It shall be unlawful for any person partnership association or corporation to drill or commence drilling a well for oil or gas within the corporate limits of the city, without a permit for such well and for the prosecution of the development having first been issued by the authority of the governing body in accordance with the terms of this article. This article shall be applicable to all existing or hereafter acquired oil and gas leases embracing real estate within said municipal boundaries.

(Ord. 167, Art. 1)

(a)   Every application for a permit to drill a well shall be in writing signed by the applicant or some person in his or its behalf. It shall be filed with the city clerk and be accompanied with a deposit of $100 in cash.

(b)   The application shall state the unit area to be attributed to the unit and included in such unit and the place it is to be located, and have attached to it copies of all oil and gas leases, or other drilling contracts with the owners of land in the unit which applicant may have together with certificates of title satisfactory to the governing body, to the end that the application sill show what proportion and what parts of the unit the applicant holds under lease or contract from the owners.

(c)   The application shall also be accompanied with a duly executed bond given by the applicant as principal and a surety company authorized to do business in the State of Kansas as surety running to the city for the benefit of the city and all persons concerned, conditioned that if the permit be granted, the applicant and his or its assigns will comply with the terms and conditions of this article in the drilling and operation of the well, will pay to any owners of mineral interests in the unit on which the applicant shall not hold oil and gas lease or contract, the oil and gas royalties as herein provided that the applicant will restore the streets and sidewalks and other public places of the city which may be disturbed in the operations to their former condition as nearly as practicable, will clear the area and lots of all litter, oil and other substances and machinery derricks and buildings erected, used or allowed in the drilling or producing operations whenever the well shall be abandoned or the operation thereof discontinued, and that he, she, or it will pay to the owners of any buildings, improvements, goods or chattels located in the city block where the well is located any extra cost of insurance.

(d)   Any owner of unleased land within the unit, and any person or corporation other than the permittee, holding oil and gas leases on land in the unit, shall have the right to share in the ownership and benefits of such oil and gas well in the proportion that the area of his or its mineral interests or lease bears to the area of the unit provided that, within 10 days from the date of the issuance of such permit, he, she, or it shall file with the city clerk a bond with an authorized surety company as surety, and in an amount representing that portion of the estimated maximum cost of the well that the area of the mineral interest owned or held under lease by the principal bears to the whole unit, conditioned that the principal in the bond will pay to the permittee and his assigns such proportion of the cost and operations of the well from time to time as required in the operations, such bond to be approved by the mayor and held by the city clerk for the benefit of all persons interested.

(Ord. 167, Art. 2)

There shall be only one permit issued for one oil well in 160 acres and/or for only one gas well in 640 acres, or such other spacing as prescribed by the State Corporation Commission, except that where more than one producing oil or gas sand shall be found in such area, a permit may be granted for one well to each of such sands in such described area, and that with such exception, it shall be unlawful to drill more than one oil and gas well in such area, provided, however, that intervening rights-of-way, streets and alleys within such units and to the center line of the same on the perimeter thereof shall be included in determining such acreage. The territory in such units shall be attributed to the well, for the drilling of which a permit may be granted. Each unit shall be appropriately numbered and the number thereof entered on any drilling permit granted for the unit. Where required, to comply with the rules and regulations of the State Corporation Commission governing the spacing of wells for production of oil or gas, lands located within the limits of the city may be pooled with other lands outside the city limits to form oil or gas units in accordance with spacing regulations.

(Ord. 167, Art. 3)

In case a permit for the drilling of a well shall be issued to a person not holding oil and gas leases or drilling contracts with the owner of all the mineral interests in the unit, it shall be a condition of the permit that the permittee, its successors and assigns, shall deliver to the credit of each of such owners whose land shall not be under lease, free of cost, in the pipe line to which the well may be connected, a share of oil produced and saved from such well, equal to 1/8 of the proportion of the whole production that the square feet of area of the mineral interests so owned bears to the square feet contained in such unit area, and a like proportion of the process of gas and casing head gas produced from the well and used off the premises.

