the company then fails to meet the lease terms.

How to Calculate

NoticeDays = 30 (default notice) or 90 (notice after discovery)

Identify whether the cancellation is based on default before discovery or after discovery.
If it is before discovery, use 30 days as the required notice period.
If it is after discovery, use 90 days as the required notice period.
Count the days from the date of the written notice to ensure the holder has that many days to act.

A company receives a notice on July 1 stating it must show due diligence within 30 days.

Result: Required action deadline = July 1 + 30 days = July 31

The commission shall reserve and may exercise the authority to cancel any prospecting permit or lease upon which a commercially valuable deposit of minerals or geothermal resources other than oil or gas has not been discovered or upon which oil or gas has not been discovered in paying quantities upon failure of the permittee or lessee (after 30 days’ written notice and demand for performance) to exercise due diligence and care in the prosecution of the prospecting or development work in accordance with the terms and conditions of the permit or lease. After discovery of a commercially valuable deposit of minerals or geothermal resources other than oil or gas on lands subject to any permit or lease issued pursuant to this chapter, or after discovery of oil or gas in paying quantities on lands subject to any lease, the permit or lease may be forfeited and canceled only upon failure of the lessee after 90 days’ written notice and demand to comply with any of the provisions of the permit or lease or of the regulations applicable thereto and in force at the date of the permit or lease. However, in the event of any cancellation the lessee under any oil or gas lease or the permittee or lessee under any geothermal resource permit or lease shall have the right to retain under the permit or lease any and all drilling or producing wells as to which no default exists, together with a parcel of land surrounding any well or wells and any rights-of-way through the lands, under permit or lease, as may be reasonably necessary to enable the permittee or lessee to drill and operate the retained well or wells. In the event of the cancellation of any permit or lease the permittee or lessee shall have a reasonable time within which to remove any and all property, equipment and facilities owned or used by the permittee or lessee in connection with operations under the permit or lease. The commission shall insert in every permit or lease issued under this chapter appropriate provisions for its cancellation in accordance with the provisions of this section. (Amended by Stats. 1980, Ch. 676, Sec. 276.)

Key Takeaways

•The commission can cancel a permit or lease if the holder does not act with due diligence.
•A written notice must be given, and the holder gets either 30 or 90 days to comply, depending on whether a discovery has been made.
•After cancellation, the holder may keep any wells that are not in default and a small surrounding area to finish drilling or producing.

Example

A mining company holds a permit to explore for copper. It fails to do the required exploration work, and after 30 days of written notice it still does nothing, so the permit is cancelled.

How to Calculate

NoticeDays = 30 (default notice) or 90 (notice after discovery)

Identify whether the cancellation is based on default before discovery or after discovery.
If it is before discovery, use 30 days as the required notice period.
If it is after discovery, use 90 days as the required notice period.
Count the days from the date of the written notice to ensure the holder has that many days to act.

A company receives a notice on July 1 stating it must show due diligence within 30 days.

Result: Required action deadline = July 1 + 30 days = July 31

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 6805 Permit Cancellation Authority

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References