§223 — Title 30 Mineral Lands and Mining | U.S. Code

Summary

If the Secretary of the Interior is satisfied that a permit holder has found valuable oil or gas on the permit land, the holder can get a lease for one-fourth of the land, or up to 160 acres if that many acres are in the permit. The holder picks a reasonably compact area. If the land is already surveyed, it must be described by the legal subdivisions. If it is not surveyed, the government will survey it at the applicant’s expense under rules the Secretary sets. Money paid for the survey will cover the cost and any extra will be returned. The lease lasts 20 years. The royalty is 5% of the amount or value of production and the holder must pay $1 per acre in advance each year; that payment is credited against royalties for that year. The lease continues under the rules that applied to leases issued before August 21, 1935. The permit holder also has first right to lease the rest of the permit land at a royalty of at least 12½% and no more than the rate set by the rules in force on January 1, 1935. That royalty is set by competitive bidding or another method the Secretary allows, and the Secretary may reject any or all bids.

Title 30, §223

Mineral Lands and Mining — Source: USLM XML via OLRC

Upon establishing to the satisfaction of the Secretary of the Interior that valuable deposits of oil or gas have been discovered within the limits of the land embraced in any permit, the permittee shall be entitled to a lease for one-fourth of the land embraced in the prospecting permit: Provided, That the permittee shall be granted a lease for as much as one hundred and sixty acres of said lands, if there be that number of acres within the permit. The area to be selected by the permittee, shall be in reasonably compact form and, if surveyed, to be described by the legal subdivisions of the public-land surveys; if unsurveyed, to be surveyed by the Government at the expense of the applicant for lease in accordance with rules and regulations to be prescribed by the Secretary of the Interior, and the lands leased shall be conformed to and taken in accordance with the legal subdivisions of such surveys; deposits made to cover expense of surveys shall be deemed appropriated for that purpose, and any excess deposits may be repaid to the person or persons making such deposit or their legal representatives. Such leases shall be for a term of twenty years upon a royalty of 5 per centum in amount or value of the production and the annual payment in advance of a rental of $1 per acre, the rental paid for any one year to be credited against the royalties as they accrue for that year, and shall continue in force otherwise as prescribed in section 226 of this title for leases issued prior to August 21, 1935. The permittee shall also be entitled to a preference right to a lease for the remainder of the land in his prospecting permit at a royalty of not less than 12½ per centum in amount or value of the production nor more than the royalty rate prescribed by regulation in force on January 1, 1935, for secondary leases issued under this section, and under such other conditions as are fixed for oil or gas leases issued under section 226 of this title the royalty to be determined by competitive bidding or fixed by such other method as the Secretary may by regulations prescribe: Provided further, That the Secretary shall have the right to reject any or all bids.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1935—Act Aug. 21, 1935, inserted “reasonably” before “compact form” and substituted “and shall continue in force otherwise as prescribed in section 226 of this title for leases issued prior to August 21, 1935” and “oil or gas leases issued under section 226 of this title” for “with the right of renewal as prescribed in section 226 of this title” and “oil or gas leases in this chapter”, respectively.

Statutory Notes and Related Subsidiaries

Limitation of Royalty on Discoveries During War PeriodAct Dec. 24, 1942, ch. 812, 56 Stat. 1080, limiting royalty obligation of oil or gas lessee who drills well resulting in discovery of new deposit on public domain during the national emergency was repealed by Joint Res. July 25, 1947, ch. 327, § 1, 61 Stat. 449. Outer Continental Shelf; LeasesGrant by Secretary of the Interior of oil, gas, and other mineral leases on submerged lands of outer Continental Shelf, see section 1331 et seq. of Title 43, Public Lands.

§223 Leases; Amount and Survey of Land; Term of Lease; Royalties and Annual Rental