Pine Bluff daily graphic., 1919-08-17

geological strata are less well under stood than in developed territory. Wasteful and Vicious Methods. Unfortunately many of the oil ' stock promoters are really more in.
 terested in selling stock than in get
 ting out oil. Some of their common
 practlSes which the investor should
 be on the look out for are these.
 CD Raising just enough money to
 complete a we'll in a producing field
 under the most favorable circun1-
 stances, although the company really
 intends to prospect in wildcat" ter
 rltory and has no chance to get into
 developed territory.
 (2) Purchasing a small interest
 In producing property and adver-
 tlslng it's initial heavy production in.
 stead of the much small present yield.
 (3) Purchasing a lot of worn-out or Junk wells whose production has almost run out, or been Stripped" /" with the idea of being able to state truthfully that the company has in addition to possibly one really good producer, the production of which is named, so many other wells. -
 (4) Purchasing a microscope lease in the heart of new gusher pool, such as a town lot or three to five acre lease in the new Burkburnett pool in Texas. On this the wells are drilled to obtain a quick, large pro- ductlon and no regard is given to how long the prod duction will hold. These wells result in drilling many offsets on adjoining leases and in waste that IS inevitable when several wells are drilled where one would eventually drain all the territory
 (5) Backing up any of the above with large acreage scattered often over many counties and even states This acreage is not usually taken on the advice of geologists, and the price paid for leases may not be higher than few cents an acre. Some of it is often acquired on ter rltory which has been condemned yet adjacent to pool of importance, while still other leases are taken up in states that have never at pest pro- duced more than a show of oil. Mixed Tn with these doubtful leases there may be an occasional lease in fairly good prospective territory.
 The chief harm these companies do outside of swindling the public is the excessive price they pay for few acres of good territory, a price that a well-managed oil company could not afford to pay, but one which the stock k-selling company can afford on account of the favorable light it sheds on the other leases held; the waste of money caused through drill ing a we'll on each acre or two in- stead of one to each eight or ten acres; the sudden flooding of the market with oil produced from their few wells and those offsetting which their neighbors must drill to protect themselves, and the bad light in which other small but honest con- cerns are placed when efforts are made to obtain financial assistance.
 Of course, one or two such com- panies would have little or no effect on the oil business, but the combined work of hundreds, such as those in Texas especially and in Kentucky, Wyoming and other places, does the damage.
 It is better to warn the investor of these practices and to put him on his guard faCnef than to attempt to Keep him out of oil stocks altogether. It is significant that the marketing and refining of the bulk of the oil which will be produced by the new concerns which are rushing into wildcatting and producing will be done by the Standard and few of the larger and older independents. One-third of the country's total refining capacity is controlled by the Standard compan- ies, and this proportion is more inn portant than is indicted because most of the Standard Oil plants are com pletely equipped refineries, while large number of the independent plants are merely "skimmers," and are comparatively inexpensive to build. The grip of the Standard on the refining industry is strengthened by it's control of the Burton system for the extraction of gasoline from low grade oils, which it leases to other companies, including indepen- dents.
 Profits of the Standard Companies.
 It has long been known in the oil industry that each branch taken sep erately was hazardous, but where production, refining, transportation