Bisbee daily review. [volume] (Bisbee, Ariz.) 1901-1971, 1919-04-06
HOW TO HANDLE OIL
WELL INDICATING
EXPLAINED BY REQUA
Director of Oil Division for
u. S. Tells Method of
Protecting Buyers
By Mark L. Requa
Director Oil Division, U. S. Fuel
Administration

The problem of wildcat oil wells is
an important one and cannot be light
" dismissed.
A wildcat well is a well drilled in
undeveloped territory without any
certainty of finding oil. 4 company
organized for the purpose of drilling
such well is called wildcatting
company. A man engaged in the drill
ing of such well is called a wild
cater. These terms are not discred-
table, but they are generally used
as indicative perhaps of the uncertain
ty surrounding such operations.
By far the largest proportion of
wildcat wells are failures, some peo-
pie even going so far as to say that
80 per cent of the strictly wildcat
wells are negative in result. The 10
percent remaining, however, is the
foundation upon which the petroleum
industry of this country is built.
There is a perfectly legitimate field
open to the promoter who wildcats
with the hope of big profits through
final success. Operations of this kind
are frequent through the organiza-
ton of small companies and by the
personal activity of the promoter
among immediate friends and ac-
quaintances, and to a certain extent
with the aid of newspaper advertis-
ing. Such promotion should be en-
couraged; the operations are usually
conducted openly and above-board,
with the final profit depending upon
the success of the enterprise.
On the other hand, there are great
abuses through irresponsible promot-
ers using advertising space freely, is
suing extensive prospectuses and ex-
aggerating statements, and presum-
ing that therei no opportunity for
failure. In many of these cases, even
with the possible success of the we'll
drilling the investor has very little
chance fort the return of his capital.
AS a general proposition, believe
that any prospective investor who has
been told the whole truth as to the
company whose stock he is purchasing
should be permitted to make the in
vestment if he cares to take the
chance. OF course the important fac
tor here is that he should be told the
whole truth, and this is seldom ever
done in ordinary oil advertising. The
promoter should discuss fully the
stock authorized by his company, in
dollars and shares; how much pro-
motion stock was issued and what
value; the nature and terms of con-
tract for land, Setting forth prices
to be- paid, ETC., as well as the pro
motion stock issued to the promoters.
The amount or amounts to be paid
for selling the stock should be dis
closed; the amount expended for ad-
vertising, fees, and similar expenses
not directly connected with drilling
should bed isclosed and agreed upon.
1t might be wise to insist upon the
promoter escrowing his stock and be-
ing prevented from selling it until
after the property is on a paying
basis.
In other words, we should limit the
possible profits to promoters, and
make a full and truthful statement
absolutely a prerequisite to the grant
ing of any permit And am inclined
to believe that promoters should not
be permitted to sell any of their
shares until the concern is a sue
cess.