[Letter from Hale Schaleben to Thomas L. James, February 12, 1954] Page: 3 of 6
3 p. ; 28 cm.View a full description of this letter.
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Mr. Thomas L. James
February 12, 1954
Page - 2 -
that lease their one-half of the 1/8th royalty, and in the event production
is obtained under such lease, of course, their reservation of that royalty
would continue as long as production continues.
As I told you over the telephone, Mr. Smith has agreed to pay $1.00 per
acre bonus for these two leases, which will entitle the owners to receive
$6,627.17 for the large lease and $440.51 for the smaller lease. Of
course, a similar payment of $440.51 will have to be made by Mr. Smith
to the State of Texas.
You will, of course, notice that there is no direct obligation upon the
part of Mr. Smith to drill the well in question. The lease and agreement
merely provide that the large lease will terminate and that the smaller
lease will be assigned to you as trustee in the event Mr. Smith fails
to drill or cause to be drilled the well in question.
I know that you would prefer that there be a positive obligation to drill
a well, and Mr. Smith would not object to assuming a positive obligation
to drill a well, if he at this time had arrangements made for the drill-
ing of the well, but as you know, he has a lease upon 1,004.11 acres
of mineral classified land and also 4,919.99 acres of mineral fee land
which also are owned by the same parties as those named as lessors in
these two leases, and Mr. Smith has a partner, Southwestern Oil &
Refining Company, with him in the ownership of the 1,004.11 and 4,919.99
acre leases, and he has not yet been able to get his partner to positively
agree to drill the 10,500 foot well. Furthermore, as you know, Stano-
lind Oil & Gas Company has leases upon the North 1/2 of Survey 15, the
North 1/2 of the lands owned by your prinvipals in Survey 16, all of their
lands out of Survey 17 and all of Survey 18. It is Mr. Smith's hope
that he might be able to get Stanolind to make a contribution toward
the drilling of the 10,500 foot well since it would, of course, tend
to prove or disprove their acreage, and he would be in an unfavorable
trading position with Stanolind if these leases provided for a positive
obligation to drill a well within a certain period of time. Furthermore,
the exact location upon which this well must be drilled is not fixed
for the reason that Mr. Smith might have to change the location of that
well, depending upon the outcome of his negotiations with his partners
in the other leases and with Stanolind. In any event, however, a location
within 7500 feet of the southwest corner of Section 15 would have to be
upon lands owned by the lessors in these leases, but it could be placed
upon either of the Stanolind leases, upon the 1004.11 acre lease, upon
the 4,919.99 acre lease or upon either one of the two leases which are
enclosed herewith.
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Schaleben, Hale. [Letter from Hale Schaleben to Thomas L. James, February 12, 1954], letter, February 12, 1954; (https://texashistory.unt.edu/ark:/67531/metapth1151917/m1/3/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Rosenberg Library.