Free Stipulation - District Court of Federal Claims - federal

Case 1:99-cv-00550-ECH

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS THE OSAGE NATION AND/OR TRIBE OF INDIANS OF OKLAHOMA, ) ) ) Plaintiff, ) ) ) v. ) ) ) ) THE UNITED STATES OF AMERICA, ) ) Defendant. ) __________________________________________)

No. 99-550 L (into which has been consolidated No. 00-169 L) Judge Emily C. Hewitt

STIPULATIONS OF FACT Background 1. The Osage Agency is part of the Department of the Interior, Bureau of Indian

Affairs, and is located in Pawhuska, Oklahoma, on the Osage Reservation. 2. The Osage Reservation is located in northern Oklahoma. The Reservation covers

roughly 1.47 million acres. The boundaries of the Osage Reservation are co-extensive with the boundaries of present-day Osage County, Oklahoma. Petroleum Terms 3. In the petroleum industry, crude oil is described as "sweet" if it has less than a

specified, very low percentage of sulfur. In the petroleum industry, crude oil that has a significant quantity of sulfur is described as "sour." 4. In the petroleum industry, the "gravity" of crude oil is its specific gravity, i.e., the

ratio between the weight of the crude oil and the weight of an equal volume of water. In the

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petroleum industry, the specific gravity of crude oil is normally expressed in degrees on a scale developed by the American Petroleum Institute. 5. "Posted prices" are so named because in former times a prospective purchaser

(usually a refiner) would tack a sheet to a post in a producing field stating how much it might be willing to pay for a crude oil or blend of oils of standardized quality (e.g., Oklahoma Sweet, West Texas Intermediate, Louisiana Light). 6. In the petroleum industry, "waterflood" is a method of recovering additional

quantities of oil by injecting water underground for the purpose of "washing" the oil out of the reservoir rock and into the bore of a producing well. The Tranche One Leases 7. The methodology for determining the monthly royalty due on crude oil produced

from the Tranche One leases is specified in the leases and regulations 8. Royalty Rate is a fraction (often 1/8 or 1/6) and is usually expressed as a

percentage. Royalty Value is expressed in United States dollars and cents per barrel. The Osage Agency's Procedures for Calculating Royalty Payments 9. As a matter of routine, the Osage Agency sent out a Highest Posted Price Letter

some time before the 25th of the month following the month in which the oil was produced. 10. The Osage Agency's Highest Posted Price Letter directed that each lessee on an

Osage lease (or purchaser paying royalties on behalf of a lessee) make royalty payments based on the posted prices in the Bulletin or the lessee's actual selling price for oil from the Osage lease, whichever was higher. 11. As a matter of routine, the Osage Agency's Highest Posted Price Letter directed

that the prices in the Highest Posted Price Letters be adjusted based on the gravity adjustment

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tables attached to the Highest Posted Price Letter and the gravity of oil reported by the purchaser or lessee paying royalty. 12. As a matter of routine, Osage Agency staff compared the information on the

lessee's report, on the purchaser's statement, and on the Highest Posted Price Letter. 13. During January 1976, May 1979, and November 1980, the Royalty Value used by

the Osage Agency for crude oil did not exceed the maximum legal price a lessee could receive (or a purchaser could pay) for the particular oil subject to royalty. Procedures for Processing Royalty Payments for Osage Leases 14. Before 1990, Osage Agency personnel sent royalty checks and associated

paperwork by certified U.S. Mail to the Muskogee Area Office for deposit. 15. Typically, when the Muskogee Area Office received Osage royalty checks, it

would verify the information sent from the Osage Agency in the associated paperwork and deposit the checks in a local federal depositary, the First National Bank of Muskogee, Oklahoma, which, in turn, would transmit the funds to the United States Treasury. 16. depositary. Procedures for Investing Royalties Received for Osage Leases 17. As a general matter, deposits made by federal program agencies at federal In January 1990, a bank in Pawhuska, Oklahoma was designated as a federal

depositaries are credited to the United States Treasury's General Account as of the next business day after the date the deposit was delivered to the depositary. 18. To invest tribal trust funds in the overnight instrument, the Bureau of Indian

Affairs had to instruct Treasury to make the overnight investment; the investment would not occur automatically.

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Dated this March 28, 2006 SUE ELLEN WOOLDRIDGE Assistant Attorney General Environment and Natural Resources Division s/ Brett D. Burton BRETT D. BURTON United States Department of Justice Environment & Natural Resources Division Natural Resources Section P.O. Box 663 Washington, D.C. 20044-0663 Telephone: (202) 305-0212 Fax: (202) 353-2021 Counsel of Record for Defendant

Respectfully submitted,

s/ Wilson K. Pipestem WILSON K. PIPESTEM Pipestem Law Firm, P.C. 1333 New Hampshire Avenue, N.W. Washington, D.C. 20036 Telephone: (202) 419-3526 Fax: (202) 659-4931 [email protected]

Counsel of Record for Plaintiff

s/ Martin L. LaLonde MARTIN J. LALONDE KEVIN WEBB United States Department of Justice Environment and Natural Resources Division Natural Resources Section P. O. Box 663 Washington, D.C. 20044-0663 Telephone: (202) 305-0247 Fax: (202) 353-2021 Attorneys for Defendant OF COUNSEL: Elisabeth Brandon Brenda Riel Attorneys Office of the Solicitor Division of Indian Affairs U.S. Department of the Interior MS 6456 Washington, D. C. 20240 Telephone: (202) 219-1659 Fax: (202) 208-3490

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Teresa E. Dawson Senior Counsel Office of the Chief Counsel Financial Management Service U.S. Department of the Treasury 401 14th Street, S.W. Washington, D.C. 20227 Telephone: (202) 874-2567 Fax: (202) 874-6627

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