Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1932-07-23

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but on the SAFE side.
The WORTH OF q royalty Ia not
q man-created factor. No matter
how many pspols want 70 sell their
Baker royalty, II does not influence
the AMOUNT Of oil under the BAk-
er farm. II everybody wants 70 sell
stock az the same time. companies
may be wrecked through inability
to finance and the stock become
valueiess.
But the WORTH Of a royalty ss
changed ONLY as the oil is taken
from the ground. When All the
oil has been taken from all sands
under a given farm. the value Of a
royalty becomes NIL. But the intelli-
gent royalty investor Is always pre-
pared for that day. since tts ar
rival viii see him prOfiting by the
fruits OF his investment.
The royalty investor IL usually
safeguarded BY the cost Of putting
oil on the surface Of the ground.
II the cost is go cents q barrel. Is
At Kevin-sunburst. the royalty OWL
er may know that the operator Is
not going 70 sell his oil for LlNss
than the cost OF producing It. The
worst that can happen Is that the
oil will STAY IN THE GROUND
until such time a. the operator can
find q market in which he can sell
ct q profit.
The deeper the fields, the greater
the lifting cost. and the higher
the necessary price for the OIL. So
the royalty owner frequently gets
a higher price for his oil from 3
deep sand than he would reeaivs
for oil from a shallow field. II il
for that reason that royalty Driees
are frequently higher on structures
where deep drilling e Necessary,
as in California. than on shallow
structures like the producing fields
OF Northern Montana.
When the lifting cost is greater
than the markekt price Of the oil.
the oil stays In the ground. The roy
atty owners share Of the oil Of
necessity stays in the ground. II IL
hike money in the bank. except that
there IL no known way Of his royalty
oil escaping, 30 there can be no
failure.
The WORTH Of q royalty can be
wiped out By one thing; the aboi-
ition OF the use OF oil. Until that
time, the royalty owner Is fairly
sure that If Mother Nature has
stored any oil under land IN which
the royalty investor has a decided
mineral interes, he vim get his
share.
He may expect that his share of
the OH win be brought to the sur
face OF the ground when it is prof
table for the operator to bring Els
share Of the oil 70 the surface OF
the ground.
Keviu-sunburst oil is today worth
&1.0s per barrel. Pondera oil IL
worth IS cents a barrel Cat Greek
oil is worth s1.4B q barrel, plus
bonus. Dry Creek oil Is worth
sl.e1 per barrel. Montana royal
~ investors are much farther along
toward the recovery from hard
times than are those Of any other
state in the union, where prices
for oil Of equal gravity are not
80 high.
The BASIS on which members Of
this Organization have purchased
their royalties Is so firm. we be-
lieve. that there has been no de-
probation IN the WORTH o. these
decided royalties. Had the OIL been
produced and dumped on the ground
or sol for 10 cents . barrel, then
persons who bought Montana roy
allies would have suffered from the
depression. But - It Il. their as
sets remained In the ground, eth
or with eurtaiIed production or com
plete cessation Of operation. as at
Bannatyne. and therefore their
WORTH has not diminished as a
result Of the hard times.
Our next current publication has
to do with q field in the Sweet
grass Hills. Il win be sent upon
request.