Page:United States Statutes at Large Volume 49 Part 1.djvu/721

 676 74TH CONGRESS. SESS. I. CH. 599. AUGUST 21, 1935. amendatory Act shall be considered as an application for lease under section 17 hereof : And provided further, That upon leases so granted in lieu of existing permits or granted to applicants for permits, no rentals sh all be payable for the fi rst two lease years, unle ss valuable deposits of oil or gas are sooner discovered within the boundaries of such lease. n pL ses etoee rmi ttee "SEC. 14 . That upon establishing to the satisfaction of the Sec- retary 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 com- pact form and, if surveyed, to be described by the legal subdivisions of the public-land surveys ; if unsurveyed, to be surveyed by the G overnmen t at th e expens e of th e applic ant for lease i n accor dance with rules and regulations to be prescribed by the Secretary of the Interior, and the lands leased shall be conformed to and be 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 c entum in amount or valu e of th e produc tion an d the an nual pa yment 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 17 hereof for leases issued prior to the effective date of this amendatory Act. 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 121/2 per centum in amount or value of the production nor more than the royalty rate prescribed by regu- lation 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 17 of this Act the royalty to be deter- min ed by competitive bidd ing or fixed by such o ther method as the Secretary may by regulations prescribe : Provided furth er, T hat the Secretary shall have the right to reject any or al l bids. "SEc . 17. All lands subject to disposition under this Act which are known or believed to contain oil or gas deposits, except as herein o therwise provid ed, may be leas ed by th e Secre tary of the Int erior a fter the effec tive date of this amen dator y Ac t, to the high est respo n- sible qualified bidder by competitive bidding under general regula- tions . Such lands shall be leased in units of not exceeding six hundred and forty acres, which shall be as nearly compact in form as possible . Such leases shall be conditioned upon the payment by the lessee of such bonus as may be accepted and of such royalty as may be fixed in the lease, which shall be not less than 121/2 per centum in amount or value of the production and the payment in advance of a rental to be fixed in the lease of not less than 25 cents per acre per annum, which rental except as otherwise herein provided shall not be waived, suspended, or reduced unless and un til a valuable deposit of oil or gas shal l have been discovered wi thin the lands leased : P rov id ed, T hat the r ental pai d for any one year shal l be cred ited agai nst the r oyal ties as they accrue for that year : Provided further, That in the event the Secretary of the Interior shall direct or shall assent to the suspension of operations or of production of oil or gas under any such lease, any payment of acreage rental as herein provided shall likewise be sus- pended during such period of suspension of operations or production Rentals. Provisos . M aximum ac reage. Location sites ; di- mens ions. Expenses of surveys . Term, royalty, and rental. Preference right to remaining area. Minimum royalty, etc. Rej ection of bids. Leases of known de- posits to highest bid- der, etc . Vol. 46, p. 1523. Size of units limited. Payment of bonus and ro ya lty . Rental s. .Provi sos . Cr edit of rent al against acc ru ed royal- ties. Rental canceled du r- ing suspension of opera- tions.