Department of Energy and Natural Resources

Office of Mineral Resources

Leasing Manual

How to Acquire a Mineral Lease on State and State Agency Lands and Water Bottoms in the State of Louisiana

Step 2: Pre-Nomination Research

A.	Category Research

For the purpose of the state mineral leasing process, state lands and water bottoms have been divided into seven (7) categories and state agency lands and water bottoms have been divided into three (3) categories. Some of these categories have special procedures that must be followed when nominating lands and water bottoms falling thereunder. Further, some of these categories have special requirements that the nominating party obtain and provide certain documentation and information. LAC 43:I.907. The nominating party shall determine what category the lands or water bottoms to be nominated fall under well in advance of application so as to timely comply with any special category procedural, documentation and information requirements.

1. Seven (7) Categories of State Lands and Water Bottoms

The seven (7) categories of state lands and water bottoms on which a state mineral lease may be acquired are:

(1)	Offshore

(2)	Inland

(3)	Louisiana Department of Wildlife and Fisheries Area/State Owned

(4)	School Indemnity Lands

(5)	Tax Adjudicated Lands

(6)	Vacant State Lands

(7)	White Lake

Following are brief definitions of each of the seven (7) categories of state lands and water bottoms and any special procedural, documentation and information requirements for each.

1)	Offshore

The lands and water bottoms in this category are owned by the state and lie seaward of the Louisiana coastline, but landward of the line lying three geographic miles from the Louisiana coastline, as decreed by the United States Supreme Court in litigation styled United States v. State of Louisiana et al.

The X-Y coordinates of the Louisiana coastline, using the Louisiana plane coordinate system [NAD 1927], south zone, are provided in Exhibits A and B (the latter providing time period variations to the coordinates set forth in Exhibit A) to the Court’s fourth supplemental decree in the above-referenced litigation at 422 U.S. 13, 95 S.Ct. 2022, 44 L.Ed.2d 652 (U.S. Jun 16, 1975) (NO. 9, ORIG.). The X-Y coordinates of the three geographic mile line (hereinafter “Three Mile Line” or “Three Mile Boundary”), using the Louisiana plane coordinate system [NAD 1927], south zone, are provided in Exhibit A to the Court’s final decree in the above-referenced litigation at 452 U.S. 726, 101 S.Ct. 2605, 69 L.Ed.2d 368 (U.S. Jun 22, 1981) (NO. 9, ORIG.). Questions concerning Offshore lands and water bottoms should be directed to the State Land Office, Division of Administration, (225) 342-4578.

2)	Inland

The lands and water bottoms in this category are owned by the state and lie landward of the Louisiana coastline as decreed by the United States Supreme Court in litigation styled United States v. State of Louisiana et al.

Note: Inland lands and water bottoms fall under the Inland category only if they do not fall under one of the following five (5) state lands and water bottoms categories.

3)	Louisiana Department of Wildlife and Fisheries Area/State Owned

The lands and water bottoms in this category are owned by the state and located within the geographical boundaries of recognized and named wildlife management areas, refuges, preserves, or similarly defined and designated areas under the jurisdiction and control of the Louisiana Department of Wildlife and Fisheries (LDWF).

The State Mineral & Energy Board, with the support of the Office of Mineral Resources, Department of Energy and Natural Resources, has the authority to mineral lease state owned lands and water bottoms falling within a LDWF Area. However, the LDWF must concur in any mineral leasing of a LDWF Area under its jurisdiction and control and any state mineral lease granted on such property must adopt and incorporate LDWF special rules, provisions, regulations and other limitations on activity for that area. See LSA-R.S. 56:4; LSA-R.S. 36:602. Questions concerning LDWF Areas should be directed to the LDWF, Office of Wildlife, Fur and Refuge Division, (504) 568-5886.

