The New York herald., 1921-06-16
MEXICAN OILS FALL
ON PHELAN REPORT
Drive Against Mex Pet. Forces
Stock Down to ia, It's Low
of Three Years.
SOLD TO 269 LAST YEAR
Doheny and Wylie Cell Phe-
lan's Report Discredited His
tory and Bear Propaganda.

"Discredited history" and "bear propo-
ganda" were appellations applied yester-
day by oil men here to the Washington
despatch quoting J. A. Phelan as report
ing to the Government that the Mexican
oil fields were about played out and
that the proved territory was going to
salt water. Edward l.. Doheny, presi-
dent. and Herbert C. Wylie. vice-presl-
dent and general manager of the Mexican
Petroleum and the Pan-American Petro-
leum and Transport companies issued
statements in contradiction to the state
/ ments OF Phelan. Mr.. Dohery said 1t
was "rehash of ancient and discredited
history" and Mr.. Wylie declared 1t to be
"berr propaganda"
In any event. the publication of the
story had the effect of completely smash
ing the market in Mexican Petroleum
shares as well as the other Mexican oil
stocks. Mexican Petroleum. which only
| about a year ago sold as high as 269,
was hammered down yesterday after a
seven point drop at the opening. to ia,
the lowest point It has sold in three
years and 13 points below its final mark
on Tuesday afternoon. The selling was
| of particularly driving character and
all day long the stock declined steadily.
| At the opening in the morning and again
| just before the close the Mexican Petro-
| leum market was In q state of demor-
alization.
PheIan Report Criticized.
1.-THE report of Mr.. Phelan," Mr..
| Doheny said. twas made as the result
OF cursory trip through the oil fields
many months ago. He is not a geologst,
or even an oil producer. Since his short
visit to the fields 145 wells have been
and are In progress Of drilling Many Of
-TAN- f-
known fact that the wells completed OH
Toteco and Hunez Chapapota open up as
new territory more than three times til
forty square miles, which is the only
| territory alluded to in the morning
newspaper stories and which Mr.. Phelan
reported as largely exhausted.
'The articles unwittingly or mali
ciously misquote the estimate OF the
Interior Department dropping three
! ciphers and stating it to ne 100000
| barrels instead OF 4,5O0, 200. 900. the
Mexican fields by George Otis Smith
Director of the Geological Survey.
This quantity Of OIL at the average rate
Of export OF 1920. would continue the
exports for forty-fivs years to come"
The refusal OF Secretary Hughes to
have his department make an investiga-
ton Of the oil situation In Mexico was
characterized by Mr.. Wylie as a show OF
"god judgment" AS "such business is
not usually considered within the pur-
view Of the State Department. request
for such report from the State De-
partment, ] think, is unprecedented"
Report Unworthy Consideration.
A scientific report as to the area OF
the field and its possible contents, Mr.
| Wylie added, was beyond the grasp of
the inexperienced and, therefore, the re-
port Of Mr.. Phelan. he said. should be
given no serious consideration. South
OF the forty square mile area mentioned
In the Phelan report, he said, there was
far greater area Of absolutely proved
oil territory which had barely been
touched, the probable oil area being
many times larger.
Regarding wells having gone to
water" he continued. II venture the as
sertion that no well, we'll within the
limits OF the oil field. has gone to salt
water without that area having produced
an amount Of oil greater than the most
optimistic had reason to expect. That
Casiano and Portrcro del Llano went to
water after having produced $4,000. 900
barrels OF oil each ia not unreasonable
or in the least disturbing Other terri
.ories in the forty square miles have
produced proport'onately az much OIL
THE wells reported as being oil in the
morning and water at night. az the bear
propagandist delights to report from
| time to time, never were OIL wells. They
were holes drilled on tho edge or outside
of the oil territory. near enough to the
field to get some oil. but in reality out
side. A number of these holes have been
drilled by various companies in an effort
to define the width OF the field, but no
well. well in the field. has been disap-
WAsHNoToN. June 10. - Chairman
Porter OF the House Foreign Affairs
Committee SAID to-day that the report
on the Mexican oil supply prepared by
J. A. Phelan. an expert of the Shipping
Board, and made public yesterday was
transmitted To him by Rear Admiral
Benson. chairman OF the board, in re-
sponsc to a letter OF request.
Mr.. Pheian, II was explained. visited
the Mexican oil fields last December by
direction of Admiral Benson to make
pei sonal investigation of the potential oil
supply. His report. as transmitted to
Chairman Porter. was dated June 13.
1921. and was said to have been based
on his personal observations during his
visit to Mexico and on more recent In
formation.
Chairman Porter said to-day that he
was preparing to have Mr.. Phelan's re-
port and the letters from Secretaries
Hughes and Fall regarding Mexican oil
published as committee documents. Mr..
Hughes's letter, transmitting one from
Mr.. Fall, was sent TO Mr.. Porter in re-