Continental Oil Co. v. United States. United States v. Continental Oil Co.

In 1929 and 1930 the United States issued to appellants Continental Oil Company and General Petroleum Corporation, herein called, respectively, Continental and General, various oil and gas leases, covering lands in the Kettleman Hills field in California. The leases were made pursuant to section 14 of the Mineral Leasing Act of February 25, 1920, 41 Stat. 442 , 30 U.S.C.A. § 223 .

The Secretary of the Interior, asserting that the posted prices for crude oil in the field, and the prices at which these companies sold and disposed of natural dry gas and natural-gas gasoline, and upon which they calculated and paid royalty under the leases, were unreasonably low, , and not in accord with true values, in 1931 made certain orders establishing minimum limitations upon valuations of oil and gas for royalty purposes. The companies affected by the orders declined to conform to them or to pay in accordance therewith, and this suit was instituted against Continental, General, and 14 other lessees, to secure a judicial determination of the Secretary’s authority to make the minimum limitation orders, to recover additional royalties asserted to be due under such orders, and to obtain…