The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1922-02-25
in THE OIL FIELDS
Office, 6241 w. H PECK Residence 2442

gravity oil or better. IL is UNDER
stood Informally that all the oil In
the burbank field in western Usage.
Which at present IL producing about
90 per cent OF tho oil in Usage
county, Is 3S gravity or better.
III seems to me only fair and
reasonable that the term Mid -Contl-
neht OIL field shall be construed to
mean the territory embraced in that
neld at the time the lease form aud
regulations were adopted, ana YOU
are hereby notified that such con-
struction will be followed hereafter
Had the word market been left
out OF the term highest posted mar
ket price there is no question In the
opinion OF this office that the
highest price posted by any purchas-
ng company. however small She
proportion purchased might be.
would be the basis under which the
lessces would be required to settle
for their royalty.
In 20 Cyc. $40, market price or
value is defined in part as.
the price or value ot the
article established or shown by
sales, public or private in the or
dinary way OF business: the fair
value OF the property AS between
one who desires to purchase and
one who desires TO sell; the cur
rent value. the general or ordi-
nary price for which property may
be bought and sold; the actual
price at which commodity is
commonly sold; the rate at which
a thing is sold; a fixed and estab-
lished price for the time; Z"
IT would appear from the fore
going that the highest posted market
price should be defined as the high
est price paid In the open market
by n purchasing company able and
willing to take a substantial propor-
tion of the oil produced in the terri
tory which II serves ms distinguished
from II company which posts a price
which applies only to companies
with which II is affiliated, or 20 a
few lessees producing certain
grade of oil, or producing oil ad-
joining their own leases, to induce
them to furnish oil the purchasing
company would not otherwise OBJ
tain.
In other words. the latter COM
panies in order to obtain a certain
grade of oil used in their reflneries,
or to obtain any oil at all from
other than their affiliated com
panies, are compelled to pay n price
In excess OF the price In the open
market.
You are therefore authorized
hereafter in constituting the term
highest posted market price in tho
Mid-Continent field to construe It as
tho highest price posted by a pur-
chasing company taking substan-
tial portion OF the oil i'm the terri
tory it is serving in Oklahoma or
Kansas as distinguished from COM
pany taking its oil mainly from
companies with which II is affiliated,
and from lessees producing GER
tain grade of oil, or which purchases
only a small proportion of the oil In
the territory 1t is serving.
with regard to your request Tor
instructions as to the price for
which lessees should settle for their
OIL from October 3 to October 7, you
oil purchased from lessees other
than the companies with which they
are affiliated. by companies posting
a price of $3.50 per barrel Is not
sufficient in the opinion of this OF.
flee to constitute market price
under which lessees are required tC
settle for their production.
you are therefore authorized &c
permit lessees to settle during that
period at the rate of si.25 per bar
rel unless the lessees received sum
In excess OF that amount.
with regard TO the price posted
by the Gulf Pipe Line company No
vember Z, of $2.25 per barrel for 3s
gravity oil or better. which applle'
to all oil produced in the Burbank
field. Il is understood that the Cult
Pipe Line company does not take al
the oil in that field. but said line
together with the Cosden COMPANY
does take about one-third of the Of
so produced 1t would seem that
other companies in that field stu
ated as the Gulf company Is should
he required under the leases TO pAy
the price posted by the Gulf com
pany. In other words where the llnr
is owned by the same or an affillat'
ed company no question OF market
or availability IS involved, and nc
good reason can be seen why such
producing companies should not pay
s2.25 from November Z.
SHOULD any question arise here,
after as 10 whether n purchasin'
company which posts a price higher
than the prevailing market price i'
taking a substantial proportion o'
the oil, 1t is suggested that all faot'
be presented to this office with sucl
report and recommendation as tr
you may seem proper, whereupor
the matter will receive considera
tion.
Sincerely yours,