Free Notice (Other) - District Court of Federal Claims - federal

Case 1:99-cv-00550-ECH

Document 309-13

Filed 06/30/2008

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REGULATIONS TO GOVERN THE LEASING OF LANDS IN THE OSAGE RESERVATION, 0KLAn, F0R 0IL AND GAS MINING PURPOSES.
Section 3 of an act of Congress, approved June 28, 1906 (34 Stat L., 539, 543), provides:
That the oil, gas, coal, or other minerals covered by the lands for the selection and division of which provision is herein made are hereby reserved to the Osage tribe for a period of twenty-five yet~ kern and after the eighth day of April, nineteen hundred and six; and leases for all oil, ga~, and other minerals, covered by selectionsand division of laud herein provided h)r, may be made by the Osage Tribe of Indians through its tribal council, and with the approval o[ the Secretary of the Interior, and ¯under such mleB and regulations as he may prescribe: Prey/tied, That the royalties to be ly~id to the Osage Tribe under any' mineral lease so made shall be determined by the President of the United States: And providedfurt.her, That no mining of or prospecting for any oI mid mineral or minerals shall be permitted on~;the homestead selections herein vided for without the written consent of the Secretary of the Interior: _Prov/ded, or, That ~thing herein contained shall be construed as affecting any valid existing lease or contruct.

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To carry this prov!!sion-of law into effect the following regulations are prescribed to go r6rn the leasing of such lands for oil and gas nnnmg purposes: DEFI1EITION. 1. The. term "officer in charge" shall refer to the superintendent of the Osage Indian School or other representabive of the Government who may, for the time, be in charge of the Osage _Agencyand Reservation, or any person who may be detailed by the Secretary of the Interior or the Conn~issioner of Indian Affairs to take charge of leasinz or mining.operationsunder these regulations. 2./~t such times as the Secretary of the Interior shah direct, the officer in charge shall publish in the two lea _'_cling_ newspapersof Pawhilska, Okla., and in such other manner as shall he deemed appropriate notices that specific tracts of-Osage lands will be offered for lease to the highest and most responsible bidder, under the sealed-hid system, leases to be executed upon the Proscribed form arid subject to these regulations. BIDS. 3. Should the Osage National Council or anyperson or corporatioa desire to have any particular tract of |and offered for lease, written request to that effect should be submitted to the officer in charge, who will promptly transmit such requests to the Secretary of the Interior withhis r~.commendation.
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Case 1:99-cv-00550-ECH

Document 309-13
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Filed 06/30/2008

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2 4. The lands selected for lease will, as a rule, be offered in large tracts, with designated subdivisions thereof of from three hundred and twenty (320) to five thousand one hundred and twenty (5,120) acres. ¯ Bids will be considered for any one or more of the smaller tracts or designated subdivisions, up to the maximum acreage which may be leased by any one person, firm, or corporation, as provided in section eighteen (18)of these regulations. "No bid for any fractional part or subdivision of any tract, except as advertised, will be considered. The right is reserved to reject any and all bids. 5. If a bidder for several designated subdivisions desires to secure ,all or none, he may so state in his bid. 6. All bids shall be submitted on form "A," which may be obtained ¯ -from the officer in charge, 7. Bids must be inclosed in a sealed envelope o .ddressed t~ the Superintendent, Osage Indian School, Pawhuska, Okla., on which /must be plainly written "Bids for leases, Osage Nation, to he opened --" (giving the date of opening named m the published advertisement). Each bid must be accompanied by a certified check on a solvent national bank, payable to the superintendent and special disbursing officer, Osage Agency, in an amount representing ten per cent (10%) of the bonus.offered plus the first year's advance rentalof fifteen (15) cent~ per acre, as a guarantee of good faith~nd the intention of the bidder to comply with the conditions of the bid and of the regulations. 8. A corporation shall file with its first bid one certified copy of articles of incorporation, and, if a foreign corporation, evidence showing compliance with local corporation laws; a list of all officers and stockholders, with their post-:office addresses, and showing the number of shares of capital stock held by each; together with a sworn statement of its proper officer showing-" . (a) The total number of shares of the capital stock actually issued, the number_of shares actually sold and specifically the amount of cash paid into the treasury on the stock sol~t; or, if paid in property, state kind, quantity, and value of the same paid. (b) Of the stock sold, how much per share remains unpaid and subject to assessment. (c) How much cash the company has in its treasury and elsewhere., and from what sources it was received. (d).What property, exclusive of cash, is owned by the company, and its value. (e) What the total indebtedness of the company is, and specifically the nature of its obligations. (#) List of officers and directors. . ti. All bids received by the officer in charge in pursuar.ce of any authorized advertisement shall be opened by him or hi~ representative on the day and at the hour named in the published ~dvertisemerit in the council room of the Osage Tribe and in the presence of the Osage l~ational Council, or such members thereof as may attend. As the bids are opened full information concerning each bid shall be entered in a journal and the same placed before the Osage Council for its action.

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F.LI~ECUTION OF LEASES AND BONDS.10. Successful bidders will be allowed thirty (30) days-from date of notice of acceptance of bid within which to execute leases and otherwise comply with these regulations. Failure on the part of a bidder whose bid shall be accepted to comply with this paragraph shall operate as a forfeiture of the amount tendered as a guarantee " of goo d faith. Successful bidders shall pay to the officer in charge the unpaid balances of their biLds upon approval of their leases by the Secretary of the Interior. Delivery of leases shall be withheld pending such payment. The amounts tendered with all bids that are rejected shall be imme" diately returned, to the bidders. 11. No drilling or miuingshall be permitted upon any tract of land until a lease covering such tract shall have been approved by the Secretary of the Interior and delivered to the lessee. 12. All leases shall be made for a period of ten (10)years from the date of the approval thereof by the Secretary of the Interior and as long thereafter ~s oil and gas are found in paying quantities: Provided, That in no case shall the term of any lease extend beyond April eight (8), nineteen hundred and thirty-one (1931). ¯ One lease shall be executed to cover all the designated subdivisions of the particular large tract advertised which may be awarded to the same .bidder. Leases made by corporations shall be accompanied by:a single affi° ¯ ° " Ct davit, form E,, ~ the secretary or premdent of the company, showby ing the authority of its officers to execute leases, bonds, and other papers. 13. No individual, firm, pipe-line company or other corporation, engaged bl the business of transporting oil, shall be permitted to ¯ acqmre any lease or any interest therein. . Lessees shall furnish with each lease an Mfidavit on form "D," which shall state specifically ¯that he, it, or they are not engaged in the business of tra~Lsporting oil, and what, if any, consideration has been paid by such le~see or on his behalf, and to whom, for the execution of the lease. 14. The action of the tribal council in connection with the acceptance of any bid or bids and the execution of any lease or leases shall be reduced to ~riting and properly signed and authenticated. A certificate signi~dby the principal chief or assistant principal chief and attested b ~ the secretary, showing action of the d0uncil, should be ~ttached to'each lease. 15. Lesseesshall furnish with each lease, at the time it is filed with the officer in charge, a bond (Form "C") with two or more acceptable sureties, or with a surety..comp~ny duly authorized to act as sole ..surety.on bonds running.t6 the United States. Such lJonds Shall be to in. a:n. amount eaual three thousand dollars ($3,000) for each and " every desi_gna~Bd subdivision covered by t.he particular lease. ¯ All bonds shall be conditioned for the payment of all rents~ royalties, and damages, if any, and for the faithful carrying out of all other provisions of t~e lease, and shall contain specific reference to the ~illi~g of test wells, payment of liquidated damages in case such

