(A) In the event that it appears that the applicant does not own leases for oil and gas or contracts concerning the same, covering all of the land within the unit, or if the drilling tract or unit does not contain at least ten acres or if the tract or unit is not square in shape, the City Clerk shall set a time and place for a hearing upon such application. The hearing shall be held not less than ten nor more than 20 days from the date of filing the application and notice of the hearing shall be given by the City Clerk by mail to the Mayor and each member of the City Council, and to the owners of any unleased land within the unit, and to the owners of oil and gas leases or contracts covering property within the unit as shown by the application. Such notice shall be so mailed at least ten days before such hearing. Copies of such notice shall also be posted in at least five public places in the city at least ten days before such hearing. The notice shall state the time and place od hearing, the name and address of the applicant and the approximate area and location of the proposed unit. The application and exhibits attached thereto shall be available for public inspection at the office of the City Clerk at a reasonable time before the hearing.
(B) At any time before the hearing any other owner or owners of oil and gas leases in the drilling tract or any owners of property within the drilling tract may file applications for a permit to drill in the unit.
(C) At the time and place fixed by the City Clerk, the City Council shall conduct a hearing on such application and all persons interested shall be given an opportunity to be heard. All witnesses shall be examined under oath and a transcript of the evidence shall be taken and filed with the City Clerk. The cost of the hearing and transcript shall be paid by the person, firm or corporation to whom a permit is granted and shall be paid before the permit is issued.
(D) The City Council shall decide whether or not the applicant, or which one of the applicants, is entitled to a permit. Preference shall be given to the applicant who has the greater portion of the area of the unit under lease. If the applicant does not have all of the land within the unit under lease or other contract, the City Council shall determine whether the estimated cost of drilling, completing and equipping the proposed well is reasonable, and if not, the City Council shall determine the sum which in its opinion is the reasonable estimated cost of these items.
(E) If a permit is granted, a notice of the decision of the City Council shall be given by the City Clerk by mail to the owners of land within the unit which is not leased for oil and gas and to the owners of oil and gas leases or contracts covering land within the unit, other than the applicant to whom the permit is issued. The $25 fee deposited by any applicant to whom a permit is not issued shall be returned to him.
(F) If a permit is issued to an applicant who does not have all of the property within the unit under lease or other contract to produce oil and gas therefrom, then the estimated reasonable cost of drilling, completing and equipping the well as determined by the City Council shall be set forth in the notice of the decision of the City Council and each addressee shall be advised to deposit his or its proportionate part of such estimated reasonable cost with the City Treasurer within ten days of the date of mailing of the notice if they desire to participate in all of the oil and gas produced from the unit. Failure on the part of any owner of property within the unit whose property is not under lease or other contract, and failure on the part of the owner of any lease or other contract covering property in the unit, other than the one to whom a permit is granted, to deposit his or its proportionate part of the estimated reasonable cost of drilling, completing and equipping the well within ten days after the date of mailing such notice shall be deemed to be an election not to participate in the produce of all of the oil and gas produced from the unit. Whether or not the owners of property lying within the unit, elect to participate in the cost of drilling, completing and equipping such well, such owners of property shall be entitled to receive their proportionate part of one-eighth royalty for oil and gas produced, saved and marketed from such well free and clear of any cost, except taxes which may accrue to such one- eighth interest.
(G) If sums are deposited with the City Treasurer for the proportionate part of the cost of drilling, completing and equipping a well as herein provided, the permittee shall, upon furnishing to the City Treasurer receipted bills showing the actual cost of drilling the well, receive such proportionate part of the deposited sum as shall be due the permittee for such sums advanced by him. If the well is abandoned and plugged at that point, the remaining sums in the hands of the City Treasurer shall be repaid to the parties who deposited them. If the well is completed and equipped, upon presentation to the City Treasurer of receipted bills for the completion and equipment expenses by the permittee, the proportionate part of such costs shall be paid to the permittee from the funds in the hands of the City Treasurer. In the event that there is then left in the hands of the City Treasurer any sum, it shall be refunded to the person who deposited the same.
(Ord. 363, passed 6-21-65)