Note: If title research reveals that the lands or water bottoms falling within the geographical boundaries of a LDWF Area are owned by the LDWF, and are not owned by the state, the nominating party is required to categorize his nomination as and follow the procedural requirements for the state agency lands and water bottoms category Louisiana Department of Wildlife and Fisheries Area/LDWF Owned.

a) Procedural Requirements

A party seeking to nominate state owned lands or water bottoms falling within a LDWF Area for mineral lease shall submit his nomination to the Office of Mineral Resources. The Office will then notify the LDWF via letter that lands or water bottoms in a LDWF Area have been nominated for mineral lease. The LDWF will usually respond via letter, concurring in the State Mineral & Energy Board mineral leasing the state owned acreage in the LDWF Area, as well as providing any LDWF minimums, special rules, provisions, regulations and other limitations on activity for that area.

b) Marsh Island Wildlife Refuge

The Russell Sage Foundation donated the acreage comprising this refuge to the state of Louisiana in November of 1920. The State Mineral & Energy Board is authorized to mineral lease all or any portion of the Marsh Island Wildlife Refuge. LSA-R.S. 56:798. The Foundation has given the state of Louisiana permission to advertise Marsh Island Wildlife Refuge tracts, to accept bids on the Foundation’s behalf at no lower than specified minimums, to prepare a lease agreement, and otherwise perform all functions necessary to execute a mineral lease agreement. However, the Foundation has reserved to itself the right to sign and enter into the actual mineral lease agreement. One-half (1/2) of any and all revenues due the state as royalty, rentals, or otherwise shall be made payable to the Russell Sage Foundation and the other one-half (1/2) shall be made payable to the Office of Mineral Resources. LSA-R.S. 56:798(A)(1).

c) Pass-A-Loutre Wildlife Management Area

The boundaries of the Pass-A-Loutre Wildlife Management Area are defined by the Louisiana Department of Wildlife and Fisheries incorporating a title opinion from the Office of the Governor dated August 3, 1998. A party interested in nominating acreage in the Pass-A-Loutre Wildlife Management Area for state mineral lease should be aware that there is state owned acreage mixed with privately owned acreage in this area. The nominating party has sole responsibility for determining what acreage is state owned and what acreage is privately owned.

d) Rockefeller Wildlife Refuge

The Rockefeller Foundation donated the acreage comprising this refuge in 1920. See generally LSA-R.S. 56:797.

4)	School Indemnity Lands

The United States government reserved each Section 16 in each township in Louisiana for school purposes and these lands are referred to as Section 16 School Lands. When a Section 16 was lacking full acreage (640 acres) in a township, the United States government set aside other lands in the state for the benefit of the lacking township and permitted the state of Louisiana to select acreage therefrom in lieu of the Section 16 School Lands. 43 USCA § 851.

The lands selected in lieu of the Section 16 School Lands are commonly referred to as School Indemnity Lands. The state holds title to these lands in trust for public school purposes and they may be leased for the development and production of minerals by the State Mineral Board only. See LSA-R.S. 30:154(C). A party seeking to nominate School Indemnity Lands will be nominating such lands for state mineral lease. Questions concerning School Indemnity Lands should be directed to the State Land Office, Division of Administration, (225) 342-4578.

Note: LSA-R.S. 41:642(A) provides that the trustee title of the state of Louisiana to those sixteenth section or indemnity lands granted by Congress to the state of Louisiana as trustee for the benefit of the school children of the township in which such lands are located, shall be transferred to the state of Louisiana in its sovereign capacity when, after July 22, 1982, such lands become a part of the bed of any body of navigable water as a result of erosion, subsidence of the surface, action of a navigable stream, bay, lake, or the Gulf of Mexico, or other similar occurrence. In such case, any such acreage shall be nominated under the state mineral lease category Inland.

5)	Tax Adjudicated Lands

When a tax debtor owning immovable property in Louisiana fails to pay taxes on that property, the tax collector for the parish wherein the property is located is authorized by law, after proper notice, to offer the property for sale at an advertised public sale. LSA-Const. Art. 7, §25; LSA-R.S. 47:2181. Prior to 1974, immovable property offered for such a tax sale that neither sold nor was redeemed was adjudicated to the state and is commonly referred to as Tax Adjudicated Lands. Beginning in 1974, such immovable property has been adjudicated to the parish. See LSA-R.S. 47:2186, 2251. Questions concerning Tax Adjudicated Lands should be directed to the State Land Office, Division of Administration, (225) 342-4578.

a) Documentation and Information Requirements

A party seeking to nominate Tax Adjudicated Lands for state mineral lease shall provide the Office of Mineral Resources with the following documentation and information.

i)	A copy of the title deed (procès verbal of the tax sale/tax adjudication) whereby the state acquired its ownership interest in the property setting forth:

(1)        The name of the party who lost the property at tax sale.
(2)        The legal description of the property.
(3)        The year for which taxes were unpaid which precipitated the tax sale.
(4)        The date of the tax sale at which the party lost the property.