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test wells are not drilled within the time required, and payment of damage~ done to the surface of the land, as provided in section twenty-six (26) of these regulations. The right is specifically reserved to change the amount of the bond in anyparticular case or to require a newbond where the Secretary of the Interior may deem it proper so to do. 16. The officer in charge may, at any time, either before or after approval of a lease, call for any additional information necessary to carry out the purpose and intent of these regulations, and such information shall be furnished within the time specified in the request therefor. 17. Should a lessee fail to furnish, within the time specified after his bid is accepted, the papers necessary to put his lease and bond in proper form for consideration, the officer in charge sl.all forward such lease immediately for disapproval. ACREAGE. 18. No person, firm, or corporation may hold at any one time under lease, assignment, drilling contract, or otl~erwise, more than t~'entyfive thousand (25,000) acres of Osage lands at present not under lease for oil or gas production ; but any lessee who may surrender or in good faith transfer, in the manner prescribed in these regulations, all or any part of his holdin~ may acquire other lands in lieu of those " ¯ surrendered or transferred. RENTALS AND ROYALTIES. 19. Lessees shall pay, in addition to other considerations, annuaI advance rentals as follows: Fifteen cents per acre for the first year; 30 cents l~er acre for the second year; 50 cents per acre for the third year; and $I per acre per annum for the fourth and each succeedh;$ year during the life of any lease: Provided., 2hat all such payments of advance rentals shall be credit~ on royalties on production during the year for which payment of advance rental is made. ¯ The payment of-annual advance rental shall not release the lesse~ from the obligation to drill test wells, as required by the terms of th~

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20. As provided in the act of June 28, 1906, supral the Preside.n~ has fixed royalties on production as follows: ¯ (a) On off the rate of royalty shall be sL~teen and two-thirds percent (16~%) of the gross proceeds of all off produced from the leased premises and such royalty shall be paid in money, based on the ac~pal. market value, not less than the guaranteed minimum value of sixty (60) cents per barrel, unless the Osage ~ouncilelects, with the approval of the Secretary of the Interior, to take the royalty in oil: (b) For gas, which is sold or used other than for the development of the lands covered by the lease, the rate of royalty shall be sixteen and two-thirds per cent (16~%) of the market value of such gas at the well: Provided~ That should either the Osage Council or the Secretary of the Intermr be of the opinion tha~ the price at which the lessee sells such gas is not thetrus market value at the well, the Secretary of the Interior shall, after notice, and hearing, determine the market value, and the lessee shall account to the lessor at the rate
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Case 1:99-cv-00550-ECH

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fixed by the Secretary of the Interior as aforesaid. Meters shall be installed at the expense of the lessee for the purpose of measuring the supply of gas, andthe accounting shall be on the basis of the supply ~s hewn by the meter statements. ~he standard rock pressure in the sale of gas shall be 2 pounds Where wellsproduce ¯both oil and gas in commercial quantities and the gas is foundkn a formation sufficiently above the oil-bearing sand andhas been casd~d off and utilized, such gas shall be gauged and the royalty determined as herein provided for gas wells. Where wells Foduce both oil, and gas through the same easing, or gas alone in limited quantities, lessees may dispose of such gas upon payment of ¯ royalty. on the part of the lessee to use a gas-producing well whic:| allure can not be profitably utilized at the rate herein described shall not ~orkif the lessee desires to retain gas-producing privileges he shall ut a forfeiture of his lease so far as the same relates to mining oil, pay a rental Of one hundred dollars ($100) per annum in advance, calculated from the date of discovery of gas, on each gas-producing well, gas from which is not marketed or utilized otherwise than for operations under the lease. In the event that any lessee during the course of a year desires to utilize commercially the gas from a well retained in accordance with the foregoing paragraph, "the one hundreddollars ($100) p.~rid as royalty shall be credited on the amount due from the lessee during the course of that year on account of the sale of gas from such well; the total amount to be paid by any lessee, however, in any one year shall be not less than one hundred dollars ($100) on each gas well On the land covered by his lease. PAY~IENT OF RENTAT.S AND ROYALTIES. 21. All rentalsj, royalties, damages, or other amounts which may b.ecome due under leases approved in accordance with these regulations shall he paid to the superintendent of the Osage Indian School at Pawl~uska, Olda. The remittances shall be in st. Louis or Kansas City exchange, except that where such exchange can not he procured post-office or express money orders will be accepted. All royalties or other payments or claims of the Osage Tribe. arising under such leases sh~l be alien upon the mining ~|ant, machinery, and all minerals mined on the property leased or in which the lessee still retains any right, claim, or interest. 22. l~oyalties on all oil and gas produced in any month shall be paid on or before the twenty-fifth (25th) clay of the month next succeeding, and the remittances shall be accompanied by sworn reports covering all operations whether there has Been production Or not. Lessees shall sho~ in this statement the total amount of oil and gas sold and not merdy their working interest, andalso the dates of discovery and begirming of utilization of gas from gas wells. 23. The lessee may include ~n one sworn statement all leases upon which there is no production or upon which dry holes have been " drilled. .24. Unless the 'Osage National Council elects to take its royalties in oxt, as provided in section twenty (20) hereof, the lessee may, with the consent of the officer in charge, make arrangements with the
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6 purchasers of oil for the payment of royalty to the superintendent of the Osage Indian School, ~ut such arrangements, if made, shall not operate to relieve the lessee from the re~p.onsibility for the payment of the royalty, should such purchaser fad, neglect, or refuse to pay the royalty. Where lessees avail themselves of the privilege outlined in this paragraph, division order3 authorizing l " ~e.Iine companies or other purchasers of oil to withbold the rov~ r interest shall be executed and forwarded to the officer in chal"~ !or approval before the oil from any well is run to any pipe-line company or other purchaser. Pipe-l[ne companies shall not accept or run oil from such leases until after the approval of division orders showing that the lessee has a lease regularIy approved and in effect. OPERATIONS. 25. Each lessee shall commence to drill at least one well on each and every leased designated subdivision within ninety (9)) days and shall complete such well or wells within one year from the date of the approval of the lease by the Secretary of the Interior. After the d~lling of a well is commenced, the drilling operations shall be conducte~ with due and reasonable diligence until such well is completed or is drilled to such depth as the oil inspector of the Osage Agency shall deem reasonable. Failure on the part of the lessee to begin, continue, or complete the drilling of the well shall be cause for cancellation or forfeiture of all or any part of the lease, as the Secretary of the Interior, in his discretion, may determine. In addition to forfeiture¯ of the lease for failure to drill the required test well or wells provided for in the lease, the lessee and his surety, by reason of the impossibility of accurately determi "_ni:ug the amount of damages which will be occasioned the Osage Iqation by such default, shall pay to the officer in charge for the use and benefit of the lessor, as and for liquidated damages and not as a penalty, the sum of two thousand dollars ($2,000) for each and every test well required by the lease to be drilled and not completed within one year from the date of the approval of the lease by the Secretary of the Interior, and execution of the lease shall be conclusive evidence of the assent of lessee and lessor to liquidated dama~,es in the sum of two thousand dollars ($2,000) per well for defaults within the time Hmit named herein, and the lessee and lfis surety shall be liable for such payment, even though the Secretary of the Interior, in his discretion, should continue the lease in force and effect. Any lessee, having drilled and completed the test well or wells required by the lease to be drilled and completed, may release and surrender all the land covered by the lease or any des! ~nated subdivision thereof, or such sections ef six hundred and forty (640) acres Of any designated subdivision as he may el ~ct~ on ~he payment of all rentals and royalties due on the date ot such surrender, as provided in section forty-five (45) of these regulations. / Any lessee electing to hold his lease, or any designated subdi/ vision thereof excee~ling in area two thousand five hundred and sixty / (2,560) acres, after the period Of one year allowed for the drilling of ] one test well on each designated subdivision has expired shall drill and complete at least one additional test well on each designated

