The herald., 1897-12-28
Salt Water Puts a Well in
4. a Pickle
TANK OWNERS MEET TODAY
TANKS WILL NOT BE DONATED
fpro THE PRODUCERS
Mining Stock Exchange Will Deal in
Certificates When the New Tanks
Begin Business

The new strikes of the past week In
the oil field have developed more salt
water than anything else. At Nettleton
& Kellerman's well in the Cottage Home
tract in the east field flow of salt
water was struck at depth of 500 feet
which filled the drill hole half way to
the top. Such quantity cannot be
pumped out and this incident settles all
hopes of a deeper sand supply in that
quarter.
W. Watts, assistant state geologist,
who is in the city preparing treatise
on the eastern extension of the oil field,
does not regard this flow of salt water
with the alarm it excites among local
Oil we'll owners generally. 1T Is not
tery unusual occurrence" he says, land
may be due to the drill penetrating the
lower edge of an inclined strata bearing
salt water"
Mr.. Watts also advances new theory
to account for the decrease of flow no.
ticeable Immediately after the late shut
downs in the east end wells. The dim
mutton of oil supply was from quarter
to half in many of the wells and was
channels about the drill holes with sand.
Geologist Watts ascribes it, however, to
ar equalization of pressure. The oil
being pumped from drill hole pene-
trates to the bottom of the oil strata,
when that is allowed to fill the pressure
is more evenly distributed. and it may
take some time after pumping is recon-
menced to bring back the pressure to its
former force.
Drilling operations in the locality first
punctured by the Rommels well still in
crease, and Scott & LOTUS, whose canny
behavior about their well near Boyle
Heights started the rumor of new oil ter
ritory there few weeks ago, have gone
to the other extreme and are now drill
ing at the farthest western edge of the
east field. They are just across the
street from the Sisters hospital and will
probably strike oil there, as there is ev-
cry indication that the vein the Rom
mels uncovered runs west under the Sis
ters' hospital at that point.
From the lack of new strata devel-
oped by the active exploitation of the
past few months oil men already fear a
dearth of oil territory.
This state of things and the increased
storage capacity provided for by the new
tank company, the Oil Storage and
Transportation company, whose first
new tank is now ready for business and
whose second is building, opened up for
that concern chance at speculation
which they do not seem averse to take
advantage of.
The suspicion that the temptation to
use these tanks for storing oil for spec
ulative purposes would be too strong
for the tank owners was announced in
these columns a fortnight ago when
their representatives were assuring all
that the building of the tanks was some
what of philanthropic measure for the
benefit of the producer.
According to the program then an
nounced the tank owners would charge
10 cents per barrel for storage and ~
cents per month after sixty days. This
was high charge for storage, but on
the other hand when the cost of building
and maintaining the tanks was cleared
from the business they We're to be trans
ferred as free gift from the tank own
ers to the Christmas stockings of the
producers. According to Secretary
Strasburg's statements yesterday. how
ever, the philanthropic and Christmas
stocking element is to be eliminated en-
tirely from the deal and a cold -blooded
business proposition will be formulated
by the tank owners at a meeting to be
held by them today.
Seven cents per barrel will be charged.
this pays two months storage, then IL
cents per month per barrel will be
charged. For delivery to tank cars, 4
cents This, it is claimed, is l cent per
barrel cheaper than the charges of
other tank companies for the same
service.
The mining exchange has been dis
cussing the question of dealing in oil
certificates. 1t was generally supposed
that public storage would be necessary
and the new tank company will not
store for any except members of the
combine.
Secretary Parsons of the mining eX-
change, however, says that will be all
right, as the storage certificates will be
transferable and so can be speculated in
by members of the mining exchange.
The tank company, he says, will be
ready to let them handle the certificates
early next month. This will give an
increase of business to the mining ex-
change and settle the mooted point as
to the real motive animating the hearts
of the owners of the tanks built to help
out the producers.
An era of oil speculation may be looked
for and oil certificates buled and beared
and banded back and forth from an
eighth to quarter and from present
yield to options on future supply may
become feature of the local mining
stock exchange to the edi1cation of the
tourist and the profit of somebody
otherwise than the oil producer, for
whose sole benefit the new tanks We're
to have been constructed, according to
the original program.