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OIL AND GAS LEASES-Continued

GENERALLY-Continued
4. An assignee of an oil and gas lease, if the assignment is otherwise

valid, is entitled to protection in accordance with the bona fide
purchaser provisions of the Mineral Leasing Act if his assignment
is filed before any adverse action or protest has been made
against the lease even though the assignment had not been ap-

proved before such action or protest is made---
ACQUIRED LANDS LEASES
1. An acquired lands lease offer for a tract of land consisting of portions

of several irregularly shaped surveyed tracts of land no part of
the boundaries of which coincide with any part of the boundary
of the tract applied for need not, in addition to giving a complete
metes and bounds description of the tract tied to a corner of the
public land surveys, give the section numbers of the surveyed

tracts portions of which are included in the tract applied for.----
2. An oil and gas offer for acquired land is not defective because it is not

accompanied by a map or plat showing the location of the land
within the administrative unit or project of which it is a part, but
the offeror may be required to submit a satisfactory showing of

such a map or plat..
ACREAGE LOITATIONS
1. Acreage embraced in a lease offer which is subject to drawing to deter-

mine priority will not be charged against the offeror until the

offer has been successfully drawn..
APPLICATIONS
1. The Departmental decision in Henry 8. Morgan, Floyd A. Wallis, et

al., BLM-A-036376 (1956), affirmed by the Secretary of the In-
terior, 65 I.D. 369 (1958), is overruled to the extent that it is
inconsistent or in conflict with the conclusion reached in the opin-

ion of the Solicitor General issued December 20, 1963..
2. Oil and gas lease offers which do not draw first priority in a drawing

of simultaneously filed offers may be conditionally rejected, sub-
ject to reinstatement in the event offers with higher priorities do

not ripen into leases.--
3. Any name used by an individual, whether real or fictitious, by which

she may be known or by which she may transact business or
execute contracts, may constitute her signature if affixed by that
individual without fraudulent intent and if there is no doubt as to
the identity of the individual, and an oil and gas lease offer in
which the signed name of the offeror differs from the typed name
of the offeror in the first block of the lease form is acceptable if,
in fact, the signature is that of the offeror and the offer is, in all

other respects, acceptable----
4. Where only one copy of an oil and gas lease offer is initially filed bear-

ing as a signature a name which differs from the name of the
offeror typed in the first block of the lease form, within 30 days
four additional copies of the offer are filed bearing the same typed
name and signature as the typed name on the original form, and
after more than 30 days from the initial filing five additional
copies are filed bearing typed name and signature consistent with

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QL AND GAS LEASES-Continued
APPLICATIONS-Continued

the original form, the offer should not be rejected if all of the
copies of the offer were signed by the offeror, but the offer will

earn priority only from the time that the last copies were filed...
5. A protest against a noncompetitive oil and gas lease offer for acquired

land is properly sustained where the offer is signed by an attorney
in fact for a corporate offeror and is accompanied only by a state-
ment of the attorney in fact as to the nonexistence of an agree-
ment between the attorney in fact and the offeror whereby the
attorney in fact will acquire an interest in any lease to be issued
and by a statement by the offeror that a third party will have an
interest in the lease and there is not filed any statement by the
offeror as to whether the attorney in fact will acquire any interest

in the lease---
6. Where only one copy of an oil and gas offer for acquired lands is filed

and thereafter within the time allowed the additional copies re-
quired are filed but such additional copies vary from the first copy
in a portion of the land description, the offer is not fatally defec-
tive and the first copy filed is deemed to be controlling despite
the fact that it was not marked as the "original" copy by either

the offeror or the Bureau of Land Management----
7. 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.---
8. An oil and gas lease offer signed by an attorney in fact for the offeror

is properly rejected where it is not accompanied by a statement
of the attorney's possible interest in the offer and the lease, if is-
sued, and, if there is such interest, the further statements as to
the attorney's qualifications to hold an oil and gas lease as re-

quired by departmental regulation---
ASSIGNMENTS OR TRANSFERS
1. Although a junior offeror may have been the first qualified applicant

for an oil and gas lease, if a lease was mistakenly issued to the
senior offeror and it is assigned to a bona fide purchaser and the
assignment is filed before the land office records show any action
taken against the lease, the interests of the bona fide purchaser
will be protected in accordance with the 1959 and 1960 amend-
ments of the Mineral Leasing Act and the junior offeror's offer