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\ subdivision exceeding two thousand five hundred and sixty (2,560) acres within one year from and after the date of expiration of the-time allowed for the drilling and completion of the first test well, or in default thereof shall pay to the officer in charge for the use and benefit of the Osage Nation by reason of the impossibility of determining the amount of damage which will be occasioned to the lessor on account of failure to drill the second test well as aforesaid the sum of two thousand dollars ($2,000), as and for liquidated damages and not as a penalty, for each second test well for which the lessee is in default, in addition to any and all other payments required by these regulations and the terms of the lease. 26. Lessees may use so much of ~he surface of the leased land as shaU be reasonably necessary for the prospe~1;itlg'and ~6~5~-r~tions required by the Iease, and shall also have the right of way ¯over and across such land to any point of prospecting or mining operations, but such use'~rI:he surface shall be permissible o nly__unc[e~.r, ondihion of least injury_and i~convenience to the allottee or owner of the land. Lessees before commencing and during such operations shall pay all reasonable damages for the useof the surface land and to any growing crops thereon, or to improvements on said land, or any damage that during the life of the ]ease may be occasioned in any manner whatsoever by the use of the surface, to the allottee or his successor in interest or assignee, or to a lessee of the surface of said land, damages to be apportioned among the parties interested in the surface, whether as owners, lessees, or otherwise, as the parties in interest may mutually agree or as their interests may appear: ProvirIed, That when the amount of such damage is not agreec[ upon between the parties in interest any of said parties may notify the officer in charge; whereupon such officer shall notify the parties in interest that he will after ten days from date of notice investigate the matter of damages, such notice to be .~ent to the lessee, allottee, or his heirs, and such other persons as m~y have informed the officer in charge in writing of a claim to an interest in the lands. The officer in charge shall thereupon determine the damages and apportionment thereof between the parties in interest, such determination to be final unless an appeal therefrom be taken to the Secretary of the Interior within ten (10) days from date of notice of the determination by the officer in charge. The de~ision of the Secretary of the Interior on appeal shall be fial and conclusive on all parties. Where appeals are taken to the Secretary of t:he Interior the lessee may proceed with operatipns, ¯ uendin~ alol~eal, by depositing with the officer in charge the amount , ~xed by h'i~a as d~aages, and pending action on the appeal so much ¯ Of said amount as is not in dispute between the parti~ m interest may be disbursed. Who.re any ~Sarty in interest is a nnnor or noncompetent Indian any agreement made as to damages, or failure to agree, may be investigated by both the principal chief of the Osage Tribe andthe officer in charge within ten days after notification to them by any party in interest, and an appraisal and written statement in reference thereto made by the principal chief and the officer in charge in writing, said written appraisal and statements to be transmitted to the Secretary nf the Interior in case of a disagreement between them or of an appeal from their determination, and the action of the Seci~etary of the Interior shall be final and conclusive on all parties.

