UCB
 
~

\

i 3 REET Noms
iy \ 7 2 Rh 2 Na AD QE
77 } at OA | { Bl aa 8 For R A R rN 3
Lda A + Rg 7 YS PIE
Go V | : : an
: i UNIVERSI I
A Off ’
Y, Pe fa. : PA

5
SN of

BS ALIRQR 2

REGULATIONS GOVERNING THE LEASING CTED ALLOTTED

   

~~ INDIAN LANDS FOR MINING PURPOSES

oo

(Not applicable to the Five Civilized Tribes or Osage Nation)

A provision in the act of March 3, 1909 (35 Stat. 781, 783), reads:

That all lands allotted to Indians in severalty, except allotments made to
members of the Five Civilized Tribes and Osage Indians in Oklahoma, may by
said allottee be leased for mining purposes for any term of years as may be
deemed advisable by the Secretary of the Interior; and the Sccretary of the
Interior is hereby authorized to perform any and all acts and make such rules
and regulations as may be necessary for the purpose of carrying the pro-
visions of this paragraph into full force and effect.

1. To carry this provision of law into effect the following regula-
tions are prescribed :

The term “officer in charge” herein refers to the superintendent
or other officer of the Indian Service or of the Government who
may have jurisdiction over the allotments involved. Allotments
of lands are regarded as made when approved by the Secretary of
the Interior and trust patents have issued.

2. No lease, assignment thereof, or interest therein will be ap-
proved to any employee or employees of the United States Govern-
ment whether connected with the Indian Service or otherwise, and
no employee of the Interior Department shall be permitted to ac-
quire any interest in such leases by ownership of stock in corpora-
tions having leases or in any other manner.

3. At such times and in such manner as he may deem appropriate,
the officer in charge shall publish notices that oil and gas leases on
specific tracts, each of which shall be in a compact body, will be
offered to the highest responsible bidder for a bonus consideration,
in addition to stipulated royalties. The successful bidder must
deposit with the officer in charge on the day of sale a certified check
or bank draft on a solvent bank in an amount equal to 20 per cent
of the bid as a guaranty of good faith. Balance of bonus shall be
paid and lease in completed form shall be filed within 30 days after
the lease. is forwarded to the lessee by the officer in charge for
execution. If the successful bidder fails to complete the lease or
pay the full consideration within said 30 days, or if the lease is
disapproved through no fault of the lessor or the Interior Depart-
ment, the amount Sopot will be forfeited for the use and benefit
of the Indian allottee, in the discretion of the Secretary of the
Interior. : :

The right is reserved by the Secretary of the Interior to reject
any and all bids and to disapprove and reject any lease made on an
accepted bid; and should any bid be rejected after deposit is made
by bidder, the deposit shall be immediately returned.

54706°—25—1
72 372999
Doe 2

4. The officer in charge shall execute leases on behalf of incom-
petent and minor allottees.

5. Leases for minerals other than oil and gas shall be negotiated
with the Indian allottee whose lands are sought to be leased after
permission so to do has first been obtained from the officer in charge,
and, with the papers required, shall be filed with the officer in charge
within 30 days from and after the date of execution: Provided, That
no such lease on lands of incompetent and minor allottees shall be
made until competitive bids have been invited therefor by advertis-
ing for at least two weeks in two or more papers of general circula-
"tion in the vicinity; but if a minor is interested with competent
adults in inherited lands, and such adults agree respecting a lease,
the officer in charge may sign for the minor without advertising.
The minor’s age and date of birth must be shown whenever possible.
The successful bidder for lands advertised shall pay the cost of ad-
vertisement.

6. If the applicant for a lease is a corporation it shall file evidence
of authority of its officers to execute papers, and with its first appli-
cation it shall also file:

(I) A certified copy of its articles of incorporation, and, if for-
eign to the State in which the lands are located, evidence showing
compliance with the corporation laws thereof.

(II) Lists of officers and stockholders with post-office addresses
and number of shares held by each.

(III) A sworn statement of the proper officer showing:

(a) The total number of shares of the capital stock actually is-
sued and the amount of cash paid into the treasury on each share
sold ; or, if paid in property, the kind, quantity, and value of the same
paid per share.

