No person shall commence to drill a well within the corporate
limits of the city until a permit therefor has been issued by authority
of the city council.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702)
(a)
Every
application for a permit to drill and operate a well shall be submitted
to the city secretary and signed by the applicant or by a person duly
authorized to sign on behalf of the applicant. A separate application
shall be submitted for each well proposed for drilling and shall include
the following information:
(1)
The date of the application;
(2)
The name and the address of the applicant;
(3)
The proposed site of the well, accompanied by the plat of the drilling
unit showing the descriptions of the lots, blocks, or tracts owned
or controlled by the applicant. Such plats shall be prepared by a
registered public surveyor of the state;
(4)
The name or names of the fee owner or owners;
(5)
The name or names of the lease owner or owners and a copy of the
lease agreement;
(6)
A brief description of the land;
(7)
The type of derrick to be used;
(8)
Whether the well shall be drilled as an oil well or gas well;
(9)
The proposed depth of the well;
(10)
The motive power of the rig that is to be used.
(b)
Every
permit application shall be accompanied by a filing fee as set by
the city council.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(1))
(a)
Within
thirty (30) days after a permit application is filed with the city
secretary, the city council will hold a public hearing thereon. At
least ten (10) days prior to such hearing the applicant shall have
published in an official paper of the city a notice in the following
form:
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Notice is hereby given that __________, acting under and pursuant
to the terms and provisions of the SMITHVILLE CITY CODE, did on the
__________ day of __________, 20_____, file with the city secretary
of the City of Smithville an application for a permit to drill a well
for oil and/or gas upon Lot No. _____, Block No. _____, of Addition/Subdivision,
in a drilling unit of acres described as follows:
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(Description)
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A hearing upon such application will be held in the council
chamber at Smithville city hall on the _____ day of __________, 20__________,
at _____.
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__________
Applicant
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(b)
If
the described drilling unit includes land not owned by or under lease
to the applicant, the owner or owners of such tract or tracts shall
be notified of the hearing at least ten (10) days prior to the date
of the hearing; the applicant shall send to each such owner a copy
of the notice described above, transmitted by registered mail to the
owner’s last known address.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(3))
If, after a public hearing, the city council approves the permit
application, the city secretary will issue a permit to drill and operate
the described well. Each permit shall:
(1)
Have
incorporated therein by reference all the provisions of this article
with the same force and effect as if this article were copied verbatim
in said permit;
(2)
Specify
the location of the well by lot number, block number, name of addition
or subdivision, or other legal description;
(3)
Specify that the permit is valid for a period of six (6) months from the date of issuance and thereafter as set out in section 4.08.036;
(4)
Specify
the depth to which the well may be drilled;
(5)
Specify
the magnitude of an indemnity bond that the permittee shall file with
the city secretary before commencing development work at the well
site;
(6)
Be
prepared in duplicate originals, both of which shall be signed by
the city secretary and the permittee, one to be retained by the city
secretary and the other issued to the permittee.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(3))
(a)
Bond.
(1)
The magnitude of an indemnity bond shall be as prescribed by the
city council, but not less than two hundred thousand dollars ($200,000.00).
Said bond shall be executed by a reliable surety company authorized
to do business in the state, as surety, and by the permittee, as principal,
running to the city for the benefit of the city and all persons concerned,
conditioned that the permittee will comply with the terms and provisions
of this article in the drilling and operation of the well. Said bond
shall become effective on or before the date the same is filed with
the city secretary and shall remain in full force and effect for at
least six (6) months subsequent to the expiration of the term of the
permit issued, and in addition the bond shall be conditioned that
the permittee will promptly pay off all fines, penalties and other
assessments imposed upon the permittee by reason of his breach of
any of the terms, provisions or conditions of this article; and that
the permittee will promptly restore the streets, alleys, sidewalks,
and other public ways and property of the city which may be disturbed
or damaged in the operations to their former condition; and that the
permittee will promptly clear all premises of all litter, trash, waste,
and other substances used, allowed or occurring in the drilling or
producing operations and will, after abandonment, grade, level and
restore said property to the same surface condition, as nearly as
possible, as existed when operations for the drilling of the well
were first commenced; and that the permittee will indemnify and hold
the city harmless from any and all liability growing out of or attributable
to the granting of such permit. If at any time the city council shall
deem any permittee’s bond to be insufficient for any reason,
it may require the permittee to file a new bond.
(2)
If, after completion of a well, the permittee has complied with all
of the provisions of this article, such as removing the derrick, cleaning
the premises, etc., he may apply to the city council to have said
bond reduced to a sum of not less than ten thousand dollars ($10,000.00)
for the remainder of the time said well produces without reworking.
During reworking operations the amount of the bond shall be increased
to the original amount.
(b)
Insurance coverage.
The permittee shall carry a policy
or policies of standard comprehensive public liability insurance,
including contractual liability covering bodily injuries and property
damage, naming the permittee and the city, in an insurance company
authorized to do business in the state. Said policy or policies in
the aggregate shall provide for the following minimum coverages:
(c)
Certificate of insurance; cancellation of policy; reduction of amount.
(1)
The permittee shall file with the city secretary certificates of
said insurance and shall obtain the written approval thereon by the
city council, who shall act thereon within ten (10) days from the
date of such filing. Said insurance policy or policies shall not be
cancelled without written notice to the city secretary at least ten
(10) days prior to the effective date of such cancellation. In the
event said insurance policy or policies are cancelled, the permit
granted shall terminate and the permittee’s rights to operate
under said permit shall cease until the permittee files additional
insurance as provided herein.
(2)
If, after completion of a well, the permittee has complied with all
of the provisions of this article, such as removing the derrick, clearing
the premises, etc., he may apply to the city council to have said
insurance policy or policies reduced as follows:
(A)
Bodily injuries, $50,000.00, one (1) person;
(B)
$100,000.00, one (1) accident;
(C)
Property damage, $50,000.00;
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for the remainder of the time said well produces without reworking.
During the reworking operations, the amount of the insurance policy
or policies shall be increased to the original amounts.
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(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(4))
(a)
A
permit shall become invalid without action by the city council if:
(1)
The permittee has not begun drilling the designated well within six
(6) months after issuance of the permit.
(2)
After the well has been completed with production of oil and gas
in commercial quantities and such production ceases, unless the permittee
commences reworking operations within six (6) months after such cessation
and commercial production is restored.
(b)
The
well shall then be considered as abandoned, and it shall be unlawful
to resume drilling or work-over operations thereon without the issuance
of another permit.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(5))
If the city council rejects a permit application, or if the
applicant notifies the city secretary in writing that he wishes to
withdraw his application, the permit [fee] shall be refunded to the
applicant except that an amount determined by the city council shall
be retained by the city as a processing fee.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(6))
Acceptance of a permit obligates the permittee to hold the city
harmless from any and all liability of every kind and nature which
may arise because of any act done or omitted by the permittee or successors
thereto.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(7))
Issuance of a permit does not grant to the permittee any right
or license to enter upon, use or occupy for the drilling or operation
of a well any land except after executing a written contract with
the surface owner, nor shall it limit or prevent the right of such
owner to contract for the payment of damages and surface rentals by
the permittee.
(1987 Code, ch. 4, sec. 6B; 2001
Code, sec. 4.702(8))
