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July 22, 1964

“One of the copies of the offer first filed(italics added) should be marked as "original.” Meinhart filed only one copy on May 17, 1961. Obviously that was the original and need not be marked as such. The description in it controlled over the description in the copies later filed within the 30-day period.

As for Tidewater's contention that the offer and offer BLM-A 057151 are defective because they were not accompanied by a map or plat showing the location of the lands applied for, the Department has held that the applicable regulation, 43 CFR, 1964 rev., 200.5 (a), now 43 CFR, 1964 Supp., 3212.1, does not require an offeror to accompany his offer with a map or plat. Hope Natural Gas Company, 70 I.D. 228 (1963); Merwin E. Liss et al., 70 I.D. 231 (1963). In the Hope case, however, it was stated that an offeror who does not furnish a map or plat

may properly be required to prove that the land for which he has applied is adequately shown on a plat or map so as to permit its location within the administrative unit or project of which it is a part (70 I.D. at 230). Accordingly, Meinhart should be required to establish that the lands applied for are adequately shown on a plat or map.

It is noted that Tidewater has singled out only two of Meinhart's offers for criticism on the ground that he did not file map or plat. An examination of Meinhart's seven other offers also shows that no map or plat was filed with those offers. Accordingly, Meinhart should be required to make the same showing with respect to these offers.

By the same token it is noted that, except for Tidewater's two offers in conflict with the two Meinhart offers singled out for criticism and a third Tidewater offer (BLM-A 056390), Tidewater, too, did not furnish a map or plat showing the location of the lands applied for. Six of Tidewater's offers are therefore subject to the same criticism as it has leveled against Meinhart's two offers. However, since the Tidewater offers are defective for the primary reason discussed earlier, no showing need be required of Tidewater so far as a map or plat is concerned unless Meinhart's offer or any other prior offer in good standing is rejected. Tidewater's offers should not, of course, be rejected, barring other fatal defects, until prior offers in conflict are accepted.

Therefore, pursuant to the authority delegated to the Solicitor by the Secretary of the Interior (210 DM 2.2A (4) (a); 24 F.R. 1348), the decision appealed from is affirmed as modified and the case is remanded for further proceedings in conformity with this decision.

ERNEST F. HOM,

Assistant Solicitor.

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Oil and Gas Leases: Extensions— Oil and Gas Leases: Rentals Alaska: Oil

and Gas Leases The annual rental due for the sixth and succeeding years on noncompetitive

oil and gas leases in Alaska issued prior to July 3, 1958, and extended there after is at the rate of 50 cents per acre per annum.

APPEAL FROM THE BUREAU OF LAND MANAGEMENT

On March 1, 1961, Colorado Oil and Gas Corporation, hereinafter referred to as Colorado, as operator of the Icy Bay-Cape Fairweather development contract area in Alaska, submitted applications for the extension of certain oil and gas leases, issued on April 1, 1956, under the terms of section 17 of the Mineral Leasing Act as amended by the act of August 8, 1946, 60 Stat. 951, and the act of July 29, 1954, 68 Stat. 583. Rental at the rate of 50 cents per acre for the sixth year of the leases was paid under protest. Colorado argued that the rental for the sixth year under the extended leases should be at the rate of 25 cents per acre, as provided in the leases, notwithstanding the fact that the so-called Alaska Oil Proviso, contained in section 22 of the Mineral Leasing Act of February 25, 1920, 41 Stat. 446, which provided that leases in Alaska “shall be upon such rental and royalties as shall be fixed by the Secretary of the Interior and specified in the lease,” had been amended by section 10 of the act of July 3, 1958, 72 Stat. 324; 30 U.S.C. $ 251 (1958), to provide that the annual lease rentals for land in Alaska not within any known geological structure July 27, 1964 of a producing oil or gas field shall be identical with those prescribed for such leases covering similar lands in the other States.

1 At various dates thereafter, Colorado submitted applications for the extension of other leases issued during 1956 and submitted rentals for the sixth year of those leases on the basis of 50 cents per acre under protest, stating that it had no objection to the consolidation of its protests.

By decision dated March 12, 1962, the land office at Anchorage, Alaska, dismissed the protest on the basis of the legislative history of the act of July 3, 1958, as set forth in J. W. Bauler, Walter P. Sharpe, 66 I.D. 377 (1959).

On appeal, the Division of Appeals, Bureau of Land Management, in a decision dated February 21, 1963, affirmed the dismissal of the protest, pointing out that under section of the Mineral Leasing Act Revision of 1960, 74 Stat. 789; 30 U.S.C. § 226–1 (Supp. V, 1964), any noncompetitive oil and gas lease extended thereunder shall be subject to the rules and regulations in force at the expiration of the initial 5-year term of the lease. The decision referred to the fact that, when the applications for the 5-year extensions were filed, the rental rates for leases in Alaska had been increased and that, while the regulation in effect when those terms expired may appear to have been inconsistent with the statute, it is the statute which must prevail.

In this appeal to the Secretary, Colorado continues to question the rate of 50 cents per acre for the sixth and succeeding years of leases on lands in Alaska held under noncompetitive leases issued prior to July 3, 1958, but extended thereafter.

It argues that, having granted valid leases with the right to extension for five years and having specified in the leases what the rate for the sixth and succeeding years would be, the Government would be abrogating its contract with the lessees if the rate of rental were changed. In other words, it argues that the leases, for all practical purposes, were for 10 years and that the rate of rental covering those leases issued prior to July 3, 1958, cannot be increased.

