every kind used by or for the purpose of producing, pumping, distributing or storing any crude petroleum or natural gas; and for the purpose of enabling him to make a correct assessment thereof, he shall go upon and have access to every plant, pump station, receiving station, tank form (farm) or office where information regarding any such properties may be obtained.

Sec. 15. Every person, company, corporation or association failing to substantially comply with the provisions of this act shall be thereby liable to a double assessment as a penalty for such failure.

Sec. 16. Any person making affidavit as required by this act who shall wil fully give a false or fraudulent list or schedule or statement shall be deemed guilty of perjury and upon conviction thereof, shall be punished therefor by confinement in the penitentiary for a period not exceeding five years.

ARTICLE IV.

Sec. 6. Each pipe line company doing business in this state shall return to the State Auditor sworn Statement or schedule as follows:

First. Of the right of way and main line, giving the entire length of main line in this and other states, showing the size of pipe and showing the proportion in each city, school district, township and county, and the total in this state.

Second. The total length of each lateral or branch line and the size of the pipe, together with the name of each city, school district, township and county in which such lateral and branch lines are located.

Third. A complete list giving location as to city, township, school district or county of all pumping stations, storage depots, machine shops, or other build ings together with all machinery, tools, tanks and material.

Fourth. A statement or schedule showing the amount of its authorized capital stock and the number of shares into which the same is divided; the amount of capital stock paid up; the market value of such stock, or if it has no market value, then the actual value thereof, and the total amount of outstanding bonded indebtedness.

Fifth. A correct detailed statement of all other personal property, including oil in storage and cash on hand, and giving the location thereof.

Approved March 10, 1909.

LAWS 1913, 630, P. 639.

CHAPTER 240.

AN ACT to provide a direct and indirect system of taxation. Be it enacted. etc.:

ARTICLE 2.

JULY 5, 1913.

NOTE: Sections 1 and 2 are inserted under the sub-title, Gross revenue-
Oil and gas production-Public Service Corporations.

REPORTS TO AUDITOR OF PURCHASES FROM CRUDE OIL AND GAS PRODUCERS.

Sec. 3. It shall be the duty of every purchaser of petroleum or other minera oils, or of natural gas (except the consumers of such gas), from the producer within this state within thirty days after the expiration of the quarter annus

period expiring respectively on the last day of June, September, December and March of each year to file with the State Auditor a statement under oath, on a form prescribed by him, showing the name and address of each producer from whom such products were purchased during the quarter-annual period last expiring, together with the price therefor and such other information as the State Auditor may require; provided, that the State Auditor may require such purchaser, hereinbefore named, to keep for his inspection separate books, records and files in this state.

Any purchaser of such crude products named in this section who shall fail to file a sworn statement, or refuse to comply with the provisions of this act within the time and manner prescribed herein shall be liable to a penalty of one hundred ($100.00) dollars for each day it shall so fail or refuse to file said statement or comply with said provisions, which will be a lien upon all the property and assets of such purchaser located in this state, and may be recovered at a suit of the state in any court of competent jurisdiction of the county where any property or assets of such delinquent is located.

REGULATIONS OF CORPORATION COMMISSION.

CONSERVATION OF NATURAL GAS AND OIL-RULES.

ISSUED JULY 16, 1917, ORDER NO. 1299.

IN RE PROPOSED Order No. 159 FOR THE PROMULGATION OF ADDITIONAL AND SUPPLEMENTAL RULES FOR THE CONSERVATION OF OIL And Natural Gas.

ORDER.

The Corporation Commission having held hearing and investigation pursuant to Proposed Order No. 159 and the Oil and Natural Gas Conservation Laws of the State and in accordance with the provisions thereof, having made its findings of fact, and being fully advised in the premises, it is therefore considered, ordered and adjudged that the following rules, regulations, and "requirements be and are hereby prescribed:

Rule 1. WASTE PROHIBITED. Natural gas and crude oil or petroleum shall not be produced in the State of Oklahoma in such manner and under such conditions as to constitute waste. (Sec. 1, Ch. 197, S. L. 1915; cule 1, order No. 957.)

Rule 2. WASTE DEFINED. The term "waste," as above used in addition to its ordinary meaning, shall include (a) escape of natural gas in commercial quantities into the open air; (b) the intentional drowning with water of a gas stratum capable of producing gas in commercial quantities; (c) underground waste; (d) the permitting of any natural gas well to wastefully burn; and (e) the wasteful utilization of such gas. (Sec. 2, Ch. 197, S. L. 1915; rule 2, order No. 937.)

Rule 3. GAS TO BE CONFINED-STRATA TO BE PROTECTED. Whenever natural gas in commercial quantities or a gas bearing stratum known to contain natural gas in such quantities is encountered in any well drilled for oil or gas in this State, such gas shall be confined to its original stratum until such time as the same can be produced and utilized without waste, and all such strata shall be adequately protected from infiltrating waters. (Sec. 3, Ch. 197, S. L. 1915; rule 3, order No. 937.)

