§ 6101 Definitions.
This chapter shall apply to all lands located within the boundaries of this State, except that sections relating to fees, royalties or rights to lease shall be applicable only to lands owned by this State. Unless the context requires otherwise:
(1) "Filled lands" includes tide and submerged lands reclaimed artificially through raising such lands above the highest probable elevation of the tides to form dry land, by placement of a fill or deposit of earth, rock, sand or other solid imperishable material.
(2) "Gas" means all natural gas and all other fluid hydrocarbons not defined as oil in subdivision (5) of this section, including condensate originally in the gaseous phase in the reservoir.
(3) "Lease" means a mineral lease issued pursuant to this chapter.
(4) "Mineral" means any natural inorganic substance with definite chemical and physical properties which is present in, or at the bottom of a body of water, or anywhere within the earth's crust.
(5) "Oil" means crude petroleum oil and all other hydrocarbons, regardless of gravity, which are produced in liquid form by ordinary production methods, but does not include liquid hydrocarbons that were originally in a gaseous phase in the reservoir.
(6) "Person" in addition to the meanings set forth in § 302 of Title 1, includes quasi-public corporations, political subdivisions and governmental agencies and instrumentalities.
(7) "Secretary" means the Secretary of the Department of Natural Resources and Environmental Control, or, if so designated pursuant to § 6140 of this title, the State Geologist.
(8) "Structure" means any construction works, including but not limited to derricks, pipelines, lines for the transmission and distribution of electricity, telephone lines, wharves, piers, slips, warehouses and units designed to act as groins, jetties, seawalls, breakwaters or bulkheads.
(9) "Submerged lands" means lands lying below the line of mean low tide in the beds of all tidal waters within the boundaries of this State established before or after July 1, 1966.
(10) "Tidelands" means lands lying between the line of mean high water and the line of mean low water.
§ 6102 Jurisdiction to lease.
(a) The Secretary and the Governor have exclusive jurisdiction to lease for mineral exploration and exploitation all ungranted submerged tidelands owned by this State, whether within or beyond the boundaries of this State, acquired by this State before or after July 1, 1966:
(1) By quitclaim, cession, grant, contract or otherwise, or
(2) By any other means.
(b) All jurisdiction and authority to lease for mineral exploration or exploitation remaining in the State over submerged lands as to which grants have been or may be made is vested in the Secretary and the Governor.
(c) The Secretary shall administer and control all lands described in subsection (a) of this section, and may lease such lands and tidelands and dispose of oil, gas, sulphur and other minerals under such lands and tidelands in the manner prescribed by this chapter.
(d) Notwithstanding any other provisions of this chapter, the Secretary may not permit any interference, other than temporary interference, with the surface of the Atlantic shore. It may, however, grant easements for mineral exploration and exploitation underlying that part of the surface of the Atlantic shore owned by the State at such times and at such places as the Secretary finds necessary to permit the extraction and transportation of oil, gas, sulphur or other minerals from state, federal or private lands; and in addition the Secretary may issue oil and gas leases underlying the Atlantic shore under the same terms and conditions as provided in this chapter.
(e) The Secretary shall have no authority to lease lands administered by the Department of Natural Resources and Environmental Control.
§ 6103 Surveys.
(a) The Secretary, upon application by any person, may permit geological, geophysical and seismic surveys, including the taking of cores and other samples, or the tide and submerged lands of this State. Such permits shall be nonexclusive and shall not give any preferential rights to any oil, gas and sulphur or other mineral lease. After consultation with those agencies of the State having an interest in the possible effects of the leasing, the Secretary shall include such rules and regulations in the permit as it deems necessary to protect the fish, game, wildlife and natural resources of the State. The Secretary may grant permission for the taking of cores and other samples.
(b) Each application under this section shall contain the following information:
(1) A description of areas where the applicant proposes to conduct a survey;
(2) The name and address of the applicant; and
(3) Such other relevant information as the Secretary requires.
§ 6104 Permits for surveys.
(a) Upon compliance of an applicant with § 6103 of this title, the Secretary may issue to the applicant a permit to conduct a geological, geophysical and seismic survey, including the taking of cores and other samples, in areas of the tide and submerged lands of this State described on the permit. The Secretary may prohibit such surveys on any area if it determines that a lease, if applied for, should not be granted as to such areas. The Secretary shall include in a permit conditions and payment proper to safeguard the interests of the State.