(0) Of the stock sold, how much remains unpaid, and subject to
assessment.

(¢) The amount of cash the company has in its treasury and else-
where, and from what sources it was received.

(d) The property, exclusive of cash, owned by the company and
its value.

(¢) The total indebtedness of the company and the nature of its
obligations.

7. Statements of changes in officers and stockholders shall be fur-
nished by a corporation lessee to the officer in charge on January 1
of each year, and at such other times as may be requested. Affidavits
may also be required of individual stockholders at any time, setting
forth in what corporations or with what persons, firms, or associa-
tions such individual stockholders are interested in mining leases of
restricted Indian lands within the State, and whether they hold such
interests for themselves or in trust.

8. Except to prevent loss or waste, leases of undivided, inherited
lands will be approved only when accompanied by proof that the
lessors are the only heirs of the deceased allottee. Heirship must be
established in accordance with the act of June 25, 1910 (36 Stat.
855), and the regulations prescribed thereunder. If the heirs have
already been so determined, the officer in charge, when forwarding
the lease, shall refer to the date and file number of Indian Office let-
ter notifying him of such determination. If the heirs include a life
43389
AMENDMENT.

Amendment to Section 9 of the Regulations governing the leasing
of restricted allotted Indian lands for mining purposes, approved July
7, 1825.

(Not applicable to the Five Civilized Tribes or Osage Nation.)

The provision of Section 9 of the regulations relating to the
execution of bonds is hereby amended to read as follows:

"Lessees shall furnish with each lease a bond (Form 5-154b) with
two or more personal sureties, or with an acceptable company authorized
to act as sole surety. Such bond shall be in amount as follows: for
less than 40 acres, $500; for 40 acres and less than 80 acres, $1,000;
for 80 acres and less then 120 acres, $1,500; for 120 acres and not more
than 160 acres, $2,000; and for each additional 40 acres or part thereof
above 160 acres, $500: PROVIDED, That a lessee may file one bond ( Form
5-154f) in the sum of $15,000, covering all leases of a particular class
in any one State up to 4,800 acres, to which he is or may become a party.
The right is reserved at any time, before or after approval of lease to
increase the esmount of a bond above the sum named in any case where the
Secretary of the Interior deems it proper to do so."
 

DEPARTMENT OF THE INTERIOR
OFFICE OF INDIAN AFFAIRS
Cctover 24, 1928.

Respectfully submitted to the Secretary of the Interior
recommending approval:

E. B. MERITT,

Agsistant Cormissioner of Indian Affairs.

Approved: October 25, 1928.
(Signed) JOHN .H. EDWARDS,

Agsigstant Secretary of the Interior.

10WL~-20
 

3

tenant, the lease must be accompanied by an agreement between such
life tenant and the remainder men, providing for the division of
the rents and royalties, subject to approval of the Secretary of the
Interior. :

If the heirs to an allotment are undetermined or can not be
located, and it appears necessary to lease the land to prevent loss
or waste, the officer in charge will report the facts to the Commis-
sioner of Indian Affairs and ask for instructions.

9. Lessees shall furnish with each lease a bond (Form 5-154b),
with two or more personal sureties, or with an acceptable company
authorized to act as sole surety. Such bond shall be in amount
as follows: For less than 80 acres, $1,000; for 80 acres and less than
120 acres, $1,500; for 120 acres and not more than 160 acres, $2,000;

and for each additional 40 acres or part thereof above 160 acres.

$500: Provided, That a lessee may file one bond (Form 5-154f), in
the sum of $15,000, covering all leases of a particular class on any
one reservation to which he is or may become a party. The right
is reserved at any time, before or after approval of a lease, to
increase the amount of a bond above the sum named in any case
where the Secretary of the Interior deems it proper to do so.

10. The officer in charge may, either before or after approval of
a lease, call for any additional information desired to carry out
these regulations. If a lessee shall fail to furnish the papers neces-

sary to put his lease and bond in proper form for consideration, the

officer in charge shall forward such lease for disapproval.

