§ 5.08.030. Evidence to be presented by applicant.

No such permit shall be granted by the Governing Body until the applicant therefor shall have supplied the following:

A.

Satisfactory evidence that all owners of property in the area attributable, or which might be attributed by unitization or declaration, to the location where it is proposed to drill a well or wells have had an opportunity to join in the execution of the oil and gas lease or leases of applicant covering the land included in such unit or attributed area; and that the applicant has a valid oil and gas lease or leases executed by persons owning at least fifty-one (51) percent of the territory included in the unit or attributed area exclusive of streets and alleys, which lease or leases shall provide or shall be accompanied by an agreement in writing providing substantially the following: That all royalties arising from the lease or leases for the production from the well proposed to be drilled on the unit or attributed area shall be distributed to the respective owners of property within the unit in the proportion that the number of square feet owned by each bears to the total number of square feet included in the unit or attributed area, exclusive of streets and alleys; provided, however, that any owner, or owner's assigns, whose land shall not be under lease to the permittee and shall be located within the unit shall have the right, within ten (10) days after the close of publication, as prescribed by law, of any ordinance granting a license or permit for the drilling of any well, to post with the governing body or the applicant for such license, a good and sufficient bond to guarantee payment of his or her proportionate share of the costs of drilling and operation of the proposed well and be thereby entitled to participate in the entire production from the proposed well in the proportion that the number of square feet of land in the unit owned by him or her bears to the total number of square feet contained in the unit, exclusive of streets and alleys.

B.

An agreement with lessee or lessees giving the City of Larned, the option to purchase all or any part of the natural gas produced from the well at the prevailing market price.

C.

A map or plat of the area covered by the oil and gas lease or leases, showing the proposed location of each well, together with the written consent of the owner or owners of the land, on which the well is proposed to be located, to the drilling of the well on the land, which the map or plat shall also show the location of all residences, buildings and other structures in the immediate vicinity of such proposed location.

D.

Adequate protection, by agreements or otherwise, to all persons who might be concerned with such drilling operations, including a reasonable and adequate plan for the handling of slush, base sediment and salt water that may be produced in connection with the drilling and operation of the well together with facilities for the handling of production to the end that no oil shall be stored within the perimeter of the City or in any tract or tracts which may not be part of the territory of the City although surrounded by such territory, and to the further end that no oil shall be stored outside the perimeter of the City where to do so would create a hazard to persons or property within the City or the fresh water supply thereof; and provision by agreements or otherwise, in the event the well is either nonproductive or abandoned, that within sixty (60) days after determination thereof, all tools, equipment and machinery used in connection with the drilling of the well shall be removed, and that as nearly and as soon as practicable the premises shall be fully restored to its original condition, and if such well is productive, only the necessary tools, machinery and equipment shall be maintained at such well and the premises surrounding same shall be restored to its original condition as nearly and as soon as practicable.

E.

Before the Governing Body shall grant a permit, as specified in Section 5.08.020, the applicant for such permit shall supply plans and facilities to provide for (1) adequate disposal of brine and other fluid waste from any producing well, in such manner as to prevent pollution of fresh water supplies and damage resulting from contamination of the soil; (2) proper plugging of an abandoned or nonproducing well to prevent damage by pollution or contamination of fresh water supplies and soil; (3) the casing off of salt water by means of concrete extending from the surface of the earth to a depth of approximately five feet into the anhydrite or the formation comparable thereto, encountered in the Larned oil field at a depth of approximately nine hundred fifty (950) to one thousand (1,000) feet below the surface of the earth, to be done in a good and workmanlike manner, to prevent damage by pollution or contamination of fresh water supplies and soil; and (4) such applicant shall furnish a bond, to be deposited with the City Clerk, and executed by some bonding or indemnity company authorized to do business in Kansas, in the amount of thirty thousand dollars ($30,000.00), or shall deposit funds, in such amount, in trust with a national or state bank located in the City of Larned, Kansas, pursuant to a trust agreement to be approved by the Governing Body, which bond or trust funds shall guarantee the faithful compliance with all plans herein referred to, all conditions of the permit, all provisions of this chapter and other applicable ordinances; provided, that in the event any applicant shall have furnished such bond or trust funds as a requisite for a permit and there shall be no unsatisfied claim upon such bond or trust funds at the time of application for subsequent permit, no further bond or trust fund shall be required for such subsequent permit or permits, and in such event there shall be endorsed on the bond or trust agreement the identification of the existing bond or trust funds at the time of application the subsequent permit or permits to which the bond or trust agreement is made applicable, but if there shall be an unsatisfied claim for any subsequent permit, at the discretion of the Governing Body an additional bond or trust funds in the aforesaid amount, or any lesser amount, may be required for such subsequent permit; such bond or trust agreement shall be for an initial term of one year and should the permittee desire to continue operation under said permit such bond shall be renewed or trust agreement extended for additional terms of one year each during such continued operations and shall remain in force and be binding upon the principal and surety, or trustee, for loss occurring while the bond or trust agreement is in full force and effect; provided, however, the amount of said bond or trust funds may be reduced to five thousand dollars ($5,000.00) sixty (60) days from and after completion of any well upon filing a new or amended bond, or trust agreement, conditioned and approved as in the case of the original bond, or trust agreement, except for the amount. Such bond or trust agreement shall be renewed or extended during the continued operation of the well and for a period of six months thereafter or until the premises has been cleared of obstructions and restored to its original condition as nearly as practicable; and (5) such applicant shall provide insurance by some responsible insurance company authorized to do business in Kansas against injury, loss or damage, for which applicant may be liable, suffered by anyone as the result of applicant's drilling, operation or maintenance of any well or any structure or machinery appurtenant thereto, and a copy of the policy or insurance shall be deposited with the City Clerk together with a certificate by the insurance company that such insurance is in force and shall not be cancelled without thirty (30) days written notice thereof to the City, and such insurance shall be in the following amounts: five hundred thousand dollars ($500,000.00) for injury to any one person in any occurrence, five hundred thousand dollars ($500,000.00) for injury to more than one person in any occurrence and five hundred thousand dollars ($500,000.00) for loss or damage to property in any one occurrence; and (6) such applicant shall furnish plans and facilities for the exclusive use of electric power for pumping of oil from any well within the perimeter of the City, in the event of production therefrom.

F.

The permit shall be valid only in the event and for so long as the permittee shall faithfully comply with and utilize the plans, facilities and other requisites, to the insurance thereof, as provided herein and by such of the provisions of this chapter as are not repealed.

(Ord. 1147 § 1, 1985; Ord. 567 §§ 1, 2, 1953; Ord. 547 § 3, 1953)