Los Angeles herald., 1910-09-22
UNION OIL. WILL ORDER
S20,000,000 BOND ISSUE
DEVELOPMENT Work Proposed in
Several Fields NeCeSsitateS
Floating Large Mortgage

A bond issue of $20,000,000 to $25,-
000,0 900 for twenty-five years at . per
cent is being considered by the Union
Oil company, as stated in circular
letter issued to the stockholders OF the
organization by Lyman Stewart pres1-
dent, in which he says:
ITO only fairly develop our proved
oil territory would require the drilling
of at least 1000 wells, which will cost,
on an average, $4,000 each, or a total
sum Of $4,000, 900. The purchase OF
lands in new oil fields, the extension OF
pipe lines, and refinery systems, IN
creases to fleet, additional marketing
stations ETC., would involve an invest
ment of many millions addltlonal
These investments would necessarily
be distributed through number OF
years.
ITO attempt to provide for all of
these developments from the compa-
ny's earnings would not only greatly
retard them, but would also limit the
companys ability to pay to ITS STOCK
holders as large percentage or lls net
earnings in dividends as they nave d
right to expect under our expressed
policy to so pay so per cent Oh net earn edLii-
ings. We have, therefore, been conslu-
ering the practicability of large bona
issue, say from $20000,000 to $25,OOO,OOo,
for twenty-five years, at 8 per cent
These bonds to be offered for sale only
as money may be required. These
bonds would absorb the issues OF the
auxiliary companies which our compa-
ny has guaranteed. This issue, there-
fore. would cover tlse entire bonded in
debtedness of our company, and should
necessarily be for a large amount, as
we could not 40 further financing along
this line while these bonds were out
standing" -,
Copies of the letter were sent with
checks in payment of the August dlVl-
dend, amounting to $145OS6. The total
of dividends paid to date by the coInpa-
ny is $7225,71o.
Other portions of the letter are:
..The head of our accounting depart
ment reports that the earnings TO date
are in excess of those for the corre-
spending period of last year, ana VIII
nroba bly exceed those of last year Dy
about 100000, exclusive of the earnings
of the Producers Transportation com
pany and the Lake View Oil company
whose great gusher, it is estimated, mas
nroduced this year over 100000 barrels
of oil and is still producing at the Idte
of 800, 900 barrels of oil month.
with the favorable financial snow
inc which we expect to be able to make
some of our directors are advocating an
increase of 20 per cent in our dividends,
increasing the monthly paylnehts " W
cents a share or 10 per cent per an
mum. The demand, however, for addl'
tional market causes us to hesitate IN
fixing the date for beginning the pay
ment of such increase.
'sWhile it is true that some companies
are having a larger monthly DIVIDEND
than we, many of them are Golns II
from a flush production ana Witnout
much reserve of territory to supply the
denIetion which must necessarily take
Mace. our company, on the contrary,
has such reserves of proved oil lands
that it would seem they could hardly
he drilled within d generation, thereby
giving reasonable assurance OF perlna-
nency of income.
our geologist, w w. Orcutt' man
of unouestioned integrity and IN ms
line a we'll acknowledged competent au-
thoritv. estimates that our company
has nroved area of oil lands winch
is nearly three times the area OF the
Bai<u field of Russia, and to date only
ner cent of this proved territory mas
been fully developed, and practleally
none of this land has produced to eX.
beustion. To date this 6 per cent oOd OF
developed territory has yielded 34,OO9,oo9
barreIs of oil. and from this nnltea
aTea the Union Oil company of Cantor
ME is still obtaining its present proouc-
tion of crude oil"