43 C.F.R. § 3162.2-3
When am I responsible for protecting my Federal or Indian lease from drainage?
You must protect your Federal or Indian lease from drainage if your lease is being drained of mineral resources by a well:
(a) Producing for the benefit of another mineral owner;
(b) Producing for the benefit of the same mineral owner but with a lower royalty rate; or
(c) Located in a unit or communitization agreement, which due to its Federal or Indian mineral owner's allocation or participation factor, generates less revenue for the United States or the Indian mineral owner for the mineral resources produced from your lease.
Notes of Decisions
Cited in 2
cases (2 in the last 5 years), 2022–2025 · leading case: Birdbear v. United States (Fed. Cl. 2022).
Birdbear v. United States (Fed. Cl. 2022). “” See also 43 C.F.R. § 3162.2-3 (a)–(b) (stating that the lessee must protect the lease against drainage caused by wells that are “[p]roducing for the benefit of another mineral owner” or “the same mineral owner but with a lower royalty rate”).”
BIRDBEAR v. United States (Fed. Cl. 2025). “47 ); 43 C.F.R. § 3162.2-3 (a)–(b)). They also include the requirement that lessees “[e]xercise diligence in mining, drilling and operating wells on the leased lands,” Id.”
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