(Ord. 167, Art. 4)

In case a permit for the drilling of a well shall be issued to persons or corporations who do not hold a lease or other valid drilling contract in writing form the owners of all of the mineral interests within the unit, any owner of unleased land within the unit, and any person or corporation other than the permittee, holding oil and gas leases on land in the unit, shall have the right to share in ownership of such oil and gas well in the proportion that the surface area of his or its mineral interest or lease bears to the surface area of the unit, provided that within 10 days from the date of the issuance of such permit, he or it shall file with the city clerk a bond with an authorized surety company as surety and in amount representing that portion of the estimated maximum cost of the well that the area of the mineral interest owned or held under lease by the principal bears to the whole unit area, conditioned that the principal in the bond will pay to the permittee and his assigns such proportion of the cost and operations of the well, from time to time, as required in the operations, such bond to be approved by the mayor and held by the city clerk for the benefit of all persons interested.

(Ord. 167, Art. 5)

It shall be unlawful to drill any oil or gas well within any of the streets or alleys of the city. It shall be unlawful to block or encumber or close up any street or alley in any drilling or production operation, except by special permit by order of the governing body and then only temporarily.

(Ord. 167, Art. 6)

In operating under any permit issued under this article, the licensee or permittee shall comply with all valid rules and regulations of the city fire marshal.

(Ord. 167, Art. 7)

The governing body shall have the power and reserves the authority to refuse any application for a permit where, by reason of the location of the proposed well and the character and value of the permanent improvements already erected on the unit in question, or adjacent thereto, and the use to which the land and surroundings are adapted for civic purposes, or for sanitary reasons, the drilling of an oil or gas well will be a serious disadvantage to the city and its inhabitants as a whole. When a permit shall be refused for any of these reasons, but not otherwise, the deposit of cash made with the application shall be returned to the applicant. Except as hereinbefore provided, if an application be found by the governing body to comply in all respects with the terms of this ordinance the city clerk shall be authorized to issue a permit for the drilling of the well. The permit shall specify the particular location of the well to be drilled, and it shall be unlawful for the permittee to drill elsewhere.

(Ord. 167, Art. 8)

It shall be unlawful to erect or use in the city within 300 feet of a residence or business or public building the drilling or operation of any oil or gas well, any drilling rig without enclosing it on all sides, and every such drilling plant shall be equipped with fire extinguishers and maintained in good order.

(Ord. 167, Art. 9)

No permit shall be granted or issued for the drilling of a well except upon ground held by the applicant under oil and gas lease or drilling contract from the owner, giving the owner’s permission to drill the well; and when a permit shall have been issued, the same shall terminate and become inoperative without any action on the part of the governing body unless within 30 days from the date of issue, actual drilling of the well shall have commenced, and after the drilling of a well shall have commenced, the cessation for a like period of the drilling operations of the cessation of production of oil or gas from the well after production shall have commenced, shall operate to terminate and cancel the permit and the well shall be considered abandoned for all purposes of this article and it shall be unlawful thereafter to continue the operation or drilling of such well without the issuance of another permit.

(Ord. 167, Art. 10)

Neither this ordinance nor any permit issued hereunder shall be interpreted to grant any right or license to the permittee to enter upon or occupy in any respect in the drilling g or production operations, any land except by the written consent of the owner, nor shall it limit or prevent the free right of the any lot owner to contract for the amount of royalty to be paid with respect to his own land, or for damages, rights or privileges with respect thereto.

(Ord. 167, Art. 11)

In operating under any permit issued under this ordinance or any amendments thereto, all oil, gas and water produced or arising from operations, shall be piped or otherwise conveyed or removed from the territory of the city, except the ordinary use of a slush pond, and all excavations in or use of the streets and alleys in such operations shall be under the reasonable direction of the city manager, and done without unreasonable obstruction of the streets and without expense or cost to the city.

(Ord. 167, Art. 12)

No permit which shall be issued under this article or under any amendment hereto, or any rights, privileges or franchise granted hereby or hereunder shall exist longer than for a period of 20 years from the date of issuance of the permit.

(Ord. 167, Art. 13)