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Mr. HUMBLE. I'm not in a position to determine the extent of overstaking. I do know that overstaking is done in the uranium industry.

Mr. FRANDSEN. How many times has Exxon overstaked another major energy company in the last 5 years?

Mr. HUMBLE. None to my knowledge.

Mr. FRANDSEN. How many times has any other energy company overstaked Exxon in the last 5 years?

Mr. HUMBLE. Exxon claims have been overstaked on occasion over the last 5 years. To my knowledge, that staking has not been conducted by another major energy company.

Mr. FRANDSEN. If the major energy companies are not willing to use the remedy of overstaking to gain possession and open for exploration the public lands being illegally claimed, then perhaps a new legislative remedy is needed; would you agree?

Mr. HUMBLE. In my observations of the mining industry, the general mining law has served the purpose well. I would not dispute the fact that modifications perhaps are in order.

Mr. FRANDSEN. Would you favor a provision in the Federal law which provides for automatic forfeiture of a claim unless the claimholder has demonstrated by detailed proof, to be filed with the Bureau of Land Management, that $100 per claim of annual assessment work has been performed? When I say detailed proof, I mean a document stating when the work was done, what specifically was done, by whom it was done, and the precise value of the work that was done.

Mr. HUMBLE. I would have no objection to that whatsoever, Mr. Frandsen.

Mr. FRANDSEN. Do you think a provision of that nature would help clear up some of the abuses that are now existent with the mining law?

Mr. HUMBLE. I think it would be a step in the right direction;

Mr. FRANDSEN. Mr. Humble, did Exxon in March of 1977, enter into a lease and purchase option agreement with General Nuclear for approximately 225 Casper claims located on the Burke Ranch in Natrona County, Wyo.?

Mr. HUMBLE. Yes, sir; it did.

Mr. FRANDSEN. The Casper claims in question had been located in 1970–7 years earlier. Mr. Flanagan had filed assessment affidavits in subsequent years, alleging that $100 per claim of labor or improvements has been performed each year. Is that correct?

Mr. HUMBLE. To my knowledge it is; yes, sir.

Mr. FRANDSEN. At the time Exxon entered into the agreement with Mr. Flanagan and General Nuclear, did Exxon's representative request proof and documentation that the assessment work required by law had been done in previous years?

Mr. HUMBLE. It made what we considered to be a reasonable inquiry. We did not insist upon documentation to the detail to which I think you're making reference.

Mr. FRANDSEN. I'm talking about the time of the negotiations with Mr. Flanagan and General Nuclear. That would be in March of 1977?

Mr. HUMBLE. Yes, sir.

yes, sir.

Mr. FRANDSEN. And you indicate that Exxon made inquiry of Mr. Flanagan as to what he had done in terms of the assessment work to substantiate the affidavits which he filed in the county courthouse?

Mr. HUMBLE. Mr. Frandsen, I personally did not conduct those negotiations. I have no firsthand knowledge of the discussions that took place in those negotiations.

I know that our instructions to all of the members of our staff were that they make reasonable inquiry to support the record. We begin our investigations by searching the Federal records and then the appropriate county records. If we find that records do exist in these custodial locations, then we have no reason to doubt the integrity and the validity of them, so long as the locator, under sworn oath, says that the proper work was performed.

In addition to that, our people are instructed to make reasonable inquiry beyond that to support it.

Mr. FRANDSEN. Part of reasonable inquiry is asking for the prior results of geologic exploration done on the claims? Mr. HUMBLE.

Different situations require different inquiries. Mr. FRANDSEN. Would you expect that your representatives would ask Mr. Flanagan and General Nuclear as to whether any prior exploratory holes were drilled on the Casper claims or whether geologic studies had been made?

Mr. HUMBLE. I would assume that to be the case, yes, sir.

Mr. FRANDSEN. At the time the negotiations were under way, were Mr. Flanagan and General Nuclear able to provide Exxon with any logs or results of exploratory drilling or geologic studies or data?

Mr. HUMBLE. Not to my knowledge. Mr. FRANDSEN. After making reasonable inquiry and not being given any substantiating documents or evidence, would you expect that your employees would inquire further of Mr. Flanagan and General Nuclear as to whether in fact the assessment work had been performed on the claims Exxon was interested in purchasing?

Mr. HUMBLE. Logically so, yes, sir.

Mr. FRANDSEN. Was it common knowledge among the employees of Exxon who deal in purchasing claims that General Nuclear was essentially a one-man operation and did not have the assets necessary to conduct the assessment work which it attested was being done?

Mr. HUMBLE. Mr. Frandsen, the agreement to which you made reference between General Nuclear and Exxon, dated March of 1977, involved 210 claims. That required annual assessment of $21,000.

Exxon and its representatives had no idea they could not conduct $21,000 worth of assessment.

Mr. FRANDSEN. Did you know that Mr. Flanagan and General Nuclear staked tens of thousands of claims in the State of Wyoming in the late 1960's?

Mr. HUMBLE. Of my own knowledge I realize Mr. Flanagan had located numerous claims. The extent of these locations I do not have personal knowledge of.

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Mr. FRANDSEN. Would the Exxon representatives who deal in these matters be aware of the number of affidavits General Nuclear was filing in the various counties of Wyoming?

Mr. HUMBLE. No, sir; it would be only in circumstances that we found those claims to be situated in a geologically attractive area in which we would pursue acreage acquisition that it would come to my knowledge. That is how we learned of these 210 subject Casper claims, because they did fall within an area of geologic interest.

Mr. FRANDSEN. Even though Mr. Flanagan was not able to pro duce drilling logs or geologic studies for the Casper claims, did Exxon's representatives make any further inquiry at that time as to the assessment work which had been done?

