tories, or Possessions, where the studies and research are to be pursued, and return to the home of the applicant (or point of departure), including travel via Washington, D. C., en route to the place of study or research and from the place of study or research to Washington, D. C., and return to that place, if necessary, for consultation with reference to the fellowship, and between places of study and research in the United States, its Territories or Possessions, in accordance with the Standardized Government Travel Regulations and the Act of June 3, 1926, as amended, in which connection claim for reimbursement may be made only for items in the following schedule and contingent upon prior authorization: If (1) Rail fare: First-class fare. travel is performed on an extra-fare train, expenses in excess of the first-class fare must be borne by the traveler. No receipts are necessary. (Government transportation requests are to be used, if practicable, within the United States.) (2) Pullman fare: Lower berth or parlor car seat. No receipts are necessary if Government transportation requests are used. If purchased with cash the Pullman stub must be attached to the reimbursement voucher. (3) Steamer fare: 'Not exceeding the lowest minimum first-class fare of the ship on which travel is performed. American vessels must be used if available (section 901 of the Merchant Marine Act of 1936, 49 Stat. 2015. This requirement has been suspended with respect to appropriations for the fiscal year 1944 by section 302 of Public Law 216-78th Congress, approved December 23, 1943). No receipts are necessary. (4) Airplane fare: Transportation by air will be allowed regardless of the cost when authorized by the head of the respective bureau. When air travel has not been specifically authorized, the traveler may proceed by air with the understanding that he may claim reimbursement therefor only in an amount not exceeding what it would have cost had the travel been performed by public conveyance over land or water. No receipts are necessary. 'In all cases, round trip tickets must be purchased if possible. In the event that the return portion of the ticket cannot be used, it should be returned to the respective bureau for collection of the refund. (5) Taxicab: At the beginning and termination of the journey and at all points where a change of conveyance is necessary while in a direct travel status. No receipts are necessary. (6) Excess baggage charges: For personal effects (not household furniture) which are not carried free by the transportation company. Receipts are necessary and they should indicate that the traveler has availed himself of the free allowance, if such an allowance is granted. (7) Drayage or transfer of baggage: For the hauling of personal effects from home to the station or dock, et cetera. Receipts are not necessary but should be submitted if possible. Charges by porters for handling the bags or baggage will not be allowed. (8) Steamer rug and steamer chair: Receipts are necessary. Charges for steamer cushions will not be allowed. (9) Tips and gratuitous fees: Will not be reimbursed. (c) Per diem. Per diem in lieu of subsistence while in travel status proceeding from, and to, his home at the following rates: $6 over land and by air in and outside of the United States, and $4 aboard vessels outside of the United States. No per diem will be allowed concurrently with monthly allowances, but per diem may be substituted therefor at the rate of $6 per day for any period of authorized travel. $ 2.5 Duration of fellowships. Fellowships will be awarded for periods not exceeding one year each from date of arrival in Washington, and may be extended for not exceeding the same periods in the manner prescribed under § 2.3 and subject to the availability of appropriations. Fellowships may be cancelled for cause by the Secretary of Agriculture on the recommendation of the appropriate bureau head, and with the approval of the Secretary of State, or the duly authorized representative of the Secretary of State. and type of fellowship, and the allowances authorized; and shall describe in general terms the program of studies: Provided, however, That the head of the bureau concerned may in his discretion subsequently amend the course of studies and duration of the fellowship within the broad outlines of the prescribed option in order to develop a program better suited to the needs and capabilities of the individual fellow. § 2.7 Definitions. As used in the regulations in this part, the term "bureau" includes the Bureau of Agricultural Economics, the Extension Service, and the Soil Conservation Service of the United States Department of Agriculture. The term "heads of the respective bureaus" includes the Chief of the Bureau of Agricultural Economics, the Director of the Extension Service, and the Chief of the Soil Conservation Service. Sec. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 PART 4-OIL AND GAS LEASES [ADDED] Oil and gas rights to which the regu- Policy as to development. Maximum aggregate acreage of oil and Compensation to the United States for Leasing of oil and gas resources in un- Future interests. Qualifications of lessees. Drainage. 4.8 4.9 4.10 4.11 4.12 4.13 4.14 Bond requirements. 