Ariz. Admin. Code § 12-5-2204

Current through Register Vol. 30, No. 50, December 13, 2024

Section R12-5-2204 - Terms of Lease

A. If, after the expiration of the ten year primary term or the additional two-year period provided for in A.R.S. § 27-6710, this lease is maintained in force and effect by the production of geothermal resources in paying quantities and the production shall cease, this lease shall continue in force and effect provided lessee pays the rentals provided for in these rules and conducts operations on the lands with reasonable diligence for the purpose of restoring the paying production of geothermal resources from the lands. In the event paying production of geothermal resources from the lands is restored within one year from the date of cessation of production, this lease shall remain in full force and effect.

B. If geothermal resources in paying quantities are discovered on the lands covered by this lease or on lands joined therewith in a cooperative or pooled unit, while the lease is in full force and effect, but lessee is unable to produce any geothermal resources because of lack of transportation, processing or generating facilities, the lease shall be extended beyond the primary term of ten years from year to year, but not to exceed a period of three years, by payment of a shut-in geothermal resources royalty of $2.00 per acre per year, payable in advance annually on the anniversary date of the lease, and if the payment is made it will be considered geothermal resources are being procured and produced in paying quantities from the leased premises for such year.

Ariz. Admin. Code § R12-5-2204

No original number assigned (Supp. 76-4). Former Section R12-5-853 repealed, new Section R12-5-853 adopted effective March 14, 1979 (Supp. 79-2). Section R12-5-2204 renumbered from Section R12-5-853 (Supp. 93-3).