which shall be not less than 2 per centum of the gross value of the output of phosphates or phosphate rock at the mine, due and payable at the end of each third month succeeding that of the sale or other disposition of the phosphates or phosphate rock, and an annual rental payable at the date of such lease and annually thereafter on the area covered by such lease at such rate as may be fixed by the Secretary of the Interior prior to offering the lease, which shall be not less than 25 cents per acre for the first year thereafter, 50 cents per acre for the second, third, fourth, and fifth years, respectively, and $1 per acre for each and every year thereafter during the continuance of the lease, except that such rental for any year shall be credited against the royalties as they accrue for that year. Leases shall be for indeterminate periods upon condition of a minimum annual production, except when operation shall be interrupted by strikes, the elements, or casualties not attributable to the lessee, and upon the further condition that at the end of each twenty-year period succeeding the date of the lease such readjustment of terms and conditions shall be made as the Secretary of the Interior shall determine unless otherwise provided by law at the time of the expiration of such periods: Provided, That the Secretary of the Interior may permit suspension of operation under such lease for not exceeding twelve months at any one time when market conditions are such that the lease can not be operated except at a loss. (Feb. 25, 1920, sec. 11, 41 Stat. 440; 30 U. S. C., sec. 213.)

1588. Use of surface of other lands.-That any qualified applicant to whom the Secretary of the Interior may grant a lease to develop and extract phosphates, or phosphate rock, under the provisions of this Act shall have the right to use so much of the surface of unappropriated and unentered lands, not exceeding forty acres, as may be determined by the Secretary of the Interior to be necessary for the proper prospecting for or development, extraction, treatment, and removal of such mineral deposits. (Feb. 25, 1920, sec. 12, 41 Stat. 441; 30 U. S. C., sec. 214.)

OIL AND GAS

1589. Prospecting permits; terms and conditions; extension; location of land. That the Secretary of the Interior is hereby authorized, and directed, under such necessary and proper rules and regulations as he may prescribe, to grant to any applicant qualified under this Act a prospecting permit, which shall give the exclusive right, for a period not exceeding two years, to prospect for oil or gas upon not to exceed two thousand five hundred and sixty acres of land wherein such deposits belong to the United States and are not within any known geological structure of a producing oil or gas field upon condition that the permittee shall begin drilling operations within six months from the date of the permit, and shall, within one year from and after the date of permit, drill one or more wells for oil or gas to a depth of not less than five hundred feet each, unless valuable deposits of oil or gas shall be sooner discovered, and shall, within two years from date of the permit, drill for oil or gas to an aggregate depth of not less than two thousand feet unless valuable deposits of oil or gas shall be sooner discovered: Provided, That said application was filed ninety days prior to the effective date of this amend

atory Act. It being the intention of Congress that there shall be no discrimination as between applicants for prospecting permits, the Secretary of the Interior is directed, in every case where one or more permits have been issued, to issue permits to all other applicants for prospecting permits on the same structure, even though one or more of the permittees has developed the said structure into a producing oil or gas field, if said application for permit was filed prior to the development of such structure into a producing oil or gas field, and said applicant has otherwise complied with the law: Provided further, That when such permit is issued upon any structure after discovery, the royalty to be paid upon the preferential lease provided for in section 14 hereof [30 U. S. C., sec. 223] shall be 10 per centum in amount or value of the production and the annual payment of a rental as provided in said section 14. No prospecting permit shall be granted upon any application filed after ninety days prior to the effective date of this amendatory Act. The Secretary of the Interior may, if he shall find that the permittee has been unable with the exercise of diligence to test the land in the time granted by the permit, extend any such permit for such time, not exceeding two years, and upon such conditions as he shall prescribe: Provided, That all permits outstanding on the effective date of this amendatory Act, which on said date shall not be subject to cancelation for violation of the law or operating regulations and which have theretofore been extended by the Secretary of the Interior, shall be, and the same are hereby, extended until December 31, 1937, subject to the applicable conditions of such prior extensions: Provided further, That the Secretary of the Interior is hereby authorized to extend, for an additional period of not to exceed one year, any permit on which diligence has been exercised or on which drilling or prospecting has been suspended at the direction of the Secretary during the extension period hereby granted, but no extension of any permit beyond December 31, 1938, shall be granted under authority of this Act, or any other Act. Whether the lands sought in any such application and permit are surveyed or unsurveyed the applicant shall, prior to filing his application for permit, locate such lands in a reasonably compact form and according to the legal subdivisions of the public-land surveys if the land be surveyed; and in an approximately square or rectangular tract if the land be an unsurveyed tract, the length of which shall not exceed two and one-half times its width, and if he shall cause to be erected upon the land for which a permit is sought a monument not less than four feet high, at some conspicuous place thereon, and shall post a notice in writing on or near said monument, stating that an application for permit will be made within thirty days after date of posting said notice, the name of the applicant, the date of the notice, and such a general description of the land to be covered by such permit by reference to courses and distances from such monument and such other natural objects and permanent monuments as will reasonably identify the land, stating the amount thereof in acres, he shall during the period of thirty days following such marking and posting, be entitled to a preference right over others to a permit for the land so identified. The applicant shall, within ninety days after receiving a permit, mark each of the corners of the tract described in the permit upon the ground

