Oil and Gas Leasing of State-Owned Lands

Q:  Who administers the program for leasing state lands for oil and gas exploration and production?

A:  The Department of Natural Resources Division of Oil and Gas.  The process is governed by Indiana Law at IC 14-38-1 and regulations of the Department of Natural Resources (DNR) at 312 IAC 17-1.

Q:   Where can I find information on the location of state-owned properties in Indiana?

A: The location of most state-owned properties can be viewed on the Indiana Oil and Gas Wells Webmap. Ownership information and a link to the deed for the state-owned properties are available from this map. To activate the layer showing this information, select the "Map Layers" tab in the upper right of the screen, then scroll down and check the "State Land Current Interest" box. The state land information will then be viewable on the map.

Q:  Are all state-owned properties shown on the interactive map?

A:  State-owned properties not shown on the Indiana Oil and Gas Wells Webmap include those owned by the Indiana Department of Transportation (INDOT) and state universities.

Q:  Who decides whether lands are available for oil and gas leasing?

A:  Decisions regarding whether specific lands are available for oil and gas leasing are made by the agency with jurisdiction over the property after consultation with the Division of Oil and Gas.

The Department of Natural Resources is the largest landholding agency within oil and gas productive areas of Indiana.  State Parks and Reservoirs, Forestry, Outdoor Recreation, Fish and Wildlife, and Nature Preserves each have different objectives and priorities for resource management which will influence any determination as to whether oil and gas activities are in the best public interest.

On many state-owned properties, surface occupancy by oil and gas operations may not be compatible with their primary management objectives. Management obligations associated with federal grants (or other alternative funding sources) used to acquire or manage properties may also make oil and gas operations incompatible. Where oil and gas operations are not incompatible with primary management objectives, greater flexibility may exist to allow for oil and gas development in a manner appropriate for the specific property.

Q:  What other factors must be considered before state lands may be leased?

A:  Other relevant factors include the extent of any surface impacts (if any) that would occur should oil and gas activities be allowed, and whether the acreage is considered “proven”.

Proven” acreage is defined as “territory so situated with reference to known producing wells as to establish the general opinion that, because of the territory’s relation to the producing wells, petroleum is contained in the territory”.  Only exploratory drilling may be conducted on “unproven” lands.

Q:  Who owns the oil and gas rights beneath rivers and streams in Indiana?

A:  The State of Indiana owns all oil and gas beneath “Navigable Waterways”.   While not all inclusive, a comprehensive list of navigable waterways in Indiana is maintained by the Natural Resources Commission (NRC).  See the “Navigable Waterways Roster” available from the NRC website.  Lists of Navigable Waterways may also be viewed on the NRC website by county and by waterway. 

Q:  Does the state competitively bid projects for the leasing of state lands?

A:  Most projects involving oil and gas leasing on state properties are required by law to be competitively bid.  However, some leases may be granted without competitive bidding where the operator has all other property within an established drilling unit leased and the state acreage is needed to complete the drilling unit.  Leases for state-owned oil and gas beneath rivers and streams and certain Indiana Department of Transportation (INDOT) properties are usually not competitively bid.  These leases almost always prohibit any surface disturbance on the state-owned lands.

Q:  How do I begin the process of leasing oil and gas on state-owned lands or waterways?

A:  Persons interested in leasing state-owned lands for oil and gas purposes should submit a completed  “Application for Petroleum Exploration or Production Activities on State-Owned Lands” form to the Division of Oil and Gas.

Q:  Who do I contact if I have any other questions about leasing state lands for oil and gas?

A:  Contact the Director of the Division of Oil and Gas at (317) 232-4058.