11. Oil and gas mining leases shall be made for a period of 10
years from the date of approval by the Secretary of the Interior
and as much longer thereafter as oil, gas, casing-head gas, or any
one of them, is produced in paying quantities, or the gas royalties
for wells capable of producing gas in paying quantities, but not

utilized are paid or as much longer thereafter as lessee is engaged

in completing the drilling of a well commenced during the 10-year
term, provided such drilling is prosecuted to completion of the well
with due diligence, and if such drilling operations result in the find-
ing of any one of the substances covered by the lease, then the lease

shall remain in force as long as such substance is produced in

paying quantities: Provided, Should lessee be unable to market the
production from the leased land, he may, with the consent of the
Secretary of the Interior, discontinue the operation of the producing
wells thereon, and the lease shall remain in force notwithstanding
such cessation of operations: Provided further, That if, while the
lease is being held by production alone, the well or wells thereon
shall cease to produce for any cause, lessee, with the consent of the
Secretary of the Interior, shall have the period of 120 days from
the stopping of production within which, at his election, to com-
mence operations for the drilling of another well, deepen an exist-
ing well or wells, or otherwise to attempt to restore the production
of such existing well or wells, and if such work is so commenced and
prosecuted with reasonable diligence, and production of any such
substance results therefrom, the lease shall remain in force as long
thereafter as such substance is produced in paying quantities.

Leases for other minerals shall be for a period of 15 years.

12. No individual, corporation, partnership, company, or associa-

tion shall hold under leases for mining purposes restricted Indian
4

lands in any one State in excess of the following areas, exclusive of
holdings in the Five Civilized Tribes and the Osage Nation:

(a) On deposits of the nature of lodes or veins, containing ores
of gold, silver, copper, lead, zinc, or other useful metals, not more
~ than 640 acres.

(6) For beds of placer gold, gypsum, asphaltum, phosphate, iron,
ores, or other useful minerals other than coal, oil, and gas, not more
than 960 acres.

(¢) For coal, oil, or gas, not more than 4,800 acres, except that in
the State of Oklahoma there is no limitation to the number of acres
any lessee may acquire, by lease or assignment, for oil or gas mining
purposes.

RENTS AND ROYALTIES

13. All rents, royalties, and 6ther payment due under leases which

have been or may be approved by the Secretary of the Interior shall
be paid to the officer in charge, or to such other person as may be
designated by the Secretary of the Interior, for the benefit of the
various lessors. No credit will be given any lessee for rents or roy-
alties paid direct to the lessors or their representatives.

14. Lessee shall pay on each oil and gas lease annually in advance,
commencing from the date of approval by the Secretary of the In-
terior, and continuing until lessee shall have drilled a producing
well, royalties as follows: Fifteen cents per acre per annum for the
first and second years; 30 cents per acre per annum for the third and
fourth years; 75 cents per acre per annum for the fifth year; and
$1 per acre per annum for each succeeding year during the term of
the lease. Such payments shall be made until the royalties on pro-
duction exceed the advance royalty: Provided, That should the pro-
ducing well or wells on the leased land cease to produce during the
fixed term of the lease, then at the next succeeding advance royalty
paying day the lessee shall resume the payment of advance royalty.

Advance annual royalties at the rates above prescribed shall also
be paid on leases for minerals other than oil and gas.

Payments of advance royalty shall be a credit on stipulated roy-
alties for the year for which the payment of advance royalty is
made, and the sums of money so paid shall not be refunded to the
lessee because of any subsequent surrender or cancellation of the
lease, nor shall the lessee be relieved from the obligation to pay said
advance royalty annually when it becomes due by reason of any
subsequent surrender or cancellation of the lease.

The advance royalty for the first year shall be paid to the officer
in charge at the time of filing the lease, and the amounts so paid
shall be and become the property of the lessor if the lease be dis-
approved because of the lessee’s failure to meet the requirements of
the law or these regulations, or because of any other fault or defect
chargeable to the lessee.