4.15 Assignment of oil and gas leases or interests therein. Inclusion of leased lands in unitization programs. Leases on same land for minerals other than oil and gas. 4.16 Non-discriminatory employment pol 408; 55 Stat. 795, 796, 797, 838, 839, 50 U.S.C. App., Sup., note prec. 1, 601, 611. E.O. 6209, July 21, 1933, 7027 and 7028, Apr. 30, 1935, 7041, May 15, 1935, 7200, Sept. 26, 1935, 7530, 7557. E.O. 9001, 9023, 3 CFR Cum. Supp. 40 Ops. Att'y Gen. No. 7, Apr. 2, 1941. SOURCE: §§ 4.1 to 4.20, inclusive, contained in Regulations, Secretary of Agriculture, May 13, 1944, effective 30 days after May 15, 1944, 9 F.R. 5103, 5397. § 4.1 Oil and gas rights to which the regulations in this part apply. The regulations herein promulgated are applicable to oil and gas rights owned by the United States and under the jurisdiction of the Department of Agriculture or any agency thereof. They are not applicable to oil and gas rights in (a) lands reserved from the public domain or acquired by exchange pursuant to the Act of March 20, 1922 (42 Stat. 465, 16 U.S.C. 485, 486), as such lands are subject to the mineral laws applicable to the public domain and the authority to execute such laws is vested in the Secretary of the Interior, or (b) to lands acquired in satisfaction of a loan from any agency under the supervision of the Farm Credit Administration. Oil $4.2 Policy as to development. and gas leases will be issued by the Secretary of Agriculture or his representative, when one or both of the following conditions are found to exist: (a) Well established necessity for the production of additional supplies of oil and gas, or for the development of additional oil and gas reserves, in order to meet war needs. (b) Where the actual or impending development of oil or gas resources of nonFederal lands may, without adequate compensation to the United States, drain the oil and gas resources of the lands administered by the Secretary. § 4.3 Right to reject bids and applications and to waive informality in bids and applications. The Secretary reserves the right to reject any or all bids and applications and to waive any informality in bids and applications. § 4.4 Maximum aggregate acreage of oil and gas leases. (a) To prevent monopoly or concentration of control of oil and gas resources owned by the United States, no person, firm, association, or corporation shall be granted, nor will approval be given to an assignment or transfer of, a lease or leases by this Department of an acreage which, combined with the acreage held by such lessee on lands of the United States under other leases or with a proportionate share in such acreage as described hereinafter in this paragraph, will exceed a maximum of 2,560 acres within the geologic structure of the same producing oil or gas field or a maximum of 7,680 acres in any single State, except as provided in paragraph (c). Where the United States owns only an undivided fractional interest in the oil and gas resources of the lands involved, the area charged against the limits above prescribed shall be that part of the total acreage involved in the lease which is proportionate to the ownership by the United States of the oil and gas resources therein: Provided, That the total acreage of lands of the United States leased for oil and gas production to any person, firm, association, or corporation, where the United States owns undivided interests in the oil and gas deposits, shall not exceed 5,120 acres within the geologic structure of the same producing oil or gas field, or 15,360 acres within any single State. (b) When a bidder or other applicant for a lease owns common stock of a corporation or is a member of a company or association, holding other oil or gas leases issued by the United States, a part of the leased acreage, proportionate to the applicant's ownership of the stock of the corporation or the applicant's interest in the company or association, shall be included in the applicant's aggregate acreage. When the applicant is a corporation whose common stock is owned by a holder of an oil or gas lease issued by the United States, or when the applicant is a company or association, a member of which holds such a lease, a part of the leased acreage, proportionate to the stockholder's ownership of common stock in the corporation or the member's interest in the company or association, shall be included in the applicant's aggregate acreage. (c) In the interest of conservation of oil and gas resources, leased lands operated in conformity with a cooperative or unit plan of development covering a pool, field, or area, which plan has been approved by the Department of Agriculture or another Federal department, will not be subject to or included within the acreage limitations above prescribed. §4.5 Compensation to the United States for oil and gas leases. Oil and gas leases will be granted only on the basis 625507-45-SUPP. VII-BK. 1-21 of payment to the United States of an equitable compensation, which will normally be made in the three following forms: (a) A bonus, to be paid for the issuance of an oil and gas lease. Such bonus will be the determining factor in the award of a lease when the lease is to be issued on the basis of competitive bidding. (b) A rental, to be paid annually and in advance, for each acre or fraction thereof in the amount of 25¢ for the first lease year, 50¢ for the second lease year, 75¢ for the third lease year, and $1.00 for the fourth and each subsequent lease years: Provided, That if