25 U.S.C. § 398e — Applications for permits to prospect for oil and gas filed under other statutes; disposition
submitted 99 years ago by ch. 299 to r/title-25-INDIANS · 619 words · no verdicts yet
People who applied to prospect for oil and gas on certain Indian lands before May 27, 1924 may still get a lease. They must show they did real work, like surveying or drilling, before 1926. If they find valuable oil or gas, they can lease part of the land for 20 years.
This section helps people who filed an oil and gas prospecting application before May 27, 1924, under an earlier 1920 law. It applies to prospecting on Indian reservation or Executive order withdrawal land.
To qualify, the applicant (or someone under contract with them) must show they did real work before January 1, 1926. That work can be any of these: spending money or labor on a geological survey of the land, building a road that helps the land, or drilling — or paying toward drilling — into the geologic structure under the land. An applicant can also qualify by filing, in good faith, a motion asking for reinstatement or a rehearing, or by doing some other act the Secretary* of the Interior decides deserves fair treatment.
If the Secretary approves, the applicant may prospect for two years starting March 3, 1927, or longer if the Secretary decides more time is reasonably needed to fully explore the land. A real contribution toward drilling counts as prospecting.
If the applicant proves to the Secretary that valuable oil and gas deposits exist within the application's land, the applicant earns a lease for one-quarter of that land. If the application covers at least 160 acres, the applicant must get a lease for at least 160 acres.
The leased land must form a compact shape. If the land has been surveyed, its description must follow the standard legal land divisions. If not, the government must survey it, at the applicant's expense, following the Secretary's rules — and the final lease must match the survey's legal divisions. Money the applicant deposits to pay for the survey is automatically set aside for that purpose; any leftover deposit is refunded to the applicant.
These leases last for 20 years. The lessee must pay a royalty of 5 percent of the value of everything produced. The lessee must also pay $1 per acre in rent each year, in advance; that rent counts against the royalty owed for that year. The lessee has first right to renew the lease for more 10-year terms, on reasonable terms the Secretary sets.
The applicant also gets first right to lease whatever land in the application was not already leased. This second lease carries a royalty of at least 12.5 percent of the value of production. The Secretary sets the exact royalty either through competitive bidding or another method the Secretary chooses by regulation. The Secretary can reject any or all bids for this lease.
The Secretary* of the Interior is hereby authorized, under such rules and regulations as he may prescribe, to allow any person who prior to May 27, 1924, filed an application for a permit in accordance with the provisions of the Act of February 25, 1920, to prospect for oil and gas upon lands within an Indian reservation or withdrawal created by Executive order who shall show to the satisfaction of the Secretary of the Interior that he, or the party with whom he has contracted, has done prior to January 1, 1926, any or all of the following things, to wit, expended money or labor in geologically surveying the lands covered by such application, has built a road for the benefit of such lands, or has drilled or contributed toward the drilling of the geologic structure upon which such lands are located, or who in good faith has either filed a motion for reinstatement or rehearing; or performed any other act which in the judgment of the Secretary of the Interior entitles him to equitable relief, to prospect for a period of two years from March 3, 1927, or for such further time as the Secretary of the Interior may deem reasonable or necessary for the full exploration of the land described in his application under the terms and conditions therein set out, and a substantial contribution toward the drilling of the geologic structure thereon by such applicant for a permit thereon may be considered as prospecting under the provisions hereof; and upon establishing to the satisfaction of the Secretary of the Interior that valuable deposits of oil and gas have been discovered within the limits of the land embraced in any such application, he shall be entitled to a lease for one-fourth of the land embraced in the application: Provided, That the applicant 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 application. The area to be selected by the applicant shall be in compact form and, if surveyed, to be described by the legal subdivisions of the public land surveyed; 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; deposit 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 may accrue for that year, with the preferential right in the lessee to renew the same for successive periods of ten years upon such reasonable terms and conditions as may be prescribed by the Secretary of the Interior. The applicant shall also be entitled to a preference right to a lease for the remainder of the land in his application at a royalty of not less than 12½ per centum in amount or value of the production, the royalty to be determined by competitive bidding or fixed by such other methods as the Secretary of the Interior may by regulations prescribe: Provided further, That the Secretary of the Interior shall have the right to reject any or all bids.
Source credit: (Mar. 3, 1927, ch. 299, § 5, 44 Stat. 1347.)
- 1927Enacted · Act of Mar. 3, 1927, ch. 299 · 44 Stat. 1347
A history note hasn’t been published yet. The record shows enactment by ch. 299 on 1927-03-03.
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