The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-10-08
KANSAS NEWS.
How Standard Oil Company
Buys Oil Is Shown.
Corporation Doesn't Prorate
Losses in This State.
HAS A NEAT RAKE OFF
Deducts Three Per Cent on Ac.
count of Sediment.
This Meant a Gain Of 1860
Barrels in September.

Independence. Kan, Oct. S.-The Re-
porter says: For the information of
those who are not familiar with the
method of the Standard in purchasing
oil. the division order below is printed
Old operators will at once recognize
that this differs in some respects from
the eastern division orders. 1t will be
observed that the oil is not actually sold
until the producer gives notice of his
purpose to sell. and he has sixty days
to make up his mind If the oil is
run today and he does not give notice
until next month. and in that time the
price goes up, he gains that much; if
it goes down he loses. If he fails to
give notice the Standard reserves the
right to pay him the market price on
the Goth day after running. This rule
has been enforced but once. Last
winter when the price of oil was adj
vancing a Chanute producer failed to
give notice of his election and on the
sixtieth day a check was drawn to his
order at the market price for that day.
When the producer finally called he was
surprised.
In the east it used to be the custom
OF the Standard if a tank of oil were
burned or lost in any way, to prorate
the loss among the producers. This is
not done in Kansas.
The Prairie Oil & Gas Co. deducts
three per cent from all oil received into
it's custody on account of dirt and sedi-
ment. Yet it is well known fact that
the company will not run any oil I'M
less it is put in clean and acceptable
condition. This deduction meant 1850
barrels to the Standard in September.
A very neat little profit in itself
There are lot of oil men who would
like to receive that amount as an in
come.
When an operator runs his oil the
gauger gives him a certificate, or
memorandum. Forty hours after the
run is made the owner may go to the
onice of the company and draw mis-
check. The intervening time is employed
in checking up the runs in order that
there may be no mistakes. The system
is surrounded with safeguards, the run
sheet having to go through several
hands before the check is finally paid.
Producers often cuss and damn the
Standard, but SO far as known there has
never been a serious controversy over
the running Of oil, if this particular pro-
Queer believes the Standard is honest.
Following is the order:
The Prairie Oil e. Gas company is
hereby authorized, until further notice
to receive oil from said wells for pur-
chase from said parties Severally in the
proportions named, subject to the fol-
lowing conditions:
First-The oil run in pursuance of
this division order shall become the
property of The Prairie Oil &, Gas COM
pany as soon as the same is received
into its custody.
Second-The oil received in pursuance
of this division order shall be paid for
to the well owners or their assigns in
proportion to their respective interests
shown above, at the market price paid
by The Prairie Oil e. Gas company for
the same kind and quality of oil on
such day, within two months after said
oil is run, on which the owner shall
notify The Prairie Oil & Gas company
of his election to take said price for
the same, or in case the owner shall
make no election within two months
after the oil is run, then at the market
price as aforesaid at the opening on the
first business day after the expiration
of said two months.
Third-The Prairie Oil & Gas company
shall deduct three per cent from all oil
received from wells into it's custody, on
account of dirt and sediment, and in
addition shall deduct one-twentieth of
cial heat above normal temperature to
which said oil shall have been subject
ed, and oil shall be steamed when nee
essary to render it merchantable.
Fourtn-The undersigned agree in
case of any adverse claim of title to
furnish The Prairie Oil & Gas company
satisfactory evidence of title, or in case
of failure to do so, to furnish satisfac-
tory indemnity, upon reasonable de-
mand, against such adverse claim or
claims, and that the said The Prairie
Oil & Gas company may retain the
purchase price of the oil until we do so,
or until dispute as to ownership is set