# Title 38 — Mining and Gas and Oil Production

## Chapter 38-08.1 — Geophysical Exploration Requirements

### § 38-08.1-01. Definitions.

As used in this chapter, unless the context requires otherwise:
1. "Commission" means the industrial commission.
2. "Geophysical exploration" means any method of obtaining petroleum-related
geophysical surveys.
3. "Operator of the land" means the surface owner or the surface owner's tenant of the
land upon or within one-half mile [.80 kilometer] of the land on which geophysical
operations are to be conducted.
4. "Permitting agent" means a person who secures a permit from an operator of the land
to conduct geophysical exploration activities.
5. "Person" means and includes any natural person, corporation, limited liability
company, association, partnership, receiver, trustee, executor, administrator, guardian,
fiduciary, or other representative of any kind, and includes any department, agency, or
instrumentality of the state or of any governmental subdivision thereof.
### § 38-08.1-02. Enforcement by commission - Persons required to comply with chapter.

Notwithstanding any other provision of this chapter, the commission is the primary
enforcement agency governing geophysical exploration in this state. Any person in this state
engaged in geophysical exploration or engaged as a subcontractor of a person engaged in
geophysical exploration shall comply with this chapter; provided, however, that compliance with
this chapter by a crew or its employer constitutes compliance herewith by that person who has
engaged the service of the crew, or its employer, as an independent contractor.
### § 38-08.1-03. Deemed doing business within state - Resident agent.

A person must be deemed doing business within this state when engaged in geophysical
exploration within the boundaries of this state, and shall, if not already qualified to do business
within the state under chapter 10-19.1, 10-32.1, 45-10.2, 45-22, or 45-23 prior to such
exploration, file with the secretary of state an authorization provided under the governing statute
of the organization.
### § 38-08.1-03.1. Surety bond - Certificate - Release.

1. A geophysical exploration contractor desiring to engage in geophysical exploration in
this state shall file with the commission a good and sufficient surety bond in the
amount of fifty thousand dollars if the contractor intends to conduct shot hole
operations or in the amount of twenty-five thousand dollars if the contractor intends to
use any other method of geophysical exploration. Each subcontractor engaged by the
geophysical exploration contractor for the drilling or plugging of seismic shot holes
must file with the commission a good and sufficient surety bond in the amount of ten
thousand dollars. The bond must be in a form prescribed by the commission and must
indemnify all owners of property within the state, including the state and its political
subdivisions, against physical damages to property which may result from geophysical
exploration and the plugging of drill holes. The bond must cover all geophysical
exploration and plugging operations conducted within one year of the date the bond is
issued and must be automatically renewed unless the commission and the person
covered by the bond receive notice sixty days before any anniversary date of the
surety's intent not to renew the bond. If the surety does not renew the geophysical
exploration contractor's bond, the surety's liability under the bond ceases six years
from the date that geophysical exploration or reclamation covered by the bond was
last conducted in the state. If the surety does not renew the drilling or plugging bond,
the surety's liability under the bond ceases two years from the date the drilling and
plugging covered by the bond was last conducted in this state. A person required to

