PUBLIC AUCTION; BIDS; ACCEPTANCE; REJECTION; PAYMENTS.

(a) The board may sell the lease or leases to the highest bidder at public auction, at Texas A & M University, in College Station, at any hour between 10 a.m. and 5 p.m.

(b) The board may reject all bids. However, the highest bidder shall pay to the board on the day of the sale 25 percent of the bonus bid, and the balance of the bid shall be paid to the board within 24 hours after notification that the bid has been accepted. Payments shall be in cash, certified check, or cashier's check, as the board may direct. Failure to pay the balance of the amount bid will forfeit to the board the 25 percent paid.

(c) A separate bid shall be made for each tract or subdivision thereof. No bids shall be accepted which offer less than the fair market price per ton for the mineral ore or a royalty of less than one-eighth of the gross production of oil, gas, sulphur, and other minerals in the land bid upon, and this minimum royalty may be increased at the discretion of the board. Every bid shall carry the obligation to pay an amount not less than $1 per acre for delay in drilling or development. The amount shall be fixed by the board in advance of the advertisement and shall be paid every year for five years unless in the meantime production in paying quantities is had upon the land or the land is re-leased by the lessee.