PRIA, Government Policy, Made Personal

Summary

Allows an oil or gas lease to be assigned or subleased, in whole or in part, and as a divided or undivided interest, to any person who is qualified under the law, but only with the Secretary’s final approval. The assignment takes effect on the first day of the lease month after three original signed copies are filed in the proper land office with any required bond and proof that the new party is qualified. Until the Secretary approves, the original lessee and their surety remain responsible. The Secretary may reject an assignment only for lack of qualification or insufficient bond, but may also refuse assignments that carve out a separate zone, part of a legal subdivision, or areas smaller than 640 acres outside Alaska (or 2,560 acres in Alaska) unless the assignment is the whole lease or clearly helps development. Requests must be processed quickly, and, unless unlawful, the Secretary must approve within 60 days of receipt. Anyone who gets the assignment or sublease must follow the lease terms as if they were the original lessee. Partial assignments must separate the assigned and retained parts and free the assignor from future obligations on the assigned lands. Segregated leases continue for the original primary term, but not less than two years after discovery of oil or gas in paying quantities on any other segregated part. Assignments can cover parts of leases in an extended term. For leases issued after September 2, 1960 and held beyond the primary term by production or compensatory royalty, an undeveloped segregated part continues for two years and then for as long as oil or gas is produced in paying quantities.

Title 30, §187a

Mineral Lands and Mining, Source: USLM XML via OLRC

Notwithstanding anything to the contrary in section 187 of this title, any oil or gas lease issued under the authority of this chapter may be assigned or subleased, as to all or part of the acreage included therein, subject to final approval by the Secretary and as to either a divided or undivided interest therein, to any person or persons qualified to own a lease under this chapter, and any assignment or sublease shall take effect as of the first day of the lease month following the date of filing in the proper land office of three original executed counterparts thereof, together with any required bond and proof of the qualification under this chapter of the assignee or sublessee to take or hold such lease or interest therein. Until such approval, however, the assignor or sublessor and his surety shall continue to be responsible for the performance of any and all obligations as if no assignment or sublease had been executed. The Secretary shall disapprove the assignment or sublease only for lack of qualification of the assignee or sublessee or for lack of sufficient bond: Provided, however, That the Secretary may, in his discretion, disapprove an assignment of any of the following, unless the assignment constitutes the entire lease or is demonstrated to further the development of oil and gas:

(1)A separate zone or deposit under any lease.

(2)A part of a legal subdivision.

(3)Less than 640 acres outside Alaska or of less than 2,560 acres within Alaska.

Requests for approval of assignment or sublease shall be processed promptly by the Secretary. Except where the assignment or sublease is not in accordance with applicable law, the approval shall be given within 60 days of the date of receipt by the Secretary of a request for such approval. Upon approval of any assignment or sublease, the assignee or sublessee shall be bound by the terms of the lease to the same extent as if such assignee or sublessee were the original lessee, any conditions in the assignment or sublease to the contrary notwithstanding. Any partial assignment of any lease shall segregate the assigned and retained portions thereof, and as above provided, release and discharge the assignor from all obligations thereafter accruing with respect to the assigned lands; and such segregated leases shall continue in full force and effect for the primary term of the original lease, but for not less than two years after the date of discovery of oil or gas in paying quantities upon any other segregated portion of the lands originally subject to such lease. Assignments under this section may also be made of parts of leases which are in their extended term because of any provision of this chapter. Upon the segregation by an assignment of a lease issued after September 2, 1960 and held beyond its primary term by production, actual or suspended, or the payment of compensatory royalty, the segregated lease of an undeveloped, assigned, or retained part shall continue for two years, and so long thereafter as oil or gas is produced in paying quantities.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1987—Pub. L. 100–203 substituted third to fifth sentences for former third sentence which read as follows: “The Secretary shall disapprove the assignment or sublease only for lack of qualification of the assignee or sublessee or for lack of sufficient bond: Provided, however, That the Secretary may, in his discretion, disapprove an assignment of a separate zone or deposit under any lease, or of a part of a legal subdivision.” 1960—Pub. L. 86–705 amended last sentence to restrict automatic extensions after Sept. 2, 1960. 1954—Act July 29, 1954, authorized partial assignment of a lease in its extended term regardless of reason for extension.

Statutory Notes and Related Subsidiaries

Savings Provision

See note set out under section 181 of this title. Leases Issued Prior to September 2, 1960 Pub. L. 86–705, § 6, Sept. 2, 1960, 74 Stat. 790, provided in part that: “The provisions of this section 6 [amending this section] shall not be applicable to any lease issued prior to the

Effective Date

of this Act [Sept. 2, 1960].”

§187a Oil or Gas Leases; Partial Assignments