6)	Vacant State Lands

Title to the lands and water bottoms in this category originated in the United States of America, was transferred by various Congressional Acts to the state of Louisiana, and is non-severed from the state of Louisiana. Examples of Vacant State Lands include swamp and overflowed lands, internal improvements lands, and swamp indemnity lands. Questions concerning Vacant State Lands should be directed to the State Land Office, Division of Administration, (225) 342-4578.

7)	White Lake

Acreage in this category is owned and/or claimed by the state of Louisiana and lies within the geographical boundaries of White Lake, located in Vermilion Parish, State of Louisiana. Past title disputes involving White Lake acreage have resulted in four (4) different subcategories of White Lake acreage for state mineral leasing purposes:

a)          White Lake Water Bottoms as of 1942
b)          White Lake Eroded Shoreline from 1942
c)          White Lake Alleged Section 16 School Lands
d)          White Lake Acreage East of the Louisiana Meridian (Range 1 East)

Following are the descriptions and any special procedural, documentation and information requirements for each of the four (4) subcategories of White Lake acreage. Questions concerning White Lake acreage should be directed to the State Land Office, Division of Administration, (225) 342-4578.

a) White Lake Water Bottoms as of 1942

Certain White Lake acreage is subject to judicial compromise and Act 92 of the 1942 Regular Session of the Louisiana Legislature, resolving a title dispute between the state of Louisiana and Acadia–Vermilion Rice Irrigating Company, Inc. This acreage is generally described as “a portion of the entirety of the beds and bottoms embraced within the meander of the shoreline as same existed in 1942, located in any parts of Township 14 South, Ranges 1, 2 and 3 West and 1 East, and Township 15 South, Ranges 1, 2 and 3 West and 1 East, the entirety of said area deemed to comprise 50,000 acres, whether actually more or less.”

i) Procedural, Documentation and Information Requirements

A party seeking to nominate White Lake Water Bottoms as of 1942 for state mineral lease shall follow the procedures and obtain documentation and information as outlined below.

(1)	Acquire a state mineral lease from the state of Louisiana.

(2)	Acquire a mineral lease from each of the successors in title to Acadia–Vermilion Rice Irrigating Company, Inc., currently: (1) LLOG Exploration Company, LLC (immediate successor in title to Energy Development Corp.) and (2) Avrico, Inc., within sixty (60) days after the execution of the state mineral lease, for not less than (1/2) of the bonus and royalty payable under and upon terms not substantially different from the state mineral lease.

(3)	Provide that the minimum aggregate total royalty from all leases shall not equal less than twenty-five percent (25%).

(4)	Include a provision in all of the mineral leases that at the end of the primary term, lessee shall release in favor of lessor all of lessee’s right, title and interest in such lease as to all depths one hundred feet (100′) below the deepest formation producing or deepest formation behind pipe capable of producing, at that time.

b) White Lake Eroded Shoreline from 1942

Certain White Lake water bottoms acreage has come into existence due to shoreline erosion occurring since the date Act No. 92 of the 1942 Regular Session of the Louisiana Legislature was enacted. The state claims 100% ownership of this acreage and requires the nominating party to obtain a mineral lease on this acreage from the state of Louisiana only.

c) White Lake Alleged Section 16 School Lands

Certain White Lake acreage is subject to judicial compromise and LSA-R.S. 41:643, resolving a title dispute between the state of Louisiana and the Vermilion Parish School Board to certain White Lake acreage alleged by the School Board to be Section 16 School Lands located in Township 15 South, Range 1 West, in East White Lake, Vermilion Parish, Louisiana.

i) Procedural, Documentation and Information Requirements

A party seeking to nominate White Lake Alleged Section 16 School Lands for state mineral lease shall follow the procedures and obtain documentation and information as outlined below.

