The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1922-05-02

wells on nearby lands, and In addi-
tion the government was faced with
n number of asserted claims within
tho reserve under tho mining law.
Moreover, the famous salt Crock
oil field, lying Immediately coutigu.
Gus to the Teapot Dome. and which
has been leased under tho general
leasing act, was without adequate
pipeline and refinery facilities. ana
Independent producers have been
unable to dispose OF moro than 30
per cent OF The possible production
OF existing wells. Furthermore. com
petition was absent from the field
through lack OF not only pipeline
and refining facilities, but OF com.
beting companies. Therefore. after
careful confederation tho secretary
of the interior. with the complete
concurrence OF tho secretary OF the
navy, Invited and considered pro-
posals from a number OF prominent
oil companies and individuals for
the development OF the wyoming
naval reserve, with the accompany
ing guarantee OF the construction Of
adequate pipeline facilities from the
field 10 Atlantic and Gulr OF Mexico
points through connection with cX-
isting pipelines.
1t is also desired that provision
be made FOR the exchange on the
crude oil produced for fuel oil for
naval purpose, In such manner and
at such points HS might be dcsig-
mated by the navy After fun con-
slderation Of all the offers submit
ted. a contract was approved 10y
the secretary OF the interior and
the secretary Of the navy with the
Mammoth OH company, n Delaware
corporation, ii. T.. Sinclair. presl-
dent. The contract is in tho form
or n lenso. with graduated royalties
up to so per cent for the entire area
OF naval reserve No. in wyoming
The contract provides for the
drilling OF at least 20 wells within
n limited time. for the construction
or a pipeline from the field to eX-
isting pipelines in Missouri, for the
exchange of crude for fuel oils, the
latter for navnl purposes, for the
delivery OF navy specified bunker
a oil at any point named in the con-
tract from Guantanamo. Cuba. to
the northeast corner OF the United
States. II provides for limo Of
credit under which exchange for
tho crude oil ample storage Tor all
tho produce is to 'bo provided with
out cash outlay by the government
at any point fixed by the navy de-
partment along the coast described.
1t provides that tho lessee shall NJ
such or any other points. at his
own expense. and without obligation
on the part Of the navy. provide
gasoline, lubrlcating and cylinder
oil at market prices.
II provides prior right OF ,rnnspor-
tatlon for all governmental oils
from not only the Teapot Dome but
from the Salt Creek field. even
prior to the uses OF tho pipeline
by the lessee. II makes tho pipe
line when built n common carrier
for all governmental oils. The pipe
lines already constructed. with
which the new pipeline will CON
meet, involve investment OF s1I5.-
100000, and the present contract
calls for an investment on the part
OF the lessee Of not less than t26.-
100000 in addition. Furthermore.
the contract will bring about Inn
mediate competition in the Salt
Creek field, and will add from 40
to so cents per barrel TO the present
prices OF governmental royalty oils.
now amounting to more than 5000
barrels per day. This IS secured y
an option given the government 30
sell royalty oil on basis OF Mid
Continent prices II and when de-
sired.
This production In at present but
40 per cent of the capacity OF ex-
lsting wells. which will immedi-
ately be raised to 100 per cent.
yielding TO the government for re-
clamation. state and treasury pur-
poses, approximately 1900 barrels
of oil per day. with an added value
thereto OF from 40 10 so cents per
barrel, or. in other words. an added
price over and above that which the
government and the Independent
producers are now receiving OF more
than $4,000 per day. Before the
contract was approved the Mann
moth oil company presented to the
secretary OF the interior deeds TO
tho United States for all outstand-
ing claims OF title OF every charac-