Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1936-03-07

WN HE oil industry Is a purely American
industry. Drilling tools. drilling
terms and drilling practices and
leasehOld systems date back TO the Drake
well in Pennsylvania Accordingly the
industry has no scientific background.
As an example, a barrel OF oil is AZ
gallons. OF all the clumsy figures in
arithmetic, nothing could be worse than
40 gallons. But that happened to be
the available size of wine casks which
were used in the early days and none has
had the gumptiOn to change it.
Until quite recent years, there was no
Improvement I'm drilling equipment. The
Told ORDER was sacred. We recall as an
example, how the oAd-timers fought
against internal combustion motors. The
OId-timers had to have steam for power.
Today the youngsters who are drilling
fin Montana prefer internal combustion
motors for both economy and efficiency.
The Pennsylvania OIL fields furnished
the precedent for leases and royalties.
The landowners retained one-eighth and
the operator received seven-e1ghths.
When someone evolved the idea of buy
ing a part OF the landowners share, he
bought half OF ft for lump sum. SO ne
had half of an eighth. His half was de
vided into fOurths. These fOurths were
divided into eighths, and so on until the
midcOntinent has division orders that
would stop a Chinese mathematician. We
have seen offerings of one 1,252ths of
the landowners eighth. Figure that out!
The result of this clumsy system was
that a person of average college educa-
tiOn was unable to figure out what share
of the oil he would receive from his
royalty assignment, especially when the
basis of buying became the royalty acre.
In other words, when a royalty investor
bought royalty in the AEidcOntinent, he
bought on the basis of the equivalent OF
ALL the landowners share on one acre.
When he bought ONE royalty acre, ne
did not receive a deed to one eighth OF
the oil from one acre, but divided 1t into
the TOTAL acreage owned. In view OF
the fact that many tracts were described
by metes and bounds-not in regular
4O-acre tracts as here in Montana, tt
was a nightmare to try to find out how
much oil a person was to receive from
an eighth of an eighth of the landowners
eighth of one royalty acre-OP some
equal problem in fractions.
As the oil industry came west, there
were departures from the Pennsyl-
vanian influence, as to geology,
drilling practices and Technology both
as to drilling and as TO leases and royal
ties. The more modern DECIMAL SYS-
TEN came into use i'm the west. Why 1t
isn't adopted universally is not apparent,
any more than il is apparent why the
industry shouldn't use a barrel containing
oil i'm an amount described in multiples
of ten.
~ ERE in the west we buy royalty
with the idea of buying oil in
A underground storage. We want
OIL not mathematics. We buy ONE
PER CENT royalty and we know that we
are getting one barrel out of every 100
under the ground. We know that one
barrel out of every 100 barrels produced
will be delivered to free OF cost OF
production. We know that If a given
acre of land contains 10000 barrels OF
oil, the owner OF 10 will receive 100
barrels free OF cost of production, when
il is brought to the surface of the ground.
How much better is that than saying that
ne will receive twO-twenty fifths OF the
landowners eighth?
We have burned the prOverbiaI mid
night oil in trying to figure out for our
clients how much oil they are to receive
under some OF the midcOntinent assign
ments-to reduce them back TO simple
decimaIs so that a man can know how
much oil he will receive out of every 100
barrels produced and thus determne
how much oil he can expect from the