(b) Permits issued under this section shall be valid for not more than 2 years, but may be renewed for like periods upon application to the Secretary and upon showing due compliance with applicable laws and regulations.
(c) The Secretary shall require the permittee to provide the Department of Natural Resources and Environmental Control with complete information with respect to the area or areas of proposed operations, type of exploration and a schedule showing the period or periods during which such explorations will be conducted. Such information shall be treated as confidential unless released by the permittee.
§ 6105 Filing of records of drilling; confidential nature of records.
(a) Records of drilling conducted by a permittee under § 6104 of this title shall be retained by the permittee and be made available to the Secretary and the State Geologist upon their request. Any such records which the permittee is required to make available to the Secretary or the State Geologist shall be for the confidential use of the Secretary and the State Geologist and shall not be open to inspection by any other person or agency without the written consent of the permittee.
(b) The Secretary may require, as a condition to the issuance of any lease under this chapter, that the lessee make available to the Secretary or the State Geologist upon request, all factual and physical exploration results, logs and records resulting from the operations under the lease. Any such factual or physical exploration results, logs or records which the lessee is required to make available to the Secretary or the State Geologist shall not be open to inspection by any other person or agency without the written consent of the lessee.
§ 6106 Unlawful disclosure of information; penalties; jurisdiction of offenses.
(a) The Secretary, or any person performing any function or work assigned to him or her by the Secretary, shall not disclose to any person who is not an employee of the Secretary or to any person who is not performing any function or work assigned to him or her by the Secretary, any information obtained from the inspection of such factual or physical exploration results, logs or records, or to use such information for purposes other than the administration of the functions, responsibilities and duties vested in the Secretary by law, except upon the written consent of the permittee or lessee making such information available to the Secretary.
(b) Whoever violates this section shall be fined not less than $25 nor more than $100, or imprisoned for not more than 30 days, or both.
(c) The Superior Court shall have jurisdiction of offenses under this section.
§ 6107 Public hearings; notice.
(a) Before offering tide and submerged lands for leasing under this chapter, or whenever any person files a written application with the Secretary requesting that lands be offered for leasing under this chapter, accompanying the same with the required fee, the Secretary shall hold a public hearing as provided in this section.
(b) Before granting a lease or inviting bids on any tide and submerged lands, the Secretary shall cause written notice describing the area under consideration and other pertinent information to be transmitted to:
(1) State Highway Department;
(2) Cabinet Committee on State Planning Issues;
(3) Department of Natural Resources and Environmental Control;
(4) Department of Health and Social Services;
(5) State Geologist;
(6) The applicant, if any, requesting the hearing;
(7) Prospective applicants or bidders, by publication in 2 or more publications of general circulation in the oil and gas industry; and
(8) The public, by publication of the notice once each week for not less than 2 weeks in a newspaper of general circulation throughout the State and in addition in a newspaper of general circulation in the county in which the lands lie or the county or counties contiguous to the area under consideration for bidding.
(c) The notice shall set forth the place of hearing and shall set its time at not less than 20 days following the date of the last newspaper publication.
(d) The Secretary may appoint 1 of his or her employees to conduct hearings authorized under this section. An officer or employee of each interested State agency, board or commission named in subsection (b) of this section may question any witnesses appearing before the Secretary or the Secretary's representative, and any interested person may offer evidence and otherwise be heard.
§ 6108 Determination of whether lease is in the public interest.
After the public hearing the Secretary shall determine whether an invitation for bidding to lease the area under consideration would be in the public interest. In such determination the Secretary shall consider whether a lease or leases of the area under consideration would:
(1) Be detrimental to the health, safety or welfare of persons residing in, owning real property or working in the neighborhood of such areas;
(2) Interfere with the residential or recreation areas to an extent that would render such areas unfit for recreational or residential uses or unfit for park purposes;
(3) Destroy, impair or interfere with the esthetic and scenic values of the Delaware coast, or other affected area;
(4) Create any air, water and other pollution;
(5) Substantially endanger marine life or wildlife;
(6) Substantially interfere with commerce or navigation; and
(7) Protect state lands from drainage of oil, gas or other minerals or objectionable substances.
