Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-07-05
.MID-CONTINENT
FIELD INACTIVE
WITH OIL AT 81
Oklahoma Industry Hasn't
Been So Stagnant in
Twenty Years.
MONEY SCARCE ARTICLE

OKLAHOMA CITY. Okla, July 5.-Io
say that the independent wing Of the oil
industry of the Mid Continent district Is
shot to pieces, expresses the situation
mildly and prosaically. Activity has not
been at so low a stage in twenty years
It is next to impossible for operators to
get money. A majority of them need it
only to pay debts and weather the storm
for it would be foolhardly TO drill wells
in this period Of overproduction and low
prices.
Critical phases of the situation are in
tensified by high prices for labor and
material. Otherwise, oil Of the Mid Con
tinent grade could be produced at a profit
at a market price of 81 a barrel 1t was
once produced at a profit for 80 cents
barrel. Representative operators who at
tended the recent sale of Usage oil leases
at Pawhuska say oil cannot today be
produced profitably at s1.75 a barrel
and the present price is 81 q barrel.
/ In the matter of labor and material
costs the oil industry is trailing along
with many others. 1t is undergoing the
same material and fundamental read
justments. 1t is affected by the same
conditions of finance, the same unsettled
state of foreign credits. 1t is swayin
between divergent opinions and two OPP
posing contests OF propaganda 1t is
baffled by timidty and fear. Psy-
| chology is against it. Talk of hard times
has permeated ii and it's stock Of hope
is like 30 many empty storage tanks.
EXPONENTS OF DEPRESSION
FILL OIL CENTERs.
All oil centers Of the Southwest
among them Tulsa, Oklahoma city,
okmulgee, Muskogee, Fort Worth,
Dallas and Wichita FaIls-are. so far
as the industry is concerned, ex-
ponents Of depression and gloom They
are filled with idle operators, lease brok-
ers and promoters. and a great majority
Of these are without money or credit.
Credit or extension OF credit they need
above all things else they must sacrifice
their properties and leave the business.
This thousands Of them are doing
already.
The low market price Of crude oil is
causing a loss OF millions OF dollars a
day to operators and royalty owners.
The Oklahoma production for two years
and more has been around 3oO,OOO barrels
daily. This now brings $4,000, where
as four months ago II brought more than
100000 This means loss OF over
100000 a month. Not all Of this is
total loss, OF course. for considera BILE or
the oil Is produced By big concerns that
can run the product TO storage and hold
II there until the return Of high prices
Bat even these concerns must suffer a
loss.
A lack OF demand for fuel oil and
kerosene is one OF the chief causes FOR
the low price OF crude Some Mid
Continent rehners have closed down be-
cause Of heavy accumulations Of fuel
oil aad kerosense. having no place to
store them nor funds from gasoline
profits to invest in storage Reasonable
profits on gasoline have had TO carry the
load Of no profits on the other prod acts
ONE CONCERN FAILS UNDER
IDEAL CONDITIONS.
What rerlners have termed the ideal
situation was enjoyed under normal con
oitions by one Western Oklahoma refln-
ing concern. II produced its own oil
70 the amount Of the refinery capacity,
transported the oil 70 tho refinery
through its own pipe lines and sold It's
products through its own marketing
machinery. II was out OF debt Yet be
cause Of finding no profitable market for
its fuel oil and kerosense, this concern
was compelled to suspend operations.
Independents who entered the oil bust
ness in the belief that the crude oil sup
ply of the country was very limited aud
that demand for its products would con
tinuye to increase, we're slow 20 be i'm
pressed with warnings that came from
money renters Of the East a few months
ago. They neglected and refused to Join
In any EFFORT to reudce the output or
crude. believing that one or two small
cuts IN crude prices would cause the re-
CURED readjustment of conditions But
they discovered before long that the East
ern propaganda contained some sound,
sensible business advice and the fore
sighted among them set about retrench-
ment
WILTCATTERS SLOW
TO HEED WARNINGS.
+ .Wlldcatters. particularly those who
were about developing field extensions,
were slower still to heed the warning.
and they brought In well after well, some
of them making up in the thousands of
barrels daily, and this necessarily forced
continuation Of offset drilling campaigns.
the net result being that Oklahoma pro.
/ duction was materially increased just ut
the time when the principles OF conser
yation and economy should have dictated
a material decrease
Independents were not alone respon-
sible for this. Standard Oil concerns in
several fields apparently made no move
to curtail drilling. When Independents
obtained hearing before the corporation
commission, asking an official inhibition
against unnecessary drilling, they were
opposed by companies with Standard Oil
connections. The Independents secured
the order the legality Of which was seri-
ously questioned by lawyers on both
sides of the CONTROVERSY and doubtlass b,-