must be rejected ----
2. In considering whether an assignee of an oil and gas lease was a bona

fide purchaser and entitled to protection in accordance with the
bona fide purchaser provisions of the Mineral Leasing Act, as
amended, the basic question is whether he in good faith and for
value acquired his interest without notice of a superior right to the
lease; he will not be considered as having constructive or imputed
notice that an offeror whose offer was junior to that for which
the lease issued had a right to the lease superior to the lessee,
if he acted prudently, even though an extremely cautious person
might have ascertained that the junior offeror might have a right
to have the voidable lease canceled.--

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OIL AND GAS LEASES-Continued

ASSIGNMENTS OR TRANSFERS-Continued
3. An assignee of an oil and gas lease, if the assignment is otherwise

valid, is entitled to protection in accordance with the bona fide
purchaser provisions of the Mineral Leasing Act if his assignment
is filed before any adverse action or protest has been made against
the lease even though the assignment had not been approved before

such action or protest is made-----
4. Section 10 of the act of July 3, 1958, amending the Alaska Oil Proviso

of the Mineral Leasing Act of 1920 to require rentals for noncom-
petitive oil and gas leases in Alaska to be the same as similar
leases for lands elsewhere in the United States, is not applicable
to leases which had been granted 5-year extensions prior to the
act as to the remainder of their extended term, including a 2-year
extension resulting from segregation of the lease by partial assign-

ment under section 30(a) of the Mineral Leasing Act as amended..
CANCELLATION
1. Where an oil and gas lease offer was filed prior to enactment of the

Alaska Statehood Act on July 7, 1958, a selection for the land was
filed thereafter by the Territory of Alaska pursuant to the grant
for the University of Alaska, and a lease was subsequently issued
in response to the offer and prior to the admission of the State of
Alaska on January 3, 1959, it is error to cancel the lease because of
the filing of the selection and it is immaterial that subsequent to
the admission of the State the land was patented to the State pur-

suant to the selection --
2. An oil and gas lease offer which describes land within an area over six

miles in width and within an area covering five whole sections and
parts of two end sections in width does not comply with the regula-
tion requiring that land sought for leasing must be within an area
six miles square or within an area not exceeding six surveyed sec-
tions in length or width, and a lease issued in response to such offer
is improperly issued and subject to cancellation if proper junior

offers have been filed for the land------
3. An oil and gas lease is properly canceled where it was issued pursuant

to an application which described less than 640 acres which were
available for leasing at the time the application was filed and did

not include adjoining lands which were available for leasing----
4. In considering whether an assignee of an oil and gas lease was a bona

fide purchaser and entitled to protection in accordance with the
bona fide purchaser provisions of the Mineral Leasing Act, as
amended, the basic question is whether he in good faith and for
value acquired his interest without notice of a superior right to
the lease; he will not be considered as having constructive or
imputed notice that an offeror whose offer was junior to that for
which the lease issued had a right to the lease superior to the
lessee, if he acted prudently, even though an extremely cautious
person might have ascertained that the junior offeror might have

a right to have the voidable lease canceled..
DESCRIPTION OF LAND
1. An acquired lands lease offer for a tract of land consisting of portions

of several irregularly shaped surveyed tracts of land no part of

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OIL AND GAS LEASES-Continued
DESCRIPTION OF LAND-Continued

the boundaries of which coincide with any part of the boundary
of the tract applied for need not, in addition to giving a complete
metes and bounds description of the tract tied to a corner of the
public land surveys, give the section numbers of the surveyed

tracts portions of which are included in the tract applied for---
2. A description in an oil and gas lease offer for acquired land of land in

a right-of-way which is excluded from the land applied for is in-
sufficient where the right-of-way is described only by giving the
course and distance of the center line and the width of the right-
of-way and by tieing the description to a quarter-quarter section

corner
3. Where an oil and gas offer for land described as the $1/291/2 of a

section is deficient because it improperly describes land in the
$1/281/2 which is to be excluded from the offer, the offer cannot
be accepted for the $1/28E1/4 because it is ascertained that the

