El Paso herald. (El Paso, Tex.) 1901-1931, 1919-07-30
tor Fl Paso Herald:

A-AAlpI FL EaSO HERALD
IN 4 recently published report OF a
meeting Of the Ad club. Of FL Paso,
one Of the speakers Is alleged to have
referred to an advertisement Of some
drilling company. IN which he said the
company claimed to have made anc
declared a dividend of more than 500
percent He thought that was an aw-
ful fabrication, and that his club. or
some other power that be" ought TO
see to II that such fake" ads should
not appear.
am wondering just how little these
would be critics and censors know
ABOUT the subject they pretend to dis
cuss- Let US make q few figures
Just such as any u year old boy can
make, and see how they look BY the
side OF the club speakers observation:
capital OF drilling company. SIS. 600.
-Four rigs. cost approximately, $780,
Three rigs run on straight contract,
anywhere a hole is wanted
One rig run on $3.50 basis, only in
strictly proven territory.
NOW, what2 The three running on
contract will get their pay. and pocket
the enormous profits which conserva-
i've drillers always and certainly
make. whether the holes prove 10 be-
busters. salt water or oil producers It
Is very conservative to say that they
VIII each drill three wells a year
nine wells. The profits from this
Work VIII more than pay the cost OF
the fourth rig drilling three wells in
proven territory on a $3.50 basis.
An unreasonably conservative esti-
mate for these three wells would be
1000 barrels per day, each. One half
OF this would go to the drilling COM
pany. That would be 5000 barrels per
day. or 1.0s5.oO0 barrels per year.
This. at 81 per barrel. would be So
I 4-r. l.. u
percent on $4,000.
In the light Of these figures. what
becomes Of the hot air denunciator's
allegations about 500 percent divf- !
bends that so offended his delicate !
nostrilsE .'Oh, but you might not get
-oeO barrels 10 the we'll" he replies /
very well. we will cut the figures in /
two in the middle. although the first /
estimate is far below what the living 1
facts are proving every day in the
proven oil fields. After this division /
by two we still have 1850 percent on /
: 5000 capital stock Just for the /
celectation Of the Solomonic critics
We viii divide by two again, and then 7
have $50 percent dividend
Note further. that I have figured 1
the price Of the oil at 50 per barrel. \
whereas the price is enough above I
that to pay the overhead expenses Of I
ne company several times over and I
then some.
Further. II a drilling company can
make such profits. taking only one /
half the product, the owner company /
,an spend every cent of its capital I
drilling well. and. taking all the /
product. make exactly double the .
amount indicated. The oil is in the
ground, and somebody is going to get .
l. These turn up nose men, who sheer /
AZ the very word oil" should go
away back and sit down" Some COM I
panies are dishonest, and rob their I
customers Let these more righteous
men organize on first class holdings
ana allow their names to back il. and /
The result will be that all their friends
VIII invest with them. and there will
be not even gleanings left for the rob-
)ers- The over sensitive financiers
ire responsible for the existance Of
-obber companies The oil is there
md people are going to try to get it.
OTIS Of them succeed
II a company IS capitalized at $780,
100 and run four strings OF four rigs
'ach. the result. as to percent. would
'e the same.
Lack of space forbids proper atten-
ION to the person who shuts his eyes
18th feet But just this An exchange .
S simply place where men who wish :
o sell their stock meet those who :
wish TO buy. The seller states, Z
Trough the auctioneer, how much, OF :
hat company. and at what price he :
Til sell The would be buyer makes
is bid The sellers vie with each
Their in making offerings at lower
cures; the would be buyers bid up
gainst each other for the offerings:
he auctioneer strives to pull the sell
rs. to lower levels and the buyer to
igher levels, until he finally gets
hem together, and sale is made. and
here you are. The buyer pays. spot
ash. in full, for what he buys The