prior to the issuance of a lease a valuable deposit of oil or gas shall have been discovered within the limits of the geologic structure upon which all or a part of the leased lands are situated, the annual rental shall be $1.00 per acre or fraction thereof. If such a deposit shall be discovered after the issuance of a lease, the rental shall be $1.00 per acre or fraction thereof for each lease year beginning after such discovery. If the interest of the United States in the oil and gas resources of the leased lands shall be less than the total or complete interest, the proportion of the rentals payable on account of each acre or fraction thereof shall be the same as the proportion which the interest of the United States in the oil and gas resources bears to the total interest. The rental paid for any one lease year shall be credited on the royalty for that year. (c) A royalty, consisting of a stipulated percentage of the total volume or value of the oil and gas produced from the leased lands, which percentage shall be computed in the manner hereinafter stated in this paragraph (c): Provided, That if the interest of the United States in the oil and gas resources of the leased lands shall be less than the total or complete interest, the proportion of production of oil and gas upon which the stipulated royalty shall be due and payable shall be the same as the proportion which the interest of the United States in the oil and gas resources bears to the total interest. (1) When the price of oil used in computing royalty value is $1 or more per barrel, the per centum of royalty shall be as follows: Page 311 When the average production for the calendar month in barrels per well per day is: Not over 50, the royalty shall be 12.5 percent. Over 50 but not over 60, the royalty shall be 13 percent. Over 60 but not over 70, the royalty shall be 14 percent. Over 70 but not over 80, the royalty shall be 15 percent. Over 80 but not over 90, the royalty shall be 16 percent. Over 90 but not over 110, the royalty shall be 17 percent. Over 110 but not over 130, the royalty shall be 18 percent. Over 130 but not over 150, the royalty shall be 19 percent. Over 150 but not over 200, the royalty shall be 20 percent. Over 200 but not over 250, the royalty shall be 21 percent. Over 250 but not over 300, the royalty shall be 22 percent. Over 300 but not over 350, the royalty shall be 23 percent. Over 350 but not over 400, the royalty shall be 24 percent Over 400 but not over 450, the royalty shall be 25 percent. Over 450 but not over 500, the royalty shall be 26 percent. Over 500 but not over 750, the royalty shall be 27 percent. Over 750 but not over 1,000, the royalty shall be 28 percent. Over 1,000 but not over 1,250, the royalty shall be 29 percent. Over 1,250 but not over 1,500 the royalty shall be 30 percent. Over 1,500 but not over 2,000, the royalty shall be 31 percent. Over 2,000 the royalty shall be 32 percent. When the price of oil used in computing royalty value is less than $1 per barrel, the per centum of royalty shall be the foregoing multiplied by the ratio of said price to a price of $1 per barrel: Provided, however, That the per centum of royalty shall never be less than 12.5. If the United States shall take its royalty in oil, the price received by the lessee as well as that received by the lessor shall be considered in determining the price to govern the per centum of royalty, unless both prices are $1 or more per barrel. (2) On gas, including inflammable gas, carbon dioxide and all other natural gases and mixtures thereof, and on natural or casinghead gasoline and other liquid products obtained from gas, the royalty shall be: When the average production of gas per well per day for the calendar month does not exceed 5,000,000 cubic feet, 121⁄2 percent of the amount or value of the gas and liquid products produced; and when said production of gas exceeds 5,000,000 cubic feet, 163 percent; said amount or value of such liquid products to be net after an allowance for the cost of manufacture: Provided, That the allowance for cost of manufacture may exceed twothirds of the amount or value of any product only on approval by the Secretary and that said value of gas and of liquid products shall be as determined by the Secretary. (3) The average production per well per day for oil and for gas shall be determined under rules and regulations approved by the Secretary. The foregoing to the contrary notwithstanding, during the period of the national emergency proclaimed by the President on May 27, 1941 (Proclamation 2487, 3 CFR Cum. Supp.), upon a determination by the Secretary of Agriculture that a new oil or gas field or deposit has been discovered by virtue of a well or wells drilled within the boundaries of lands described in a lease issued under these regulations, the royalty obligation to the United States of the lessee who drills such well or wells as to such new field or deposit shall be limited for a period of ten years following the date of such discovery to a flat rate of 122 per centum. Any sand or zone situated at a stratigraphic level higher or lower than the known productive sands within the area of any geologic trap shall be deemed upon discovery to be a new deposit. The discovery of a new oil or gas field or deposit shall not affect the rate of royalties on production from deposits previously known to