# IDAPA 20.03.16.022: Section 022. Lease Acquisition Process

> Idaho · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_ID_IDAPA_20_03_16_022

## Section

- **Citation:** IDAPA 20.03.16.022
- **Heading:** Section 022. Lease Acquisition Process
- **Jurisdiction:** Idaho
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Idaho Administrative Code / IDAPA 20 (Lands, Department of) / Chapter 20.03.16 / Section 022

## Text

01. Acquiring a Lease. A Lease may be acquired for the exclusive right and privilege to explore fo r and produce Oil and Gas by oral auction, online auction, or such other method of competitive bidding, which i s authorized by the Board and, based on the Board’s discretion, determined to be in the state’s best interest. The Lease will be awarded to the winning bidder at close of auction. The winning bidder at auction will be issued the Lease b y the Department on the first day of the month following Final Board Approval. The Board and Department reserve th e right to reject any or all nominations or bids, and expressly disclaim any liability for inconvenience or loss caused b y errors that may occur concerning lease offerings. (7-1-25) 02. Lease Provisions. (3-18-22) a. Advance Annual Rental. The Lessee must pay to the state of Idaho an advance annual rental for each lease of three dollars ($3) per acre with a minimum of two hundred fifty dollars ($250) per Lease. (7-1-25) b. Notification at End of Lease Period. The Lessee must notify the Director in writing prior to th e final year of his Lease that drilling or reworking operations has commenced on the leased premises, or on lands pooled or unitized therewith, and will extend beyond the expiration date of the Lease. Advance annual rental, pe r Subsection 022.02.a. for any additional and each succeeding year, must be received prior to the Lease’s expiratio n date and entitles the Lessee to hold the Lease only as long as drilling or rework operations are pursued in accord wit h these rules. There will be no refund of unused rental. (7-1-25) c. Abandonment. During any additional or succeeding year of any Lease, cessation of production fo r a period of six (6) months, or cessation of continuous operations as provided in Subsection 055.03.b., is considered a n abandonment
the Lessee to hold the Lease only as long as drilling or rework operations are pursued in accord wit h these rules. There will be no refund of unused rental. (7-1-25) c. Abandonment. During any additional or succeeding year of any Lease, cessation of production fo r a period of six (6) months, or cessation of continuous operations as provided in Subsection 055.03.b., is considered a n abandonment. The Lease will then automatically terminate at its next anniversary date unless the Director determine s that such cessation of production or continuous operations is justified or the well meets the requirements of a shut i n well under Subsection 022.02.d. (7-1-25) d. Suspension of Production. The Director may grant a suspension of production after receiving a Lessee’s written application. The Lessee must show: that they are unable to market Oil and Gas from a well locate d on the leased premises, which is capable of Oil and Gas Production in Paying Quantities, due to a lack of suitabl e production facilities, of a lack of a suitable market for Oil and Gas, and that such conditions are outside of th e reasonable control of the Lessee, and; that the Lease is being otherwise maintained in force and effect. Th e suspension of production cannot exceed one (1) year. The Lessee may request an extension of the suspension o f production by submitting a written request to the Director at least thirty (30) days before the suspension perio d expires. If the well is shut in, and the Director approves the application for suspension of production prior to the expiration or termination of the Lease, then the Lease will be extended, per Section 47-801, Idaho Code, for a perio d of one (1) year if: (i) the well is shut in; (ii) the Lessee timely submits an application in a form approved by the Director, and; (iii) upon approval of said application, pays a shut-in royalty in the amount equal to double the annua l rental, per Subsection 022.02.a., for each well capable of producing Oil or Gas in paying quantities
ll be extended, per Section 47-801, Idaho Code, for a perio d of one (1) year if: (i) the well is shut in; (ii) the Lessee timely submits an application in a form approved by the Director, and; (iii) upon approval of said application, pays a shut-in royalty in the amount equal to double the annua l rental, per Subsection 022.02.a., for each well capable of producing Oil or Gas in paying quantities. The Lessee mus t remit the shut-in royalty payment while the Lease is otherwise maintained in force and effect. Payment of shut-i n royalty after the expiration or other termination of the Lease will not revive or extend the Lease. (7-1-25) e. Water Rights. The Lessee will comply with all state laws and rules regulating the appropriation o f water rights. No water rights developed or obtained by the Lessee in conjunction with operations under a Lease ma y be sold, assigned, or otherwise transferred without the Director’s written approval. Upon surrender, termination, o r expiration of the Lease, the Lessee must take all actions required by the Director to assign to the Board all wate r rights, including applications and permits, subject to applicable laws regarding the transfer or assignment of permit s to appropriate water. (7-1-25) 03. Nominating a Tract for Auction. A Tract may be nominated for auction either by the Departmen t or by application to the Department. Nomination must be made at least ninety (90) days prior to a Department- defined close of auction date. Any qualified Person may nominate a Tract for lease auction by submitting a Department nomination form to the Department and paying the nomination fee, which is determined by the Board . Each nomination for a Tract for auction is deemed an offer by the nominating Person to Lease the Tract for th e advance annual rental amount, per Subsection 022.02.a. (7-1-25) 04. Withdrawing a Tract for Auction