§ 6109 Maximum area.
The maximum area which shall be included in any single lease to any person shall be 6 square miles or 3,840 acres.
§ 6110 Form of lease or permit.
(a) The language of §§ 6111 and 6117 of this title shall be incorporated substantially into every lease.
(b) The language of § 6113 of this title shall be incorporated substantially into every permit.
(c) Every lease, and every permit, shall contain those provisions selected by the Secretary after consultation with interested agencies, boards and commissions.
§ 6111 Exclusive right to drill and remove minerals.
The lease shall grant the exclusive right to drill for and produce all oil, gas, sulphur and other mineral deposits in the leased land and be for a primary term of 10 years and for so long thereafter as oil, gas, sulphur or other minerals are produced in paying quantities from the leased land, or lessee is diligently conducting producing, drilling, deepening, repairing, redrilling or other necessary lease or well maintenance operations on the leased land, or is excused from conducting such operations under the terms of the lease.
§ 6112 Royalty.
The Secretary shall specify in the notice described by § 6107 of this title and in the lease the rate of royalty paid under such lease which royalty shall not be less than 12 1/2 percent of gross production, or the value thereof, produced and saved from the leased lands and not used by lessee for operations thereon or for injection therein. Such royalty shall, at the Secretary's option, be paid in kind or in value, and be computed after an allowance for the actual cost of oil treatment or dehydration of not to exceed $0.05 cents per barrel or royalty oil so treated or dehydrated.
§ 6113 Lien on production.
The State shall have alien upon all production for unpaid royalties.
§ 6114 Rental for leased land.
The Secretary shall specify a rental payable annually in advance of not less than $0.25 for each acre of land subject to the lease at the rental date. After production has been established, rent paid shall be deducted from any royalty due under the terms of a lease during the year for which such rent has been paid.
§ 6115 Bonds.
Sufficient bonding or insurance requirements, as determined by the Secretary shall be specified to secure to the State performance and the faithful compliance by the lessee with the terms of the lease, and further to secure adjacent landowners and the public generally as to all proper claims for damages arising from operations thereunder.
§ 6116 Cessation of production.
In the event production on the leasehold shall cease at any time or from time to time, after the expiration of the primary term of the lease, the lease shall nevertheless continue in full force and effect if the lessee shall, within 6 months after the cessation of production or within such longer period of time as the Secretary may authorize, commence and thereafter prosecute with reasonable diligence drilling, deepening, repairing, redrilling or other operations for the restoration of production of oil, gas, sulphur or other minerals from the leased lands.
§ 6117 Slant and adjacent drilling.
Unless otherwise determined by the Secretary, each well drilled pursuant to the terms of the lease may be drilled or slant drilled to and into the subsurface of the tide or submerged lands covered by the lease from upland or littoral drill sites owned or controlled by the State or owned by or available to the lessee, or from drill sites located upon any lands filled before or after July 1, 1966, whether contiguous or noncontiguous to the littoral lands or uplands, or from any pier constructed before or after July 1, 1966, owned by or available to the lessee and available for such purpose, or from platforms or other fixed or floating fixtures in, on or over the submerged lands covered by the lease, or otherwise available to the lessee.
§ 6118 Restoration of visible lands to original condition.
Upon any partial or total termination, surrender or forfeiture of its permit or lease, the Secretary may require that the permittee or lessee, within a reasonable time, restore that portion of the premises that is visible at extreme low tide, to substantially its original condition.
§ 6119 Pollution and contamination prohibited.
(a) Avoidable pollution or avoidable contamination of the ocean and of the waters covering submerged lands, avoidable pollution or avoidable contamination of the beaches or land underlying the ocean or waters covering submerged lands, or any substantial impairment of and interference with the enjoyment and use thereof, including but not limited to bathing, boating, fishing, fish and wildlife production, and navigation, shall be prohibited and the lessee shall exercise a high degree of care to provide that no oil, tar, residuary product of oil or any refuse of any kind from any well or works shall be permitted to be deposited on or pass into the waters of the ocean, any bay or inlet thereof, or any other waters covering submerged lands; provided, however, that this section does not apply to the deposit on, or passing into, such water or waters not containing any hydrocarbons or vegetable or animal matter.
