Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-03
AGREEMENT ON OIL
OUTPUT IS URGED
Midcontinent Operators Are
Anxious to Settle East
: Texas Situation.
BY the Associated Press.

BY the Associated Press.
DALLAS, Tex, September 3.-What-
ever unconcern Gov. r. s, Sterling
and the Texas Railroad Commission
might profess toward crude oil price
fluctuations, operators of the mid
tinent area and the Nation waited anx-
1ouSly today for some definite pro-
auction agreement in the East Texas
fields.
The East Texas area has remained
closed under martial law since August
IT, Gov. Sterling invoked that 1aeans
as last resort to halt unbridled kro-
auction. PROBATION orders had bean
houted or suspended by court inilncl
lions. Prices slumped until East Texas
crude sold at from 5 to 10 cents a
barrel at the well. After the shutdown
the Magnolia Petroleum Co. and the
Sun Co. posted fiat purchase rates of
% cents per barrel. Others continued
to buy available storage at the best
prices obtainable.
Operators Wish to Resume.
For this reason East Texas operators
were impatient to reopen their wells.
Drilling has not been hampered by the
shutdoWn. 1t was estimated there were
1000 wells in the field August IT. Brig
Gen. Jacob F. VOTERS, commandment in
the martial law area, said YESTERDAY
probably ! 300 wells would be ready to
open whenever Gov. Sterling gave them
permission
Settlement of the controversy ap-
peared in sight yesterday, when the
State Railroad Commission prepared to
issue new statute enacted bv the
Texas Legislature in the special session
which ended August II. The order
would have set the allowable on a fat
basis Of 225 barrels per we'll daily. It
ignored the acreage basis recommended
by the Texas Central Proration Ad-
visory Committee.
Gov. Sterling conferred with the
commissioners and apparently disap-
proved terms of the order. Immediately
he directed Gen. Wolters not to permit
any wells in the field to be opened I'M
til an executive order was received.
G. V. Terrell, chairman of the COM
mission, and Commissioner Lon A.
Smith apparently were aligned against
Gov. Sterling and Commissioner Pat
M. Nef in the controversy.
Gov. Sterling said the projected
order, setting the allowable at 225 bar
rels per well daily, would put the lit
tie fellow out of business because he
hasn't the money like the big operator
to drill more wells
Commissioner Neff declared the pro-
Jected order merely would start a race
to see who could drill wells the fastest. +"
He contended that when the commits
sion had adopted an efficient oil and
gas ratio, provided for greater spacing
of wells and took steps to prevent phys-
ical waste in drilling and operating
methods, it wauld have gone far enough.
He opposed the projected order because
1t did not contain an oil and gas ratio.
The new conservation statute specifi-
cally forbade consideration of market de-
mands IN setting an allowable.
Military Order.
officials in touch with the situation
believed the Governor would merely
substitute the new commission order
for his original martial law proclama-
ton and leave troops in the field to
enforce production regulations, after
wells were permitted to reopen.
Gen. Wolters had issued a military
order directing all operators to report
not later than noon today the amount
OF oil stored on each lease and specified
that no we'll would be allowed to re-
open before all such information was
assembled at military headquarters in
kugore. He reiterated that the field
could not be reopened. regardless of
any proration orders from the railroad
commission, until Gov. Sterling so di-
rected.
Oil storage in the field had been
rapidly depleted since the shutdown.
especially since the price increases an
nounced by the Magnolia and Sun
companies. Great quantities still re-
manned, though. for production in the
field Immediately before the shutdown
had been estimated at between 100000
and 100000 barrels daily. Storage ia
cilitles were greatly increased in prep
aration for reopening of the field.
Attorneys believed if the Governor
refused to lift martial law that rail-
road commission orders would have
legal immunity from court attacks sew
eral companies were expected to make
upon the proration orders and also
upon validity of the new conservation
law.