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27. Lessees and those acting under them shall not conduct prospecting or mining operations w~thin or upon any homestead selection or upon land which has been cultivated thirty days or more prior to application ~0 drill, without the written consent of the Secretary of the Interior, to be given only after a written statement showing the views of the allottee with reference thereto or after reasonable opportunity shall have been given for the allottee to be heard, and after appraisal and determination of damages shall have been agreed upon or fixed as heretofore provided wi~n respect to other allotments. Guardians, legal or natural, may make such written s[atement for their Indian wards,¯ and where no one is authorized or where no person is deemed by the officer in charge to be-a proper party to speak for a minor or person of unsound mind or of feeble understandiug, Such written statement may be made by the principal chief of the Osage Tribe. . l~.sec or an allottee or the heirs of a 28. Any person, other than ~.o deceased allottee, claiming an interest in any leased tract or in damages thereto must furnish to the officer in charge a statement in writing showing his interest, and'failure to furnish such statement shall constitute a waiver of notice and estop said person from elahning any pa~t of such damages after the same shall have been disbursed. 29. Lessees will not be permitted to use any timber from any Osage lands not relieved of restrictions upon alienation except under written agreement with the owner approved by the officer in charge. 30. No well shall be drilled within fifty feet of any public highway or section line. No oil or gas well or tank shall be located within three hundred (300) feet of any building used as a dwelling, granary, shelter for stock, or established watering place, unless, in order to prevent serious loss to any lessee by reason of drainage, written permission to drill within said prohibited distance shaft be given by the officer in charge after ten (10) days' notice to the allottee as herein provided: As far as practicable, all pipes shall be laid underground, so as not to interfere with agricultural or gra~Jng privileges, and the oil inspector of the Osage Agency shall have the right of final decision in all cases as to the practicability in view of all the circumstances including the place of operations and the cost of laying such pipes underground. 31. Lessees or operators shall plug all dry or abandoned wells in accordance with the laws of the State of Oklahoma. In the e~ent the lessee or operator shall fail to plug properly any dry or abandoned well in accordance with the laws of the State, the officer in charge may, after five (5) days' notice to the parties in interest, plug" such well at the risk and cost of the lessee and his sureties. Failure to plug a dry or abandoned well as herein provided shall be a good and sufficient cause for the cancellation of the lease in the discretion of the Secretary of the Interior. 32..Whenever any lessee or operator, in drilling wells for oil or gas on lands from which coal or other minerals are being mined, finds that such well passes thr?ugh any such. mine,_the lessee or operator shall drill the well to a depth of at least 10 feet below the vein of coal or other mineral being mined, and such well shall be cased and sealed on the outside of the casing with suitable material to the level of the floor of the mine, and each vein of coal or other mineral being mined, pierced by such well, shall be sealed in the same manner.

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9 Upon the abandonment of any well drilled for oil or gas, which has passed through any vein of coal or other mineral, the lessee or operator shall fully protect such vein of coal or other mineral in the same manner as has been heretofore provided in section thirty-one hereof for the protection of oil or gas bearing rock or sand or in such manner as shall be.satisfactory to the officerin charge. 33. All "B-S" or other refuse from tanks and wells shall be drawn off into proper receptacles at'a safe distance from the tanks, well~ or buildin~ and disposed of by being burned; but in no case shall it be permitted to flow over the surface of the land to the injury of any surrounding property or to the.polution of any stream: Provided., That in cases where it is impossible to burn "B-S" and other refuse, or where in the operation oira well it is necessary to pump salt water in such quantities as would damage the surface of the lands or pollute any stream, the officer in charge, after having been so notffied by the lessee or opera,r, shall cause an examination of the conditions and shall issue, instructions in each separate instance as to the manner in which the 'B-S' and refuse or s~.lt water shall be disposed of. Failure on the part of the lessee to properly care for "B-S" and other refuse, in accordance with this provision, will be sufficient cause for the cancellation of the lease bv the Secretary of the Interior after not.ice and opportunity to be heard. 34. If in the drilling of wells both gas and oil are encountered in commercial quantities and the gas is found in a formation sufficiently above the oil-bearing sand to permit being separated from the oil by casin~ such ~as ~'hal] be so separated frown the oil and securely shut

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as an oil well or .,~hall be closed in untfl such time as the gas may be utilized and the oil produced without waste of gas. 35. To prevent the escape of gas, lessees and operators in possession of any gas-producing well shall, within five days after penetrating the gas-bearing rock or s.nd, shut in and confine the gas in such well until such ttme as the gas shall be utilized for light, fuel, ste~n, or other purposes: Prey/deal, That this regulation shall no~ app!y to ~ny welIwhich is operated for oil, or during the process of dh'll~ng when reasonable diligence is used, or when off is found in a lower stratum of sand and the gas found in the upper stratum is cased off and the well is operated as an oil Well. Lessees or operators shall pay to the officer in charge the sum of ten dollars ($10) per day for each well du~ing the time such well is allowed to go uncontrolled or uncared for, as provided in this section, unavoidable accidents excepted. 36. Lessees shrill have the right to the free use of so much of the oil and gas on any leased trac~ as shall be fairly -necessary.. for light and fuel-in mining operations conducted on such tract, "but such privilege shall be, restricted to an economical use by the means of modern appliances: Provided, That should off or gas be furnished from any leased tract to the lessee, driller, or operator on another le~ed tract, .the ][essee furnishing oil or gas for mining operations on
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10 ~uch other leased t.ract not producing sufficient oil or gas to conduct operations thereon shall pay to the officer in charge the royalties prescribed in the lease. 37. Lessees and those operating under them who may use natural gas for outside illumination upon the premises covered by a lease shall be required to use the device known as a "Storm burner," or other burner which consumes no more gas than the "Storm burner." Lamps shall not be lighted earlier than five (5) o'clock m the afternoon and shall be extinguished not later than eight (8) o'clock each morning, and the officer in charge shall be the sole judge as to the number of lights to be permittedupon and around any leased tract, subject to appeal therefrom to the Secretary of the Interior. Stopcocks shall be pIaced on all pipes used for c()nveying gas to burning devices of any character and the gas shall be shut off at all times when not in use. 38. Lessees and those operating under them, using natural gas for fuel in steam boilers, shall provl~de a standard economical T)urner adapted for steam boilers and shall also provide such boilers with stan~t, ard boiler regulators so connected that the steam pressure will ¯ regulate the flow of gas. The boiler shall also be provided with a smokestack not less than ten (10) feet in height. 39. Lessees shall provide proper tankage of suitable shape for accurate measurement into which produetmn of crude oil shall be ¢.onducted direct from wells through pipes or other closed conauctions. If the contents of such tanks are removed from the leased premises or disposed of in any manner other than to a purchaser to ~hom a div~ion order has been approved, authority therefor must first be ~)rocured from the officer in charge, accurate measurement made and ¯ the production reported and royalty thereon paid in the usual manner. 40. In cases of emergency where the capacity of new wells is such that lessees are unable immediately to provide proper tankage, production may, with the approval of the officer in charge, be conducted to openponds or earthen tanks, but in no case shall any embankment ¯ xceed fifteen (15)feel in height: Such ponds or earthen tanks shall .be so constructed as to minimize the danger of overflow or collapse .or damage to crops on adjacent property. 41. Crude oil run into earthen tanks in eases of emergency shall not ¯ e allowed to remain in such earthen tankage for a longer period than fifteen (15) days,¯ except that where lessees desire so to store their oil, such tankage may be used after the oil has been properlygauged and royalty paid thereon when the tanks are so constructed as to remove all reasonable danger of fires, overflow, and damage to other property. The right is reserved for the officer in charge to supervise ~Jae construction of earthen tanks. ¯ . 42. Oil to be temporarily held or stored in earthen tankage must be ~n from the wells rote receiving tanks capable of accurate measurement, and then gauged before being turned into earthen ~ankage. 43. Oil shall not be sold to a pipe-line company until a diwsion order is approved by the officer in charge. Should the lessee desire sell or remove oil from the leased premises in any other manner, ¯ uch sale or removal shall not be made until first authorized by the Officer in charge. The lessee or his authorized representative shall actually be present when oil taken under division orders is run by ~e pipe-line company and the lessee shall be responsible for the

