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(5 ILCS 615/11) (from Ch. 96 1/2, par. 5011)
Sec. 11.
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.
(Source: Laws 1951, p. 1167.)
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