(b) For the purposes of this section, "avoidable pollution" or "avoidable contamination" means pollution or contamination arising from:
(1) The acts or omissions of the lessee or its officers, employees or agents; or
(2) Events that could have been prevented by the lessee or its officers, employees or agents through the exercise of a high degree of care.
§ 6120 Extension of lease where permits required.
If the lessee, as disclosed by information submitted with his or her bid, proposes to drill 1 or more wells from filled lands, whether contiguous or noncontiguous to the littoral lands or uplands, or from any pier or from platforms or other fixed or floating structures to be constructed for such purpose, and if permission from any federal or state agency is legally required in order to construct any such filled lands or structures, the lessee shall be allowed a reasonable time following the execution of the lease within which to secure the necessary permission from such federal and state agencies as shall be legally required, and, upon the securing of such permission, a further reasonable time, determined with regard to the nature of the filled lands or structure or structures to be constructed, within which to commence operations for the drilling of such well or wells, and if necessary, the drilling term provided for in § 6121 of this title shall be extended by the Secretary to the date to which the time to commence operations for the drilling of such well or wells has been extended.
§ 6121 Commencing of operations for drilling.
Subject to the lessee's right to surrender, the lessee shall commence operations for the drilling of a well within 5 years from date of the lease and commence production within 3 years of discovery of oil, gas, sulphur or other minerals in paying quantities, unless the Secretary shall have, for cause, granted an extension of time for such act. In addition, the lease shall have such exploratory, drilling and producing requirements as the Secretary deems necessary to encourage the exercise of due diligence on the part of the lessee.
§ 6122 Nonconflicting uses.
The State reserves the right to permit reasonable nonconflicting use (including seismic surveys but excluding core hole drilling of lands under lease) so long as:
(1) Such uses do not unreasonably impair or interfere with operations of the lessee; and
(2) Requirement is made that the permittee indemnify the lessee against any damage caused by such use.
§ 6123 Assignability of lease.
No permit, easement or lease, or any portion thereof shall be assignable without the prior written consent of the Secretary.
§ 6124 Protection against drainage.
The lessee shall at all times proceed with due diligence to protect the leasehold from drainage by wells on land not owned by the State.
§ 6125 Surrender by lessee.
The lessee may at any time file with the Secretary a written surrender of all rights under the lease or any portion thereof or any separate or distinct zone or geological horizon or any portion thereof. Such surrender shall be effective as of the date of its filing subject to the continuing obligation of the lessee to pay all rentals and royalties theretofore accrued and to place all wells on the lands or in the zone or horizons surrendered in condition for suspension or abandonment in accordance with the applicable lease terms, regulations and law. Thereupon the lessee shall be released from all obligations under such lease with respect to the lands, zones or horizons surrendered, but no such surrender shall release such lessee from any liability for breach of any monetary obligation of the lease with respect to which such lessee is in default at the time of the filing of such surrender.
§ 6126 Cancellation of lease; judicial proceedings.
The Secretary may cancel any lease upon which oil, gas, sulphur or other minerals have not been discovered in paying quantities, upon failure of the lessee after 30 days' written notice and demand for performance, to exercise due diligence and care in the prosecution of the prospecting of development or work in accordance with the terms of the lease. After discovery of oil, gas, sulphur or other minerals in paying quantities on lands subject to any lease, such lease may be forfeited and cancelled only by appropriate judicial proceedings upon failure of the lessee after 90 days' written notice and demand for performance, to comply with any of the provisions of the lease or of laws or regulations applicable thereto and in force at the date of the invitation for bids in pursuance of which the lease was awarded; provided, however, that in the event of any such cancellation, the lessee shall have the right to retain under such lease any and all drilling or producing wells as to which no default exists, together with a parcel of land surrounding each such well and such rights-of-way through the leased lands as may be reasonably necessary to enable such lessee to drill and operate such retained well or wells. In the event of the cancellation of any lease, the lessee shall have a reasonable time within which to remove all property, equipment and facilities owned or used by the lessee in connection with operations under the lease.
§ 6127 Lease shall conform to all laws, rules and regulations.
