REGULATIONS PRESCRIBING PERCENT OF ROYALTY

Section 17 of General Land Office Circular 1386, dated May 7, 1936, states:

17. Royalties.--Royalties, as follows, shall be paid on the amount or value of all production from the leased lands (except that portion thereof used for production purposes on said lands or unavoidably lost):

(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:

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.

(2) 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.

(3) 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.

The average production per well per day for oil and for gas shall be determined under rules and regulations approved by the Secretary of the Interior.