[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR226.9]

[Page 625]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 226_LEASING OF OSAGE RESERVATION LANDS FOR OIL AND GAS MINING
--Table of Contents
 
Sec. 226.9  Rental and drilling obligations.

    (a) Oil leases, gas leases, and combination oil and gas leases. 
Unless Lessee shall complete and place on production a well producing 
and selling oil and/or gas in paying quantities on the land embraced 
within the lease within 12 months from the date of approval of the 
lease, or as otherwise provided in the lease terms, or 12 months from 
the date the Superintendent consents to drilling on any restricted 
homestead selection, the lease shall terminate unless rental at the rate 
of not less than $1 per acre for an oil or gas lease, or not less than 
$2.00 per acre for a combination oil and gas lease, shall be paid before 
the end of the first year of the lease. The lease may also be held for 
the remainder of its primary term without drilling upon payment of the 
specified rental annually in advance, commencing with the second lease 
year. The lease shall terminate as of the due date of the rental unless 
such rental shall be received by the Superintendent, or shall have been 
mailed as indicated by postmark on or before said date. The completion 
of a well producing in paying quantities shall, for so long as such 
production continues, relieve Lessee from any further payment of rental, 
except that should such production cease during the primary term the 
lease may be continued only during the remaining primary term of the 
lease by payment of advance rental which shall commence on the next 
anniversary date of the lease. Rental shall be paid on the basis of a 
full year and no refund will be made of advance rental paid in 
compliance with the regulations in this part: Provided, That the 
Superintendent in his discretion may order further development of any 
leased acreage or separate horizon if, in his opinion, a prudent 
operator would conduct further development. If Lessee refuses to comply, 
the refusal will be considered a violation of the lease terms and said 
lease shall be subject to cancellation as to the acreage or horizon the 
further development of which was ordered: Provided further, That the 
Superintendent may impose restrictions as to time of drilling and rate 
of production from any well or wells when in his judgment, such action 
may be necessary or proper for the protection of the natural resources 
of the leased land and the interests of the Osage Tribe. The 
superintendent may consider, among other things, Federal and Oklahoma 
laws regulating either drilling or production. If a lessee holds both an 
oil lease and a gas lease covering the same acreage, such lessee is 
subject to the provisions of this section as to both the oil lease and 
the gas lease.
    (b) The Superintendent may, with the consent of and under terms 
approved by the Osage Tribal Council, grant an extension of the primary 
term of a lease on which the actual drilling of a well shall have 
commenced within the term thereof or for the purpose of enabling Lessee 
to obtain a market for his oil and/or gas production.

[43 FR 8135, Feb. 28, 1978. Redesignated at 47 FR 13327, Mar. 30, 1982]

[[Page 626]]