(1)

Acquire a state mineral lease from the state of Louisiana without regard to the minimum royalty of LSA-R.S. 30:127(A).

(2)

Acquire a mineral lease from the Vermilion Parish School Board at the same time as acquiring a state mineral lease from the state of Louisiana for consideration equal to that of the state mineral lease without regard to the minimum royalty of LSA-R.S. 30:127(B). Failure to acquire a mineral lease from the Vermilion Parish School Board shall cause forfeiture of all rights under the state mineral lease.

Note: For ease of reference, the procedural, documentation and information requirements for acquiring a mineral lease from the Vermilion Parish School Board are set out in (a) through (b)(iii) below:

(a)

Contact the Vermilion Parish School Board and confirm whether it wants to mineral lease its interest in the White Lake Alleged Section 16 School Lands itself or by resolution direct the State Mineral & Energy Board to do so on its behalf. See LSA-R.S. 30:152(A), 153.

(b)

Should the Vermilion Parish School Board want the State Mineral Board to mineral lease the School Board’s interest in the White Lake Alleged Section 16 School Lands on the School Board’s behalf, the nominating party must provide the Office of Mineral Resources with a certified copy of a resolution by the Vermilion Parish School Board that:

(i)	Directs and authorizes the State Mineral & Energy Board to mineral lease the School Board’s interest in the White Lake Alleged Section 16 School Lands.

(ii)	Provides information as to the location and ownership of surface and mineral rights in the White Lake Alleged Section 16 School Lands.

(iii)	Contains any specific conditions, including minimum bonus and royalty, which the Vermilion Parish School Board wants to have advertised along with the description of the White Lake Alleged Section 16 School Lands acreage.

(3)

Acquire a mineral lease from each of the successors in title to Acadia–Vermilion Rice Irrigating Company, Inc., currently: (1) LLOG Exploration Company, LLC (immediate successor in title to Energy Development Corp.) and (2) Avrico, Inc., within sixty (60) days after the execution of the state mineral lease, for an aggregate amount of not less than one-half (1/2) of the aggregate bonus and royalty payable under and upon terms not substantially different from the state mineral lease and the Vermilion Parish School Board mineral lease.

(4)

Provide that the minimum aggregate total royalty from all leases shall not equal less than twenty-five percent (25%).

(5)

Include a provision in all of the mineral leases that at the end of the primary term, lessee shall release in favor of lessor all of lessee’s right, title and interest in such lease as to all depths one hundred feet (100′) below the deepest formation producing or deepest formation behind pipe capable of producing, at that time.

d) White Lake Acreage East of the Louisiana Meridian (Range 1 East)

It is the policy of the State Mineral & Energy Board to treat the White Lake acreage located east of the Louisiana Meridian (Range 1 East) as being 100% privately owned, with the state having zero ownership interest therein. Therefore, no state mineral lease is available or required on this acreage.

2. Three (3) Categories of State Agency Lands and Water Bottoms

For the purpose of the state mineral leasing process, the three (3) categories of state agency lands and water bottoms on which a state agency mineral lease may be acquired are:

1)         State Agency Lands
2)         Louisiana Department of Wildlife and Fisheries Area/LDWF Owned
3)         Section 16 School Lands

Following are brief definitions of each of the three (3) categories of state agency lands and water bottoms and any special procedural, documentation and information requirements for each.

1) State Agency Lands

The lands and water bottoms in this category are owned by state agencies such as levee districts, drainage districts, road districts, school districts, school boards, or other boards, commissions, parishes, municipalities, state universities, state colleges, state penal or charitable institutions or agencies, units or institutions of the state or a subdivision thereof, ultimately deriving power from the state of Louisiana. LSA-R.S. 30:151.

Generally, state agencies may lease their own lands for the development and production of minerals or may by resolution direct the State Mineral & Energy Board to do it for them. LSA-R.S. 30:152(A), 153. If a state agency leases its own lands, it must do so in the same manner statutorily provided for State Mineral & Energy Board leasing of state acreage and the lease must be approved and countersigned by the State Mineral & Energy Board or it is considered null and void. See LSA-R.S. 30:155, 158. If the State Mineral & Energy Board leases a state agency’s lands on behalf of the state agency, then after execution of the original lease, all rights and authority in connection therewith shall be vested in the agency to the same extent as if the agency had itself leased the land. LSA-R.S. 30:153. Questions concerning State Agency Lands, including any post-award procedures, e.g. amendment, transfer of interest, release, should be directed to the state agency who owns the lands.