with substantial monuments, so that the boundaries can be readily traced on the ground, and shall post in a conspicuous place upon the lands a notice that such permit has been granted and a description of the lands covered thereby: Provided further, That in the Territory of Alaska prospecting permits not more than five in number may be granted to any qualified applicant for periods not exceeding four years, actual drilling operations shall begin within two years from date of permit, and oil and gas wells shall be drilled to a depth of not less than five hundred feet, unless valuable deposits of oil or gas shall be sooner discovered, within three years from date of the permit and to an aggregate depth of not less than two thousand feet unless valuable deposits of oil or gas shall be sooner discovered, within four years from date of permit: Provided further, That in said Territory the applicant shall have a preference right over others to a permit for land identified by temporary monuments and notice posted on or near the same for six months following such marking and posting, and upon receiving a permit he shall mark the corners of the tract described in the permit upon the ground with substantial monuments within one year after receiving such permit: Provided further, That any person holding a permit to prospect for oil or gas which shall not be subject to cancelation for violation of the law or operating regulations or which shall have been extended under the authority of this or any other Act, in force on or after the effective date of this amendatory Act, or for which timely and acceptable application for extension shall have been filed prior to said date, shall have the right prior to the termination of such permit to exchange the same for a lease to the area described in the permit without proof of discovery at a royalty of not less than 1212 per centum or value of the production, to be determined by the Secretary of the Interior by general rule and under such other conditions as are fixed in section 17 of this Act [30 U. S. C., sec. 226]: Provided further, That no such lease shall be subject to the acreage limitations of section 27 of this Act, as amended [30 U. S. C., sec. 184], until one year after the discovery of valuable deposits of oil or gas thereon: Provided further, That any application for any prospecting permit filed after ninety days prior to the effective date of this 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 shall be payable for the first two lease years, unless valuable deposits of oil or gas are sooner discovered within the boundaries of such lease. (Feb. 25, 1920, sec. 13, 41 Stat. 441; Aug. 21, 1935, sec. 1, Public, 2972, 74th Cong.; 30 U. S. C., sec. 221.)

1590. Same; conditions as to purchase and use of water holes discovered while prospecting.-(a) All prospecting permits and leases for oil or gas made or issued under the provisions of this Act shall be subject to the condition that in case the permittee or lessee strikes water while drilling instead of oil or gas, the Secretary of the Interior may, when such water is of such quality and quantity as to be valuable and usable at a reasonable cost for agricultural, domestic, or other purposes, purchase the casing in the well at the reasonable value thereof to be fixed under rules and regulations to be

prescribed by the Secretary: Provided, That the land on which such well is situated shall be reserved as a water hole under section 10 of the Act of December 29, 1916 [43 U. S. C., sec. 300].

(b) In cases where water wells producing such water have heretofore been or may hereafter be drilled upon lands embraced in any prospecting permit or lease heretofore issued under the Act of February 25, 1920, as amended, the Secretary may in like manner purchase the casing in such wells.

(c) The Secretary may make such purchase and may lease or operate such wells for the purpose of producing water and of using the same on the public lands or of disposing of such water for beneficial use on other lands, and where such wells have heretofore been plugged or abandoned or where such wells have been drilled prior to the issuance of any permit or lease by persons not in privity with the permittee or lessee, the Secretary may develop the same for the purposes of this section: Provided, That owners or occupants of lands adjacent to those upon which such water wells may be developed shall have a preference right to make beneficial use of such water.

(d) The Secretary may use so much of any funds available for the plugging of wells, as he may find necessary to start the program provided for by this section, and thereafter he may use the proceeds from the sale or other disposition of such water as a revolving fund for the continuation of such program, and such proceeds are hereby appropriated for such purpose.

(e) Nothing in this section shall be construed to restrict operations under any oil or gas lease or permit under any other provision of this Act. (Feb. 25, 1920, sec. 40; June 16, 1934, 48 Stat. 977; 30 U. S. C., sec. 229a.)

