Approval of APDs on Litigated Leases

Upon receipt of an APD and during the processing of an APD, the BLM FOs in coordination with state offices (SOs) should determine if the APD proposes a well that would be located on, or would drill through or into, a lease that is or has been subject to litigation, but for which the BLM’s decision to offer and issue the lease has not been vacated by a court order and the lease has not otherwise terminated or been cancelled. FOs should review all the leases that would be penetrated by a well proposed in the APD to identify whether any of those leases have been affected by litigation. The BLM’s Automated Fluid Mineral Support System (AFMSS) identifies APDs by the first Federal or Indian Lease penetrated for production. In the case of horizontal wells, FOs must look in the location data table in AFMSS or use other available tools, such as a Geographic Information System (GIS) to identify the complete list of Federal leases that would be penetrated by a well proposed in the APD.

If the BLM receives an APD that proposes a well that would be located on, or would drill through or into, a lease subject to litigation, the BLM should:

1. Consult with the appropriate Regional Solicitor’s Office as to whether the litigation affects the BLM’s ability to approve the APD. A court’s direction to further review the analysis supporting the BLM’s decision to issue the lease(s) that would be penetrated by a well proposed in the APD, or the BLM’s own agreement or decision to complete further review of that analysis, do not necessarily prevent the BLM from potentially approving an APD that proposes a well that would penetrate that same lease.
2.  If the litigation precludes the BLM from approving the APD at the time the APD is filed, the BLM should process the APD to the extent allowed by the relevant court order or settlement agreement, but should then defer the APD consistent with 43 CFR 3171.12(b)(2)(ii) and 3171.12(b)(3). The BLM may also deny the APD if the APD cannot be approved because of reasons other than the litigation, pursuant to 43 CFR 3171.12(b)(2)(iii).
3.  If the litigation does not preclude the BLM from issuing a decision on an APD, the BLM’s policy is to review and process the APD and, as directed by the Mineral Leasing Act, as amended (30 U.S.C. 226(p)(2)) and the BLM regulations (43 CFR 3171.12(b)(2)), approve, deny, or defer the APD, so long as such action is not otherwise prohibited by law. If an applicable court order or settlement agreement imposes conditions on the BLM’s APD processing and/or decision-making, the BLM must comply with those conditions and should consult with the relevant Regional Solicitor’s office prior to issuing any decision to ensure any such conditions have been met. In determining how to process an APD that proposes a well that would penetrate a lease for which the BLM is reviewing, or intends to review, the original supporting lease specific analysis (i.e., the National Environmental Policy Act (NEPA) analysis that supports the lease sale), the BLM should identify any weaknesses in the original lease specific analysis that need to be addressed with any supplemental environmental analysis to support a decision on the APD, including by addressing any deficiencies identified by any applicable court order.

Sundry Notices proposing to change the lease(s) of the APD should follow the same process outlined in this IM. Nothing in this IM is intended to alter the requirements contained in the Mineral Leasing Act or any other statute, the BLM’s regulations, or any court order or settlement agreement.