In the view of the Department, the charging of the higher rental on extended terms of leases in Alaska is not in violation of a valid contractual term. On the contrary, it is in accordance with the mandate of the Mineral Leasing Act.

The source of the Secretary's authority to issue oil and gas leases on the public domain is entirely statutory. Any provision in a lease inconsistent with the terms of the act is necessarily invalid. At the time the leases here in question were issued, the Secretary had no authority to issue a noncompetitive lease on land in Alaska for a fixed term of more than five years. Section 17 of the Mineral Leasing Act as amended by the act of August 8, 1946, supra, specifically provided that:

* * Leases issued under this section shall be for a primary term of five years and shall continue so long thereafter as oil or gas is produced in paying quantities.

The provision in the Mineral Leasing Act relating to extensions of noncompetitive leases in effect when the leases here in question were issued in 1956 is to be found in the third paragraph of section 17, as amended by the act of July 29, 1954, supra, which stated :

Upon the expiration of the initial five-year term of any noncompetitive lease maintained in accordance with applicable statutory requirements and regulations, the record titleholder thereof shall be entitled to a single extension of the lease, unless than otherwise provided by law, for such lands covered by it as are not on the expiration date of the lease withdrawn from leasing under this section. * * * Any noncompetitive lease extended under this paragraph shall be subject to the rules and regulations in force at the expiration of the initial five-year term of the lease. *

Thus the Secretary had no authority to bind the Government to a contract extending beyond five years, except where production had been obtained. Furthermore, at the time the leases here in question were issued, there was no absolute, unqualified commitment on the part of the Congress to give the lessees an extension. The extension was to be given “unless then otherwise provided by law” at the expiration of the initial 5-year term and "subject to the rules and regulations in force at the expiration of the initial five-year term of the lease.” One of the rules in force at the end of the initial term of the leases here in question was the new statutory provision on rentals.

The Secretary is bound by the terms of the statute. He could not at the time of granting these leases have agreed to any lease term inconsistent with the statute. He could not bind the United States to grant an extension of that lease except to the extent that the statute authorized such extension and the statute states unequivocally that the extension shall be "subject to the rules and regulations in force at the expiration of the initial five-year term of the lease.” With the rental rates for the sixth and succeeding years changed by statute, the earlier agreement in the original leases as to the rental rates for the extended period became a nullity.”

The Department's position in this matter is supported by the legislative history of section 10 of the 1958 act. That section was initiated by the Senate Committee on Interior and Insular Affairs. In its report on the legislation (S. Rep. No. 1720, 85th Cong., 2d sess. 6-8 (1958)) the Committee said:

? A logical extension of appellant's argument that the Government made a binding con. tract as to the rental for the sixth and succeeding years by providing the rental rates for those years in the lease would be that since the lease specified the rental rates for those years the Government bound itself to extend the lease for five years after expiration of the initial 5-year term. As we have seen, the statute did not permit a binding commitment to extend a lease for five years. Consequently the rental provisions in the lease for the sixth and succeeding years must be read simply as a statement of the rental rates for those years if the lease should be extended and unless the rates should be changed from what they were at time of issuance of the original lease.

July 27, 1964

The committee amendment, which is section 10, amends the Alaska oil proviso which now grants the Secretary the authority to charge a lesser rental and royalty on Alaska lands than on similar lands within the States, revoking such authority. The amendment also specifically requires that the Secretary charge equal rents and royalties for similar lands in the Territory and in the States.

An exception is made for those who are entitled to leases under offers or applications to lease which were filed prior to May 3, 1958, and pending on that date. * * * This exception to the lease rental rate will not apply to any extended terms of such leases. The amendment requires that all leases hereafter issued on noncompetitive Alaska lands will require the payment of the same royalty as is required on similar lands within the States of the United States. No reduction of this royalty figure is allowed for leases issued pursuant to offers or applications filed prior to May 3, 1958. Those who hare leases in effect as of the date of the act would be entitled to maintain their leases at the previous rental and royalty figure during the original term of the lease. However, the amendment causes a change in the rules and regulations; so any extended term hereafter granted on such existing leases will be subject to the increased rental and royalty figure. (Italics supplied.)

That the regulations issued by the Department with respect to rentals on noncompetitive oil and gas leases in Alaska did not immediately reflect the change in the law is immaterial because regulations in conflict with specific statutory provisions are nullities. The statute itself changed the rate of rental for the sixth and succeeding years of noncompetitive oil and gas leases in Alaska which had been issued prior to July 3, 1958, but for which applications for extensions were filed thereafter.

Accordingly, it must be held that it was proper to have dismissed the protest of Colorado.

Therefore, pursuant to the authority delegated to the Solicitor by the Secretary of the Interior (210 DM 2.2A (4)(a) ; 24 F.R. 1318), the decision of the Division of Appeals, Bureau of Land Management, is affirmed.

ERNEST F. HOM,

Assistant Solicitor.

UNION OIL COMPANY OF CALIFORNIA

Decided July 27, 1964

A-30035

Oil and Gas Leases: Applications
An oil and gas lease offer signed by an attorney in fact is not to be rejected

for failure to accompany it with evidence of his authority to sign the offer and lease if the offer contains a reference to a land office record in which the pertinent information has been filed.

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