Los Angeles herald., 1910-06-02
COIN ENTERS OIL
SAND IN MIDWAY
Heavy Gas Pressure Stops Work
Twelve Feet in ProduC-
tive Formation
STRIKE PROVES NEW GROUND
Well Establishes Connection Be-
tween McKittriiCk and
Field to the South
STRIKE PROVES NEW GROUND
Especial to The TIerald)

BAKERSFIELD, June 1.-Much in
terest and Importance is attached to
the strike OF the Coin OIL company
on section 4, 31-2 in the North Midway
field late yesterday afternoon. Thls
company went into rich heaVing SAND.
the depth of which is unknown, as 1t
is impossible to go more than twelve
feet in the oil-bearing formation on ac-
count of the great gas pressure.
This is the most northerly strike IN
the Midway field, the nearest we'll being
more than two miles to the SOUTH ana
it is believed by many to establish the
connection between the Mckittrick and
Midway fields. The Hale-McLeod well
on section 8, 1928, is being watched
with much interest by local oil menfl.
When this gusher first broke loose
string of tools was lost and the Well
sanded up so that no definite line on
it's production could be obtained. 1t
gives promise, however, of being one
of the largest producers in the field.
The owners are at present constructing
immense slump holes in anticipation of
a tremendous flow when they succeed
in cleaning out the well.
One of the subjects scheduled for
early consideration by the executive
committee of the Independent Oil Pro-
ducers' agency is the issuance of stor-
age certificates in such form that the
mum cash advances upon them. What
arrangement will be made is not yet
known, but an interesting suggestion
has been made by a man who is con-
nected with one of the large banking
institutions of the state. This sugges-
tion, in brief, is that the agency ar
range to give a fixed cash value to the
certificates. For example, instead of
making the certificates represent so
many barrels of oil at no specified price
each month at which the oil we'll net
the agency cannot be accurately fore
told at the beginning of the month, but
1t is possible to closely approximate it,
and sufficient leeway could be allowed
to make the agency safe, says the
banker.
FOR FACE VALUE
1t is claimed that were the agency,
for example, to issue storage certifi-
Gates for next months oil at 40 cents
a barrel the certificates, on the
strength of the agencys credit would
be good for their face value, less only
a sufficient discount to cover the in
terest until they could beeonverted into
cash on the sale of the oil if the GER
tificates are placed leaves the value of
oil to the appraisement of the banks the
amount of money advanced must be
much less, according to the authority.
"There is an abundance of money
aVallaDlG TO uudIlCe the IIdIh6lliS VI
the oil if the certificates are placed
in form where they can readily cir
culate between commercial institutions
with a fixed and certain value like
bank note" said the banker. But the
oil business-the marketing end-can-
not be financed by local banks. 1t is
going to take millions, and it will be
necessary to draw on the resources of
the great financial centers.
aft will also he naraSSaTV To OrOVidp
some cheap form of insurance, and the
best and cheapest method l know of is
the mutual insurance. With the stor-
age scattered throughout the different
fields and along the pipe lines the fire
risk will really be very small A very
small tax to the barrel on all the stored
oil would provide an ample fund to
cover all fire losses"
1t is understood the newly elected
executive committee will hold a meet
ing in Los Angeles in the near future,
possibly this week, and the question Of
storage and storage certificates may be
taken up at that time.