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U.S. Code as of:
01/19/04
Section 398e. Applications for permits to prospect for oil and gas filed under other statutes; disposition
The Secretary of the Interior is hereby authorized, under such
rules and regulations as he may prescribe, to allow any person who
prior to May 27, 1924, filed an application for a permit in
accordance with the provisions of the Act of February 25, 1920, to
prospect for oil and gas upon lands within an Indian reservation or
withdrawal created by Executive order who shall show to the
satisfaction of the Secretary of the Interior that he, or the party
with whom he has contracted, has done prior to January 1, 1926, any
or all of the following things, to wit, expended money or labor in
geologically surveying the lands covered by such application, has
built a road for the benefit of such lands, or has drilled or
contributed toward the drilling of the geologic structure upon
which such lands are located, or who in good faith has either filed
a motion for reinstatement or rehearing; or performed any other act
which in the judgment of the Secretary of the Interior entitles him
to equitable relief, to prospect for a period of two years from
March 3, 1927, or for such further time as the Secretary of the
Interior may deem reasonable or necessary for the full exploration
of the land described in his application under the terms and
conditions therein set out, and a substantial contribution toward
the drilling of the geologic structure thereon by such applicant
for a permit thereon may be considered as prospecting under the
provisions hereof; and upon establishing to the satisfaction of the
Secretary of the Interior that valuable deposits of oil and gas
have been discovered within the limits of the land embraced in any
such application, he shall be entitled to a lease for one-fourth of
the land embraced in the application: Provided, That the applicant
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
application. The area to be selected by the applicant shall be in
compact form and, if surveyed, to be described by the legal
subdivisions of the public land surveyed; 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; deposit 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 may accrue for that year, with the preferential
right in the lessee to renew the same for successive periods of ten
years upon such reasonable terms and conditions as may be
prescribed by the Secretary of the Interior. The applicant shall
also be entitled to a preference right to a lease for the remainder
of the land in his application at a royalty of not less than 12 1/2
per centum in amount or value of the production, the royalty to be
determined by competitive bidding or fixed by such other methods as
the Secretary of the Interior may by regulations prescribe:
Provided further, That the Secretary of the Interior shall have the
right to reject any or all bids.
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