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October 21, 2005
In Reply Refer To:
3108 (310) P
Instruction Memorandum No. 2006-026
Expires: 09/30/2007
To:              State Directors
From:          Assistant Director, Minerals, Realty and Resource Protection
Subject:      Implementation of Section 371(a), Energy Policy Act of 2005
Program Area: Oil and Gas Leasing
Purpose: This Instruction Memorandum (IM) provides guidance to implement Section 371 – Reinstatement of Leases in the Energy Policy Act of 2005 (Energy Act).
Policy/Action: Notify any former lessee in writing (return receipt) who had an oil and gas lease terminate during the period starting September 1, 2001, and ending June 30, 2004, who has stated, either in writing or verbally, interest in having their lease reinstated. Inform them of the requirement to submit a petition that would address Section 371(a) of the Energy Act as follows:
1.      The lease terminated during the period of September 1, 2001, through June 30, 2004;
2.      A petition for reinstatement is filed before the close of business on December 6, 2005;
3.      The lessee complies with the conditions of Section 31 (e) of the Mineral Leasing Act (30 U.S.C. 188(e));
4.      The lessee did not receive a termination notice by the date that was 13 months from the date the lease terminated; and
5.      The lands are available for leasing.
Under the Energy Act, all petitions for lease reinstatement under Section 371(a) must be received by the proper Bureau of Land Management State office by close of business December 6, 2005.  Any petitions must be complete when filed, including all monies required under Class II reinstatement provisions. Attachment 1 contains specific guidance for providing notice.
Use Attachment 2 as the model Federal Register notice for leases reinstated under the provisions of Sec. 371(a) of the Energy Act, instead of Illustration 38 of the BLM Handbook H-3108-1.
Timeframe: This IM is effective immediately.
Budget Impact: The effect on the budget is minimal. About 50 lessees expressed an interest in reinstating leases at the Class II rates.
Background: In September 2001, the Minerals Management Service (MMS) transitioned all financial information relating to oil and gas lease rental and royalty to a new, internet-based computer system. From October 2001 to August 2003, the MMS experienced problems with its automated system. During this time, the MMS could not identify leases that terminated by operation of law. On September 25, 2003, MMS’ automated system was again able to identify leases that terminated for late or nonpayment of full rental. Once BLM received notice from MMS of those leases with late or nonpayment of rental, the time within which the lessees could petition for reinstatement was over. Prior to passage of the Energy Act, the Secretary of the Interior did not have authority to reinstate terminated leases beyond the statutory 15-month period following the date of lease termination.
Section 371(a) of the Energy Act allows eligible lessees to petition for lease reinstatement if they file within 120 days after enactment of the Act. While BLM is not required to notify lessees of their potential eligibility, some lessees expressed interest in lease reinstatement (prior to passage of the Energy Act). Those lessees who expressed an interest in having their leases reinstated are waiting for notification of the process they should follow.
Manual/Handbook Sections Affected: Bureau Manual/Handbook Section 3108 contains basic guidance for lease reinstatement. The procedures contained in this IM are temporary and the handbook does not require updating.
Coordination: This guidance was coordinated with the Solicitor’s Office.
Contact: If you have any questions about the guidance in this IM, please contact Mary Nagel, WO-310D, by telephone at
303-236-0837, or by email at Mary_Nagel@blm.gov
Signed by:                                                  
Authenticated by:
Tom P. Lonnie                                                      
Barbara J. Brown
Assistant Director                                       
Policy & Records Group, WO-560
Minerals, Realty and Resource Protection
2 Attachments

Last updated: 10-21-2009