post a bond under this subsection may post cash or a certificate of deposit in lieu of
the bond under rules adopted by the commission.
2. The aggregate liability of the surety on the bond may in no event exceed the amount of
the bond.
3. Upon filing the bond required by this section and presenting a certificate of authority to
transact business in this state issued under section 10-19.1-136, a certificate of
incorporation issued under chapter 10-19.1, or some other certificate issued by the
secretary of state showing the name of the person designated as resident agent for
service of process, the commission shall issue to the person desiring to engage in
geophysical exploration or plugging operations or any subcontractor of that person a
certificate showing that the bond has been filed and showing the name and address of
the surety company and the name of the person designated resident agent for service
of process.
4. The proceeds of a surety bond become the property of the commission or the cash or
certificate of deposit posted in lieu of a surety bond may not be returned to that person
if the principal or person posting the bond, cash, or certificate of deposit fails to comply
with this chapter and rules adopted by the commission under this chapter. This must
be determined by the commission after notice and hearing in accordance with rules
adopted by the commission. Notice of the hearing must be given to the principal and
surety on the bond or to the person posting the cash or certificate of deposit by mailing
a copy of the notice of hearing and a copy of a complaint, stating the grounds for
forfeiture to them, filed by the commission. This must be done by certified mail, return
receipt requested, and addressed to their last-known address listed with the
commission. If the principal or surety or person posting the cash or certificate of
deposit has a defense to, or otherwise wishes to contest the complaint of the
commission, that person must file a written statement or answer setting forth the
defense with the commission at least three business days before the commission
hearing. Any defense or reason for contesting the complaint is waived if that person
fails to do so. The commission may treat the failure to file a defense or reason to
contest the complaint or the failure to appear at the hearing as default by the party. If
the commission determines the principal on the bond or the person posting the cash or
certificate of deposit as security has complied with this chapter and rules adopted by
the commission under this chapter, including the proper plugging of wells and seismic
holes and reclamation of the surrounding affected area, with respect to all operations
secured by the bond, the commission shall release the obligation of the bond or return
the cash or certificate of deposit upon its next anniversary date.
### § 38-08.1-04. Application for permit to engage in geophysical exploration.

Any person desiring to engage in geophysical exploration before actually engaging in the
exploration shall file an application for a permit to engage in geophysical exploration with the
commission. The application for a permit for geophysical exploration must include the following:
1. The name, address, and telephone number of the person intending to engage in
geophysical exploration or plugging operations and the name and telephone number
of any local representative who may be contacted by the commission concerning
geophysical exploration activities.
2. The name, address, and telephone number of any subcontractors, including drilling
and plugging subcontractors, to be employed by the person intending to conduct
geophysical exploration or plugging operations.
3. The name and address of the resident agent for service of process of the person
intending to engage in geophysical exploration.
4. The date upon which geophysical exploration is to begin.
5. The approximate number and depth of any drill holes and the specific location of any
drill holes or a description of the property on which the geophysical exploration is to be
conducted described by township, range, section, and quarter section.
6. A fee of up to one hundred dollars.

The person making application for a geophysical exploration permit shall file an amended
application whenever there is any new information or a change in the information contained in
the application on file with the commission.
### § 38-08.1-04.1. Exploration permit.

1. Upon filing a complete application for permit to explore pursuant to section 38-08.1-04,
the commission may issue to any person desiring to engage in geophysical exploration
a "geophysical exploration permit". A person may not engage in geophysical
exploration activities in this state without having first obtained a geophysical
exploration permit from the commission.
2. The permit must show, at a minimum:
a. The name of the person.
b. The name and address of the resident agent for service of process.
c. That an application to engage in geophysical exploration has been duly filed.
d. That a good and sufficient surety bond has been filed by the person, naming the
surety company and giving its address.
3. The permit must be signed by the director of the commission's oil and gas division or
the director's designee. The permit is valid for one year.
4. Within seven days of initial contact between the permitting agent and the operator of
the land, the permitting agent shall provide the operator of the land and each
landowner owning land within one-half mile [.80 kilometer] of the land on which
geophysical exploration activities are to be conducted a written copy of section
5. The permitting agent shall notify the operator of the land at least seven days before
the commencement of any geophysical exploration activity, unless waived by mutual
agreement of both parties. The notice must include the approximate time schedule and
the location of the planned activity.
6. The permit or a photostatic copy thereof must be carried at all times by a member of
the crew during the period of geophysical exploration and must be exhibited upon
demand of the landowner or tenant operator or county or state official.
7. The permitholder shall notify the county auditor or the auditor's designee at least
twenty-four hours, excluding Saturdays and holidays, before the permitholder
commences geophysical exploration in the county. Notice must include the
approximate time schedule and location of the planned activity.
### § 38-08.1-04.2. Notification of issuance of permit - Revocation - Suspension.