exist. § 4.6 Leasing of oil or gas resources in proved territory, or in unproved territory where competitive interest in leasing is evident. In territory proved by prior development of producing oil or gas wells or by geologic determination, or in unproved territory where competitive interest in leasing is evident, and where the United States is the full owner of the oil and gas resources in the lands involved or where the undivided fractional interest of the United States in the oil and gas resources is such that its separate disposal is practicable and equitable, oil and gas leases will be issued only after due publicity through advertisements in newspapers of local circulation and trade journals, posting of no tices of intent in appropriate public places, and written announcements to persons known to be interested in the development of such resources, followed by the receipt and consideration of formal sealed bids. The award will be made to the qualified bidder who offers the largest sum of money as a bonus for the issuance of a lease. § 4.7 Leasing of oil and gas resources in unproved territory where competitive interest in leasing is not evident. In territory which has not been proved by prior development of producing oil or gas wells or by geologic determination and where competitive interest in leasing is not evident, on lands in which the United States is full owner of the oil and gas resources or where the undivided fractional interest of the United States in these resources is such that its separate disposal is practicable and equitable, oil and gas leases may be issued to a qualified applicant on the basis of negotiation without the requirement of competitive bidding, but under such terms and conditions as are found by the Secretary to be in the public interest. Applications for such leases shall be submitted on standard Departmental forms, obtainable from representatives of the Secretary in the field or in Washington, D. C., and shall be mailed or personally delivered to the Division of Purchase, Sales and Traffic, Department of Agriculture, Washington, D. C. An application so received shall be held for a period of ten working days following its receipt. If during such period other applications for leases on any or all of the same lands are received, or the Department is otherwise apprised of a competitive interest in leasing the lands involved, all applications will be rejected, and the procedure prescribed by § 4.6 will be followed. Otherwise, if the applicant is qualified, the application will be recognized, at the expiration of the tenth working day following the day of its receipt, as affording the applicant priority in the issuance of a lease upon such terms and conditions as the Secretary may deem to be in the public interest; competitive bids will not be solicited nor will any application subsequently received be given precedence over the first application filed in the manner herein prescribed. §4.8 Leasing of undivided fractional interests to co-owners. Where the United States is the owner of an undivided frac tional interest in oil and gas resources and the disposal of such interest to persons other than the co-owner or coowners thereof is not practicable or equitable, leases may be granted to such co-owner or co-owners or their lessees on the basis of negotiation without the requirement of competitive bidding and regardless of any other application which may be filed, but under such terms and conditions as are found by the Secretary to be in the public interest. § 4.9 Future interests. Where the United States owns a future interest in oil or gas, the Secretary may, where it is deemed in the public interest, enter into an agreement for the issuance of an oil and gas lease at some future time. § 4.10 Qualifications of lessees. In order to obtain an oil and gas lease, the prospective lessee must prove to the satisfaction of the Secretary that he is a citizen of the United States, that he has the legal capacity to enter into the lease, and that he has the financial ability to carry out the provisions of the lease. Proof of other qualifications may be required, in accordance with § 4.20. § 4.11 Drainage. When the Secretary determines that wells drilled upon lands not owned by the United States are draining oil or gas from lands or deposits owned in whole or in part by the United States and administered by him, he may negotiate agreements whereby the United States, or the United States and its lessees, shall be compensated for such drainage, such agreements to be made with the consent of all the lessees affected thereby. Steps leading to the negotiation of such agreements may be initiated in the Department or by application of interested parties. The precise nature of any agreement negotiated will depend on all the conditions and circumstances involved. § 4.12 Assignment of oil and gas leases or interests therein. No oil and gas leases issued by or under the authority of the Secretary or any interest therein shall be assigned either by operating agreement, working or royalty interest, or otherwise, nor shall any portion of the leased premises be sublet, except (a) with the consent in writing of the Secretary obtained prior to the assignment, or (b) subject to the assignment being submitted to the Secretary within thirty days of the date of its execution and to his approval. All assign |