15. The minimum rate of royalty on oil shall be 1214 per cent of
the gross proceeds of all crude oil extracted from the leased premises,
payment to be made at the time of sale or removal of the oil, and
in no event shall such royalty be paid on the basis of less than the
posted market price for oil of like quality, grade, and gravity in the
particular oil field of which the lease is a part the day the oil is run
5

to the pipe line or into permanent storage. If a difference obtains
in the price posted in said field for oil of the like quality, grade, and
gravity, the average posted price of purchasers taking 50 per cent
or more thereof shall be the basis for the payment of said royalties.
Settlement shall be made on the 15th day of each month for royalties
accruing during the preceding calendar month: Provided, if pipe-
line connections with the lease or other facilities for the marketing
of the production therefrom are not available to the lessee he may,
with the consent of the Secretary of the Interior, store the oil and
defer settlement for royalties until such pipe-line connections are
secured or until such other facilities for the marketing of the pro-
duction from the lease are obtained.

In time of war or other public emergency any of the executive
departments of the United States Government shall have the option
to purchase at the highest posted market price on the date of sale
all or any part of the oil produced under any lease.

16. The royalty on gas, whether it shall be gas from which the
casing-head gasoline has been extracted or otherwise, shall be 1214
per cent of the value thereof in the field where produced: Provided,
That where wells produce both oil and gas or oil and gas and water
to such an extent that the gas is unfit for ordinary domestic purposes
but is used temporarily in connection with drilling and pumping
operations on adjacent or near-by tracts, the lessee shall pay royalty
at the rate of 1214 per cent of the gross proceeds of the sale of gas
from such wells. Failure on the part of the lessee to use a gas-
producing well which can not profitably be utilized at the rate herein
named shall not work a forfeiture of the lease so far as it relates
to mining oil, but if the lessee desires to retain gas-producing privi-
leges he shall pay a rental of $100 per annum in advance, calculated
from the date of the discovery of gas on each gas-producing well,
the gas from which is not marketed nor utilized other than for opera-
tions under the lease. If the leased premises produce gas in excess
of lessee’s requirements for the development and operation of said
premises, then lessor may use sufficient gas free of charge for all
stoves and inside lights in the principal dwelling house on said land
by making his own connection with the well or wells thereon, the use
of such gas to be at lessor’s risk at all times.

On casing-head gas used or sold for the manufacture of casing-
head gasoline the rate of royalty shall be 1214 per cent of the value
of the casing-head gas, which value shall be determined and com-
puted on the basis and in the manner provided in the regulations
governing the utilization of casing-head gas produced from oil wells
on restricted Indian lands.

In cases where gas produced and sold has a value for drip gaso-
line, casing-head gasoline content, and as dry gas from which the
casing-head gasoline has been extracted, then the royalties above pro-
vided shall be paid on all such values.

Evidence of discovery of gas wells and the beginning of utilization
must be furnished promptly in the form of a sworn statement.

Payments of annual gas royalties shall be made within 25 days
from the date such royalties become due, other royalty payments to
be made monthly on or before the 25th day of the month succeeding

54706°—25——2
6

that for which such payment is to be made, supported by sworn
statements. :

The capacity of wells shall be ascertained, under the direction of
the Secretary of the Interior, when necessary under the terms of the
lease to determine the amount of royalty to be collected.

Except in cases of emergency, which shall not exceed 10 days, not
more than 20 per cent of the capacity of any gas well shall be
utilized.

17. The royalty on coal shall not be less than 10 cents per ton of
2,000 pounds on mine run, or coal as it is taken from the mines, in-
cluding what is commonly called “slack.”

18. The royalty on asphaltum shall be not less than 10 cents per
ton of 2,000 pounds on crude asphalt or 60 cents per ton on refined
asphalt. :

19. For gold, silver, copper, lead, zine, and tungsten the lessee
shall pay quarterly a royalty of not less than 10 per cent, to be com-
puted on the gross value of the ores as shown by reduction returns
after deducting freight and treatment charges.

20. For substances other than gold, silver, copper, lead, zinc,
tungsten, coal, asphaltum and allied substances, oil, and gas the
lessee shall pay quarterly a royalty of not less than 10 per cent of the
value at the nearest shipping point.

