30 U.S.C. § 223 : US Code - Section 223: Leases; amount and survey of land; term of lease; royalties and annual rental

Search 30 U.S.C. § 223 : US Code - Section 223: Leases; amount and survey of land; term of lease; royalties and annual rental

Upon establishing to the satisfaction of the Secretary of the
Interior that valuable deposits of oil or gas have been discovered
within the limits of the land embraced in any permit, the permittee
shall be entitled to a lease for one-fourth of the land embraced in
the prospecting permit: Provided, That the permittee 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 permit. The area
to be selected by the permittee, shall be in reasonably compact
form and, if surveyed, to be described by the legal subdivisions of
the public-land surveys; 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; deposits
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 accrue for that
year, and shall continue in force otherwise as prescribed in
section 226 of this title for leases issued prior to August 21,
1935. The permittee shall also be entitled to a preference right to
a lease for the remainder of the land in his prospecting permit at
a royalty of not less than 12 1/2 per centum in amount or value of
the production nor more than the royalty rate prescribed by
regulation in force on January 1, 1935, for secondary leases issued
under this section, and under such other conditions as are fixed
for oil or gas leases issued under section 226 of this title the
royalty to be determined by competitive bidding or fixed by such
other method as the Secretary may by regulations prescribe:
Provided further, That the Secretary shall have the right to reject
any or all bids.