Energy Minerals Management Program
The Minerals Section of the Arizona State Land Department (ASLD) is responsible for energy exploration and production activities on State Trust land. Its primary obligation is to maximize revenues from processing and administering leases on State Trust lands for commodities including oil & gas, CO2, helium, and geothermal resources while considering the long term best interest of the Trust. Arizona’s public schools are the primary State Trust beneficiary. The right to explore for and produce energy mineral commodities on State Trust land is accomplished by obtaining the following mineral-related lease.
Energy Minerals Leases
- A non-refundable filing fee of $500.00 is required for each application.
- An Environmental Disclosure Questionnaire must be filled out and accompany each application.
- Applications must be typed or printed in ink. Applications that are incomplete or illegible will be returned.
- Each application can cover a maximum 2,560 acres, which must be within any 6 contiguous sections.
- The term of an energy mineral lease is five (5) years, renewable for a second term of five (5) years. The lease can be held for an additional (third) five-year term if a well has been drilled on the lease that is considered to be in shut-in status, or held indefinitely with a producing well on which royalty is paid to the ASLD (see item 17, below).
- Lease boundaries and access routes must be plotted separately on a USGS topographic map included with the application.
- The application must be signed by the applicant(s) or an authorized agent. If an agent is filing for the applicant, a notarized Power of Attorney must be filled with the Department. The filing fee for a Power of Attorney is $50.00.
- The processing of an energy mineral lease takes one (1) to two (2) months.
- The application is reviewed by the Minerals Section.
- Rent is $1.00 per acre per year for the first five-year term, and $2.00 per acre per year for second five-year term if renewal is requested and granted. The rental for a third term, held by a shut-in well, is also $3.00 per acre per year.
- A Surface Use Plan must be submitted and approved by ASLD prior to exploration activities on the lease, such as drilling or geophysical surveys.
- If surface disturbing activities are planned, an Archaeological survey is required and a Biological survey may be required; in addition, any other applicable permits must be submitted for review.
- The review and processing of the Surface Use Plan is also done by the Minerals Section and again takes one (1) to two (2) months.
- Any drilling activities must also be permitted and approved through the Arizona Oil & Gas Conservation Commission (OGCC).
- A minimum bond of $25,000 is required by the OGCC.
- The Plan of Operations expires with the lease.
- If a discovery (oil, natural gas, Helium, CO2) is made, the lessee will pay a royalty to the ASLD of12.5% of the gross value of the production.
Minerals Section contact Information
Arizona State Land Department
1616 West Adams Street
Phoenix, Arizona 85007