. Any qualified Person may nominate a Tract for lease auction by submitting a Department nomination form to the Department and paying the nomination fee, which is determined by the Board . Each nomination for a Tract for auction is deemed an offer by the nominating Person to Lease the Tract for th e advance annual rental amount, per Subsection 022.02.a. (7-1-25) 04. Withdrawing a Tract for Auction. A Tract nomination may be withdrawn by the nominator if a written request for withdrawal is received by the Department at least ten (10) business days prior to the auction’ s opening date. The nomination fee will not be refunded. (7-1-25) 05. Auction Conditions. The Department will determine the conditions associated with the auction , which may include: when, or if, a Tract will be offered for auction; whether the Tract is to be removed from th e auction; whether multiple Tracts will be combined in a single Lease; and any disclaimers, additional information, an d any other such terms and conditions associated with the auction of the Tracts. Any such terms and conditions , disclaimers, and additional information will be posted on the Department’s website. (7-1-25) 06. Lease Information for Auction. For each lease to be auctioned, the Department’s website wil l provide: a lease number designated by the Department; the legal description; the lease length; the number of acres; a minimum bid; a lease template; any lease stipulations; any other lease information; and a specific date, time, an d location of the auction. A notice of lease auction will be published at least once per week for the four (4) consecutiv e weeks prior to the date of auction in a newspaper in general circulation in the county in which the nominated lease i s located and in a newspaper in general circulation in Ada County. (7-1-25) 07. Auction Procedure. The Department will determine the procedures associated with the auction , such as the bidder registration procedure. Additional auction procedures are as follows: (7-1-25) a. Bid Increments
rior to the date of auction in a newspaper in general circulation in the county in which the nominated lease i s located and in a newspaper in general circulation in Ada County. (7-1-25) 07. Auction Procedure. The Department will determine the procedures associated with the auction , such as the bidder registration procedure. Additional auction procedures are as follows: (7-1-25) a. Bid Increments. The minimum bid increment is one dollar ($1). (3-18-22) b. Winning Bid. At close of auction, the winning bid will be the highest dollar amount offered by a n auction participant. If, at close of auction, a bid for a lease has not been submitted, then the lease will be awarded t o the nominating applicant. Entering a bid constitutes an enforceable contractual obligation. (7-1-25) c. Amount Due. The amount due for a lease is the winning bid, plus the first year’s annual renta l amount, per Subsection 022.02.a., plus the nomination fee. If the nominator of the Tract(s) submits the winning bi d the nomination fee will not be included in the amount due since the fee was already submitted to the Department I f the nominator is not the winning bidder, they will be refunded the nomination fee. (7-1-25) d. Transfer of Funds. Unless otherwise required in the notice of auction, the winning bidder for each lease has five (5) full business days after the close of auction to complete the transfer of funds to the Department. Failure of the winning bidder to transfer funds within the specified period constitutes a breach of contract, and th e state may pursue any action or remedy at law or in equity against the winning bidder. (7-1-25) 08. Execution of Lease. The completed lease must be executed by the winning bidder within thirt y (30) days from the date of mailing after the close of auction, or from the date of receipt if personally delivered to th e applicant or their agent by the Department. An individual who executes a lease on behalf of another Person mus t submit a power of attorney outlining such delegated authority
-25) 08. Execution of Lease. The completed lease must be executed by the winning bidder within thirt y (30) days from the date of mailing after the close of auction, or from the date of receipt if personally delivered to th e applicant or their agent by the Department. An individual who executes a lease on behalf of another Person mus t submit a power of attorney outlining such delegated authority. (7-1-25) 023. -- 044. (RESERVED)

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- [IDAPA 20.03.16.022 Section 022. Lease Acquisition Process](https://www.frixlaw.com/law-library/statutes/STATE_ID_IDAPA_20_03_16_022.md)
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- [IDAPA 20.03.16.055 Section 055. Operations Under The Lease](https://www.frixlaw.com/law-library/statutes/STATE_ID_IDAPA_20_03_16_055.md)
- [IDAPA 20.03.16.060 Section 060. Assignments](https://www.frixlaw.com/law-library/statutes/STATE_ID_IDAPA_20_03_16_060.md)
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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_ID_IDAPA_20_03_16_022. Check the current official text before relying on it. Not legal advice.