GENERALLY-Continued
2. Where BLM sends by certified mail a notice to an offeror at his record
address that he must file a certificate as to his qualification to hold
an oil and gas lease, and the letter is returned to BLM marked "Not
Deliverable as Addressed, Unable to Forward," and it is established
that nondelivery was due to post office error, the appellant will not
be considered to have received notice, and the rejection of the lease
offer will be set aside___
(See also Mineral Leasing Act, Outer Continental Shelf Lands Act-if included
in this Index.)
1. Sec. 28 of the Mineral Leasing Act of 1920, 30 U.S.C. § 185 (1976), is not
applicable to on-lease oil and gas production facilities which are in-
cluded in a surface use and operations plan, and which are authorized
by the approval of an application to conduct leasehold operations
or construction activities__.
2. Sec. 29 of the Mineral Leasing Act of 1920, 30 U.S.C. § 186 (1976), has
consistently been interpreted as not providing authority separate from
sec. 28 of the Mineral Leasing Act, 30 U.S.C. § 185 (1976), for oil
and gas pipeline rights-of-way. Instead, it reserves to the United States
the right to allow other rights-of-way or to lease other minerals on Fed-
eral land already leased for the extraction of one mineral, and allows
the reservation of the right to dispose of the surface of land leased for
mineral extraction "insofar as said surface is not necessary to the use
of the lessee in extracting and removing deposits thereon".
3. The Secretary has broad power to regulate all on-lease activities by oil
and gas lessees and operators pursuant to the conditions contained
in oil and gas leases and his general regulatory authority under the
Mineral Leasing Act. The procedures for regulating activities on oil and
gas leases, established under Secretarial Order 2948 and the BLM-
USGS Cooperative Procedures Agreement implementing that order,
reserve to the Department the authority to protect the United States
legal interests in the property. The Secretary has broad discretion
either to continue this procedure, or to substitute any other delegation
of his authority and any other reasonable regulatory procedure which
he concludes would equally protect the United States interests___
4. All facilities related to an oil and gas lease which are located on Federal
land outside the lease, regardless of their nature, may be constructed
only after appropriate rights-of-way have been granted. Similarly,
on-lease oil and gas transportation facilities and on-lease commercial
facilities require rights-of-way. Depending on the nature of the facil-
ity, the right-of-way would be granted pursuant to either sec. 28 of
the Mineral Leasing Act of 1920, 30 U.S.C. § 185 (1976), or Title V
of the Federal Land Policy and Management Act of 1976, 43 U.S.C.
§§ 1761-1771 (1976)__.
5. Although under the Departmental regulations a competitive bidder in an
oil and gas lease sale, must, where there is another party in interest,
submit the signed statements required by 43 CFR 3102.7, failure to
comply with the regulation does not require rejection of the bid. This
result follows because in noncompetitive offerings the critical element
OIL AND GAS LEASES—Continued
GENERALLY-Continued
is determining the first qualified offeror. For competitive bidding,
the amount of the bid replaces priority of filing as the dominant
factor_-_
6. Where BLM sends by certified mail a notice to an offeror at his record
address that he must file a certificate as to his qualification to hold
an oil and gas lease, and the letter is returned to BLM marked "Not
Deliverable as Addressed, Unable to Forward," and it is established
that nondelivery was due to post office error, the appellant will not
be considered to have received notice, and the rejection of the lease
offer will be set aside...
1. An oil and gas lease offer filed in the name of a corporation in a simultan-
eous filing is properly rejected where it is not accompanied either by
corporate qualification papers or by any reference to a serial number
where such information might be found, as required by 43 CFR
3102.4-1. Such omissions cannot be cured after the drawing__
2. Where a corporate simultaneous oil and gas lease offeror alleges no facts
which could disprove its failure to comply with 43 CFR 3102.4-1,
no hearing will be granted as requested.
3. An entry card in a simultaneous oil and gas lease drawing need not be
rejected under 43 CFR 3112.2-1(a) where the offeror's name and ad-
dress are affixed with a rubber stamp outside the preprinted boxes but
are otherwise legible and in the designated manner on the face of the
card____
1. "Interest in an oil and gas lease or offer." Where a party to a pooling
agreement is authorized to advance funds for filing of drawing entry
cards in simultaneous oil and gas lease drawings, payment of rentals,
and office expenses, and is entitled to be reimbursed therefor with
interest and receive a consultation fee from the pooled proceeds of any
leases issued, all parties to the agreement have an interest in each lease
offer within the meaning of 43 CFR 3102.7, requiring the disclosure
of interested parties____
2. Where a party to a pooling agreement is authorized to advance funds for
filing drawing entry cards in simultaneous oil and gas lease drawings,
payment of rentals, and office expenses, and is entitled to be reimbursed
therefor and receive a consultation fee from the pooled proceeds of the
sale or assignment of any lease issued, the filing in a lease drawing for
a particular parcel by more than one party to the agreement constitutes
a multiple filing in violation of 43 CFR 3112.5-2...