excluded land lies in the S1/28W1/4 of the section-----
4. Under regulation 43 CFR 3123.8, which requires that oil and gas lease

offers for lands shown on protracted surveys include only entire
sections of land or describe all of the lands available for leasing
in each section by legal subdivisional parts, where only a portion
of a section is available, it is not proper to reject an offer for such
land which describes all of the land in the section with a state-
ment that the offer is to be deemed to include all of the land
in the described section which is available for lease if the offer
is accompanied by the first year's rental payment for the en-

tire section-
5. Where only one copy of an oil and gas offer for acquired lands is

filed and thereafter within the time allowed the additional copies
required are filed but such additional copies vary from the first
copy in a portion of the land description, the offer is not fatally
defective and the first copy filed is deemed to be controlling despite
the fact that it was not marked as the "original" copy by either

the offeror or the Bureau of Land Management---
6. An oil and gas offer for acquired land is not defective because it is

not accompanied by a map or plat showing the location of the land
within the administrative unit or project of which it is a part, but
the offeror may be required to submit a satisfactory showing of

such a map or plat-
DRILLING
1. To qualify as actual drilling operations sufficient to extend an oil and

gas lease pursuant to section 4(d) of the Mineral Leasing Act Re-
vision of 1960, drilling must be conducted in such a way as to be a
serious effort which one seriously looking for oil and gas could be
expected to make in that particular area, given existing knowledge
of geologic and other factors normally considered when drilling

for oil and gas-----
2. Where the purpose of drilling a well is only to test shallow formations

500 feet deep, known to be fresh water aquifers in the area sur-
rounding the well, where gas has been found within several
miles only in formations below 7,000 feet, and the nearest produc-

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OIL AND GAS LEASES-Continued
DRILLING—Continued

tion from the shallow formations is about 25 miles away, the drill-
ing does not serve to extend the life of a lease that would other-

wise expire-----
3. An oil and gas lease is not entitled to a 2-year extension under sec-

tion 4(d) of the Mineral Leasing Act Revision of 1960, which
grants such an extension when the lessee has commenced “actual
drilling operations" before the end of its term and is diligently
prosecuting such operations at the end of the term, when prior to
the expiration date of the lease the only acts undertaken by the
lessee are acts preliminary to the actual drilling and the actual

drilling is not commenced until after the lease has terminated.--
EXTENSIONS
1. An oil and gas lease on land within the known geologic structure

of a producing gas field which attains a minimum royalty status
because of inclusion in the participating area of a producing gas
unit but on which there is no producing or producible well and
which is subsequently extended as a consequence of the termina-
tion of the unit reverts to a rental status and is subject to the

automatic termination provision of the act of July 29, 1954.--2. To qualify as actual drilling operations sufficient to extend an oil and

gas lease pursuant to section 4(d) of the Mineral Leasing Act
Revision of 1960, drilling must be conducted in such a way as to
be a serious effort which one seriously looking for oil and gas
could be expected to make in that particular area, given existing
knowledge of geologic and other factors normally considered when

drilling for oil and gas_----
3. Where the purpose of drilling a well is only to test shallow forma-

tions 500 feet deep, known to be fresh water aquifers in the area
surrounding the well, where gas has been found within several
miles only in formation below 7,000 feet, and the nearest produc-
tion from the shallow formations is about 25 miles away, the
drilling does not serve to extend the life of a lease that would

otherwise expire-----
4. An oil and gas lease is not entitled to a 2-year extension under section

4(d) of the Mineral Leasing Act Revision of 1960, which grants
such an extension when the lessee has commenced "actual drilling
operations” before the end of its term and is diligently prosecut-
ing such operations at the end of the term, when prior to the ex-
piration date of the lease the only acts undertaken by the lessee
are acts preliminary to the actual drilling and the actual drilling

is not commenced until after the lease has terminated-----
5. The annual rental due for the sixth and succeeding years on noncom-

petitive oil and gas leases in Alaska issued prior to July 3, 1958,
and extended thereafter is at the rate of 50 cents per acre per

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6. Section 10 of the act of July 3, 1958, amending the Alaska Oil Proviso

of the Mineral Leasing Act of 1920 to require rentals for noncompetitive oil and gas leases in Alaska to be the same as similar leases for lands elsewhere in the United States, is not applicable

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