Competitive Leasing Process Noncompetitive Leasing Process
Competitive Leasing Process - General Information
expression of interest (EOI) or a noncompetitive "presale" lease offer on Form 3100-11 (July 2006) entitled, "Offer To Lease And Lease For Oil and Gas". Federal Regulations governing oil and gas leasing can be found under Title 43, Groups 3000 and 3100, of the Code of Federal Regulations.
The Competitive Oil and Gas Lease Sale Notices will contain lands from a variety of sources, for example:
- Lands in expired, terminated, relinquished, and cancelled leases,
- Lands contained in public requests or expressions of interest or noncompetitive "presale" offers,
- Lands selected for offering by BLM motion, and
- Lands declared by the General Services Administration as excess or surplus and those lands subject to drainage under the protective leasing provisions.
Information on Filing an Expression of Interest (EOI) or Noncompetitive "Presale" Lease Offer
When filing an EOI or noncompetitive presale lease offer, please make sure the following conditions are met:
Requirements for Filing an Expression of Interest (EOI)
An EOI is an informal nomination. It can be in writing or e-mailed. No filing fee or rental is required. Provide a complete legal land description, which includes the meridian, township and range, section and sectional subdivisions; metes and bounds; or tract number if it is acquired land managed by another Federal agency. Please identify the State in which the lands are located. If known, give the name of the surface management owner. The name of the party that files an EOI is kept confidential until two business days following the competitive sale.
Requirements for Filing a Noncompetitive "Presale" Lease Offer
The offeror or his authorized agent must complete Form 3100-11, either typewritten or printed in ink, and manually sign and date them. Submit one original plus two copies, include a $335 filing fee and the first year's advance rental of $1.50 per acre or portion thereof (acreage should berounded up when calculating rental). Executing the lease form signifies agreement to standard lease stipulationsand/or any additional stipulations posted to lands on a competitive sale notice. A noncompetitive offer is not kept confidential.
Helpful Hints To Keep in Mind When Submitting Expression of Interests (EOI) or Noncompetitive (Presale) Lease Offers
- Lands currently under lease should not be requested;
- Request lands in Federal ownership only;
- Lands within city limits, wilderness or wilderness study areas, withdrawn from mineral leasing, or within Indian Reservations are not available for leasing. For a complete listing of unavailable areas, review Federal Regulations 43 CFR 3120;
- BLM-managed surface lands should not be mixed with other Surface Management Agencies lands;
- Where the lands have been surveyed under the rectangular survey system, an offer for public domain minerals may not include less than 640 acres or one full section, whichever is larger. This minimum lease offer size is required except where the offer includes all available lands within a section and no contiguous lands are available for lease in an adjoining section. However, an offer to lease acquired lands minerals may exceed the 6-mile square limit;
- The maximum allowable acreage for a noncompetitive presale offer is 10,240 acres;
- NCO presale offers may be filed on terminated or expired leases one-year after its termination or expiration date;
- Do not mix public domain and acquired minerals in the same (presale) lease offer;
- Presale lease offers should not include lands within and outside a unit boundary or communitization agreement.
Oral Auction Proceedings
Notices of the Competitive Oil and Gas Lease Sales, list parcels to be offered at the auction and are published at least 45 days before an auction is held. Sale Notices can be purchased for a nominal fee. Lease stipulations applicable to each parcel are specified in the Sale Notice. Auctions are held quarterly at Eastern States and are conducted by oral bidding only. No sealed or mailed bids are accepted. Bidders or his/her representative must attend the auction in order to obtain a competitive lease.
On the day of the auction, the successful bidder must submit: (1) a properly executed lease bid form (Form 3000-2 (February 2005)), which constitutes a legally binding lease offer, (2) pay a bonus bid deposit of at least $2 per acre or fraction thereof, (3) the total amount of the first year's rental, and (4) pay an administrative fee of $130 per parcel.
This amount must be paid on the day of the auction. The balance of the bonus bid must be received within 10 working days after the auction. Bidders who fail to submit the balance of the bonus on time will forfeit their bid and all monies submitted.
Payments may be made by money order, personal, cashier's or certified check, made payable to the Department of the Interior-BLM. VISA, MasterCard, Discovery and American Express will be accepted. Cash is not accepted.
After receipt of the remaining bonus bid, a lease will be issued. The effective date of the lease shall be the first day of the month following the execution of the lease form by the authorized officer, except when the lessee request that the lease be effective the first day of the month in which issued. The primary lease term is 10 years, or for so long thereafter as oil or gas is being produced in paying quantities.
Noncompetitive Procedures - Information and Procedures for Filing a "Postsale" Lease Offers
On the first business day following the competitive oral auction, lands that have been offered competitively and received no bids shall be available for leasing noncompetitively for two (2) years.
Noncompetitive offers should be filed in triplicate on a Bureau approved form (Form 3100-11, July 2006 edition).
At least one original copy should be typewritten or printed plainly in ink, signed and dated by the offeror or anyone authorized to sign on his/her behalf. Exact reproductions of Form 3100-11 (July 2006) are acceptable. A $335 non-refundable filing fee and the first year's advance rental of $1.50 per acre or fraction thereof must be submitted with each separate offer filed.
All postsale offers filed on the first business day following the auction will be considered as having been filed simultaneously. The priority among any multiple offers received on this day for the same parcel will be determined by drawings open to the public. Offers received on subsequent days will receive priority according to the time of filing.
From the first day following the sale date until the end of that same month, the only acceptable description for a noncompetitive lease offer for the lands shall be the parcel number, as identified on the Notice of Competitive Lease Sale. Each such offer shall contain only a single parcel.