21. With the consent of the officer in charge, lessees may make
arrangements with the purchasers of oil for the payment of the
royalties to the officer in charge by such purchasers, but such ar-
rangement, if made, shall not operate to relieve a lessee from respon-
sibility should the purchaser fail or refuse to pay royalties when
due. Where lessees avail themselves of this privilege, division orders
permitting the pipe-line companies or other purchasers of the oil to
withhold the royalty interest shall be executed and forwarded to the
officer in charge for approval before wells are brought in, as pipe-
line companies are not permitted to accept or run oil from leased
Indian lands until after the approval of a division order showing
that the lessee has a lease regularly approved and in effect. The
right is reserved to cancel a division order at any time or require
the pipe-line company to discontinue to run the oil of any lessee who
fails to operate the lease properly or otherwise violates the provisions
of the lease or of these regulations.

22. Royalty payments on leases other than oil and gas shall be
made monthly, on or before the 25th day of the month succeeding
that for which such payment is to be made.

23. A sworn report of the lessee shall accompany each royalty
remittance, covering all operations, whether there has been produc-
tion or not, except that where division orders have been approved
and the royalty paid by the pipe-line company or other purchaser
of oil lessees need not make monthly reports direct. All leases upon
which there is no production or upon which dry holes have been
drilled may be included in one report. :

24. Separate quarterly reports for each lease, whether or not oil
royalty is paid by the pipe-line company or other purchaser, shall
be submitted by the lessee to the officer in charge within 15 days
after March 31, June 30, September 30, and December 31 of each
year, upon prescribed forms, showing manner of operation, total
&

production, and all receipts during the quarter from any operations .
under the lease for the benefit of the lessor or the lessee, or both,
giving amount of each payment, name of person making same, and
nature of the operations from which the money paid was derived.
Sworn reports of gas wells shall be made both when discovered and
when utilized.

STIPULATIONS

25. The lessee under any lease heretofore approved may, by stip-
ulation, with the consent of the lessor and the approval of the Sec-
retary of the Interior, make such approved lease subject to all the
terms, conditions, and provisions contained in these regulations
and in the lease form authorized and adopted in pursuance thereof.
Form 5-1541 shall be used for this purpose.

ASSIGNMENTS

26. (a) Leases hereafter approved, or any interest therein, may
be assigned or transferred only with the approval of the Secretary
of the Interior, and to procure such approval the assignee must be
qualified to hold such lease under existing rules and regulations, and
shall furnish a satisfactory bond for the faithful performance of
the covenants and conditions thereof.

(0) No lease or any interest therein or the use of such lease shall
be assigned, sublet, or transferred, directly or indirectly, by working
or drilling contract, or otherwise, without the consent of the Sec-
retary of the Interior.

~(¢) Assignments of leases and stipulations modifying the terms
of existing leases shall be filed with the officer in charge within 30
days after the date of execution. "

CANCELLATIONS

27. A lease will be canceled by the Secretary of the Interior for
good cause upon application of the lessor or lessee, or if at any time
the Secretary is satisfied that the provisions of the lease or of any
regulations heretofore or hereafter prescribed have been violated.
When the lessee applies for cancellation he must, before the same
will be considered, pay a surrender fee of $1 and all royalties and
rents due to the date of completion of such application, surrender
all parts of the lease actually delivered to him, and furnish a duly
recorded release of the acreage covered by the application if the
lease thereon has been recorded: Provided, That where the appli-
cation is made by an assignee to whom no copy of the lease was
delivered he will be required to surrender only his copy of the
assignment.

If the lease is owned in undivided interests by more than one per-
son, firm, or corporation all shall join in the application for can-
cellation.

All required fees and papers must be at least in the mail on or
before the date upon which rents and royalties become due in order
for the lessee and his surety to be relieved from liability for the
payment thereof,
8

No part of any advance royalties or annual rentals shall be re-
funded to the lessee, nor shall he be relieved from his obligation to
pay royalties and rentals annually when due by reason of any sub-
sequent surrender or cancellation of the lease. Upon cancellation
of a lease the lessor shall be entitled to take immediate possession
of the land.

OPERATIONS

28. Lessees will be required to carry out and observe the regula-
tions now or hereafter in force governing oil and gds operations on
restricted Indian lands. Operations will not be permitted under
any lease requiring approval of the Secretary of the Interior until
the approved lease has been delivered. If there has been a contest
respecting a lease or leases, the approved, disapproved, or canceled
parts thereof will be held in the office of the officer in charge for
five days after promulgation by him, by mailing or delivery of the
department’s decision, and will not be delivered if within that
period a motion for review or reconsideration be filed until such
motion is passed upon by the department.

