---
kind: "section"
citation: "30 C.F.R. § 550.184"
title: "30"
number: "550.184"
heading: "What is the amount of compensation for lease cancellation?"
url: "https://uscodex.org/cfr/30/550.184"
---

# §550.184. What is the amount of compensation for lease cancellation?


When the Secretary cancels a lease under §§ [550.181](/cfr/30/550.181.md), [550.182](/cfr/30/550.182.md) or [550.183](/cfr/30/550.183.md) of this subpart, you are entitled to receive compensation under [43 U.S.C. 1334(a)(2)(C)](/usc/43/1334.md?p=a-2-C). You must show the Director that the amount of compensation claimed is the lesser of paragraph [(a)](#a) or [(b)](#b) of this section:

- (a) **The fair value of the cancelled rights as of the date of cancellation, taking into account both—**
  - (1) Anticipated revenues from the lease; and
  - (2) **Costs reasonably anticipated on the lease, including—**
    - (i) Costs of compliance with all applicable regulations and operating orders; and
    - (ii) **Liability for cleanup costs or damages, or both, in the case of an oil spill.**
- (b) The excess, if any, over your revenues from the lease (plus interest thereon from the date of receipt to date of reimbursement) of:
  - (1) All consideration paid for the lease (plus interest from the date of payment to the date of reimbursement); and
  - (2) **All your direct expenditures (plus interest from the date of payment to the date of reimbursement)—**
    - (i) After the issue date of the lease; and
    - (ii) **For exploration or development, or both.**
- (c) Compensation for leases issued before September 18, 1978, will be equal to the amount specified in [paragraph (a)](#a) of this section.

## Notes

### Authority

Authority: 30 U.S.C. 1751; 31 U.S.C. 9701; 43 U.S.C. 1334.

### Source

Source: 76 FR 64623, Oct. 18, 2011, unless otherwise noted.