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(a) The lessee shall make rent and royalty payments to the credit of the State of Alaska Bank Account by an ACH transaction, by a wire transfer through the Federal Reserve System, or by another method as approved by the commissioner, to the address specified in writing by the commissioner.
(b) The lessee shall pay bonus bid deposit amounts required to participate in competitive lease sales in accordance with the instructions included in the notice of lease offering. The successful bidder in the competitive sale of an oil and gas lease shall pay the balance of the bonus to the state in accordance with the instructions included in the notice of lease offering and lease award. The division will apply lease sale payments in the following order:
(1) bonus;
(2) rent; and
(3) interest.
(c) The lessee shall make first-year rental payments in accordance with the instructions included in the notice of lease offering and lease award. The lessee shall make rental payments, other than the first-year-rental payment, in accordance with (a) of this section.
(d) The lessee shall make minimum royalty payments in accordance with the minimum royalty provisions of the lease, when applicable. Otherwise, the lessee shall make minimum royalty payments in accordance with (a) of this section.
(e) The lessee shall make payments of amounts other than royalties, bonuses, or rentals, including payments of interest or administrative fees, in accordance with (a) of this section.
(f) The division will
(1) except for a payment of a bonus bid deposit under (b) of this section, and unless otherwise requested by the lessee in writing, such as in a payment remittance advice or a royalty report, apply a payment described in (a) - (e) of this section in the following order:
(A) first, to pay administrative fees;
(B) next, to pay interest;
(C) next, to pay past principal;
(D) finally, to reduce current principal; and
(2) apply the payment first to the accounting unit with the smallest produced volume for the production month being paid by the lessee.
History: Eff. 2/21/98, Register 145; am 12/27/2002, Register 164
Authority: AS 38.05.020
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Last modified 7/05/2006