Purchaser shall, at the time of the execution of the contract, furnish and thereafter maintain in favor of the State a good and sufficient bond or other such security in such sum as may be specified by the State Lands Commission, guaranteeing faithful performance by the purchaser of the terms, covenants, and conditions of the contract. Such bond or other such security will be used to indemnify the State for all costs and damages, including, but not limited to, damages caused by default of the purchaser of royalty oil. The cost of the bond or other security shall be paid for by the purchaser. The Commission may in its discretion reduce, eliminate, or reinstate the security requirement during the term of the sales contract.