5 ILCS 615/11

Current through Public Act 103-1052

Section 5 ILCS 615/11 - Lands classified as proven territory

Petroleum leases shall not be issued on lands which have not been classified by the Department as proven territory. As to any proven territory to which no permit holder is entitled to a lease, the Department shall lease in areas to be determined by it, any or all of the lands in such proven territory to the responsible person offering the greatest consideration for such lease providing such person files with the Department five days prior to the opening of the sealed bids, or the auction, as hereinafter provided, a bid bond in any amount fixed by the Department to guarantee the posting of a performance bond in the event he is the successful bidder. In order to obtain the best possible consideration for such leases the Department may in its discretion offer leases under the following conditions:

(a) The Department may call for competitive offers by prospective lessees as to the royalty rate to be included as a term of the lease. The Department may call for sealed bids as to the leases, but may temporarily reject all sealed bids and forthwith offer the property for competitive bidding at public auction. If none of the bids received at public auction exceed the highest sealed bid received by the Department, the lease shall forthwith be granted to the responsible person making such highest sealed bid.

(b) The Department may set, as to any lease it offers, a minimum acceptable royalty rate, which in no case shall be less than twelve and one-half (12 1/2 %) per centum, and call for competitive offers by prospective lessees as to cash bonuses in addition to the set royalty provision. This competition may be conducted in the alternative manners provided for in subsection (a) of this section.

Any permittee who qualifies for a lease of one section, or an equivalent area, of the lands embraced by his prospecting permit shall have a preferential right to leases on the remainder of the lands embraced by his prospecting permit upon meeting the highest bid as to royalty or bonus which the Department may receive. The Department shall be authorized to reject any bid, provided that the rejection of the bid of a permittee, if he would otherwise be the successful bidder, shall be accompanied by a statement to him of the reasons for such rejection.

5 ILCS 615/11

Laws 1951, p. 1167.