(a) Subject to the provisions of Section 6906, the commission may issue a prospecting permit to the first qualified applicant therefor under such rules and regulations as it may prescribe for lands which have not been selected by the commission for lease by competitive public bid. An application for a permit shall be denied if, prior to the issuance of the permit, the lands are selected by the commission for lease by competitive public bid.

The applicant shall submit for the commission’s approval a prospecting program, including a time schedule, which may include, but not be limited to, the conduct of surveys, tests, or experiments using geological, geophysical, or other exploratory methods, including exploration drilling. Such prospecting program shall be specified in the terms and conditions of the prospecting permit. At a minimum, each prospecting permit issued under this article shall provide that the permittee is required to drill a geothermal well during the term of the permit, and such term shall not be extended pursuant to subdivision (b) unless the permittee has commenced the drilling or applied for the necessary permits to drill such a well. Rental shall escalate each year until a well is drilled, whereupon the rental, royalties, and other terms shall be as specified in Section 6913. The escalating rental shall be one dollar ($1) per acre during the first year, not more than five dollars ($5) per acre during the second year, and not more than twenty-five dollars ($25) per acre during the third year and every year thereafter. In the event the permittee elects to quitclaim its interest in a permit prior to the expiration of the initial two-year term, its obligation to drill a geothermal well shall thereupon terminate.

(b) A prospecting permit shall give to the permittee the exclusive right for a term of two years to prospect for geothermal resources upon lands included within such prospecting permit. The commission may, in its discretion, extend the term of any prospecting permit for a period not exceeding two years; provided that the combination of the term and extension of any prospecting permit shall not exceed a total of four years. The commission may amend or terminate any permit issued by it within the term or within the extension, if any, with the consent of the permittee.

(c) Upon the discovery of geothermal resources in commercial quantities within the prospecting permit area, the permittee shall be entitled to a lease by the commission if provided as a term of the permit, for such lands within the permit area. The terms of such lease shall include the royalties and other terms contained in Section 6913.

(d) Obligations imposed by a prospecting permit or lease pursuant to this section may be suspended during such time as a lessee is prevented from complying therewith by wars, riots, acts of God, laws, rules and regulations from any federal, state, county or municipal agency, or by such other unusual conditions as are beyond the control of the lessee.

(Repealed and added by Stats. 1978, Ch. 1139.)