This Agreement, Made this 20th day of June, 1905, by and between M. L. Pembroke, of the City of Los Angeles, County of Los Angeles, State of California, party of the first part, and Blue Bird Oil Company, a corporation, having its principal place of business at Los Angeles, California, party of the second part,
Witnesseth : That the said party of the first part has covenanted and agreed with the said party of the second part, its successors and assigns, and does hereby, as an independent contractor, covenant and agree to drill for said party of the second part two (2) wells, to be numbered 1 and 2, for the purpose of obtaining petroleum oil, said two wells to be located from time to time, and in ample time, by said party of the second part, at sites to be selected by it on that certain parcel of land situate in the County of Kern, State of California, described as the Southwest Quarter (S. W. ¼) of Northwest Quarter (N. W. ¼), Section Thirty-two (32), T. 28 S., R. 28 E., M. D. B. & M.
The materials, machinery and appliances necessary for the drilling and completing of each of said two wells shall be furnished, and the work of drilling the same shall be done, in the manner hereinafter specified, to-wit:
Roads and Rig Grades: The said party of the second part shall make all necessary grades at the well sites to be selected as aforesaid, by it, and shall also make all roads leading thereto which are necessary to be made.
Rigs, Machinery and Tools: The said party of the second part shall furnish, at its own cost and expense, a complete drilling rig of good quality for each well, erected on the locations selected as above, and also the necessary wooden conductor, boiler, engine, belt, bull rope, and steam and gas connections, and all casing as hereinafter provided, which rig, as also all appliances of every kind furnished by the said party of the second part, shall be examined by the said party of the first part and when accepted by said party of the first part, said rig or appliances shall, for the purposes of this agreement, be deemed to be of good quality, and any use of the same by said party of the first part shall constitute an acceptance thereof by him. The said party of the first part shall, at his own cost and expense, keep each drilling rig in good repair while the well is being drilled, and shall put in place and connect up at the well, the boiler, engine, etc., furnished by said party of the second part. The rigs, machinery and appliances furnished by said party of the second part for the drilling of any well hereunder shall, upon the completion of such well, be returned to said party of the second part in as good condition as when received by the party of the first part, ordinary wear and tear and damage by the elements excepted.
Water and Fuel: The said party of the second part shall furnish, at its own cost and expense, all water that may be required for drilling each well hereunder, and also will furnish all crude oil which may be required for fuel; provided, however, that where the supply of water furnished hereunder shall fail or be cut off for any reason, then no claim for damage shall lie against the party of the second part, it being understood that said party of the second part shall at all times use due diligence and in good faith endeavor to provide a sufficient supply of water.
Drilling and Drilling Crews: Said party of the first part shall commence forthwith to perform the work to be done hereunder, and shall prosecute such work on each of said wells continuously and in good faith to success or abandonment, Sundays excepted; and he further agrees to have a full drilling crew of four men at work in the actual work of drilling within thirty (30) days from the date hereof. The said party of the first part shall always keep at least two full drilling crews of four men each at work continuously until the said two wells are drilled to completion or abandonment.
Depth of Well; Price for Drilling: Each of said wells, unless sooner abandoned by direction of the party of the second part, shall be drilled to a depth of eleven hundred (1100) feet, and the consideration for said drilling and for the materials furnished, and for the labor provided incident thereto, shall be one dollar and fifty cents per linear foot for each well drilled, and no more.
It is further understood and agreed by the parties hereto that the said party of the first part will, at the option of said party of the second part, continue the drilling of either of these wells after the said well has reached a depth of 1100 feet, so long as he can make expenses, which, for the purposes of this contract, are to be considered as being thirty (30) dollars per diem for each string of tools.
Kinds and Sizes of Casing to Be Used: The sizes of casing to be furnished by the party of the second part and used by the part of the first part in the said wells, are as follows:
11⅝ inch casing, weighing 30 lbs. per linear foot,
8 ¼ inch casing, weighing 24 lbs. per linear foot,
6⅝ inch casing, weighing 17 lbs. per linear foot.
The said party of the first part agrees to drill the hole of each well hereunder of such size as will admit of the using, commencing with the largest size, of the greatest number of linear feet of the respective sizes of casing; it being understood that the chief purpose and use of the 11 ⅝ inch casing is to shut off the surface water, and that when that is accomplished, the use of said 11⅝ inch casing shall be abandoned.
Shutting Off Water: If water shall be encountered at any point in either of said wells while the same is being drilled, the party of the first part agrees to case off all such water before continuing to drill in said well, and whenever water has been cased off in either of said wells, as aforesaid, said party of the first part agrees to notify said party of the second part, or its agent, thereof, and to discontinue drilling in said well at least 12 hours so that said party of the second part, if it so elect, may "thief" the well for water; and if the water be found coming into the well upon such test, or if the casing, for any cause, is not tight and properly put into the well and the water is not properly shut off, the said party of the first part agrees to adjust the same to the satisfaction of the party of the second part before continuing to drill in said well.