Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-21
Oil Trade Turns
Hopefully Toward
PROBATION Farley
Conference at Austin,
Tex, June 20 May Prove
Boon to Industry.
Special Dispatch to The star,

special Dispatch to The Star.
TULSA, Okla. June 20-The eyes
Of the oil trade are turned to the
forthcoming State wide proration con.
ference In Austin, Tex, on June 20
as likely to prove the turning point
in the demoralized industry.
On that date the State Railroad Com
mission will meet oil producers in 6
final effort to bring the East Texas
field within the proration fold. I'm.
portant oil executives are convinced
that, If the situation in that tfouble-
some area can be brought under con-
troll, orderly production of oil can bs
restored and the foundation laid fol
price advances such as have been put
into effect in California.
The alternative to failure Of the con-
ference, should such be the outcome
probably would be a call issued by
Gov. Ross S. Sterling of Texas for q
special session of the Legislature tc
enact amendments to the proration
laws which will put teeth into them
1t Is recognized by all elements. how
ever. that voluntary obedience TO pro-
ration rules is far preferable to en-
forced observance.
independents Blamed.
Independent producers in East Texas.
whose rebellion against proration regu-
lations promulgated by the State Rail-
road Commission precipitated the cur
rent generalization In the oil business,
are beginning to see the light Of rea-
son and to realize that there Is no
possibility of making money so long
as unbridled production Is permitted
in that field.
No longer are those small producers
attracted by the lure of imaginary
profits to policy of riotous drilling.
A slump in prices to as low as 10
and IS cents q barrel has convinced
them Of the folly Of such a course.
1t is estimated that even with 35-
cent market 1t would be necessary to
produce about two-thirdS of all re-
coverable oil In the field to recover
merely the capital invested But even
that possibility has faded with the
weighted average price of oil in the
field estimated to range between 17I2
and 20 cents barrel.
Proof of a change of heart among
East Texas oil producers Is seen in
numerous conferences of independents
which have resulted In evolution OF a
voluntary plan to curb production.
That plan would limit output of oil
to an average of 300 barrels to every
20 acres in the field. Several hun
dred independent oil producers have
given their assent and will try to put 1t
into effect today.
Markets Depressed.
Meanwhile, six months of disorderly
development Of the East Texas field,
which already has caused a break of
6625 per cent in the crude oil market
Of the midcontinent area. continue q
depressing influence in the markets.
The crisis has been intensified within
the week by the withdrawal of support
from the East Texas crude oil market
of large units. This action, unprece-
denied within the recent history of the
development of all fields, has created
probably the most chaotic marketing
conditions ever witnessed in the oil in
dustry. The situation has taken on
the appearance Of the last stages of a
struggle for the survival of the flttest.
(Copyright, 1917