30 C.F.R. § 256.77 – Cancellation of leases.

(a) Any nonproducing lease issued under the act may be cancelled by the authorized officer whenever the lessee fails to comply with any provision of the act or lease or applicable regulations, if such failure to comply continues for 30 days after mailing of notice by registered or certified letter to the lease owner at the owner's record post office address. Any such cancellation is subject to judicial review as provided in section 23(b) of the Act.
(b) Producing leases issued under the Act may be cancelled by the Secretary whenever the lessee fails to comply with any provision of the Act, applicable regulations or the lease only after judicial proceedings as prescribed by section 5(d) of the Act.
(c) Any lease issued under the Act, whether producing or not, shall be canceled by the authorized officer upon proof that it was obtained by fraud or misrepresentation, and after notice and opportunity to be heard has been afforded to the lessee.
(d) Pursuant to section 5(a) of the Act, the Secretary may cancel a lease when:
1. (1) Continued activity pursuant to such lease would probably cause serious harm or damage to life, property, any mineral, National security or defense, or to the marine, coastal or human environment;
2. (2) The threat of harm or damage will not disappear or decrease to an acceptable extent within a reasonable period of time; and
3. (3) The advantages of cancellation outweigh the advantages of continuing such lease or permit in force. Procedures and conditions contained in § 550.182 shall apply as appropriate.