29. Lessee shall commence the drilling of a test well on the land
covered by the lease within one year from the approval thereof by
the Secretary of the Interior, or, in lieu thereof, beginning one year
from such approval, pay the officer in charge in advance an annual
rental of $1 per acre, such payments to continue throughout the 10-
year term, or until the drilling of said test well is commenced, or
the lease is surrendered in the manner provided therein. The com-
pletion of a well or wells producing oil, gas, or casing-head gas in
paying quantities shall terminate lessee’s obligation to pay rentals
thereunder during the producing life of such well or wells: Pro-
vided, That should the producing well or wells on the land cease
to produce during the fixed term of the lease, or a test well come in
dry during said period, then at the next succeeding annual rental
paying day, lessee shall resume the payments of rental, unless prior
thereto he has commenced the drilling of another test, or has sur-
rendered the lease.

The lessee may be required by the Secretary of the Interior, or
by such officer as he may designate for the purpose, to drill and
operate wells to offset paying wells on adjoining tracts and within
300 feet of the dividing line, except that where the well or wells
to be offset are paying gas wells, the lessee shall be relieved of his
obligation to drill upon payment of a sum equivalent to the gas
royalty stipulated for in the lease, and for such purpose the open-
flow capacity and the use to which the offset well is devoted shall
be the criterion to determine the lessee’s royalty obligation.

30. Lessees shall agree to allow the lessors and their agents or any
authorized representative of the Interior Department to enter, from
time to time, upon and into all parts of the leased premises for the
purposes of inspection, and shall further agree to keep a full and
correct account of all operations and make reports thereof, as herein
required, and their books and records showing manner of operations
and persons interested shall be open at all times for examination of
such officers of the department as shall be instructed in writing by
the Secretary of the Interior to make such examination.
9

31. Oil shall not be sold to a pipe-line company until division
order is filed as hereinbefore provided. Should the lessee desire to
sell oil or remove it from the leased premises in any other manner,
such sale or removal shall not be made until authorized by the
officer in charge. Lessee or his representative shall actually be
present when oil taken under division orders is run by pipe-line com-
panies, and lessee shall be responsible for the correct measurement
and report of oil so run; otherwise the approval of division order
may be revoked.

LAND FROM WHICH RESTRICTIONS HAVE BEEN OR MAY BE REMOVED

32. All leases of any description whatever executed by an allottee
on land from all of which the restrictions against alienation had
been removed before such execution may be executed without any
provision for reference to or supervision by the Secretary of the
Interior or any official of the Department of the Interior; and the
officer in charge shall refuse to accept for consideration any lease
covering land from all of which restrictions had been removed
before such execution.

33. All leases executed before the removal of restrictions against
alienation on land from all of which restrictions against alienation
shall be removed after such execution, if such leases contain specific
- provision for approval by the Secretary of the Interior, whether now
filed with the department or presented for consideration hereafter,
will be considered and acted upon by this department as heretofore.

34. Oil and gas leases heretofore approved and leases for other
minerals now or hereafter in force on land from all of which re-
strictions against alienation have been or shall be removed, even if
such leases contain provisions authorizing supervision by this de-
partment, shall, after such removal of restrictions against alienation,
be operated entirely free from such supervision, and the authority
and power delegated to the Secretary of the Interior in said leases
shall cease, and all payments required to be made to the officer in
charge shall thereafter be made to lessor or the then owner of said
land; and changes in regulations thereafter made by the Secretary
of the Interior applicable to oil and gas leases shall not apply to such
leased land from which said restrictions are removed.

In the event restrictions are removed from a part of the land
included in any lease to which this section applies the entire lease
shall continue subject to the supervision of the Secretary of the
Interior, and all royalties thereunder shall be paid to the officer in
charge until such time as the lessor and lessee shall furnish the
Secretary of the Interior satisfactory information that adequate
arrangements have been made to account for the oil, gas, or mineral
upon the restricted land separately from that upon the unrestricted.
Thereafter the restricted land only shall be subject to the supervision
of the Secretary of the Interior, provided that the unrestricted por-
tion shall be relieved from such supervision as in the lease or regula-
tions provided.

