Bonds

Bonds for mineral leasing

By authority conferred on the Department of Natural Resources, financial assurance requirements under sections 502 and 504 of 1994 PA 451, MCL 324.502 and MCL 324.504 may be satisfied through any of the following instruments.

The Michigan Department of Natural Resources must be provided with an original. Also, the lessee’s name on the bond must read exactly as it would on their State lease(s).

1. Cash Bond - Cash submitted as a lease bond must be a certified check or money order in the appropriate amount (see below) made payable to "State of Michigan."  A personal or company check is not acceptable.  The check should be accompanied by a letter on company letterhead stating its purpose (on behalf of what company and for what type of leasing purposes).  Please mail to Cashier’s Office, Michigan Department of Natural Resources, PO Box 30451, Lansing, Michigan 48909.

    

2. Certificate of Deposit (CD) - A CD may be obtained through a local bank and submitted as a bond.  The CD shall be made out in the sole name of "Director of the Department of Natural Resources" in the appropriate amount.  A CD must be non-negotiable, non-transferable, and interest accrued should be added to the value of the CD at maturity or may be transferred to an account of the payee.  The CD must be automatically renewable.  The State's Federal ID Number (38-6000134) shall be used on all certificates.  The CD must contain the name of the lessee and lease type.

    

3. Irrevocable Standby Letter of Credit - A letter of credit can be obtained from a local bank.  Released letters of credit are returned to the issuing bank.  The required language of a letter of credit may be viewed by opening the sample letter of credit (link to sample). Please do not alter the language of these letters in any way.

 

4. Surety Bond - The bond form PR3402 for your surety to use.  The agent's power of attorney must also be attached.  Only original surety bonds are acceptable.

Amount of Bond

The amount of a bond varies depending on the acreage leased.

Oil and Gas

Metallic or Nonmetallic Minerals

and

Underground Gas Storage

For additional information, please contact Ms. Kimberly Venne, Property Specialist, Minerals Management Section, at 517-284-5912 or VenneK@michigan.gov.

Mailing Address:

DNR-Minerals Management Section
Attention: Kimberly Venne
P.O. Box 30452
Lansing, Michigan 48909

Express/Overnight Mailing Address:

DNR-Minerals Management Section
Attention: Kimberly Venne
Deborah A. Stabenow Building, 3^rd Floor
525 West Allegan Street
Lansing, Michigan 48933