For lease offers filed after the end of the month of the sale date, use a legal land description instead of the parcel number. If the parcel number is used during the remainder of this 2-year period, the lease offer will be rejected. An offer filed during this same time period can include all or a portion of a parcel or can include a combination of parcels as they appeared on the sale notice. Just remember to use legal land descriptions and stay within the maximum acreage limitation of 10,240 acres per lease offer.
If a postsale lease terminates, is relinquished or is cancelled at any time during the 2-year period following the date of the oral auction, those lands must be re-offered through the competitive bidding process. As stated in the Reform Act, such lands are not available for noncompetitive leasing under 43 CFR 3110.1(a) during any remaining portion of the 2-year period.
If an offeror wishes to withdraw his/her lease offer (in whole or in part) the request must be received in the proper BLM office within 60 days of receipt of the lease offer. Once a lease has been authorized/signed by the Authorized Officer it cannot be withdrawn.
Noncompetitive leases are issued effective the first day of the month after signature by the Authorized Officer. The primary lease term is 10 years, or for so long thereafter as oil or gas is being produced in paying quantities.
Information and Procedures for Assigning and Transferring Oil and Gas Lease Interest
Regulations governing the filing of transfers, which includes record title assignments, operating rights transfers, overriding royalty assignments, mergers, name changes and transfers through estates, can be found in the Federal Regulations, 43 CFR 3106. Record title, operating rights and overriding royalty interest are defined as follows:
Record Title: primary ownership of an interest in an oil and gas lease that includes the obligation to pay rent, and the rights to assign and relinquish the lease. Overriding royalty and operating rights are severable from record title interests.
Operating Rights/Working Interest: the interest or contractual obligation created out of the lease (such as a sublease) authorizing the holder of that right to enter the leased lands to conduct drilling and related operations, including production, which may include as consideration a share in revenues therefrom. Operating rights may or may not be transferred through an operating agreement, however, transfer of operating rights on Federal leases must be filed and approved on the official assignment form.
Overriding Royalty: a royalty paid to someone by a record title holder in addition to, or over, the royalty paid to the United States; also, an interest in the lease which provides no control over the operations of the lease, only revenue from lease production.
Leases may be transferred by assignment or sublease as to all or part of the acreage or as to either a divided or undivided interest in a lease. An assignment of a separate zone or deposit, or of part of a legal subdivision will not be approved. The transfer should be submitted on the appropriate form and filed with the proper Bureau of Land Management State Office for approval within 90 days of execution (signature and dating) of the assignment by the assignor. The rights of the assignor to an interest in a lease will not be recognized by the Department until the transfer has been approved by the authorized officer.
Filing Procedures:
When filing an Assignment of Record Title, a $75 nonrefundable filing fee must accompany each assignment that is filed. Three originally-executed copies of Record Title Interest in a Lease for Oil and Gas or Geothermal Resources, Form 3000-3, the current edition, must be filed in the Bureau of Land Management State Office which administers the lease. Machine copies of the original signatures are not acceptable. If the official form is reproduced, the copies must be the same exact two-sided reproductions. The assignee is required to originally execute only one Request for Approval on the reverse of the assignment form. The date on the Request for Approval by the assignee must be the same date or after the date of execution by the assignor. The assignment of record title must be filed within 90 days of execution (signature and dating) of the assignment by the assignor. If the assignments are filed after the 90-day period, you may furnish a statement signed by the assignor and assignee stating that the assignment is still in effect.
Multiple assignors may convey interest on a single record title assignment. Two or more assignors may convey interest to one or more assignees on the same record title assignment.
When filing a Transfer of Operating Rights, a $75 nonrefundable filing fee must accompany each assignment that is filed. Three originally-executed copies of Transfer of Operating Rights (Sublease) in a Lease for Oil and Gas or Geothermal Resources, Form 3000-3a , the current edition, must be filed in the Bureau of Land Management State Office which administers the lease. Machine copies of the original signatures are not acceptable. The transferee is required to originally execute only one Request for Approval on the reverse of the transfer document.
Each transferor must sign and date each of the three forms. The date on the Request for Approval by the transferee must be the same date or after the date of execution by the transferor. The transfer must be filed within 90 days of execution (signature and dating) of the assignment of transfer by the transferor.
Operating Rights transfers must identify the lease formation depths either by zone, formation, or deposit. It is not necessary to file separate operating rights transfers when conveying interest in several sections of land. One transfer can convey various interest percentages at various depths.
Overriding Royalty Interests may be filed on either form, Form 3000-3 or Form 3000-3a. Only one originally executed copy is required to be filed, accompanied by a $10 filing fee for each affected lease. If more than one copy is filed, the remaining copies are returned to the assignee. If the 3000-3 or 3000-3a Form is not used, the transfer document shall include the transferee's executed statement as to his/her qualifications under 43 CFR 3102. These statements are contained on the reverse of the official Forms 3000-3 and 3000-3a.
Overriding royalty assignments are not adjudicated. The document is date stamped upon receipt and filed in the case file to validate the assignee's interest.
Mass Transfers - Mass transfers are used when a transferor is conveying interests of any type in a large number of Federal leases to the same entity. Filings should be made on the Bureau-approved current Form 3000-3 or Form 3000-3a with an exhibit of all the leases involved attached to each of the three originally-executed forms. A single copy of the assignment and appropriate exhibit for each affected lease must also be submitted to document each lease file. A $75 nonrefundable filing fee for each lease must accompany the mass transfer. An assignment (regardless of type) may be withdrawn if its received prior to approval by the Authorized Officer. However, either signatures (assignee/assignor) or (transferor/transferee) are required on the written request.
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