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11 correct measurement and report of oil so run; and shall be liable t~ account on the basis of the pipe-line reports, plain error or misvake excepted, othervrise the approval of division orders may be revoked. ASSIGNMENTS. 44. ApproVed leases or any interest therein may be sublet, transferred, or assigned with the consent and approval of the Secretary of the Interior and not otherwise. Subleases, transfers, or assignments, when so approved, shall be subject to the terms and conditions of the ori~nal leases and the regulations under which such leases were approved as well as to such additional requirements as the Secretary of the Interior may prescribe. The sublessee, transferee, or assignee shall furnish with hi% sublease, transfer, or assignment a satisfactory bond as hereinbefore prescribed in connection with leases. Any attempt to sublease, transfer, or assign an approved lease or any interest therein without the consent and a~pproval of the Secretary of the Interior shall be absolutely void and snail subject the original lease to cancellation in the discretion of such Secretary. SURRENDER AND CANCELLATION. 45. When a lessee makes application for the cancellation of a lease in" whole or in part, all royalties dr rentals due up to and including the date of the application for cancellation must be paid, and tha~ part of the leas~, delivered the Iessee shall be surrendered before such application will be considered. In the event a lease is surrendered. for cancellation, in whole or in part, after a new lease year has been entered upon, the lessee and his surety shall be liable for the advanced ~entals required to be paid under the lease for that year, and no par~ of such rentals wl~ch may have been paid shall be refunded.
GENERAL.
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"46. All lessees shall maintain offices or have representatives at Pawhusk~, in Osage County, Okla. 47. Lessees, su blessees and assignees must submit to the officer in charge on January first (1) of each year, and at such other times as ¯ may be required by the Secretary of the Interior, a statement containing the inform~ation called for in paragraphs "a" and "f" of section eight (8) of these regulations and also showing any change~ in officers or changes in or additions to stockholders. At any time individual stodkholders may be required to show to the satisfaction of the Secretar~ of the Interior in what companies or with what persons or firms ihey are interested in oil or gas mining leases on ~e Osage Reservation and whether they hold such stock or interests for ¯ themselves or ]~ trust. 48. Lessees shall allow the agents and representatives of the lessor, or any authorized representative of the Interi_orDepartment, to en~r~ from time to time, upon and into all parts of the .leased premises Ior the purpose 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 operational ann persons interested shall be open at all times for the examination

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12 of such officers of the department as shall be instructed by the Secretary of the -Interior to make such examinations. 49. All persons or corporations drilling wells under approved leases, subleases, or assignments shall keep a true and correct record of each well, including the log of same, and shall furnL~h to the o~cer in charge a copy of s uchlog not later than 15 days after such ~ell has been drilled, duly certified to under oath b~ the operator or representative, and the said operator or his representative shall furnish a statement under oath as to whether the rig timbers were procured on the Osage Reservation; and, if so, state the name of the allottee or other person from whom the said rig timbers were purchased, and shall also furnish any other information the officer m charge may desire relative to the drilling of said we]l. or the pro"" curement of timber used in connection with such operation. 50. Wherever notice is provided for in these regulations it shall be suffici.ent if notice has been mailed to the last-known place of address of. the party, and time shall begin to run with the day next ensuing after the mailing or from the date of delivery_ of personal notice; but where the party is outside the State of Oklahoma the officer in charge may. inhis discretion, increase the time allowed. 51. Lessees are required, when so requested, to file a plat of their leases showing exact locations of all producing oil or gas wells, dry holes, proposed locations, tanks, power houses, pumping stations, etc. Such plats should also show locations of dry or producing wells upon " the adjoining tracts, so far as known to the lessee. 52. The Osage Nation shall have the right to the free use of gas for all school and other buildi~s belonging to the Osage Nation from any well or wells that may be discovered: Prov~ed, That no expense shall be incurred by the lessee in piping gas for such purposes and the lesse.e Cshall not be required to pay royalty on suchgas, ¯ 53. All gas discovered and produced under any lease made in accordance with these regulations shall be utilmed within the limits of Osage County, except with the consent of the Osage National Council-, approved by the Secretary of the Interior. ¯ 54. Excet)t in cases of emergency which shall not exceed ten (10) days, not more than sixty per cent (60%) of the capacity of any gas ~ell ~hall be utilized. FORMS. 55. Bids, leases, and.other papers must be upon forms prepared by ~he department, and the superintendent of the Osage Inaian School, l~awhuska,-Okla., will furnish prospective lessees with such forms at a cost of one dollar ($1) per set. Copies of such forms are printed herewith. ¯ -Form k. Bid and application for oil and gas lease, including financial showing. Form B. Oil. and gas lewes. ¯ Form 0. ¯Bond. .Form D. Affidavit of lessee and'proof of bonus. ~. Form ]~. Authority of officers to execute papers. ¯ Form F. Assignment. ¯ : 56. On the failure of any lessee, sublessee, or assignee to comply ~vith any regulation or any obligation in the lease, sublease, or a~signm ent, the Secretary of the Interior may cancel a~d annul such lease

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13 without resorting to the courts and without any further proceeding: Provided, That the party or parties Charged with such violation shall be first given not less than thirty (30) days' notice to show cause why such lease should not be canceled and annulled or other order made with reference thereto. These regulations ar~ subject to change or alteration, at any time, by. the Secretary of the Iviterior.
DEPARTMENT OF THE INTERIOR~ OFFICE OF INDIAN ~-FFAIRS~
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The foregoing regulations are respectfully submitted to the SecretaLy of the Interiorwith the recommendation that they be approved. F. H. ABBOTT, Assis~nt Gommissioner of Indian Affairs.
DEPARTMENT OF THE INTERIOR, July

