B-152519, MAY 12, 1964

B-152519, MAY 12, 1964

TO THE SECRETARY OF THE INTERIOR:

WE ARE TRANSMITTING FOR PAYMENT BY YOUR DEPARTMENT THE CLAIM, WITH FILE, OF THE PAN AMERICAN PETROLEUM CORPORATION, OKLAHOMA CITY, OKLAHOMA, IN THE AMOUNT OF $2,190.44 FOR ROYALTY OVERPAYMENTS MADE TO THE FEDERAL FARM MORTGAGE CORPORATION FOR NATURAL GAS PRODUCED IN THE KANSAS HUGOTON GAS FIELD AND PURCHASED BY THE PAN AMERICAN PETROLEUM CORPORATION DURING THE PERIOD FROM JANUARY 1954 TO DECEMBER 1957.

THE FEDERAL FARM MORTGAGE CORPORATION WAS ABOLISHED BY PUBLIC LAW 87-353, 75 STAT. 773, AND UNDER THAT LAW ALL RIGHT, TITLE AND INTEREST TO MINERAL INTERESTS OF THE FEDERAL CORPORATION, NOT DISPOSED OF, WERE TO BE ADMINISTERED BY THE SECRETARY OF THE INTERIOR.

THE CLAIM OF THE PAN AMERICAN PETROLEUM CORPORATION AROSE BY REASON OF ITS REQUIRED COMPLIANCE WITH THE ORDER OF THE KANSAS STATE CORPORATION COMMISSION OF KANSAS SETTING MINIMUM PRICES FOR GAS AND THE SETTING ASIDE OF SUCH ORDER BY THE SUPREME COURT IN THE CASE OF CITIES SERVICE GAS CO. V. STATE CORPORATION COMMISSION OF KANSAS, 355 U.S. 391, 2 L.ED. 355.

ON DECEMBER 6, 1963, THE CLAIM FILE WAS TRANSMITTED BY THE CLAIMS DIVISION OF THIS OFFICE TO THE DIRECTOR, GEOLOGICAL SURVEY FOR APPROPRIATE ACTION. BY LETTER DATED MARCH 13, 1964, THE CLAIM FILE WAS RETURNED HERE INDICATING THAT JURISDICTION WAS ASSUMED BY THE GEOLOGICAL SURVEY OVER THOSE LEASES COMMENCING FOR THE LEASING PERIOD AFTER SEPTEMBER 1957 AND THAT NO AUTHORITY EXISTED TO MAKE PAYMENTS FOR THE PRIOR PERIOD. THE LETTER OF MARCH 13, 1964, CONTAINS THE STATEMENT THAT IF THERE ARE NO LEGAL OBJECTIONS AND, IF PROPER FEDERAL AUTHORITY WILL DIRECT PAYMENT TO BE MADE BY YOUR DEPARTMENT, THE ROYALTY REFUNDS WILL BE MADE FOR THOSE PRIOR PERIODS BY ALLOWING CREDIT FROM FUTURE PRODUCTION ROYALTY PAYMENTS.

OUR OFFICE HAS MADE CAREFUL REVIEW OF THE LAW CONCERNING THIS CLAIM AND HAS FOUND NO BASIS FOR DENYING PAYMENT OF THIS CLAIM. FURTHER, WE BELIEVE THE CONDITIONS SET FORTH IN THE LAST SENTENCE OF THE NOTICE TO PERSONS RECEIVING GAS SETTLEMENTS FROM KANSAS HUGOTON PRODUCTION, DATED FEBRUARY 19, 1954, FROM THE CLAIMANT'S PREDECESSOR IN INTEREST, STANOLIND OIL AND GAS COMPANY, TO THE EFFECT THAT ACCEPTANCE OF THE CHECKS IN PAYMENT OF THE HIGHER PRICE UNDER THE KANSAS STATE ORDER WOULD CONSTITUTE AN AGREEMENT TO REFUND ANY AMOUNTS WHICH ARE ABOVE THE AMOUNTS SANCTIONED BY THE COURTS, PROVIDE A SOUND LEGAL BASIS FOR THE PAYMENT OF THE CLAIM.

FOR THESE REASONS OUR OFFICE IS RETURNING THE CLAIM FILE OF THE PAN AMERICAN PETROLEUM CORPORATION. PAYMENT OF THE CLAIM FOR REFUND OF THE ROYALTY OVERPAYMENTS MAY BE MADE BY YOUR DEPARTMENT BY ALLOWING CREDIT FROM FUTURE PRODUCTION ROYALTY PAYMENTS, AS PROPOSED BY THE DIRECTOR, GEOLOGICAL SURVEY, IN LETTER DATED MARCH 13, 1964.