Mr. HUMBLE. At the time we were negotiating with Mr. Flanagan we were advised by the surface owner, or his legal representative, Mr. Dan Burke, that the Casper claims on a portion of his ranch did not exist although the county records reflected they did.

Upon that notice we made additional inquiry to Mr. Flanagan.

Mr. FRANDSEN. Was this prior to entering into the agreement with Mr. Flanagan?

Mr. HUMBLE. I cannot be specific as to the exact timing. It all happened about the same time. Whether it was a day, or a week or two, before or after, I have no documentation as to the exact time.

Mr. FRANDSEN. The agreement was entered into in mid-March. Is that correct?

Mr. HUMBLE. March 18 is my recollection.

Mr. FRANDSEN. You would have wanted to be assured prior to entering into that agreement that the assessment work attested to in Mr. Flanagan's affidavit had in fact been done.

Mr. HUMBLE. Very definitely. We felt with the examination of the records and with customary inquiry that we had done what is usually proper. Then we followed that up again.

Mr. FRANDSEN. Didn't you indicate your customary inquiry came up blank, that Mr. Flanagan was not able to produce anything?

Mr. HUMBLE. I am sorry, Mr. Frandsen. I don't have specific knowledge of the response on that. I did say that to my knowledge we didn't get physical copies of logs.

Mr. FRANDSEN. Mr. Flanagan not only filed an affidavit in 1976 but he also filed assessment affidavits for those same claims for the preceding 3 or 4 years, since 1973.

Mr. HUMBLE. Yes, sir.
Mr. FRANDSEN. Is that correct?
Mr. HUMBLE. Yes.

Mr. FRANDSEN. So he would have been obligated over a 4-year period to expend approximately $90,000 on those claims; is that correct?

Mr. HUMBLE. Yes, sir.

Mr. FRANDSEN. Was Mr. Flanagan able to produce any other evidence or any substantiating documentation that he had in fact spent $90,000 on the Casper claims that Exxon was purchasing?

Mr. HUMBLE. Not to my knowledge.

Mr. FRANDSEN. Yet Exxon obtained its lease and purchase option for approximately $6,300. Is that correct?

Mr. HUMBLE. Yes, sir.

Mr. FRANDSEN. Why did Exxon purchase an interest in these claims which were, at best, of questionable validity? Was it because it was cheaper?

Mr. HUMBLE. No, sir; the reason Exxon acquired an option on these claims is because these 210 claims were situated within our geologic area of interest, that of record they appeared to be valid. We had no reason to question those beyond ordinary inquiry based upon this fact.

Mr. FRANDSEN. Didn't your ordinary inquiry give you reason to question those claims-Mr. Burke tells you they are not properly located and Mr. Flanagan cannot produce any backup data or information behind his assessment affidavit.

Mr. HUMBLE. It is not too unusual, Mr. Frandsen. We acquire a lot of properties annually. From time to time we get guidance outside the record. Representations that claims are valid, representations that claims are invalid, we make business judgments on these representations and make what we consider to be prudent followup.

We have found ourselves in conflict with claimowners, taking advice of others who say they have not done the assessment work, they have not done sufficient work-on that basis we go in, locate claims. These senior locators come back and show us where they have done the work. Therefore, we are caught in a situation of going both ways.

If we take as gospel truth every word and advice we get from the layman we just can't conduct our business.

Mr. FRANDSEN. What about the fact that Mr. Flanagan could not produce any records showing any exploratory drilling logs, assays, or geologic studies to back up his assessment affidavits?

Mr. HUMBLE. I know generally that Mr. Flanagan has entered into agreements with other companies since he has entered into the uranium-staking business. In all of those agreements it is customary that the optionee or the lessee will conduct assessment obligations. That is part of the agreement.

Some of those agreements provide that that data is given to the original claim owner and some do not. But even if they provide that, the information is not always given.

Our geological staff likes to make its own interpretative decisions, make their own interpretations. Geology is not an exact science, as perhaps other sciences are, so we like to use our own data.

Not having specific data from every claimant is not significant to

us.

Mr. FRANDSEN. You would want the results from prior drilling, would you not? Wouldn't that benefit Exxon in its analysis?

Mr. HUMBLE. It depends on the quality of the data; yes, sir. It could. However, I am saying it is not that critical to us because the quality of the data, the dependability of the data is not all that significant in most instances.

Mr. FRANDSEN. Were you aware that no prior drilling had been done on the Casper claims by General Nuclear?

Mr. HUMBLE. No, sir, and I am still not aware of that.

Mr. FRANDSEN. There is testimony in this record to that effect, Mr. Humble.

Did you consider the option to overstake those Casper claims and acquire possession that way?

Mr. HUMBLE. We always hold this as an alternative. Whether or not we mentally went through this thought process on this specific instance I am not able to answer specifically, but we always hold that option available to us; yes, sir.

Mr. FRANDSEN. Does the term "floating," when used in reference to a claim, mean one whose boundaries cannot be identified be cause of missing stakes?

Mr. HUMBLE. Mr. Frandsen, I am not certain that everyone would have the same definition of a floating claim.

Mr. FRANDSEN. What is your definition?
Mr. HUMBLE. I will share my definition with you if it would help.
Mr. FRANDSEN. If you please.

Mr. HUMBLE. My definition of a floating claim is that the location of a claim that is placed of record, is so vaguely described so that one cannot locate it by reading the description of record.

Mr. FRANDSEN. Mr. Humble, I would like to have the staff hand you a portion of a map which Exxon made and which discusses the Casper claims located on the Burke ranch.

[The map referred to follows:]

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