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~kpproved: First. As,s~istan~ Secretary.
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FORMS.
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Form A.--BID AND APPLICATION FOR 0IL AND GAS MINING LEASE, OSAGE RESERVATION. i:~:÷': :,191--. The S~c~T~a~ o~ T~ INTERIOR (Through United States Indian Superinte,dent), 08age Indian Agency, Pawh~s~..a, O~la. The undersigned, hereinafter called the applicant, hereby offers a bonus of $ per acre for a lease for oil and gas mining purposes on designated subdivisions of tract --- of Osage Indian lands described as: Subdivision ---, ~ T. -- N.) ,191--. There is inclosed certified check R. -- E., as advertised uflder date of for $-----~,'the ~ame being 10 per cent of the amount of bonus offered phm the ~d: vance annum rental of 15 cent~ per acre for the first year. In event of the acceptance of th~ bid the applicant hereby agrees to be bound by the conditions and requirements set forth in the r%oulations prescribed for the leasing of said lands, and that on failure of the applicant so to do'the amount herewith shaUbe forfeited to the O~ge Nation of Indians, and such forfeiture shall not be a waiver of any right of action the Osage Tribe may have. ¯ It is further agreed by the applicant that th~ bid, if accepted, shall be considered a part of the lease which shall be executed in accordance herewith. The applicant guarantees to pay royalty on a minimum price of 60 cents per barrel on all oil produced. . Remarks: ~. The applicant solemnly swears that the lease, for which bid and application is hereby mad.e, is to be taken in good faith in the interest and for the exclusive benefit of the applicant, and not for speculation or transfer, or a~ agent for, or in the interest of or for the benefit of any other person, firm, corporation, or association; that no other person, firm, corporation, or association has any interest, present or prospective, directly or indirectly, therein, and that there is no understanding or agreement, expre~sed or implied, by which the land leased, or any interest in or under the lease by working or drilling contract or otherwise, is to be used, sublet, assigned, or transferred, without the coasent of the Secretary of the Interior first obtMned, but that it is to be taken for the purpose of operation and development under the direction, supervision, and dontrol of the applicant, except as herein ~tated. ' Affiant solemnly sweam that the applicant is not interested, either directly or indirectly, in oi~ andga~ mining leases i~ that portion of the Osage reservation to be . leased under reoO~flations of ~uly 3, 1912, except with the followingon~med persons, firms, corporations, or a~ociation~, and that the aggregate of all these interests, te~ether with the leases held by the. applicant alone, and that applied for herein, will nst exceed 25,000 acres:
Name. ¯ Post-o~5c~ addr~.~.

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The applican.t hereby states that his general busines~ experience for the past five o years hasbeen as follows: -- The applicant's financial condition at this time is ~ -. The applicant's x~oumes ar~ as follows: ~, and he has available at least y------for the ae~elopment of the land for which this application is made: The applicant, a corporation, hereby sho~s that at this time it has $-- paid up capital and $------ in its t~easury available for oil and gas operations. (Note a.) It is hereby agreed that on the issue, transfer, or cancellation of stock of corporations, or changes in officers, prompt reports will be made thereof as required by the tions. , . . re~ee books and accounts of the applicant covering the business to be camed on under the lease, if approved, will be kept at --, in the custody of -.
(Reference.% Note b ) (Po~t. office adfl~ )

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Executed ~ -- day of ---, 1O--, at --, --"(10

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, State of --, personBefore me, a notary public in and for the county of , who, being first duly sworn according to law, deposes ally appeared .... and says that the foregoing bid and application was s~ned by proper authority in good faith for the purposes therein stated, and that the statements made therein are tnie as he verily believes.
EAL.] ~Icommission expire~ -y Notary Public.
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¯ {a) Corporations shalJ furnish with their first application the additional finauciaJ showing required by the regulations. (b) Bank relerences are preferred.

Form B.---OIL AND GAS MINING LEASE, OSAGE RESERVATION, OKLAHOMA.
This indenture of lease made and entered into, in quadrupfic~te, on this -- day " of ~, A. D. 19--, by and between the Osage Tribe of Indian~, by of Oklahoma, party of the first part, hereinafter designate~ ~ lessor, and ~ -28, 1906 (34 Stat., 539, 543), witnesseth: : ::.7:-.": " " - ! : ,

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itspfincipal chief, under authority conferred by the Osage Tribal Council, of the State , party of the second part, hereinafter designated as lessee---, under of .... " and in pursuance of the provisions of section 3 of the act of Confess approved June 1. The lessor, for audin consideration of one dollar, the recei]~t whereof is acknowledged, and of the roya]ities, covenants, stipulations, and conditions hereinafter contained, and hereby agreed to be paid, observed, and- performed by ~e lessee--, does
hereby demise, grant, lease, and let unto the lessee.--., for the term of ten.years from the date of the approval hereof by the Secretary oi the Interior, and ~ long thereafter as oil or ~ is found in paying quantiti.es, provided, however, that the term of

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this lease shall not extend beyond April 8, 1931, all the oil deposits and natural
in or under the following demgnated subdivisions of land, of tract --, lying and being within the Osage Reservation, Osage County, State of Oklahoma, described as: " , T. -- N, R. -- E. (insert description in full in each case), of SubdivisiQn the Indian meridian, and containing in the a~o~r~ egate -- acres, more or less, with the exclusive right tv prospect for, extract, pipe, store, and remove oil and natural gas, and to occupy and'use so much only of the surface of said land as may be reasonably necessary to carry on the work of prospecting for, extracting, piping, storing, and removing such oil and natural gas; also the right to obtain from wells or other sources carry on said operatio~, and also the right to use, free of cost: m! and.natural gas as " 2. The lessee-- hereby agree-- to pay or cause to be paid to the superintendent of the Osa~e Indian School, at Pawhuska, Okla., for the lessor, as royalty, 16.] per cent of the g~oss proceeds oil all crude oil extracted from the said land, such royalty_~o be

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on said land, by mea~ of pipe lines or otherwi~, a sufficient .supply of water to light and fuel so far as necessary to the development aria operation oi sam proper~y.
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paid in money based on the actual market value, unless the Osage National Council, with the approval of the Secretary of the Interior, shall elect to take the royalty in oil, payment to be made st the time of sale or removal of the oil. It is understood and
agreed, however, that t~hould the actual market value of such oil be less than 60 cents

per barrel, the lessee-- guarantee--- to pay royalty based on the minimu.mTrice of 60 cents per standard barrel. And the. lessee- ~,ree-:, ~ ~ay .as royalty'on each
g~-producing well utilized otherw£~e than as provme~ hereto 16] per cen~ oi the market value of the gas at the well: Provided, That should either the Osage National Council or ~t~e Secretary of the Interior be of the opinion that the well, the Secretary of the Interior shall, after notice and hearing, determine the market value and the l~.-see- shall account to the lessor at the rate fixed by the Secretary of the Interior a~ aforemid. The lessee shall establish meters at expense to measure the supply of gas received from the leased premises, and the

price at which the l~see- sell- such gas is not the true market value at the

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'accotinting shall be on the basis of the supply as shown by such meter statement.s. It is understeod and a~eed by the parties hereto that the standard rock pressure for the ~.le of gas from this lease shall¯ be two pounds. The O~ge Nation shall have the right to the free use of gas for ~chool and public buildin~_ .of the Osage Nation from any .well or wells that may be discovered on the leased lands: Provided, That no expense e~all be incurred by the lessee- in piping gas ~or such purposes, and the lessee- shall
not be re~nired to pay royalty on such gas: Failure on the part of the lessee- to use a