1591. Same; extension of time for beginning drilling, etc.-The Secretary of the Interior may, if he shall find that any oil or gas permittee has been unable, with the exercise of diligence, to begin drilling operations or to drill wells of the depth and within the time prescribed by section 13 of the Act of Congress approved February 25, 1920 (41 Stat. 437) [30 U. S. C., sec. 221], extend the time for beginning such drilling or completing it, to the amount specified in such section for such time, not exceeding three years, and upon such conditions as he shall prescribe. (Jan. 11, 1922, 42 Stat. 356; 30 U. S. C., sec. 222.)

1592. Extension of oil or gas prospecting permit authorized.-Any oil or gas prospecting permit issued under the Act entitled "An Act to promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain ", approved February 25, 1920 [30 U. S. C., sec. 221], or extended under the Act entitled "An Act to authorize the Secretary of the Interior to grant extension of time under oil and gas permits, and for other purposes", approved January 11, 1922 [30 U. S. C., sec. 222], may be extended by the Secretary of the Interior for an additional period of two years, if he shall find that the permittee has been unable, with the exercise of reasonable diligence, to begin drilling operations or to drill wells of the depth and within the time required by existing law, or has drilled wells of the depth and within the time required by existing law, and has failed to discover oil or gas, and desires to prosecute further exploration. (Apr. 5, 1926, sec. 1, 44 Stat. 236; 30 U. S. C., sec. 222a.)

1593. Extension of permits already expired. Upon application to the Secretary of the Interior, and subject to valid intervening rights and to the provisions of section 1 of this Act [30 U. S. C., sec. 222a], any permit which has already expired because of lack of authority under existing law to make further extensions, may be extended for a period of two years from April 5, 1926. (Apr. 5, 1926, sec. 2, 44 Stat. 236; 30 U. S. C., sec. 222b.)

1594. Further extension of oil or gas prospecting permits.-That any oil or gas prospecting permit issued under the Act entitled "An Act to promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain", approved February 25, 1920 [30 U. S. C., sec. 221], or extended under the Act entitled "An Act to authorize the Secretary of the Interior to grant extensions of time under oil and gas permits, and for other purposes ", approved January 11, 1922 [30 U. S. C., sec. 222], or as further extended under the Act of April 5, 1926 [30 U. S. C., secs. 222 a, b], may be extended by the Secretary of the Interior for an additional period of two years, if he shall find that the permittee has been unable, with the exercise of reasonable diligence, to begin drilling operations or to drill wells of the depth and within the time required by existing law, or has drilled wells of the depth and within the time required by existing law, and has failed to discover oil or gas, and desires to prosecute further exploration. (Mar. 9, 1928, sec. 1, 45 Stat. 252; 30 U. S. C., sec. 222c.)

1594a. Further extension of permits already expired.-Upon application to the Secretary of the Interior, and subject to valid intervening rights and to the provisions of section 1 of this Act [30 U. S. C., sec. 222c], any permit which has already expired because of lack of authority under existing law to make further extensions, may be extended for a period of two years from the date of the passage of this Act. (Mar. 9, 1928, sec. 2, 45 Stat. 252; 30 U. S. C., sec. 222d.)

1595. Extension of oil or gas prospecting permits from January 1930.— That any oil or gas prospecting permit issued under the Act of February 25, 1920 (Forty-first Statutes, page 437), [30 U. S. C., sec. 221], or extended under the Act of January 11, 1922 (Forty-second Statutes, page 356), [30 U. S. C., sec. 222], or as further extended under the Acts of April 5, 1926 (Forty-fourth Statutes, page 236), and March 9, 1928 (Forty-fifth Statutes, page 252), [30 U. S. C., secs. 222 a, b, c, d], may be extended by the Secretary of the Interior for an additional period of three years in his discretion on such conditions as he may prescribe. (Jan. 23, 1930, sec. 1, 46 Stat. 58; 30 U. S. C., sec. 222e.)

1596. Same; permits already expired.-Upon application to the Secretary of the Interior, and subject to valid intervening rights and to the provisions of section 1 of this Act [30 U. S. C., sec. 222e], any permit which has already expired because of lack of authority under existing law to make further extensions, may be extended for a period of three years from the date of this Act. (Jan. 23, 1930, sec. 2, 46 Stat. 59; 30 U. S. C., sec. 222f.)

1597. Extension of oil or gas prospecting permits from June 1932.That any oil or gas prospecting permit issued under the Act of February 25, 1920 (41 Stat. 437), [30 U. S. C., sec. 221], or extended under the Act of January 11, 1922 (42 Stat. 356), [30 U. S. C., sec.