The Birmingham age-herald., 1920-02-15


 supply large quantities of casing head
 gas.
 Proven I.ease-A lease which is all
 ready proven with producing oil wells.
 Oil Shale-The chief commercial
 operations on oil shale are in Scotland
 and were begun<in 1S47. These indus-
 tries were demoralized when Pennsyl-
 vania petroleum first appeared on the
 market. but later recovered partially
 and are now operated with profit. The
 amount of oil obtainable from one ton
 Of shaie varies from one gallon to 90
 gallons. In Scotland it is 25 gallons, in
 Colorado alone there is said to be
 enough shale to produce 20,000,000 bar rels of oil and 300, 100000 tons of am
 monium sulphate.
 Gasoline made from shale is of in- ferior quality, containing large amount of olcfins and aromatic compounds and giving a large shrinkage on refining. Offset Well--If a producing well IS
 brought in within a certain distance, usually between 20 and $50 feet of
 an arjoining lease, the lessor, or the producing company leasing this ad-
 Joining lease. is obliged to drill with
 in a given time, usually SO days. This well is called an offset well. The
 state oil inspector notifies the produc-
 ing company on the adjoining lease
 that it is necessary to drill an offset
 well. This Is a state law to protect
 he owner of the iand adjoining a pro
 ducing we'll. This law is based on the
 theory that q well within certain
 distance will drain some of the oil
 from the adjoining property. The off, set law protects the property owner. It is the bane of many lease man. In
 case 8 party or company leasing a
 certain property are notified that they
 must drill an offset well within cer- tain time, and if they fail to do it, they forfeit their lease to the property and the owner of same can lease to someone else.
 Lease Hound-A speculator in oil leases He secures options on leases at a certain price per acre and en- deavors to sell it at a higher price. Some times he does and has to divide his profits with number of others en- gagged in the same business and through whom he secured the lease. Some very large profits have been made in such efforts in rapidly en- l hancing values in a developing oil field.
 PRODUCTION IS SPECULATION In conclusion it may be stated that there are four divisions of the oil in- dustry as conducted today. Produc- l ton, transportation refining and dis 
 | tribution.
 The production end of the business constitutes the very foundation of the oil industry and operations on leases 1 in proven properties, under capable, honest and sincere management. pre- sent opportunities for unusual profits accompanied by risks that are neglig- ible in comparison. It is the produc- | tion branch of the business however 1 that is Speculative and when success l full make quicker and larger returns or fortunes for the operator or in vestor.
 Capital placed in the transportation, refining or distributing end of the business, under the same conditions, may be regarded as investments upon whose securities. may be reasonably expected, certain large and satisfac- tory yields from earnings and in- crease in intrinsic values, in compari- sor with any rapidly growing and | profitably conducted enterprise or in- l dustry.