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Show 18 EBPORT OF THE COMMISSIONER OF INDIAN AFFAIRS of 13.532.857 barrels for the v"ear.. fro m which the Indians received a revenui of $4,214,100. During the year six wells were completed on leases located on the Navajo treaty reservation, four of which are producing. There are now 14 producing wells on the reservation, the oil from which is of a very high grade and contains a large gasolme content. A deep test well is being drilled on the Rattlesnake structure for the purpose of testing out the sands in the lower horizons. The Midwest Refining Co. has laid a 3-inch pipe line from its lease on the EIogback struc-ture to Farmington, N. Mex., a distance of 20.1 miles. The Santa Fe Co. has laid a 2-inch pipe line from its lease on the Rattlesnake structure to connect with the west end of the Midwest Refinin Co.'s Hogback line, a distance of about 14 miles. The United Oil 80. has built a small refinery at Farmington, N. Mex., which will take care of at least part of the production from the Rattlesnake structure. Based on the report and recommendation of the Bureau of Mies the department on April 25,.1925 approved, as a price basis for com-puting royalties, a differential 02 60 ants per barrel shove the mid-continent price for 3638.9 gravity oil produced on the Hogback structure and a differential of 45 cents for oil produced on the Rattlesnake structure. On May 18,1925, a hearing was held with representatives of Osage operators with regard to revokimg the order of May 9, 1923, which permitted lessees to hold their leases without drilling upon payment of an annual rental of $1 per acre, and the superintendent was ad-vised by letter approved June 4, 1924, that the order would not be changed so far as existing leases were concerned, but that advertise-ments of lands offered thereafter should indicate that at least one well be drilled within 12 months from date of approval, as' provided in the lease. During the period of overproduction and low prices several oil cpmpanies operating in the Osage Reservation were granted permis-slon to remove from the reservation oil produced from their leases and to store the same. When the oil which had been run to storage was sold a question arose whether the royalty settlements should he made on the basis of the price prevailing on the day of removal of the oil from the reservation for storage or the price received on the da of sale The matter was resented to the department for con-siAration ind the solicitor on $anuary 31,1925, held that settlement should be made on the basis of the price revailing on the date of f rovided it be removed before t 31 e sale thereof, unless a different asis of settlement be stipulated in an agreement executed by the parties to the lease with the approval of the Secretary of the Interior. - -... On July 23, 1924, the department prescribed new regulations under section 3 of the act of February 28, 1891 26 Stat. 1,. 795), as amended by the act of May 29, 1924 (43 Stat. 244), to govern the leasing of tribal Indian lands for minin purposes. These regu-lations provide that oil and gas leases on tri % a1 lands shall be sold at public auction to the highest responsible bidder in tracts not exceed-ing 640 awes: Prov%ed, however, That the Secretary of the Interior in his discretion may offer at public auction an exploratory lease for any number of acres not exceeding 4,800 on structures where there is no lease; also that the 10-year term of existing tribal oil and gas |