Code of Federal Regulations: Containing a Codification of Documents of ...

SOURCE: The provisions of this Subpart 3110 appear at 35 F.R. 9689, June 13, 1970, unless otherwise noted.

§ 3110.1-1 Duration of lease.

All noncompetitive leases shall be for a primary term of 10 years and so long thereafter as oil or gas is produced in paying quantities.

(a) Special acts—(1) Rights-of-way. The term of the lease will be for a period of not more than 20 years and the compensatory royalty agreement will be for the period necessary to reasonably extract all oil and gas from the right-ofway.

§ 3110.1-2 Dating of leases.

All noncompetitive oil and gas leases, excepting renewal leases, will be dated as of the first day of the month following the date the leases are signed on behalf of the lessor except that where prior written request is made a lease may be dated the first of the month within which it is so signed.

§ 3110.1-3 Acreage limitation.

(a) Public domain. An offer may be made by a legal guardian or trustee in his name for the benefit of a nonalien minor or minors but an offer may not be filed by a minor. An offer may not include more than 2,560 acres except where the rule of approximation applies. The lands in the offer must be entirely within an area of 6 miles square or within an area not exceeding six surveyed sections in length or width. No offer may be made for less than 640 acres except where the offer is accompanied by a showing that the lands are in an approved unit or cooperative plan of operation or such a plan which has been approved as to form by the Director of the Geological Survey, or where the land is surrounded by lands not available for leasing under the act.

(b) Acquired lands. An offer may not include more than 2,560 acres except where the rule of approximation applies. That portion of § 3110.1-3(a) providing that an offer may not be made for less than 640 acres is not applicable to acquired lands lease offers.

§ 3110.1-4 Withwdrawal of offer.

(a) Regular filings. An offer may not be withdrawn, either in whole or in part, unless the withdrawal is received by the land office before the lease, an amendment of the lease, or a separate lease, whichever covers the land described in the withdrawal, has been signed on behalf of the United States.

(b) Simultaneous filings. An applicant may withdraw his simultaneous offer drawing card prior to the drawing.

§ 3110.1-5 Amendment to lease.

If any of the land described in Item 2 of the offer is open to oil and gas filing when the offer is filed but is omitted from the lease for any reason and thereafter becomes available for leasing to the offeror, the original lease will be amended to include the omitted land unless, before the issuance of the amendment, the land office receives a withdrawal of the offer with respect to

tained in subpart 3110 and § 3111.1 shall govern the disposal and development of minerals under the act.

§ 3111.1-3 Special acts.

(a) Rights-of-way-(1) Application. No particular form of application for lease of land in a right-of-way will be required. Applications shall be filed in the appropriate land office. Such applications must be filed by the owner of the right-of-way or by his assignee and be accompanied by a filing fee of $10, and, if filed by an assignee, by a duly executed assignment of the right to lease. The application should detail the facts as to the ownership of the right-of-way, and of the assignment if the application is filed by an assignee; the development of oil and gas in adjacent or nearby lands, the location and depth of the wells, the production, and the probability of drainage of the deposits in the right-of-way. Since rights-of-way are of record in the Bureau of Land Management, a description by metes and bounds is not necessary or required, but each legal subdivision through which the portion of the right-of-way desired to be leased extends should be described.

(2) Compensatory royalty. After the Bureau of Land Management has determined that a lease of a right-of-way or any portion thereof is consistent with the public interest, either upon consideration of an application for lease or on his own motion, the manager of the land office will serve notice on the owner or lessee of the adjoining lands, as provided in section 3 of the act of May 21, 1930 (46 Stat. 374; 30 U.S.C. 303), allowing him 30 days or such other time as may be provided in the notice within which to submit an offer or bid of the amount or percentage of compensatory royalty such owner or lessee will agree to pay for the extraction through wells on his adjoining land of the oil and gas under and from such right-of-way. Notice to the owner of the right-of-way will be given at the same time allowing him opportunity within the same period to submit a bid or offer as to the amount or percentage of royalty he will pay if a lease is awarded to him.

(3) Award of lease or compensatory royalty agreement. Award of lease to the owner of the right-of-way, or of a contract for the payment of compensatory royalty by the owner or lessee of the adjoining lands, will be made to the bidder whose offer is determined to be

to the best advantage to the United States, considering the amount of royalty to be received and the better development of the oil and gas deposits in the right-of-way under the respective means of production and operation.

(4) Forms (i) Compensatory royalty agreement. The agreement with the owner or lessee of the adjoining land to pay compensatory royalty for the extraction through wells on his adjoining land of the oil and gas in or under the rightof-way will be on a form approved by the Director.

(ii) Lease. The lease issued to the owner of the right-of-way or assignee of such owner will be on a form approved by the Director, modified to conform to the requirements of the law and these regulations.