Note: State agency lands and water bottoms fall under the State Agency Lands category only if they do not fall under one of the other two (2) state agency lands and water bottoms categories.

a) Procedural, Documentation and Information Requirements

A party seeking to nominate State Agency Lands for state agency mineral lease must follow the procedures and obtain documentation and information as outlined below.

(i)

Contact the state agency that owns the State Agency Lands and confirm whether it wants to mineral lease the State Agency Lands itself or by resolution direct the State Mineral & Energy Board to do so on its behalf. See LSA-R.S. 30:152(A), 153.

(ii)

Should the state agency want the State Mineral & Energy Board to mineral lease the State Agency Lands on the state agency’s behalf, the nominating party must provide the Office of Mineral Resources with a certified copy of a resolution by the state agency that:

(1)	Directs and authorizes the State Mineral & Energy Board to mineral lease the state agency’s interest in the State Agency Lands.

(2)	Provides information as to the location and ownership of surface and mineral rights in the State Agency Lands.

(3)	Contains any specific conditions, including any bonus and royalty minimums, which the state agency wants to have advertised along with the description of the State Agency Lands.

Note: In cases where two (2) or more state agencies have an interest in the same State Agency Lands, all resolutions must contain the same written description of the nominated State Agency Lands and the same specific conditions, if any.

2) Louisiana Department of Wildlife and Fisheries Area/LDWF Owned

The lands and water bottoms in this category are owned by the Louisiana Department of Wildlife and Fisheries (LDWF) and located within the geographical boundaries of recognized and named wildlife management areas, refuges, preserves, or similarly defined and designated areas under the jurisdiction and control of the LDWF.

The State Mineral & Energy Board, with the support of the Office of Mineral Resources, Department of Energy and Natural Resources, grants state agency mineral leases on LDWF owned lands and water bottoms falling within a LDWF Area. However, the LDWF must concur in any mineral leasing of any LDWF Area under its jurisdiction and control and any state agency mineral lease granted on such property must adopt and incorporate LDWF special rules, provisions, regulations and other limitations on activity for that area. See LSA-R.S. 36:602. Questions concerning LDWF Areas should be directed to the LDWF, Office of Wildlife, Fur and Refuge Division, (504) 568-5886.

Note: If title research reveals that lands or water bottoms falling within the geographical boundaries of a LDWF Area are owned by the state, and are not owned by the LDWF, the nominating party shall categorize his nomination as and follow the procedural requirements for the state lands and water bottoms category Louisiana Department of Wildlife and Fisheries Area/State Owned.

Note: If title research reveals that lands or water bottoms falling outside the geographical boundaries of a LDWF Area are owned by the LDWF, than the nominating party shall categorize his nomination as and follow the procedural requirements for the state agency lands and water bottoms category State Agency Lands.

a) Procedural Requirements

A party seeking to nominate LDWF owned lands or water bottoms falling within a LDWF Area for mineral lease shall submit his nomination to the Office of Mineral Resources. The Office will then notify the LDWF via letter that LDWF lands or water bottoms in a LDWF Area have been nominated for mineral lease. The LDWF will usually respond via letter, concurring in the State Mineral & Energy Board mineral leasing the LDWF owned acreage in the LDWF Area, as well as providing any LDWF minimums, special rules, provisions, regulations and other limitations on activity for that area.

b) Russell Sage Wildlife Management Area

The Ouachita Farm Corporation sold acreage that comprises a portion of the Russell Sage Wildlife Management Area to the Louisiana Wild Life and Fisheries Commission (now the Louisiana Department of Wildlife and Fisheries) via Act of Sale dated December 28, 1960. In the Act of Sale, Ouachita Farm Corporation reserved an undivided one-half (1/2) of the mineral rights to itself but transferred to the Louisiana Wildlife and Fisheries Commission (now the Louisiana Department of Wildlife and Fisheries) all rights to initiate, manage and handle all mineral and royalty interests appertaining to the property including, but not exclusively, the execution of leases, extension of leases, exploration rights, collection of rentals and lease bonus monies, approval and signing of additional orders and all other rights necessary and incidental thereto.

