Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-10-14
SECRETARY FALL
ASKS BIDS FOR
OIL ROYALTIES
Governments Share of Cat
Creek and Salt Creek Crude
to Be Sold.
(Tribune's Washington Bureau.)


Washington, Oct. 13.-Albert B.
Fall, secretary of the interior, has in
vited sealed bids to be submitted to
his office, Interior building, Washing
ton, D. c., prior to noon of Novem-
Der 1, 1922, for the royalty oil ac-
cruing to the United States from
leases on government land in the Salt
Greek and Cat Greek fields.
The Salt Greek field, which recently
has added to it's fame as an oil pro-
Queer by bringing in a 1900 barrel
gusher, is located in Wyoming. The
Cat Creek district, the oldest and
largest producer of the Montana
fields, is located near Winnett, north
Of Billings.
AT present, the total government
royalty oil from the Salt Creek field
and from the Cat Greek field well
v 500 barrels daily. Secretary
Fall stated that the bids must be for
a period either of five or 10 years
and that the successful bidder will be-
gin buying his oil January 1, 1923.
Oil Brings Premium
The royalty oils due the government
in both Wyoming and Montana have
been disposed of to the United States
shipping board, since the leasing act
Of 1920. The government has been
delivering its royalty oil in this way
to the shipping board at the market
price for oil in the field from which
taken. Secretary Fall in ordering that
the oil be disposed of to private in
dividuals has done SO in view of the
knowledge that the oil has been worth
a premium over the field price.
All bidders for royalty oil from
leases ON the government land in the
Cat Greek field must agree to pur-
chase the entire royalty oil accru-
ing to the United States, but two or
more qualified bidders may submit a
joint proposal for the Cat Greek roy
atty.
In the Salt Greek field, bids will be
received for the purchase of royalty oil
from leases on government land in
that field, On either or both of the fol-
lowing proposals: a. cash royalties
for all of the government royalty oils
from the Salt Greek field, or (2) cash
royalties for fixed amounts of gov
eminent royalty oil of not less than
1000 barrels daily.
In making the announcement, Sec
rotary Fall stated that the bids win
be based upon the posted field price
in the Oklahoma-Kansas field for oil
of the same quality. Because of this
qualification it will be necessary to
state the bids, either in terms of equal
ity with the Oklahoma-K Kansas price
for crude oil, or else by a differential
in cents a barrel above or below that
price.
A clause in the proposal inviting
bids provides that the bid which is
most advantageous to the government
will be accepted. This indicates that
the lowest bidder may not be the most
successful one.
States VIII Benefit
Edwin S. Booth, former state SEN
ator from Fallon county and now So
licitor of the department of the inte-
rior, was asked Immediately after Sec
rotary Falls announcement if this pro-
posed sale would have any direct eff
feet upon the oil industry in Montana
and Wyoming.
The action of Secretary Fall Is of
great Importance to the states affect
ed" said Solicitor Booth, "for the
states in which these fields are located
will receive the major portion Of the
royalty"
Under section % of the leasing
act, 5212 per cent of all amounts de-
rived from royalties are paid into. re-
served and appropriated as part of the
reclamation fund; 37E per cent Of
the amount derived from royalty is
paid to the state whiting the bounda-
ries in which the leased lands or de-
posts are located.
The premium over the price in the
field has amounted to 2 per cent q
barrel, or better. Under the proposed
plan of Secretary Fall, the oil is sold
to the highest bidder and the states
will derive their proportionate benefit
of the increased price received. This
action of sthe secretary of the interior
shall secure every benefit possible for
the state in the handling of the oil
business"