Rule 4. COMMERCIAL QUANTITIES DEFINED. Any gas stratum showIng a well defined gas sand and producing gas shall be considered capable of 24918-21-17

producing gas in commercial quantities and any gas coming from such a stratum or sand shall be considered a commercial quantity, and such stratum or sand shall be protected the same as if it produced gas in excess of two million cubic feet per day of twenty-four hours. (Sec. 3, Ch. 197, S. L. 1915; rule 4, order No. 937.)

Rule 5. GAS TO BE TAKEN RATABLY. Whenever the full production from any common source of supply of natural gas in this State is in excess of the market demands, then any person, firm or corporation having the right to drill into and produce gas from any such common source of supply, may take therefrom only such proportion of the natural gas that may be marketed without waste, as the natural flow of the well or wells owned or controlled by any such person, firm or corporation bears to the total natural flow of such common source of supply having due regard to the acreage drained by each well, so as to prevent any such person, firm or corporation securing any unfair proportion of the gas therefrom: provided, that the Corporation Commission may by proper order, permit the taking of a greater amount whenever it shall deem such taking reasonable or equitable. (Sec. 4, Ch. 197, S. L. 1915; Rule No. 5, Order No. 937.)

Rule 6. COMMON PURCHASER RULE. Every person, firm or corporation. now or hereafter engaged in the business of purchasing and selling natural gas in this State, shall be a common purchaser thereof, and shall purchase all of the natural gas which may be offered for sale, and which may reasonably be reached by its trunk lines, or gathering lines, without discrimination in favor of one producer as against another, or in favor of any one source of supply as against another save as authorized by the Corporation Commission after due notice and hearing, but if any such person, firm or corporation shall be unable to purchase all the gas so offered, then it shall purchase natural gas from each producer ratably. (Sec. 5, Ch. 197, S. L. 1915; Rule 6, Order No. 937.)

Rule 7. COMMON PURCHASER - DISCRIMINATION PREVENTED. No common purchaser shall discriminate between like grades and pressures of natural gas, or in favor of its own production or of production in which it may be directly or indirectly interested, either in whole or in part, but for the pur pose of pro-rating the natural gas to be marketed, such production shall be treated in like manner as that of any other producer or person, and shall be taken only in the ratable proportion such production bears to the total produc tion available for marketing. (Sec. 5, Ch. 197, S. L. 1915; Rule 7, Order No 937.)

Rule 8. GAS TO BE METERED. All gas produced from the deposits of thi State when sold shall be measured by meter and the Corporation Commission shall, upon notice and hearing, relieve any common purchaser from purchasin gas of an inferior quality or grade, and the Commission shall from time to tim make such regulations for delivery, metering and equitable purchasing and tak ing as conditions may necessitate. (Sec. 5, Ch. 197, S. L. 1915; Rule 8, Orde No. 937.)

Rule 9. COMMISSION SHALL REGULATE THE TAKING OF NATURA GAS. The Corporation Commission shall as occasion arises, prescribe rules an regulations for the determination of the natural flow of any well or wells in thi State, and shall regulate the taking of natural gas from any and all commo sources of supply within the State so as to prevent waste, protect the interest of the public and of all those having a right to produce therefrom, and sha prevent unreasonable discrimination in favor of any one common source ( supply as against another. (Sec. 4, Ch. 197, S. L. 1915; Rule 9, Order No. 937 Rule 10. EMINENT DOMAIN-ACCEPTANCE OF LAW TO BE FILE WITH COMMISSION. Before any person, firm or corporation, shall hav

possess, enjoy or exercise the right of eminent domain, right of way, right to locate, maintain, construct or operate pipe lines, fixtures, or equipment belonging thereto or used in connection therewith, for the carrying or transportation of natural gas, whether for hire or otherwise, or shall have the right to engage in the business of purchasing, piping, or transporting natural gas, as a public service corporation, or otherwise, such person, firm or corporation, shall file in the office of the Corporation Commission a proper and explicit authorized acceptance of the provisions of the law. (Sec. 9, Ch. 197, S. L. 1915; Rule 10, Order No. 937.)

Rule 11. DUTIES OF CONSERVATION OFFICERS IN REFERENCE TO RULE 10. All conservation agents of the Corporation Commission are directed to inquire into the matter of the performance of and compliance with the foregoing rule (No. 10), and to prevent the transportation of gas by any person, firm or corporation, found not to have complied with said rule. (Sec. 8, Ch. 197, S. L. 1915; Rule 11, Order No. 937.)

Rule 12. APPROVED METHODS OF PREVENTING WASTE TO BE USED. All operators, contractors, or drillers, pipe line companies, gas distributing companies or individuals, drilling for or producing crude oil or natural gas, or piping oil or gas for any purpose, shall use every possible precaution in accordance with the most approved methods, to stop and prevent waste of oil and gas, or both, in drilling and producing operations, storage, or in piping or distributing, and shall not wastefully utilize oil or gas, or allow same to leak or escape from natural reservoirs, wells, tanks, containers, or pipes. (See also Rule 28 infra.)

