The Alaska daily empire., 1922-06-23
ROYALTY RATES
ARE ANNOUNCED
BY SEC'Y FALL
Ruling Made on Procedure to
Follow Discoveries of
Oil in Territory.

In a ruling made early this month,
Secretary FAN fixed the rate of roy
atty to be paid by permittees oper-
ating in Alaska oil districts under
government leases. according to tele-
graphic information received by per-
sons ITO whom prospecting permits
have been granted. The rates range
from 5 per cent to 10 per cent on
single leasing units of $3.50 acres and
from per cent to 1212 and 80 l-3
per cent on additional assigned
leases.
Under the regulations, permittees
discovering oil are entitled to an
absolute right to drill on one-quarter
of the claim covered by the prospect
ing permit. burt the remaining three
quarters is subject to bids with the
holder of the original permit having
the right to acquire drilling rights by
meeting the highest bid submitted
TO the government, according to
Frank A. Boyle, Register of the 10
cal U. S. Land Office. Thus the
holder of a permit to prospect 1850
acres who makes a discovery has
the absolute right to drill on $40
acres. but must bid against others
for the drilling rights on the re
manning 1920 acres in the unit with
the privilege of meeting any offer
made by other bidders. he explained.
Where prospecting permits not ex-
cceding four in number are assigned
10 a single individual or corporation,
in the case of discoveries being made
on each claim, the same procedure is
carried out as to drilling rights.
Ruling Of Secretary
The rates OF royalty fixed by Sec
Rotary Fall apply ito these different
kinds OF leases In the kilograms
mentioned above Iii was stated: THE
ruling of the Secretary of Interior,
paragraphs s and 231a, adopted June
9, this year, is substantially as fol-
lows On one prospecting permit
mnder paragraph 1914, in event of
discovery Of oil, the permittee would
be entitled ITO lease for one-quarter
of the land free from royalty during
the first five years succeeding the
date of the lease. Thereafter he
would pay per cent royalty on the
said one-quarter On the remaining
threequarters he would pay no roy.
atty for the first five years on wells
Welding less than 100 barrels per
day per month and over that amoun.
per cent For the second five years
5 per cent on AID the oil produced
on the said remaining three-quaIr ers
and for the last 10 years 10 per
cent on the said three quarters.
Where the same party or corporation
acquires additional permits by as
signment not exceeding four in num-
Der. they will be entitled upon dis
covery of oil ON each of said assigned
permits to a lease for onequar-
ter OF each of them at a
straight per cent for the full pc
riod of 20 years. On the remaining
threequarters of permits obtained
by assignment the royalty would
range from 1914 ITO a maximum OF
33 1-3 per cent, according to the
quality and quantity of the oil
Seek to Have Changed
It us understood hero that an eff
fort is now being made to get the
Department of Interior ito change the
ruling in the last named class oil
permits. Representatives of corpora
tions desiring 10 drift in the field arc
asking that flat royalty of II pei
cont be put on three-quarters of tho
area held under lease instead of {
varying rate as established by Sec
rotary Falls ruling.