Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-16
PROBATION VERDICT
HELD AID TO TRADE
Step in Effort to Stabilize Oil
Prices Wins Court
: Favor.
BY BENNETT WOLFE,
ID Press STAFF writer.


TULSA, Okla, october 16.-The Ok
lahoma Supreme Courts decision up
holding proration of crude oil produc-
ton was regarded in this oil capital
as victory for the forces seeking to
stabilize the petroleum industry.
That the decision would serve to hold
the lid on oil surfeited areas, preventing
a threatened undermining of the pro-
| trous results to the industry, was the
view held by leaders Of the industry
here.
| Legal departments Of oil companies
which have been active in the fight
! for continuance of the proration method
of conservation pointed out the decision
J was the first to be made by any high
! tribunal in the United States dealing
With the conservation of petroleum.
Julian's Contention.
The courts opinion was rendered
| yesterday in a case in which the c. G.
Julian Oil 81 Royalties Co. asked a writ
of prohibition that would restrain the
State Corporation Commission from en-
forcing its proration orders against the
company, which is an operator in the
teeming Oklahoma City field.
Julian, who moved his oil activities
to Oklahoma from California a few
months ago, contended the proration or
ders constituted price-flxing and he
further set forth that freeing his COM
pany from the orders would not result
in waste, since his business was COM
plete unit itself, including producing
wells, pipe lines, refineries and market
ing stations.
Explaining the courts judgment john
H. Brennan, chief counsel of the
Barnsdall Corporation, said the deci-
sion held that one producer of oil could
not take from a common pool or a
common source of supply more than
his equitable share" and that waste
would result should other operators in
the Oklahoma City field, without means
of handling increased production, be
forced to open their wells to full now
in order to get their part from the res
ervoirs that would be drained by unre-
stricted production Of the Julian wells.
PROBATION Defended.
other company attorneys declared
that had the decision not upheld the
powers of the Corporation Commission
to prorate production, or allowing one
field to produce certain percentage of
its potential output, another field diff
ferent percentage and so on, a crum-
bling of the country's present conser-
walton program would have resulted,
bringing wide open production and a
flooding of the market.
C. c. Herndon, executive vice presi-
dent of the Skelly Oil Co., asserted the
continuance of proration was "fndis-
pensable in the present emergency
THE condition of waste and demon
alization would reach staggering pro-
portions" Herndon said, should the
proration structure break down with
the potential production of Oklahoma
now approaching 5000, 600 barrels daily
or from 100000 to 100000 barrels
daily in excess of the total market
output from the State
The Oklahoma City field alone, with
approximately $40 giant wells, is esti-
mated to have a potential production
Of more than 100000 barrels daily, or
nearly equal to the present output of
the entire United States.
Started in Oklahoma.
The proration method Of limiting pro-
duction received its start in 1927 in
the Greater Seminole district OF Okla
homa, then the worlds wonder pool,
after that area had set a production
record Of $4,000 barrels in one day, or
as much as the whole State now is
producing. Gradually the plan was ex-
tended into other Oklahoma felds
and into the other principal oil-produc-
ing States.