35. All oil and gas leases hereafter executed shall contain the fol-
lowing relinquishment of supervision clause and terms operative
after such relinquishment:
10

Should the Secretary of the Interior, at any time during the life of this
instrument, relinquish supervision hereof as to all or part of the acreage
covered hereby, such relinquishment shall not bind lessee until lessor shall
have given lessee 30 days’ written notice of such relinquishment, accompanied
by a certificate of the officer in charge, officially evidencing such relinquish-
ment. Until said requirements are fulfilled, lessee may continue to make all
payments due hereunder, whether royalties, advance royalties, or rentals, to
the officer in charge, who, for these purposes, shall be deemed the lawful agent
of lessor and his successors in title to receive said payments and distribute
same. After notice and proof of relinquishment have been received by lessee,
as herein provided, this lease shall be subject to the following further con-
ditions:

(a) All royalties, advance royalties, and rentals for deferred drilling opera-
tions thereafter accruing shall be paid in the following manner: Royalties
shall be paid to lessor or his successors in title, or to a trustee appointed
under the provisions of paragraph 9 hereof, at the time, in the manner, and
subject to the conditions hereinbefore set out respecting the payment of such
royalties to the officer in charge. Advance royalties and rentals for deferred
drilling operations shall be paid directly to lessor or his successors in title, or
to said trustee, as the case may be, or, at lessee’s election, the same may be
mailed or delivered to bank offic 1. Li 200
Gehl lin. Shai for deposit to the credit of lessor, his successors in title, or
said trustee, which bank or its successors is hereby made the lawful agent
of lessor or his successors in title, or said trustee, to receive and distribute
said payments, and said bank or its successors shall continue as such agent
during the period that advance royalties and rentals are payable hereunder,
regardless of any change in the ownership of said land or of said advance
royalties or rentals. All payments called for in this paragraph may be made
by lessee’s check or bank draft, and the mailing of same, postage prepaid,
on or before the due date of the particular installment represented by such
check or draft, shall prevent a forfeiture under the provisions of paragraph
II hereof.

(b) After such relinquishment of supervision this lease may be assigned, in
whole or in part, without the approval of the Secretary of the Interior and
without the consent of lessor, the assignee, or assignees, to enjoy all the
rights and privileges hereinbefore specifically granted assignees hereof.

(¢) If at the time supervision hereof is relinquished lessee shall have made
all payments then due hereunder and shall have fully performed all obligations
on its part to be performed up to the time of such relinquishment, then the
bond given to secure the performance hereof, on file in the Indian Office, shall
be of no further force or effect.

(d) After such relinquishment this instrument shall no longer be subject
to the supervisory regulations of the Secretary of the Interior, and the power
of the Secretary of the Interior to prescribe regulations of this character shall
not be transferred to nor vested in lessor, and all the acts herein provided to
be done and performed by the lessee with the consent or on the approval of the
Secretary may be done or performed by the lessee without such consent or
approval and without limitation or condition.

(e) Should such relinquishment affect part of the acreage hereof only, then
lessee may continue to drill and operate the land covered hereby as an en-
tirety : Provided, Lessee shall pay to the officer in charge for the benefit of
lessor such proportion of all royalties, advance royalties, and rentals due
hereunder as the acreage retained under the supervision of the Secretary of
the Interior bears to the entire acreage of the lease, the remainder of such
royalties, advance royalties, and rentals to be paid directly to lessor or his
successors in title, or said trustee, as the case may be, as provided in subdivi-
sion (a) of this paragraph.

After the removal of restrictions or relinquishment of jurisdiction by the
Secretary of the Interior this lease can only be forfeited on the following
grounds: (a) For failure to pay an advance royalty as provided herein; (b)
for failure to pay a rental for deferred drilling operations as provided herein;
(¢) for failure to drill an offset well to a paying well on adjoining premises
when required hereunder, or, in lieu thereof, in the case of an offset gas well,
to pay the gas royalties herein provided for. The existence of any one of the
ahove grounds of forfeiture shall be determined in an appropriate action in a
court of equity, and the lessee shall have the right to avoid such forfeiture by
complying with the conditions violated within 30 days from the final judicial

 
11

decree of forfeiture. If this lease be producing when a decree of forfeiture is
made, such forfeiture shall relate only to the undrilled portions of the lease.

