(a) A lease or permit issued under this chapter may be assigned, transferred, or sublet as to all or any part of the leased or permitted lands, and as to either a divided or undivided interest therein, or as to any separate and distinct zone or geological horizon or portion thereof, subject to approval by the commission, to any person, association of persons, or corporation, who, at the time of the proposed assignment, transfer, or sublease, possesses the qualifications provided in this chapter. Any assignment, transfer, or sublease shall take effect as of the first day of the month following the approval by the commission and filing with the commission of an executed counterpart thereof, together with any required bond and proof of the qualification, under this act and the rules and regulations of the commission, of the assignee, transferee, or sublessee to take or hold that lease, permit, or interest therein. Unless approved by the commission, no assignment, transfer, or sublease shall be of any effect. Upon approval of any assignment, transfer, or sublease, the assignee, transferee, or sublessee shall be bound by the terms of the lease or permit to the same extent as the assignor, transferor, or sublessor has been, and, except as provided in subdivision (c), shall continue to be, any conditions in the assignment, transfer, or sublease to the contrary notwithstanding. Any assignment or transfer of a separate portion of any lease or permit or of a separate and distinct zone or geological horizon, or a portion thereof, shall segregate the assigned, transferred, or subleased portion thereof from the retained portion thereof, and those segregated leases or permits shall continue in full force and effect for the primary term of the original lease or permit, but, in the case of any lease, for not less than two years after the date of discovery of oil or gas in paying quantities, or commercially valuable deposit of minerals, upon any segregated portion of the lands, zones, or horizons originally subject to that lease, and so long thereafter as oil or gas is produced in paying quantities. Assignments or transfers under this section may also be made with the approval of the commission of parts of leases that are in their extended term because of production, and the segregated lease of any undeveloped lands, zones, or horizons shall continue in full force and effect for two years and so long thereafter as oil, gas, or minerals are produced in paying quantities from the segregated lease lands, zones, or horizons. (b) (1) In considering the approval of an assignment, transfer, or sublease of a lease or permit under subdivision (a), the commission may consider whether a proposed assignee is likely to comply with the terms of the lease or permit for the duration of both the primary term of the original lease or permit and any extended term of the lease because of production, as determined by all of the following factors: (A) The proposed assigneeâs experience with offshore or onshore oil or gas production or mineral extraction, as applicable. (B) Any financial or economic considerations that may affect a proposed assignee and its ability to comply with the terms of a lease or permit. (C) Any information concerning the proposed assigneeâs compliance or noncompliance with other contractual obligations to the state or other government agency. (D) Any record of noncompliance with any other laws or regulations. (2) For purposes of this section, âproposed assigneeâ means the person or entity in whose name the lease or permit will be held after assignment, transfer, or sublease of a lease or permit, or any person or entity that makes managerial decisions for or exercises managerial control over the assignee. (c) An assignment, transfer, or sublease pursuant to subdivision (a), or a memorandum of the assignment, transfer, or sublease, shall be recorded in the office of the county recorder of the county in which the leased or permitted lan
‹ Prev All California sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.