It shall be a continuing condition of any lease that the lessee shall conform to all applicable laws of the State and all duly promulgated rules and regulations pursuant thereto in effect at the date of the invitation for bids in pursuance of which the lease was awarded. Periodic mutual negotiations between lessee and lessor may be carried out to make conditions, rules and regulations current as warranted by changes in environment or operational methods.
§ 6128 Notice of offer to lease; bid award; fee.
(a) The Secretary may offer to lease tide and submerged lands by publication of a notice of his or her intention to do so, once each week for not less than 2 weeks in 2 or more newspapers of general circulation in this State, 1 of which is published or has general circulation in the county in which the lands lie or the county contiguous thereto. The notice shall describe the lands so offered, and shall specify the rate of royalty and the rental, the manner in which bids may be filed with the Secretary, the amount of the deposit that must accompany each bid, and the time and place for filing bids, which time shall not be less than 30 days after the date of last publication of such notice. Further, the notice shall state that the lease will be awarded to the bidder offering the highest cash bonus, that the form of lease, conditions for bidding and bid form may be obtained from the Secretary upon request, and that the lease is subject to prior approval by the United States Defense Department.
(b) Each bid shall be enclosed in a sealed envelope, shall be on the form provided by the Secretary and shall be accompanied by duplicate lease forms executed by the bidder, and by a certified or cashier's check or checks payable to the State in the amount fixed by the Secretary which sum shall be deposited as evidence of good faith and, except in the case of the successful bidder, shall be returned to the bidder promptly. If the successful bidder fails to pay the balance of the cash bonus bid and the annual rental for the first year within 15 days after the award of the lease, or fails to post any bond required by the lease or the regulations in effect at the date of the invitation for bids within the time prescribed, the amount of the deposit shall be forfeited to the State.
(c) At the time and place specified in the notice the Secretary shall publicly open the sealed bids and shall within 30 days reject all bids or award the lease for each parcel to a responsible bidder who, in addition to complying with all of the conditions for bidding, offers the highest cash bonus. The Secretary may reject any or all bids.
(d) Following the award of the lease, the payment by the successful bidder of the balance of the cash bonus, the annual rental for the first year, and the fees specified in this section, and the posting of any required bonds, the Secretary and the Governor shall execute the lease in duplicate on behalf of the State and transmit 1 counterpart thereof to the lessee. The lease shall become effective as of the date of such execution.
(e) The Secretary shall prescribe a reasonable fee to cover the procedures under this section, which shall be paid by the successful bidder.
§ 6129 Execution of lease.
All leases and other instruments required in carrying out this chapter shall be executed by the Secretary and the Governor. All bonds, contracts and other instruments required by this chapter for the protection of the interests of this State and its political subdivisions, persons and property therein, shall be executed and delivered to the Secretary.
§ 6130 Proceeds to General Fund.
The proceeds from all leases under this chapter, including rents and royalties, after payment of the necessary expenses incurred by the Secretary in carrying out this chapter, shall be turned over to the Secretary of Finance and deposited by him or her in the General Fund of the State.
§ 6131 Discriminatory bidding requirements prohibited.
In leasing tide and submerged lands, the Secretary may not discriminate between bidders by requiring drilling from:
(1) Upland or littoral drill sites;
(2) Sites on filled land, whether contiguous or noncontiguous to the littoral lands or uplands; or
(3) Any pier, platform or other fixed or floating structure in, on or over tide and submerged lands with respect to which this State or any other owner thereof has consented to use.
§ 6132 Retention or protection of fill.
Under a lease entered into by the Secretary pursuant to this chapter, the fill constituting filled lands may be retained in place or protected by bulkheads, seawalls, revetments or similar enclosures and may be placed at any location approved by the Secretary in consultation with interested agencies, boards and commissions.
§ 6133 Interest leaseable.
Any interest in lands, or lands in fee simple, acquired by the Secretary by purchase, donation, lease, condemnation or otherwise, may be made available to any lessee of the State for the purposes contained in this chapter and upon such terms and conditions as may be determined by the Secretary.
§ 6134 Joint exploration.
