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United States. Office of Indian Affairs / Annual report of the Commissioner of Indian Affairs, for the year 1905, Part I

Reports concerning Indians in Indian territory,   pp. 202-221 PDF (9.1 MB)

Page 214

One of the most important amendments to the regulations, promulgated March
20, 1905, requires each lessee to drill at least one well on the land covered
each tract leased within twelve months from the date of approval of the bond,
as all leases contain a clause that the same shall be subject to the rules
regulations of the Secretary of the Interior. This applies to leases approved
before the adoption of this regulation, as well as to those subsequently
mitted. In case of leases previously approved, the lessee has one year from
date of the regulation, viz, March 20, 1905. 
The following regulations have been prescribed fixing the royalty on gas
and providing a penalty for the failure of the lessee to securely cap or
plug any 
well abandoned or not used: 
On each gas-producing well, where the gas is utilized, lessees shall be required
to pay, 
at the end of each year, a royalty of $150. Failure on the part of the lessee
to use a 
gas-producing well vhere the same can not be reasonably utilized at the prescribed
shall not work a forfeiture of the lease for oil purposes, but if the lessee
desires to retain 
gas-producing privileges, he or they shall pay a royalty of $50 per annum
on each gas- 
producing well not utilized, the first payment to become due and to be made
thirty days from the date of the discovery of gas; but upon gas wells heretofore
the gas from which is not being utilized, the first payment shall become
due and be made 
within thirty days from March 20, 1905. Subsequent payments for such wells
shall be 
made in advance at the first of each succeeding year dating from the first
Where payments of $150 per annum are required to be made at the end of each
where the gas is utilized, the year necessarily commences to run from the
date of the 
utilization of said gas, evidence of which date the lessee must furnish in
the form of a 
sworn statement. 
Every lessee shall securely cap or plug each oil or gas well upon the land
within three days after the same is abandoned or not used, and every lessee
failing to 
securely cap or plug his oil or gas well, as above required, shall pay the
United States 
Indian agent for the Union Agency, for the use of the lessor, the sum of
$10 per day for 
each well during the time said well or wells remain not capped or plugged,
and for any 
failure on the part of the lessee to comply with any rule or obligation in
his lease, the 
Secretary of the Interior may revoke his approval of any such lease, after
due notice to 
the lessee. This regulation shall be applicable to leases heretofore made
as well as .those 
hereafter entered into. 
Under the regulations, all royalties due under these leases are required
to be 
paid to the United States Indian agent at Union Agency, for credit to the
Indian lessors. 
With the consent of the agent, lessees may make arrangements with pipe-line
companies and purchasers of oil for the payment of the royalty by the pur-
chaser, but such arrangement, if made, shall not operate to relieve the lessee
from the responsibility of the payment of such royalty should such purchaser
fail, neglect, or refuse to pay the same when it becomes due. 
Under recent instructions, leases and papers when once filed in this office
can not be withdrawn for any purpose whatever. If corrections or additions
are desired to be made the same may be done at this office if not material,
but erasures, alterations, or interlineations in the body of an executed
ment can not be made without the written consent of all parties thereto.
Newly executed leases or papers will, however, be received to take the place
of those found to be incorrect. 
The forms of lease provide that the same shall not be in force or effect
satisfactory bond is furnished within sixty days from the date of approval.
Immediately upon advice of approval of any lease, the lessee is advised and
called upon to furnish bond in the proper sum, and upon this being done and
approval of the bond the lease is in full force and effect; the original
retained in the files of your Office, one copy in this office, one forwarded
the lessee, and one to the lessor. 
Some few applications have been made, after leases are approved, for per-
mission to transfer the same to other companies or individuals. The agent
has been instructed that it is the desire of the Department that such restric-
tions be made with reference to these transfers as will avoid encouraging
same. The Department will not release the original lessee from his obligations
under his contract, as he is required in the first instance to submit ample
proof that the lease was taken in good faith and not for speculation and
resale; nor will application for permission to assign or transfer them be
approved unless it is clearly shown to be to the best interest of the Indian
lessor. Where these requests are submitted, formal application should be
made by the original lessee company for permission to transfer the lease,
setting forth in full and in detail the reasons why it is desired to make
transfer, and whether or not it will result in more active development of
property and accordingly be to the best interests of the lessor, with the
consent of said lessor. Full information should also' be submitted as to
company or individual to whom it is desired to transfer the lease, the respon-

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