Lawful right to drill, develop, or explore.

Before applying for a drilling permit, the applicant or operator must acquire a lawful right to drill, explore, or develop from a majority of the mineral interests within a drilling unit. This acquired right may be in the form of mineral ownership, a lease, farmout, or any other legal instrument which conveys said mineral interest or the right to develop it to the applicant or operator.

(1)(a) Any operator who has obtained a permit to drill shall give written notice by certified mail, return receipt requested, of a proposal to drill a well to those mineral owners who would be deemed “notified owners” holding a minority interest within the drilling unit and who are:

1. Unleased mineral owners; or

2. Owners of mineral leases which have not entered into a farmout agreement or any other agreement to drill or produce a well with the operator.

(b) The notice shall include an offer by the operator to allow the notified owner to participate for its pro rata share of the costs and expenses of drilling the well, or to lease or farm out all of its right, title, and interest in the drilling unit to the applicant. In no instance shall the bonus and royalty amounts in the offer to lease from the notified owner be less than provided in s. 377.247(2).

(c) The notice must be given at least 60 days prior to the commencement of drilling of the well.

(2)(a) The notified owner must respond in writing within 30 days after receipt of said notice if the notified owner elects to lease, farm out, or participate in the well. All notified owners who fail to respond in writing to the applicant’s notice within 30 days after receipt of said notice shall be deemed to be a carried leasehold working interest owner or “carried owner.”

(b) A carried owner shall receive no revenue until the applicant and its joint working interest owners have been paid from the sale of production from the well an amount equal to 300 percent of the actual costs of drilling, developing, and producing the well.

(c) The applicant will provide to each of the carried owners an annual accounting of the amounts left to recover before such owner begins to receive revenues.

(d) This section shall not apply to state-owned minerals.