3. An entry card in a simultaneous oil and gas lease drawing need not be
rejected under 43 CFR 3112.2-1 (a) where the offeror's name and
address are affixed with a rubber stamp outside the preprinted boxes
but are otherwise legible on the face of the card.
1. "Interest in an oil and gas lease or offer." Where a party to a pooling agree-
ment is authorized to advance funds for filing of drawing entry cards
in simultaneous oil and gas lease drawings, payment of rentals, and
office expenses, and is entitled to be reimbursed therefor with interest
and receive a consultation fee from the pooled proceeds of any leases
OIL AND GAS LEASES-Continued
Sole Party in Interest-Continued
issued, all parties to the agreement have an interest in each lease offer
within the meaning of 43 CFR 3102.7, requiring the disclosure of
interested parties__
2. Although under the Departmental regulations a competitive bidder in an
oil and gas lease sale, must, where there is another party in interest,
submit the signed statements required by 43 CFR 3102.7, failure to
comply with the regulation does not require rejection of the bid. This
result follows because in noncompetitive offerings the critical element
is determining the first qualified offeror. For competitive bidding, the
amount of the bid replaces priority of filing as the dominant factor.
COMMUNITIZATION AGREEMENTS
1. Federal lands included in a unit agreement approved pursuant to 30 CFR
Part 226 or a communitization agreement approved pursuant to 43
CFR 3105.2 are treated like an individual oil and gas leasehold for
the purpose of determining whether rights-of-way are required for facil-
ities located thereon__.
1. Although under the Departmental regulations at competitive bidder in an
oil and gas lease sale, must, where there is another party in interest,
submit the signed statements required by 43 CFR 3102.7, failure to
comply with the regulation does not require rejection of the bid. This
result follows because in noncompetitive offerings the critical element
is determining the first qualified offeror. For competitive bidding, the
amount of the bid replaces priority of filing as the dominant factor___
1. An order by a Conservation Manager of the Geological Survey directing
oil and gas lessees of Outer Continental Shelf lands to subscribe to a
unit plan allocating production from a specific reservoir on the basis
of original net acre-feet of gas-bearing sand, i.e., the volume of gas-
bearing sand in place prior to production of any gas from the reservoir,
will be affirmed where such a plan of allocation of production is in
common use on OCS lands and it has not been shown that the order is
arbitrary or capricious__
FIRST-QUALIFIED APPLICANT
1. An oil and gas lease offer filed in the name of a corporation in a simulta-
neous filing is properly rejected where it is not accompanied either by
corporate qualification papers or by any reference to a serial number
where such information might be found, as required by 43 CFR
3102.4-1. Such omissions cannot be cured after the drawing-.
1. The Crude Oil Windfall Profit Tax Act, P.L. 96-223, 94 Stat. 229 (1980)
imposes the windfall profit tax on Federal oil royalty revenue. The
states have no economic interest, as that phrase is used in the Wind-
fall Profit Tax Act, in Federal royalty revenue that would exempt their
share from taxation. Moreover, revenue from the windfall profit tax
cannot be treated as royalty revenue and be distributed to the states
under sec. 35 of the Mineral Leasing Act, as amended, 30 U.S.C. § 191
(1976). Accordingly, the states' share of Federal oil royalties must be
based upon after-tax royalty revenue__--
OIL AND GAS LEASES-Continued
STIPULATIONS
1. The Secretary has broad power to regulate all on-lease activities by oil
and gas lessees and operators pursuant to the conditions contained in
oil and gas leases and his general regulatory authority under the
Mineral Leasing Act. The procedures for regulating activities on oil
and gas leases, established under Secretarial Order 2948 and the
BLM-USGS Cooperative Procedures Agreement implementing that
order, reserve to the Department the authority to protect the United
States legal interests in the property. The Secretary has broad dis-
cretion either to continue this procedure, or to substitute any other
delegation of his authority and any other reasonable regulatory pro-
cedure which he concludes would equally protect the United States
interests...
UNIT AND COOPERATIVE AGREEMENTS
1. Federal lands included in a unit agreement approved pursuant to 30 CFR
Part 226 or a communitization agreement approved pursuant to 43
CFR 3105.2 are treated like an individual oil and gas leasehold for
the purpose of determining whether rights-of-way are required for
facilities located thereon___.