For the purpose of properly conserving the natural resources of any single oil, gas or other mineral, pool or field lessees under this chapter and their representatives may unite with each other jointly or separately, or jointly or separately with others owning or operating lands not belonging to the State, in collectively adopting and operating under a cooperative or unit plan of development or operation of the pool or field, whenever it is determined by the Secretary to be necessary or advisable in the public interest. The Secretary may, with the consent of the holders of the leases involved, establish, alter, change and revoke any drilling and production requirements of such leases, and make such regulations with reference to such leases, with like consent on the part of the lessees, in connection with the institution and operation of any such cooperative or unit plan, as the Secretary deems necessary or proper to secure the proper protection of the interests of the State.
§ 6135 Sulphur.
This chapter applies equally to the exploration and leasing of tide and submerged lands for the production of sulphur, save and except that the royalty for sulphur produced under this chapter shall not be less than $1.00 per long ton.
§ 6136 Jurisdiction over matters affecting health and safety.
This chapter does not deprive this State or any agency or instrumentality thereof of its jurisdiction over matters affecting the public health and safety, including but not limited to the control of air and water pollution.
§ 6137 No permit or lease to violators of this chapter.
No permit or lease shall be granted to any person then in violation of any law or regulation applicable to this chapter.
§ 6138 Rules, regulations, orders.
In addition to and not in lieu of any other powers granted under this chapter, the Secretary may promulgate reasonable rules, regulations and orders necessary to regulate geological, geophysical and seismic surveys on, and operations to remove oil, gas, sulphur and other minerals from the tide and submerged lands of this State under this chapter.
§ 6139 Federal approval.
All leases and permits granted pursuant to this chapter shall be subject to prior approval by the Department of Defense of the United States and shall be subject to any restriction or limitation imposed by the Department of Defense.
§ 6140 Delegation of authority.
The Secretary may, from time to time, delegate the State Geologist, with his or her consent, to act in the Secretary's behalf under this chapter. When so designated, the State Geologist shall have all the duties and powers of the Secretary under this chapter.
§ 6141 Existing rights.
This chapter shall not change the law of this State relating to existing property, riparian or other rights of this State or other persons in submerged, tideland or filled lands.
§ 6142 Violations; enforcement; civil and criminal penalties.
(a) The Secretary shall enforce this chapter.
(b) Whoever violates this chapter, or any rule, or regulation, or condition of a lease or permit issued pursuant to authority granted in this chapter or an order of the Secretary shall be punishable as follows:
(1) If the violation has been completed, by a civil penalty of not less than $1,000 nor more than $10,000 for each completed violation. Each day of continued violation shall be considered as a separate violation. The Superior Court shall have jurisdiction of a violation in which a civil penalty is sought.
(2) If the violation is continuing or threatening to begin, the Secretary may, in addition to seeking a monetary penalty as provided in paragraph (b)(1) of this section, seek a temporary restraining order, a temporary injunction or permanent injunction in the Court of Chancery.
(c) Whoever violates this chapter, or any rule, or regulation promulgated thereunder or any rule or regulation in effect at the time of the enactment of this chapter or any lease or permit condition, or any order of the Secretary, shall be punished by a criminal penalty of not less than $50 nor more than $500 for each violation. Each day of violation shall be considered as a separate violation. The Courts of the Justice of the Peace shall have jurisdiction of offenses under this subsection.
(d) Any person who knowingly makes any false statement, representation or certification in any application, record, report, plan or other document filed or required to be maintained under this chapter, or under any lease or permit, rule, regulation or order issued under this chapter, or who falsifies, tampers with or knowingly renders inaccurate any monitoring device or method required to be maintained under this chapter, shall upon conviction be punished by a fine of not less than $500 nor more than $5,000 or by imprisonment for not more than 6 months, or both. The Superior Court shall have jurisdiction of offenses under this subsection.
§ 6143 Cease and desist order.
The Secretary shall have the power to issue an order to any person violating any rule, or regulation, or permit condition, or lease condition, or provision of this chapter, to cease and desist from such violation. Any cease and desist order issued pursuant to this section shall expire (1) after 30 days of its issuance, or (2) upon withdrawal of said order by the Secretary, or (3) when the order is superseded by an injunction, whichever occurs first.
§§ 6144 -6150. [Reserved.]
§§ 6151 -6159. [Reserved.]
§ 6160 [Reserved.]
§§ 6161 -6163. [Reserved.]