The State Mineral & Energy Board grants a state agency mineral lease on the subject acreage on behalf of the Louisiana Department of Wildlife and Fisheries, which itself is acting for and on behalf of itself and Ouachita Farm Corporation. The payment of bonus, rental and royalty, as well as any other leasehold payment shall be made in two (2) checks of equal amount: one for one-half (1/2) of the total amount due and owing made payable to Ouachita Farm Corporation and the second for one-half (1/2) of the total amount due and owning made payable to the Louisiana Department of Wildlife and Fisheries.

3) Section 16 School Lands

The United States Congress reserved every Section 16 in each township in Louisiana for public school purposes. See Acts of Congress April 21, 1806 (2 Stat. 391, c. 39, Sec. 11) and March 3, 1811 (2 Stat. 662, c. 46, Sec. 6). The state holds title to these lands, which are commonly referred to as Section 16 School Lands, in trust for public school purposes and they may be leased for the development and production of minerals either by school boards or the State Mineral Board. See LSA-R.S. 30:152(A), 153.

The school boards of parishes within which there lies a township or any portion of a township containing a sixteenth section or any portion of a sixteenth section shall be entitled to a portion of the revenues arising from mineral leases thereon. The proceeds and revenues thereof shall be credited to the parish school boards in which such townships are situated in proportion to the percentage of the townships lying in each parish. See LSA-R.S. 41:640(B). Questions concerning Section 16 School Lands should be directed to the State Land Office, Division of Administration, (225) 342-4578, and the parish school boards having an interest in the lands.

Note: Generally, the beds and bottoms of all navigable water bodies located in a Section 16 are owned by the state in its sovereign capacity. See LSA-Const. Art.9, § 3; LSA-C.C. Art. 450. Therefore, unless title research reveals that the state does not own the beds and bottoms of a navigable water body located in a Section 16, such acreage shall be nominated under the state mineral lease category Inland.

a) Procedural, Documentation and Information Requirements

A party seeking to nominate Section 16 School Lands for state agency mineral lease shall follow the procedures and obtain documentation and information as outlined below.

Determine whether the township containing the Section 16 School Lands falls within more than one parish.

ii)

Contact the school board for each parish wherein the township containing the Section 16 School Lands falls and confirm whether it wants to mineral lease its interest in the Section 16 School Lands itself or by resolution direct the State Mineral & Energy Board to do so on its behalf. See LSA-R.S. 30:152(A), 153; LSA-R.S. 41:640(B).

iii)

Should the school board want the State Mineral & Energy Board to mineral lease the school board’s interest in the Section 16 School Lands on the school board’s behalf, the nominating party shall provide the Office of Mineral Resources with a certified copy of a resolution by the school board that:

(1)	Directs and authorizes the State Mineral & Energy Board to mineral lease the school board’s interest in the Section 16 School Lands.

(2)	Provides information as to the location and ownership of surface and mineral rights in the Section 16 School Lands.

(3)	Contains any specific conditions, including minimum bonus and royalty, which the school board wants to have advertised along with the description of the Section 16 School Lands.

Note: In cases where two (2) or more school boards have an interest in the same Section 16 School Lands, all resolutions shall contain the same written description of the nominated Section 16 School Lands and the same specific conditions, if any.

iv)

Should the township containing the Section 16 School Lands fall within more than one parish, the nominating party shall provide the following from the Section 16 School Lands Parish Records maintained by the State Land Office:

(1)	The township percentage lying within each parish.

(2)	A copy of the Section 16 School Lands Parish Records that set forth the township percentage lying within each parish. See LSA-R.S. 41:640(B). LAC 43:I.907.

b) Alleged Section 16 School Lands Located in White Lake, Vermilion Parish

For organizational purposes, the procedures for obtaining a state agency mineral lease from the Vermilion Parish School Board on the alleged Section 16 School Lands located in White Lake in Vermilion Parish are set forth under the state lands and water bottoms category number 7) White Lake, subcategory c) White Lake Alleged Section 16 School Lands.