Evening star., 1933-07-05
HIGHER OIL PRICES
SEEN THIS MONTH
Trade Circles Believe Pro-
duCtion Cuts Will Bring
More Revenue.
By the Associated Press.

DALLAS, Tex, July 5.-Encouraged
/ by reduced production in the East Texas
field and strengthening of the Texas
Railroad Commissions position in
legal way as enforcer of proration
regulations, oil men looked forward
today to higher price levels in July.
Regardless of what agreements may
be effected among oil producers and
| flners under the Federal industrial re-
covery act, the month of June holds a
momentouS place on the calendar Of
| the Texas oil industry. After nearly
| three years Of wrestling with the un-
ruly East Texas field, in and out of
court in injunction suits and by eXecu-
! tive use of armed militiamen, the rail-
road commission, enfo-cer of the States
| conservation statutes, at last seemed
to have found legal sanction in its work.
Decision Favors Commission.
| The latest "break" for the commits
sion was q three-judge Federal court
| decision handed down July l at ANA
| rillo, in which Danciger Oil Co. was de-
| MED an injunction upsetting the COM
missions proration control Of the Pan
handle field.
Commenting on the plea that pro-
ration rules fundamentally were un-
constitutional. the opinion held the
! Texas Legislature has power to control
! ratural resources and that the commits
! sion is its duly delegated agent.
| Previously a three judge Federal court
at Fort Worth had ruled that Rowan
/ and Nichols and nearly a score of other
East Texas producers were not entitled
! to an injunction against the commits
sion's orders in that field.
| After hearing June u at Austin,
when testimony showed pressure in the
field was dropping, the commission
! issued new orders in East Texas re-
ducing the daily allowable in that field
from approximately $4,000 barrels to
| $4,000 barrels, by decreeing that wells
should produce daily only 10 per cent
Of their potential production for one
hour, instead Of the IS per cent allowed
! previously. Stripper wells also were
allowed to produce only 25 barrels daily.
| compared to 30 barrels daily allowed
! before the Legislature amended law
governing them.
Subsequently on June 90. the allow
able of the Panhandle field was in
creased from $4,000 to $4,000 barrels
daily, effective July l, and the Howard
G.asscock field in Southwest Texas was
given an increase from 10000 to 10000
barrels daily.
This left the total allowable of Texas
! fields, outside of East Texas. approxi-
mately 441420 barrels daily, which
added to the $4,000 East Texas allow
able, made an allowable for the entire
State of around 991, 600 barrels daily,
as July began. Under the old orders,
the allowable had been approximately
1,256,750 barrels daily.
However, the bogey Of 100000 bar
rels of back allowable due East Texas
wells, to compensate for q shutdown
| last April. kept production in East
Texas near the 7O0,O00-barrel mark
daily until back allowable runs were
stopped last Saturday.
Association Meeting.
Saturday. the FIRST day Of the new
order, showed the effects q the plan,
for runs that day, according to official
commission figures, totaled only 540,-
600 barrels in East Texas. On Friday,
the last day back allowable runs were
permitted, the fields production totaled
| $780, 900 barrels, including approximately
100000 barrels Of back allowable. The
commission had not decided what policy
to follow when the 3l-day suspension
Of back allowable runs had expired.
The Texas Independent Ref1ners' As
sociation, organized several weeks ago,
will meet here tomorrow to consider
adoption Of code Of practices which
would provide for reduction from the
allowable Of those withdrawing oil the
amounts Of Withdrawals from stocks
and would deduct from the allowable OF
those importing all amounts OF imports
excepting those made under bond for
| processing and re-eXpOrting,