30 CFR 250.204 : Mineral Resources (§ 1.1 To Parts 1291-1299) — (Parts 200-202 To Parts 591-599) — Bureau Of Safety And Environmental Enforcement, Department Of The Interior (Parts 200-202 To Parts 292-299) — Offshore (§ 250.101 To Part 285) — Oil And Gas And Sulphur Operations In The Outer Continental Shelf (§ 250.101 To § 250.1933) — Plans And Information (§ 250.200 To § 250.295) — General Information (§ 250.200 To § 250.205) — How must I protect the rights of the Federal government?

(a) To protect the rights of the Federal government, you must either:

(1) Drill and produce the wells that the Regional Supervisor determines are necessary to protect the Federal government from loss due to production on other leases or units or from adjacent lands under the jurisdiction of other entities (e.g., State and foreign governments); or

(2) Pay a sum that the Regional Supervisor determines as adequate to compensate the Federal government for your failure to drill and produce any well.

(b) Payment under paragraph (a)(2) of this section may constitute production in paying quantities for the purpose of extending the lease term.

(c) You must complete and produce any penetrated hydrocarbon-bearing zone that the Regional Supervisor determines is necessary to conform to sound conservation practices.