The Seward gateway., 1922-07-08
ROYALTY RATES
 ARE ANNOUNCED
 BY SECRETARY FALL
RULING MADE ON PROCEDURE TO FOLLOW DISCOVERIES OF
 OIL IN TERRITORY

JUNEAU, July S-In a ruling made early this month, Secretary Fall fixed the rate of royalty to be paid by per mittees operating in Alaska oil district under government leases, according to telegraphic information received by persons to whom prospecting permits have been granted. The rates range rom five per cent to ten per cent on single leasing units of 2560 acres and from per cent to 12 1-2 and B 1-3 per cent on additional assigned leases. Under the regulations, permittees discovering oil are entitled to an ab- solute right to drill on one quarter of the claim covered by the prospecting permit, but the remaining three quar- ters is subject to bids with the holders of the original permit having the right to acquire drilling rights by meeting the highest bid submitted to the gov ernment, according to Frank A. Boyle Register of the local U. s. Land office. Thus the holder of a permit to pros pect 2,560 acres who makes a discov- cry has the absolute right to drill on $40 acres, but must bid against others for the drilling rights on the remain ing 1920 acres in the unit with the privilege of meeting any offer made by other bidders, he explained. Where prospecting permits not exceeding four in number are assigned to a single in diyidual 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 Secre- tary Fall apply to these different kinds of leases. In the telegrams mentioned above it was stated: "The ruling of the Secretary of Interior, paragraphs 8 and 23 1-2, adopted June ? this year, is substantially as follows: On one prospecting permit under paragraph 23 1-2 in event of discovery of oil, the permittee would be entitled to lease for one quarter of the land free from royalty during the first five years succeeding the date of the lease There after he would pay per cent royalty on the said one quarter On the re- maining three quarters ne would pay no royalty for the first five years on wells yielding less than 100 barrels per day per month, and over that amount five per cent. For the second five years five per cent on all the oil produced on the said remaining three quarters and for the last ten years ten per cent on the said three quarters. Where the same party or corporation acquires additional permits by assign ment not exceeding four in number. they will be entitled upon discovery of oil on each of said assigned permits to lease for one-quarter of each Of them at a straight five per cent for the full period of 20 years On the re- maining three quarters of permits ob- tained by assignment the royalty would range from 12 1-2 to a maxi mum of 33 1-3 per cent, according to the, quality and quantity of oiP'
 Seek to Have Ruling Changed
 It is understood here that an effort is now being made to get the Depart ment of Interior to change the ruling in the last named class of permits. Representatives of corporations desir- ing to drill in the field are asking that a flat royalty of F per cent be put on three quarters of the area held under lease instead of varying rate as es- tablished by Secretary Falls ruling.