2. The authority to segregate partially unitized oil and gas leases must be
clear, since segregation creates two new leases from a single lease and
fundamentally modifies a lessee's legal rights and obligations. Such
authority will not be presumed or extrapolated from a general grant
of regulatory authority_-_-
3. An order by a Conservation Manager of the Geological Survey directing oil
and gas lessees of Outer Continental Shelf lands to subscribe to a unit
plan allocating production from a specific reservoir on the basis of orig-
inal net acre-feet of gas-bearing sand, i.e., the volume of gas-bearing
sand in place prior to production of any gas from the reservoir, will
be affirmed where such a plan of allocation of production is in common
use on OCS lands and it has not been shown that the order is arbitrary
or capricious_‒‒.
OUTER CONTINENTAL SHELF LANDS ACT
(See also Oil & Gas Leases-if included in this Index.)
GENERALLY
1. The Outer Continental Shelf Lands Act, as amended, 43 U.S.C. §§ 1331-56
(Supp. II 1978), provides the exclusive authority for the development
of minerals on the outer continental shelf. Mining claims situated on
the outer continental shelf assertedly located pursuant to the placer
provisions of the general mining law, 30 U.S.C. §§ 35-36 (1976), must
be declared null and void..
2. Apart from control over authorizations to exploit the mineral resources of
the OCS, the Department has no authority to regulate activities affect-
ing mineral resources on the OCS_ _ _.
3. The National Historic Preservation Act, Outer Continental Shelf Lands
Act and National Environmental Policy Act authorize a stipulation
which provides that a cultural resource included on or eligible for in-
clusion on the National Register which is discovered by an OCS lessee
as a result of lease operations and which is salvaged, be made reason-
ably available to recognized scientific or educational institutions for
study..
OUTER CONTINENTAL SHELF LANDS ACT-Continued
4. The legislative history of the OCS Lands Act shows that the Secretary is
authorized to modify and incorporate the regulatory provisions of the
Mineral Leasing Act, as they existed in 1953 when the OCS Lands Act
was passed, into OCS leasing regulations as the circumstances of off-
shore leasing make appropriate___.
5. The Secretary generally is free to adopt any reasonable regulatory meas-
sures which he determines to be necessary and proper to prevent waste,
conserve natural resources, protect correlative rights, or carry out
the leasing provisions of the OCS Lands Act, regardless of whether such
measures are expressly listed in either the Act or the Mineral Leasing
Act____
GEOLOGICAL AND GEOPHYSICAL EXPLORATION
Generally
1. A deep stratigraphic test, whether drilled on or off a structure believed to
hold oil or gas, is a kind of geological exploration. Therefore, the Secre-
tary has the authority to allow prelease on-structure tests under sec.
11 of the Outer Continental Shelf Lands Act___
Reimbursement
1. The U.S. Geological Survey must pay permittees reasonable reproduction
costs for geological data and information submitted under sec. 26_-_-_-
OIL AND GAS INFORMATION PROGRAM
1. The U.S. Geological Survey has a right to look at all of a lessee's geological
and geophysical data and information. If it keeps the lessee's copy, it
must pay the lessee a reasonable sum for reproduction costs. In certain
situations, the Survey must also pay the lessee a reasonable sum for
processing geophysical data____
Secretary's Access to Data and Information
1. Sec. 26(a)(1)(A) applies to geological and geophysical data and informa-
tion only. Other types of data and information are gathered under
other sections of the Act___
2. The Secretary may require permittees to ship data and information to him
for review. If he then decides to keep them, he must pay the reimburse-
ment required by sec. 26---
1. The Secretary's mandate under the Outer Continental Shelf Lands Act,
43 U.S.C. § 1331 et seq. (Supp. II 1978), to administer and supervise
development and production of the oil and gas resources of the OCS
could not be accomplished without the authority to require develop-
ment and production plans from oil and gas lessees in the Gulf of
Mexico....
2. Sec. 25 of the Outer Continental Shelf Lands Act, 43 U.S.C. § 1351 (Supp.
II 1978) does not deprive the Secretary of authority to require develop-
ment and production plans for oil and gas leases in the Gulf of Mexico__
3. Secs. 25(a) (1) and (b) of the Outer Continental Shelf Lands Act, 43 U.S.C.
§ 1351(a)(1) and (b) (Supp. II 1978), exempt oil and gas lessees in the
Gulf of Mexico and OCS lessees who have discovered oil or gas in
paying quantities at the time of enactment of these sections from
submitting development and production plans which meet the require-
ments of sec. 25 of the Act____
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