Rule 13. NOTICE OF INTENTION TO DRILL, DEEPEN OR PLUG. Notice shall be given to the Corporation Commission of the intention to drill, deepen or plug any well or wells and of the exact location of each and every such well. In case of drilling, notice should be given at least five days prior to the commencement of drilling operations.

Notice of intention to plug must be accompanied by a complete log of the well, on forms prescribed by the Corporation Commission.

Blanks for notification and reports can be obtained on application to the Corporation Commission or its conservation agents.

Rule 14. PLUGGING DRY AND ABANDONED WELLS.

(a) Must Be Plugged Under Supervision of Conservation Agent.

All abandoned or dry wells shall immediately be plugged under the supervision of an oil and gas conservation agent of the Corporation Commission. (b) Manner of Plugging.

All dry or abandoned wells must be plugged by confining all oil, gas or water in the strata in which they occur by the use of mud-laden fluid, and in addition to mud-laden fluid, cement and plugs may be used.

These wells must first be thoroughly cleaned out to the bottom of the hole and before the casing is removed from the hole, the hole must be filled from the bottom to the top with mud-laden fluid of maximum density and which shall weigh at least 25 per cent more than an equal volume of water; unless the Commission directs that some other method shall be used.

(c) Notice of Intention of Plug.

Before plugging dry and abandoned wells, notice shall be given to the Corporation Commission or its conservation agent in the field and to all avail*ble adjoining lease and property owners, and representatives of such lease and property owners, may, in addition to the oil and gas conservation agent of the Commission, be present to witness the plugging of these wells if they so desire, but plugging shall not be delayed because of failure or inability to deliver notices to adjoining lease and property owners.

Rule 15. LOG AND PLUGGING RECORD TO BE FILED WITH COMMISSION. The owner or operator shall, upon the completion of any well, file with the Corporation Commission a complete record or log of the same, duly signed and sworn to, upon blanks to be furnished by the Commission upon application; and upon plugging any well for any cause whatsoever, a complete record of the plugging thereof shall be made out and duly verified on blanks to be furnished by the Commission. (Rule 25, Order No. 937.)

Rule 16. PROPER ANCHORAGE TO BE LAID. Before any well is begun in any field where it is not known that high pressure does not exist, proper anchorage shall be laid, so that the control casing-head may be used on the inner string of casing at all times, and this type of casing-head shall be kept in constant use unless it is known from previous experience and operations on wells adjacent to the one being drilled that high pressure does not exist or will not be encountered therein. (Rule 15, Order No. 937.)

Rule 17. EQUIPMENT FOR CONSERVING NATURAL GAS SHALL BE PROVIDED BEFORE "DRILLING IN." In all proven or well defined gas fields, or where it can reasonably be expected that gas in commercial quantities will be encountered, adequate preparation shall be made for the conservation of gas before “drilling in" any well; and the gas sands shall not be penetrated until equipment (including mud pumps, lubricators, etc.) for “mudding in" all gas strata, or sands, shall have been provided.

Rule 18. SEPARATE SLUSH PIT TO BE PROVIDED. Before commencing to drill a well, a separate slush pit or sump hole shall be constructed by the owner, operator or contractor for the reception of all pumpings from clay or soft shale formations in order to have the same on hand for the making of mudladen fluid. (Rule 14, Order No. 937.)

NOTE. In order to avoid freezing casing, operators are cautioned not to allow sand or lime to be mixed with clay or soft shale pumpings.

Rule 19. WELLS NOT TO BE PERMITTED TO PRODUCE OIL AND GAS FROM DIFFERENT STRATA. No well shall be permitted to produce both oil and gas from different strata unless it be in such manner as to prevent waste of any character to either product. Therefore, if a strata should be encountered bearing gas and the owner, operator, or contractor should go deeper in search for other gas or oil bearing sands, the stratum first penetrated and likewise each and every sand in turn, shall be closed separately, and if it is not wanted for immediate use, it shall be securely shut in so as to prevent waste, either open or underground. (Rule 16, Order No. 937.)

Rule 20. STRATA TO BE SEALED OFF. No well shall be drilled through or below any oil, gas or water stratum without sealing off such stratum or the contents thereof, after passing through the sand, either by the mud-laden fluid process or by casing and packers, regardless of volume or thickness of sand (Rule 17, Order No. 937.)

Rule 21. MUD-LADEN FLUID TO BE APPLIED. No gas sand or stratur upon being penetrated shall be drilled or left open more than three days without the application of mud-laden fluid to prevent the escape of gas while further drilling in or through such sand or stratum. (Sec. 3, Ch. 197, S. L. 1915; Rule

18, Order No. 937.)

No op

Rule 22. DENSITY OF MUD FLUID WHERE WELL CONTAINING WATER IS DRILLED INTO OIL OR GAS PRODUCING STRATA. erator shall drill a well into an oil or gas producing sand with water from s higher formation in the hole, or with a sufficient head of water introduced int the hole to prevent gas blowing to the surface. The well shall either be allowed to blow until the sand has been drilled in or it shall be drilled in under a head of fluid consisting of not less than 25 per cent mud; but in no case shal