OIL AND GAS LEASES-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
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 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
OIL AND GAS LEASES—Continued
EXTENSIONS—Continued
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 as-
signment under section 30(a) of the Mineral Leasing Act, as
amended...
FIRST QUALIFIED APPLICANT
1. A protest by a junior offeror in a drawing of simultaneously filed oil
and gas lease offers which charges disqualification of a senior
offeror because the senior offeror is married to another offeror so
that neither was actually the sole party in interest in the separate
offers filed is properly dismissed in the absence of any proof that
either of the two offerors in question was not acting in his own
behalf and that under the law of the State in which the land ap-
plied for lies a married person cannot hold or acquire property
for his sole benefit without the other spouse's consent---
2. 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-----
3. Where an oil and gas lease is issued which erroneously omits a part
of the land applied for which is available for leasing, and the
land office simultaneously issues a decision which indicates that
the omitted land is included in the lease, the omission will not
be construed as a rejection of the offer as to the omitted land from
which the offeror must appeal in order to preserve the priority
of his offer, but the lease may be amended to include the omitted
land notwithstanding the filing of a conflicting offer for the same
land subsequent to the issuance of the lease but prior to the dis-
covery of the omission___.
KNOWN GEOLOGICAL STRUCTURE
1. A determination that land is within the undefined known geologic
structure of a producing oil or gas field is, in effect, a withdrawal
of that land from noncompetitive leasing, and where that deter-
mination is reflected by the records of the Bureau of Land Man-
agement, the land is unavailable for noncompetitive leasing and
must be excluded in determining whether a lease offer complies
with the requirements of 43 CFR 192.42 (d) ––
2. The phrase "known geologic structure of a producing oil and gas
field" has been so long understood to include oil and gas fields
which once produced and are still capable of production, although
not currently producing, that the phrase as used in Rev. Stat. 2276
(a) (2) will be considered to have the same meaning, despite the
fact that the word "producing" is used in the next paragraph of
the statute to mean actual production__---
1. A determination that land is within the undefined known geologic
structure of a producing oil or gas field is, in effect, a withdrawal
of that land from noncompetitive leasing, and where that deter-
mination is reflected by the records of the Bureau of Land Man-
agement, the land is unavailable for noncompetitive leasing and
must be excluded in determining whether a lease offer complies
with the requirements of 43 CFR 192.42 (d) ‒‒‒‒
2. "Available for leasing," as used in 43 CFR 192.42(d) and decisions
interpreting that regulation, means lands which are available for
noncompetitive leasing under the Mineral Leasing Act----
1. Land in any lease of a unit agreement which is in a participating area
is to be considered as land in a producing or producible status so
that all lands subject to that lease, whether in the unit or par-
ticipating area, are not eligible for selection by a State as school
indemnity lands____
1. An oil and gas lease on land within the known geologic structure of a
producing gas field which attains a minimum royalty status be-
cause 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. 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
3. 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
assignment under section 30(a) of the Mineral Leasing Act, as
amended ---.
4. If there are applicable funds available, refund may be made of oil and
gas lease rentals paid in excess of that required under the lease
and applicable statutes and regulations-----
5. An oil and gas lease which converts to a minimum royalty basis dur-
ing its primary term because of the discovery on it of oil and gas
in paying quantities remains in a minimum royalty status even
though production ceases and the part of it which had been put
in a known geologic structure is reclassified as not within a known
geologic structure, but it reverts back to a rental basis if the lease
is extended for a five-year period------
6. Where an office of the General Accounting Office, after an audit, re-
quests the local land office to demand minimum royalty payments
OL AND GAS LEASES-Continued
RENTALS-Continued
from a lessee for seven years of an extended oil and gas lease...
term and, upon appeal, the Comptroller General decides that only
annual rentals paid by the lessee were due, the Department will
not require the lessee to make any additional payments for the
extended term___
1. An oil and gas lease on land within the known geologic structure of
a producing gas field which attains a minimum royalty status be-
cause 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 termination of
the unit reverts to a rental status and is subject to the automatic
termination provision of the act of July 29, 1954---
2. An oil and gas lease which converts to a minimum royalty basis dur-
ing its primary term because of the discovery on it of oil and gas
in paying quantities remains in a minimum royalty status even
though production ceases and the part of it which had been put in
a known geologic structure is reclassified as not within a known
geologic structure, but it reverts back to a rental basis if the lease
is extended for a five-year period---.
3. Where an office of the General Accounting Office, after an audit, re-
quests the local land office to demand minimum royalty payments
from a lessee for seven years of an extended oil and gas lease
term and, upon appeal, the Comptroller General decides that only
annual rentals paid by the lessee were due, the Department will
not require the lessee to make any additional payments for the
extended term---
1. 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
regulation requiring that land sought for leasing must be within
an area six miles square or within an area not exceeding six sur-
veyed sections 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___
1. A determination that land is within the undefined known geologic
structure of a producing oil or gas field is, in effect, a withdrawal
of that land from noncompetitive leasing, and where that determi-
nation is reflected by the records of the Bureau of Land Man-
agement, the land is unavailable for noncompetitive leasing and
must be excluded in determining whether a lease offer complies
with the requirements of 43 CFR 192.42 (d)---
2. "Available for leasing," as used in 43 CFR 192.42 (d) and decisions
interpreting that regulation, means lands which are available for
noncompetitive leasing under the Mineral Leasing Act_‒‒‒‒‒
OIL AND GAS LEASES—Continued
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------
UNIT AND COOPERATIVE AGREEMENTS
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. Land in any lease of a unit agreement which is in a participating area
is to be considered as land in a producing or producible status so
that all lands subject to that lease, whether in the unit or partici-
pating area, are not eligible for selection by a State as school
indemnity lands-----
1. An agreement providing for the delivery by one party of a quantity of
power which cannot, with certainty, be determined in return for
the delivery by the other party of stated amounts of power over
the same period constitutes a power-for-power exchange agree-
ment
2. The advantage at federal hydroelectric projects to be realized from
implementing the "Treaty between Canada and the United States
of America relating to cooperative development of the water re-
sources of the Columbia River basin," through the execution of
exchange agreements support, as a matter of law, the Bonneville
Power Administrator's determination of "economical operation"
as required by section 14 of the Reclamation Project Act of 1939
(53 Stat. 1197, 43 U.S.C. 389) and section 5(b) of the Bonneville
Project Act (50 Stat. 734, 16 U.S.C. 832d (b)) ––
3. An applicant for an amended transmission line right-of-way under the
act of March 4, 1911, is properly required to file the stipulation re-
quired by the Department's regulations agreeing to permit the
the Department to utilize surplus capacity in the line or to
increase the capacity of the line for the transmission of power by
the Department---.
4. The requirement imposed by the Department's regulations on an appli-
cant for a transmission line right-of-way that he agree to permit
the Department to utilize surplus capacity in the line or to
increase the capacity of the line for the transmission of power by
the Department is valid___
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