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ga~-nrodt~cin_~ well, whicI~ ca~ not profitably be utilized at t~e rate herein prescribed,
si~u~l~ not wor~k a fbrfeiture of this lease so far as the same relates t~ mining oil, but if

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the lessee- desires to retain gas-producing rlght~ or privileges, lessee-- shall pay a rental of one hundred dollars' per annum in advance on each gas-producing well, the

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gas from which is not marketed or not utilized otherwise than for operations under this lease, and the same shall be credited on gas royalties due and payabl% if, during the year [or which advance gas royalties are paid lessee- elects to market the gas. " 3. The lessee- shall pay to the officer in charge, as advance annual rental on this | lease, fifteen cents per acre in advance for the first year; thirty cent~ pet acre in | advance for the second year; fifty cents per .~cre in advance for the thirdyear; and [ one dollar per acre per annum, in advance for the fourth .and each succeeding year ] therealter, ~t being understood and agreed that the mid sums of money so paid d~ / arep~ayable shall.... a credit on the stipu---" any~.yeear in.which royaf ties on prod.ction be ¯lated royalties due ~rom the levee- if such royalties on production exceed the advance
" annual rental for .that year. . 4. The levee-- covenant-- and agree--- to commence to drill at least one well on every leased designated subdivision within ninety days and to complete such well or wells within one year-from the date of the approval of this lease .by the Secretary of the Interior. After the drilling of a well is commenced the drilling operation shall be conducted witK due and reasonable diligence until such well b completed or is drilled to such depth as the oil im_-~pector of the Osage Nation shall deem reasonable. In addition to forfeiture in the sole discretion of the Secretary of the Interior of the lease for failure to drill and complete the required testwell or test wells on each and every designated subdivision as aforesaid, within the time provided by this lease and the regulations relating thereto, the lessee-- and -- sure~, by reason of the impossibility of accurately determining the amount of damages wh*ch will be occasioned the Osag_ e Nation by such default, shall pay to the superintendent of .the Osage echoer for the use and benefit of the lessor as and for liquidated damages, and not .as a penalty, the sum of two thousand dollars ($2,000) for each and every test well required to be drilled and not. completed within one year from the date of approval of this lease by the Secretary of the Interior and the execution of thin lease shall be conclusive evidence of the assent of lessor and lessee to hqmda~d d.ama~es in. the sum of two .thousand lessee--, after having drilled and completed the test well or wells requtrefi. ~ be drilled and completed, m~.y release and surrender .all the land covered by the ease, or any designated subdivasiou thereof, or such sections of s~x hundred forty acre~ of any d~ignated subdivision as he may elect on the payment of all rentals and royalties due on the date of such surrender, as provided i~. paragraph eig.ht of this lease. Should the lessee-- elect to hold the lease or any des~'nated subdivision thereof exceeding in area 2,560 acres after the l)eriod of on~. year allowed for the drilling of one test wen

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dollars ($2,000) per wen ror aefaults w~thin_ _the time l!nnt.na.m_ea hereto. l-he

on each designated subdivision has exp~rea, --ne-- sna~ ami ana complete a~ *eas~
one additional test well on each designated subdivision exceeding in area 2,560 acres within one year from and after the date of expiration of the time allowed for the drilling and completion of the first test well, or in default thereof, shall pay to the superin'tendent of the Osage Indian Schcol for the use and benefit of the Osage Nation by reason of th~ impossibility of dete .rn~in" .'rag the amount of da_mage which will occasioned to said nation on account of failure to drill such second test well as aforesa,d the sum of two thousand dollars ($2,000~, as and for liquidated damages and no.t. as a

penalty, for each second test wen for which.the less~.eFv maybe in default, .in.add,tion to any and all other .payme_nts required by.me r.egu. Iztio.us .aria me ~rms el thin. ,ease.
Failure on the part of the l~ to comply strictly w~m _me proms~ous oz ~ paragraph shaU constitute a violation of one of the substantial terms and conditions of lease and shall.shall operate as a forfeiture of the lessee-- righ~ and subject the lease ~o cancellation.in the discretion of the Secretary of the Intenor, but such forfeiture and cancellation shall not operate to relieve or release the lessee-- and surety

from the payment of. liquidated dau~g, ea .as herein, pro_vided for e~e~.-thongh the
:Secretary of the Interior ~hall, m hm discretion, continue the lease m orce ann enect. 5. The lessee- may use so much of the surface of the land as may oe reasonamy

necessary for prospecting and mining operations required by this lease and shall also
have the right of way over and across such land to an)" point of prospecting or mining operations, but such use.of the surface shall be permutable only under the condition of least injury and inconvenience to the allottee and owner of the land. Lessee,i

before commencing and during such operations shall pay all reasonable damages for
the use Of suchsurfaceof the land and to any gr0wing crops thereon, or to any improvements on such land or anydamages that during the life of this lease shall be occasioned in any manner whatsoever to the allottee or his successor in interest or assignee, or to the lessee of the surface of the land by the use of the surface, such damages to be apportioned among the parties interested in the surface, whether as ownerslessees, or otherwise, as such parties may mutually agree or as their interests may up, pear: Provfded, That when the damages can not be agreed upon betw~.#h the parties m in-

