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shall be entitled to reimburse himself for such o\'mer's propol'. tionate part of the costs out of such owner's propoertionate part of the oil, gas and Casinghead gas or the value thereof beforEI making deliveries of products or settlement for the value ther'eof. If Option 1 is exercised by the owner of any lot or lots, bloc,k or blocks~ tract or tracts, such owner shall, within the time pro- vided for notice of such election above set fc,rth, file with the City Clerk a bond or other obligation executed by such owner as pr~ncipal and by an authorized surety company as surety, in which such principal and surety agree, bind and obligate themselves to pay to the permittee, his heirs, successors and assigns currently each ffionth that pr~portion of the actual and necessary costs and .- gation shall then be upon the permittee, his :h.eirs, sUccessor:~ and assigns, to make settlement with such ownGr on the terms pro- vided in Option 2 above, providing for the payment of a one-eigh'!:ib (liB} royalty. If the owner of a lot or lots" block or blockfl, t.r~ct or tracts, shall exercise Option 1 above gnd treat his in.. terest as a working interest, as therein prov~.ded, the permitt.ee . r-_ --....... ' does not exercise the rights and option above provided, the ob11.. the value of same at the well at the option of the permittee; or (2) to treat his interest as a royalty interE.lst interest and re- ceive, delivered free of cost in the pipe liLe to which the well ms.y be connected, a share of all oil produced and saved from st1ch well equal to one-eighth (l/S) of the proportion of the whole quantity of oil so produced and saved that tte number of square feet in the area owned by him bears to the number of square feet in such drilling block~ or at the election of permittee to receive such proprotion of the value at the well of t~e oil so produced, and to receive a like proportion of the gas and casinghead gas produced, saved and utilized or sold, or at the election of per- mittee the value at the well of such proporti~n of gas or casing- head gas produced, saved and utilized or sold, or at the elec'~ion of permittee the value at the well of such pr:Jportion of gas c)r casinghead gas produced, saved and uti.lized or solde If any owner -; , .':.--," ,--/ -3- :e .. .