(iii) Bond. The bond required under section 2(a) of the lease and by the contractor under agreement to pay compensatory royalty, should be on a form approved by the Director.

(5) Royalty charge. The royalty to be charged will be fixed by the Bureau of Land Management, after consideration of all the facts and circumstances in each case, but will not be less than 121⁄2 percent.

(6) Duration. The term of the lease will be for a period of not more than 20 years, and the compensatory royalty agreement will be for the period necessary to reasonably extract all oil and gas from the right-of-way.

(b) Nevada (1) Applicability of regulations. Deposits of oil and gas within the lands shall be subject to disposal pursuant to the applicable regulations issued under the Act of February 25, 1920 (41 Stat. 437) as amended.

(c) Lands patented to the State of California-(1) Minerals to be leased. All disposal of minerals within the reserved areas covered by this section shall be by lease.

(2) Applicability of other regulations. The regulations contained in subparts 3110 and 3111 to the extent that they are applicable and not inconsistent with this section shall govern oil and gas leases issued under this section.

(3) Notice of application. The Manager of the Land Office will notify the surface owner or his authorized representative of each application received. Notice of any proposed offer of lands for lease will also be given to the surface owner prior to publication thereof. Should the surface owner object to the

additional rental must be paid within 30 days from notice under penalty of cancellation of the lease.

(2) An offer covering not more than 10 percent over the maximum allowable acreage of 2,560 acres. The lease will be approved for 2,560 acres in the discretion of the signing officer or so much over that amount as may be included under the rule of approximation.

(3) An offer completed in pencil or script.

(4) An offer on a lease form not currently in use.

(5) An offer on a form not correctly reproduced provided it contains the statement that the offeror agrees to be bound by the terms and conditions of the lease form in effect at the date of filing. § 3111.1-2

Acquired lands.

(a) Application—(1) Forms. Except as provided in subpart 3112, to obtain a noncompetitive oil and gas lease of an existing mineral interest whether the Government's interest be whole or fractional, an offer to lease must be made on a form approved by the Director, "Offer to Lease and Lease for Oil and Gas; Noncompetitive Acquired Lands" or unofficial copies of that form in current use: Provided, That the copies are exact reproductions of one page of both sides of the official approved one-page form and are without additions, omissions, or other changes or advertising. An official form approved by the Director, or a valid reproduction, will also constitute the lease, when signed by the authorized signing officer of the Bureau of Land Management. Seven copies of the official form, or valid reproduction thereof, for each offer to lease shall be filed in the proper land office (see §3000.5). For the purposes of this part an offer will be considered filed when it is received in the proper office during business hours.

(2) Qualifications. Compliance with subpart 3102 is required.

(3) Approval. Such application or offer will be considered only as to the acquired lands described therein. If public domain lands or minerals are also included the application or offer will be rejected as to such lands or minerals.

(4) Rejection. Except as provided in subpart 3112 an offer which is not filed in accordance with the applicable regulations in subpart 3110 or this part will be rejected and will afford the applicant no priority.

(5) Surface jurisdiction—(i) Showing required. All applications and offers for permits or leases should name, if practicable, the Government agency from which consent to the issuance of a permit or lease must be obtained, or the agency that may have title records covering the ownership of the mineral interest involved, and identify the project, if any, of which the land is a part. Permits or leases to which such consent is necessary will not be issued until the lessee or permittee executes such stipulations as may be required by the consenting agency.

(ii) Transfer of surface control. Where the United States has conveyed the title to, or otherwise transferred the control of the surface of the lands containing the deposits to any State or any political subdivision, agency or instrumentality thereof, or a college or any other educational corporation, or association, or a charitable or religious corporation or association, such party shall be given written notification by certified mail of the application for the permit or lease, and shall be afforded a reasonable period of time within which to suggest any stipulations deemed by it to be necessary for the protection of existing surface improvements or uses to be included in the permit or lease, setting forth the facts supporting the necessity thereof, and also to file any objections it may have to the issuance thereof. Where such party opposes the issuance of the permit or lease, the facts submitted in support must be carefully considered and each case separately decided on its merits. However, such opposition affords no legal basis or authority to refuse to issue the permit or lease for the reserved minerals in the lands; in such case, the final determination whether to issue the permit or lease depends upon whether the interests of the United States would best be served thereby.

(6) Acreage holdings. Each offer or application for a lease or permit must contain a statement that applicant's interest, direct or indirect, in leases, permits, or applications for similar minerals does not exceed the maximum chargeable acreage permitted to be held for that mineral in federally owned acquired lands in the same State.

(7) Other regulations applicable. Except as otherwise specifically provided in this part the regulations prescribed under the mineral leasing laws, and con