Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1936-07-04

The average Independent operator,
working on his own funds or his own
plus the funds of friends can make q
lot of mOney-n he doesn't get too am
bilious. Over-ambitiOn has cost many AN
operator everything ne has. That is not
a proposition confined TO the oil business.
1t applies 20 farming and most other pro-
ductiVe Enterprises. A farmer having 100
acres of farm land is able to till this
inGensiveIy and successfully. He gets a
crop, makes some money and then he
spreads out. He leases lot of land and
invests heavily In tractors and equipment
and he starts big scale farming. He
usually ends up ION the county" The
exception to this rule who ''gets away
is so outstanding that he is pointed out
frequently, leading many, many others
10 try to duplicate his success.
So it is in the oil business. Suppose
an operator has so acres of oil land,
with 871k of the Oil-12M to the roy
atty owners. III he VIII make ND his
mind that his only problem is to get that
oil out of the ground at a profit, he viii
make money, as scores of successes will
testify. Surprising there is the modest
amount of 1000 acres OF oil under each
acre (not 10000 as ON the Emmons.)
His so acres contains 8Ox4 600 or 100000
barrels of oil, worth over the period OF
years an average of 81 per barrel Sup
pose that it costs HALF of that amount
to drill and to lift the oil He has
100000 which he can recover In 10
years. That is a met OF $4,000 per year.
1t is being done today, by operators who
are "dOwn 20 earth"
The trouble La the past has been that
when am operator gets an income Of
$4,000 per year, he decides to drill three
or four wildcats and finds himself paying
rentals ON 10000 or more acres of leases.
He gets so much invested that he can't
back out and so he loses his 10000 while
chasing the possibility OF making
million.
If an operator would DRILL OUT one
lease before starting ON another, he could
then build mp to q tremendous fortune,
but HOW MANY OPERATORS do
THAT? The leases i'm Kevin-Sunburst
field that have been DRILLED QUE
are so few and far between that we
could name them on one hand. me
EmmOns 40 is one of the few that is
entirely drilled out. 1t accordingly is
one of the few leases we can point to as
am example of what complete develop
ment means.
Sunburst with but one well ON ii.
One well ON $40 acres Is not likely
to pay profit Drilling is the only way
to make money in the oil business. The
operator, large or small, who tries TO
pump wells scattered in isolated spots
over 100000 acres is just as bad off as
the farmer who tries to run a dozen
patches OF wheat land scattered ala
over the county. It can't be efficiently
and profitabIy done.
We recently handled a royalty ON a
half section Of land operated by Ohio
Oil company. This tract has two wells
which have each produced more than
$4,000 barrels Of oil. 1t awakened us
to the fact that had the Ohio drilled
"a wells on this tract instead OF two, It
would have had lot more profit than
it has had from scattered leases over
the field which have yielded a lot less
oil per well. In fact, the Ohio let go
of large number OF its improbable
leases, retaining this one referred to,
on which we bought half the landowners
royalty, as evidence OF the soundness
Of the theory.
We used to watch the ''rule of three
Had but one well been drilled on the
Baker farm there would have been no
famous Baker No. 8. Had only one well
been drilled on the Hoyyling farm, there