1

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17
terest, the amount of such damage shall be determined in accordance with the regulutions approved by the Secretary of the Interior. 6. The levee shall carry on development and opemtious in a workmanlike manner, commit no waste on the said land~ suffer none to be committed upyn the portion in occupancy or use, take good care of the same, and promptly surrender and /'- return the premises upon the termina~ ion of this lease to whomsoever shall be lawfully ] entitled thereto, unavoidable casua~;ies excepted; shall not remove therefrom any | bttildings or permanent improvemelits erected thereon during the said term by the | said lessee-, but said buildings and improvements shall remain a part of said land | and become the property oi the owner of the surface of the land, excepting the tools, ~t derricks, boilers, boiler houses, pipe lines, pumping and drfllingoutfi~, tanks, ~\ engines and machinery, and.the casing, of all :dry or exhausted wells, which shall ~" remain the property o| the lessee-, ana may De remove~l a~ any rune. wlmln slxty \days after the termination of the lease by forfeiture or otherwise, provmea me payments a~eed upon by this lease and the regulations applicable thereto have been made to the lessor but not otherwise; shall not permit any nuisance'to be maintained on the premises under lessee-, control, nor allow any intoxicating liquors to be sold or given away for any proposes on such premises; shall not use such premises for any other purpose than those authorized in this lease; and before abandoning .auy well shall securely plug the same, so as effectually to shut off an water Irom me on-bearing stratum, as provided in the regulations prescribed by the Secretary ?f the'Interior. 7. The lessee- shall keep an accurate account of all off and gas mmmg.pper.a, tmns, showing the sales, prices, dates, purchasers~and the whole amounto[ oil mmea or removed and the quantity of gas sold and the gross receipts derived therelrom, an(l shall make sworn reporl~s thereof as required by the regulations, and all sums due as royalty, advance rental,.liquidated or surface damages shall be a lien on all implements, tools, movable macfiinery, and all other personal chattels used in operating said property, and upon all of the tmsold off obtained from the land herein leased, as security for payment of said sums. 8. The lessee- may at any time, bypaying to the Indian superintendent all amounts then d t~e-as provided herein and the ft~rther sum of .$1, surrender all or any par~ oI ~e land covered by this le~se ~:nd have the lease can6eled as to the land surrendered and be relieved from all further obligations and. liabilities thereunder as to the part .surrendered: /~rov/ded, That in the event the lease is surrendered for cancellation in whole or in part after a new lease year has been entered_upon, the less esT. - and the surety shall be held liable for the advance rentals required to be paia ror ma~ year, and no part of such renlMs which may hairs been paid shall be rehmded. 9. This lease shall be subject to the regulations of the Secre t~.. of the Interior, now or hereafter in force, relative to such leases, all of-whl .cl}. regulations are maae a pva~l and condition of this lease: Prov/ded, That no regulatmns made after the approva of this lease, affecting either thepayments or dama~es thereunder, shall operate to affect the terms and conditions of this lease. ]0. Upon'the violation of any of the terms and conditions of this lease, the Secretary of the Interior shall have the fight at any time after thirty (30) days' notice to ~e lessee--specifying the terms or conditions violated, to declare this lease null and void. ¯ 11. Before fliis-lease ,shall be in force and effect the lessee--shall furnish a bond with responsible surety to the satisfaction of the Secretary of the Interior, c ondi~oned for the performance of this lease, wh|ch bond shall be depomum ana remain on me m the Indrmn Office. 12. Assign. ment of this lease or any interest therein may be made with the approval " of the Sec~tary of the Interior and not otherwise. 13. Each and every clause and covenant of this indentum shall extend. ~ the heirs, executors, administrators, successors, and lawfu| asmgns of the ~arues nereto. In witness whereof, the said parties have hereunto, subscribed their names and affixed their seals on the day and year flr~. above mentioned. Two witnesses to execution by lessor: . Post Office, ~ .... Post Office, Two witnes~s to execution by lessees: Post Office .... Post Office, Attest
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day of On this , A. D. 19-i, before me, a- within and for the -- - and -, aforesaid, personally appeared .... and ...... , to me personally known, who being by me duly sworn, did each ~y that ..... is the ~ president and -- ~ is the ~ secretary, of ~, a corporation, and that the seal affixed to the foregoing and annexed instzument is the corporate seal of said corporation, and that said hmtrument was signed and sealed in behalf of said corporation by authority'o{ its board o[ directors; andsaid ~ -- and -- duly acknowledged that they each had in their said official capaci~es executed the forgoing instrument as the act and deed of the said company for the cousideration and purposes therein mentioned and set forth. Witn~s my hand aud official seal this -- day of --, 19--.
!

My commission expires -U. S. I~nL~N S~.~wcs, OSAG~ Ae ~.t~cY, Pa~hu~a, O~la., -~-----, ~9~. The within lease is forwarded to the Commissioner of Indian ~ffaira with recommendation that it be ~.. See my report of even date. (O~cial title:)" OI~FICE OF INDIAN AI~FAI~S, Washington, D. C., --., 19--. Respectfully submitted to the Secretary of the Interior with recommeudation that it be Oomm~s~ner.
WASHINGTON,

D. C.,---, 19--.

The within lease is Secretary o/the ln~r. Filed for record this ~ day of ~, 19--, at -- o'clock -- m.

\

Case 1:99-cv-00550-ECH

Document 309-13

Filed 06/30/2008

Page 19 of 22

19
Form C.--BOND. (To accompany }e:ues for oil and gas mining purposes, Osage Reservation, Okla.) Know all men by these presents that ~, of --, as principal, and --, of m__, as suret--, are held and firmly bound unto the United State~ of America in the sum of ~ dollars, lawful money of the United States, for the payment of which, y,ell andtruly to be made, we bihd ourselves, and each of us, our and each of our hel~s, successors, executors, or adminJslr~ters, jointly and severally, firmly by these p.res~mte. Sealed with our seals and dated this ~ day of ~, 19--. The condition of this obligation is such that: Whereas the above-bounden , as principal --, entered into a certain indenture of lease, dated --, 19~, with the Osage tribe of Indians, for the lease of certain lands described as: Subdivision . T. -- N., R. ~ E. (Insert description in full in each case.) of the Indian Meridian, and located in tract ~ in the Osage Reservation, 0kla., for oil and gas minirlg purposes for the period of 10 years from the date 0f approval thereof by the Secrel~ry of the Interior and as long thereafter as oil and gas are found in paying quantities on said land: Prodded, That in no event should the term of said lease extend beyond April 8, 1931; and did covenant and agree in said lease Whereas, the abo~re-bounden to pay advance rentals annually at the rate of fifteen cents per acre for the first year, thirty cents per acre for the second year, fifty cents per acre for the third year, and one dollar per acre per annum for the fourth and each succeeding year during the life of said lease, and to pay royalties on production at the rate of sixteen and two-thirds per cent of the groin proceeds of all oil produced from the leased premises based on the actual market w,lue, but not in any event to be less than sixty cents per standard barrel and sixteen and two-thirds per cent of the market value at the well of all gas sold or utilized other than for operations under the lease; and Whereas, the above-bounden did covenant and agree in said lease to drill and complete one test well on each designated mbdivision covered by said lease within one year fror~L the date of approval of the lease by the Secretary of t~e interi