The commission shall immediately forward notice of the issuance of a permit to the board of
county commissioners of the county in which the lands are located. The commission may
revoke the permit of any person engaging in geophysical exploration upon a showing that that
person has violated any applicable requirement pertaining to geophysical exploration. The
commission shall notify that person, by the most effective written means, of the permit
revocation. Upon notification, the person engaging in geophysical exploration may, within fifteen
days, request a hearing before the commission on the matter. The commission shall either
affirm, modify, or deny the permit revocation. The commission may also suspend the permit
temporarily in those cases where climate and physical conditions are such as to cause harm,
damage, or undue stress to roads, bridges, pastures, crops, or other physical features. For
these same reasons, a board of county commissioners, upon notice to the permitholder and the
commission, also may suspend, for not longer than forty-eight hours, a permit for operations
within the county.
### § 38-08.1-05. Duty to file record showing where work performed.

Within thirty days following any calendar month in which geophysical exploration is begun
by any person within this state, such person shall file with the commission and shall send to the
owner or occupier of any land upon which work is begun, a record showing the township, range,
section, and quarter section in the county in which such work was performed and the date upon

which such work was commenced. The notice also must include the actual shot point location
and the amount of explosive charge, if any, in each drill hole.
### § 38-08.1-06. Duty to plug drill holes.

1. Drill holes must be plugged and abandoned as required by this section.
2. The seismic company responsible for the plugging and abandonment of seismic shot
holes shall notify the commission in writing that it intends to plug and abandon the drill
hole. The required notice must be received by the commission at least twenty-four
hours before the time plugging activities are scheduled to begin. The notice must
include the date and time the activities are expected to commence, the location by
section, township, and range of the holes to be plugged, and the name and telephone
number of the person in charge of the plugging operations. A copy of the notice must
be sent to the landowner or lessee at the same time it is sent to the commission. The
seismic company shall notify the commission in writing upon completion of the
plugging operation.
3. All seismic shot holes must be plugged as soon after being used as reasonably is
practicable; however, they may not remain unplugged for a period of more than thirty
days unless, upon application, the commission grants an extension which may not
exceed ninety days. All seismic shot holes must be temporarily capped during the
period between drilling and final plugging.
4. The plug must have permanently affixed to it a durable nonrusting metal or plastic tag
or plate imprinted with the name of the operator responsible for the plugging of the
hole and the operator's permit number.
5. The surface around each seismic shot hole must be restored to its original condition
insofar as restoration is practicable and all stakes, markers, cables, ropes, wires,
primacord, cement or mud stacks, and any other debris or material not native to the
area must be removed from the drill site and lawfully disposed of.
### § 38-08.1-06.1. Plugging requirements - Rules - Liability for damage.

All seismic holes must be plugged in accordance with rules adopted by the commission.
The commission shall review and revise its rules governing plugging requirements as
technology in the field evolves. The seismic company is liable for all damages resulting from
failure to comply with rules adopted by the commission pursuant to this section.
### § 38-08.1-07. Civil and criminal penalties.

1. A person who violates any provision of this chapter or commission rule or order is
subject to a civil penalty imposed by the commission not to exceed one thousand
dollars for each offense, and each day's violation is a separate offense. A penalty
imposed under this section, if not paid, may be recovered by the commission in the
district court of the county in which the defendant resides, or in which any defendant
resides if there is more than one defendant, or in the district court of any county in
which the violation occurred. Payment of the penalty does not legalize the activity for
which the penalty was imposed, or relieve the person upon whom the penalty was
imposed from liability to any other person for damage caused by the violation.
2. Notwithstanding this section, a person who willfully violates any provision of this
chapter or a commission rule or order is guilty of a class C felony.
### § 38-08.1-08. Commission to adopt rules.

The commission may adopt and enforce rules to implement this chapter.
