CONDITIONS

On which the right to sink for Petroleum has been granted to the Taranaki Petroleum Company.

1. THAT in the opinion of this Council it is desirable that the following shall form the basis of a lease or leases for defining the extent of land over and in which Messrs. Chilman and Co. shall have the right to sink for Petroleum, and the conditions on which that right shall be granted, viz:—

2. That the Company shall have the right to sink for Petroleum on the following lands, viz., the part of the Sugar-loaf Reserve west of Carter’s claim, containing about 110 acres, the Sugar-loaf Island Pararaki, and all that portion of land lying between said reserve and low-water mark, which lands are more clearly defined on the accompanying map and coloured pink, and that a lease be granted for the term and on the conditions hereinafter mentioned.

3. That the Company shall be allowed to sink for Petroleum on the Island Mikotahi, on the condition that if it is required for harbour works they shall give up possession to the Government when required, without any compensation whatever for any works in progress.

4. That on the condition of obtaining the right above specified, Messrs. Chilman and Company shall undertake to raise a Company with a capital of not less than £10,000 for the purpose of fully testing the oil-bearing strata in the block of land herein named, and to provide the necessary plant to refine the oil in this province, and to expend a sum not less than £3,000 in sinking for Petroleum before the works are abandoned, at the rate of at least £1,000 per annum. Provided that if at any time the Company shall discontinue their operations, the balance of the said sum of £3,000, which shall not be proved to have been expended in the manner above stated, shall be sued for or recovered by the Superintendent as liquidated damages for non-performance of the conditions of the lease. Provided that the above conditions shall not at any time preclude the Government from levying any general duty on the article if it may be deemed advisable to do so.

5. That the royalty to be paid to the Government by the Company on all the Petroleum produced shall be at the rate of 10 per cent., delivered in sound and tight packages fit for exportation, or an equivalent in money value according to its worth in the market, as the Superintendent may select—such value being determined by arbitration in the event of disagreement between the parties.

6. That the Company, subject to the conditions herein named, shall have the right to sink for or otherwise procure Petroleum in or on the lands herein described for the term of nine years, dating from the assent of the Superintendent to these resolutions.

7. That as the leases are granted only for the purpose of securing to Messrs. Chilman and Co. the right of prospecting, sinking, or otherwise procuring Petroleum on the lands herein named and described, the Superintendent shall have full power at any time to enter on the said lands by his agents or otherwise, and take possession of any part for any public purpose, or to let the right over the said lands to search or mine for any substance, mineral, or metallic ore, on or below the surface, with the sole exception of Petroleum or bituminous shale, and also to give the right to erect any building or machinery, and to enclose grounds (not in the actual occupation of the said Company as specified in clause 8), and also to prohibit the said Company from sinking, erecting buildings, or making enclosures on any portion of the said land which would obviously interfere with the formation of any necessary road, harbour, or other public work or township contemplated by the Government. Provided that if at any time it is required to enter on land where the Company are carrying on operations, and thus render necessary the removal of their refineries, reservoirs, buildings, enclosures, or other plant necessary for the conduct of their business, compensation shall be made for any damage the Company may sustain, and which may be awarded by arbitrators appointed in the usual manner, excepting as regards the Island of Mikotahi; and it is hereby provided that before any operations are undertaken by the Company to prepare for sinking or erecting machinery or buildings, that a formal application shall first be made to the Superintendent to ascertain if it would interfere with the construction of any public work contemplated by the Provincial Government.

8. That the Company shall have the right to make ample enclosures for the purpose of erecting buildings, machinery, making reservoirs, or for any other purpose necessary for the successful promotion of the work, subject to the conditions herein named, and also to make use of any stone or other material on or in the ground, which will be necessary to carry on their operations.