The Hot Springs star. (Hot Spings [Hot Springs], Dakota [Dakota Territory, i.e. S.D.]) 1886-189?, 1888-07-27
II UGLY OIL TIGER:
How Producers Have Lost olll,ooo,0oS
In Speculation.

VI. SnatmDurg, OF this city, says .
Iit,.sville (Pa.) letter to the st. Louis
Globe Democrat, who has q large inter-
est in st. Louis, is one of the Oldest
ard best known oil-producers in Penn
s,yi yania. He has been constantly en-
gagged in the business since 1866 and
has amasscd a large fortune in the OIL
industry. The rich pool known as the
'''Shamburg district" was developed by
him. DIR. Shamburg has given a Globe
Democrat correspondent some inter-
csting "reminiscences which show the
profits that are sometimes made in the
production of oil. When the first we'll
was struck, ut place afterward known
as Cash-up. the doctor was early ON the
ground. The new strike stood alone
four miles from any producing wells
OF consequence. 1t had barely touched
the oil sand end was flowing in a fine
spray about ITO barrels a day. The
well was owned by three Young
men. After negotiation, extending
over q day or two. DR.. Shamburg
bought the we'll for $4,000 cash. Il
was located on n fivc-acrc lease, and
he then succeeded in buying this for
$500 600 cash. There was a small strip
of land on one side of him that he
wanted, and for this he was obliged
to pay about $4,000 cash in hand.
The manner in which these purchases
were made gave the place the name of
"Cash.up," by which it is known in
our history. The doctor drilled the
well deeper, and it Immediately iu-
creased to eight hundred barrels q day,
ut which rate it continued to produce
for three. months. Oil was then $4:2o
Il barrel.s The we'll fell off in produc.
ton until it was down to three hun.
drnd barrels a day, when still deeper
drilling increased it to twelve hundred
barrels II day. While it was flowing
ut this tremendous rate DR.. Shamburo
sold his production ahead for two
months for 81 II bar.r'.
Mr.. Hilton, later vi IL. FIRM Of Hill.
ton 4 Waugh, agreed to take the pro
duction of the we'll ut this figure for
tho period named. Mr.. Hilton mad,
this proposition without knowing that
the well had increased from three hum
drcd to twelve hundred barrels q day
When it became known in tho trad.
that the we'll had increased to such MI
extent the market broke from 81. q TO
81 II barrel.
During the two months that the con
tract had to run-and it was simply o
verbal contract-the well produced
twcnty-six thousand barrels of oil.
which Mr.. Hilton accepted, and fl,
which he paid DR.. Shamhurg "a a bar.
rel. The first months production of
this well paid back tho $50. 900 which
the property had cost the doctor, and
the net profits of the we'll in nine
months and the few acres around it
were upward of $3.50, 900.
Even with the present low prices for
oil four fa.::ls in Washington county
have yielded $4,000, 900 within the past
ten months.
There is another side to the oil pic.
turc that is not drawn in such bright
The latest calculations of the
Producers association show that the
aggregate oil has been produced at Il
less since 1883. Since that year 1852
wells were drilled; of these 6.SSS were
producers and 1864 were dry holes.
The total cost of drilling these wells,
including cost of leases, amounts to
sos, 71l, 700. The net income of these
tn the producers, after dcductinQ
share Of the landowners, was $53.s.
$4,000. During the last six years it
has cost on an average $1.29 per bar
to produce oil, and the price of oil,
this time has averaged 80 cents.
The annual loss to oilsepculators on the
of the exchange has been $40. 600.
900. or II total of $40, OOO, 600 since 1881.
Add to this $21, O0O,OO for brokers'
commissions and $50, 600, 600 for stor.
asgs.,, and a total. of $l41, 200, 600 has
lost in the junglcs of the oil tiger
seven years. 1t should be stated in
Ibis connection that large producing
like the Forest, Archer, and
that have operated in u con.
sentative way, have declared large
dividends during the same period.