Should the fee to said land be divided into separate parcels, held by different
owners, or should the royalty or rental interests hereunder be so divided in
ownership, after the execution of this lease and after the Secretary of the
Interior relinquishes supervision hereof, the obligations of lessee hereunder
shall not be added to or changed in any manner whatsoever. Notwithstanding
such separate ownership, lessee may continue to drill and operate said premises
as an entirety: Provided, Each separate owner shall receive such proportion
of all royalties, advance royalties, and rentals accruing after the vesting of his
title as the acreage of the fee, or royalty or rental interest, bears to the entire
acreage covered by the lease: Provided further, That if at any time after
departmental supervision hereof is relinquished, in whole or in part, there
shall be four or more parties entitled to advance royalties, rentals, or royalties
hereunder, whether said parties are so entitled by virtue of undivided inter-
ests or by virtue of ownership of separate parcels of the land covered hereby,
lessee, at his election, may withhold the payment of further rentals, advance
royalty, or royalties (except as to the portion due the Indian lessor while
under restriction) until all of said parties shall agree upon and designate in
writing and in a recordable instrument a trustee to receive all payments due
hereunder on behalf of said parties and their respective successors in title.
Payment to said trustee shall constitute lawful payment hereunder, and the
sole risk of an improper or unlawful distribution of said funds by said trustee
shall rest upon the parties naming said trustee and their respective successors
in title.

36. Should the removal of restrictions affect only part of the
acreage covered by an oil-and-gas lease containing provisions to the
effect that the royalties accruing under the lease, where the fee is
divided into separate parcels, shall be paid to each owner in the pro-
portion which his acreage bears to the entire acreage covered by the
lease, the lessee or assignee of such unrestricted portion will be re-
quired to make the reports required by these regulations and the
operating regulations with respect to the beginning of drilling op-
erations, completion of wells, and production, the same as if the
restrictions had not been removed. In the event the unrestricted por-
tion of the leased premises is producing, the owners of the lease
thereon will be required to pay the portion of the royalties due the
Indian lessor at the time and in the manner specified by these regu-
lations.

FEES

37. In accordance with the provisions of the act of February 14,
1920 (41 Stat. IL. 408-415), a fee of $5 is hereby required upon ap-
proval of each lease, sublease, or assignment. This fee shall be paid
at the time of filing the lease, sublease, or assignment, and will be re-
funded in case the instrument is disapproved.

FORMS

_ 38. The forms prescribed for use in connection with these regula-
tions are designated as follows, and may be obtained from the offi-
cer in charge at a cost of 10 cents each:

5-154. Lease for minerals, other than oil and gas.
5-154b. Bond.

5-154d. Authority of officers to execute papers.
5-154e. Assignment.

5-154f. $15,000 collective bond.
12

5-154g. Affidavit of personal surety to accompany bonds.
5-154h. Oil-and-gas lease.

5-1541. Stipulation modifying terms of oil-and-gas mining lease,

DerARTMENT OF THE INTERIOR,
OFFICE OF INDIAN AFFAIRS,
June 10, 1925.
The foregoing regulations are respectfully submitted to the Sec-
retary of the Interior with recommendation that they be approved.
CHas. H. Burks,
Commissioner of Indian Affairs.
Approved July 7, 1925.
Joux H. Epwarps,
Assistant Secretary.

WASHINGTON : GOVERNMENT PRINTING OFFICE : 1925
GENERAL LIBRARY - U.C. BERKELEY

Aw

BOOO983049

RETURN Government Documents Department
TO===p 350 Main Library 642-2568
LOAN PERIOD 1 |2 3

 

 

4

 

 

 

 

 

JUN + “|

 

 

 

 

 

| —Nov141936
{REC MOFFITT DEC 16 '94

 

Ail TT Q 200
IAN 1 8 ZLBUa
IVEY 4

“/

 

 

 

 

 

 

 

 

UNIVERSITY OF CALIFORNIA, BERKELEY

FORM NO. DD7. 68m, 1/82 BERKELEY, CA 94720 oe