Sealed bids required.

All lands subject to this law shall be leased upon sealed bids. All bids shall be directed to the Board of Trustees of the Internal Improvement Trust Fund. Said bids shall not be opened until the day, time, and place designated by the board of trustees and provided in said notice, at which time all bids shall be opened and at which time any person so desiring may be present. The board shall determine in advance the amount of royalty, never less than one-eighth in kind, or in value, and a definite rental, increasing annually after the first 2 years, upon lands not developed for oil or gas, or upon which no well has been commenced in good faith to secure production in paying quantities of gas or oil. The board may, in its discretion, incorporate within the terms of any lease provisions for pooling or unitizing the leased premises, in whole or in part, with other lands or leases and provisions for payments that may be made in lieu of royalty on wells which have been completed as gas wells and are capable of producing gas in paying quantities but are shut in pending development of a satisfactory market outlet, provided this shut-in period pending development of a satisfactory market outlet shall not exceed 48 months from the date of completion of such gas well or wells as herein described, if the lease is not being otherwise maintained by drilling or reworking or by production, which, if made, shall operate to cause the lease to be considered as producing in paying quantities for all purposes thereof. In addition to such fixed charges for said lease, there shall be a cash consideration. The bids shall be for this cash consideration, offered for said lease, in addition to such fixed charges for royalty, rental, and payments in lieu of royalty and shall be payable upon acceptance of said bid. All bids shall be accompanied by a cashier’s check, or certified check, for the amount of such cash consideration and shall be payable to the state board, department, or agency which holds title to or controls the land offered for lease. No bid filed subsequent to the date and hour of sale specified in the advertisement of sale shall be considered.