Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1937-11-06

~ cents q DdrFel. Win no IakeTSs the
solution was found in proration. Except
for proration, every small producer who
had no refinery outlets of his own, would
have starved and lost his properties. AS
it is, the small producer would be the
first to protest where there is any move
to raise proration and return to the dog
eat-dog situation such as Montana pro-
ducers have today
RAILROADS CAN
HELP IN TIMES
OF GREAT NEED
In Salt Greek, Wyoming, a similar
situation arose. Here was Salt Greek
with great gushers and no market for
refined products within hundreds of
miles, The few barrels that could be
sold profited none, because there were
so many producers-not to be termed
''chislers," either-who were so anxious
to sell that they were willing to give any
amount of oil to get a few dollars.
Level heads got together and formed
the Salt Creek Producers association.
Two organizations sprang up, in fact.
They saved the day for soon they were
able to get a railroad rate that made it
possible to ship a trainload Of gasoline
each day to the Atlantic seaboard for
export. Despite the long freight haul
they were able to so market their crude
at a profit.
And while we are considering the pow
er of organization, it is interesting to
look back 10 more recent and more
localized history, to see what happened
in Cat Creek Thousand barrel wells
were coming in before there was any
semblance of a refinery In Montana.
What happened? This oil was shipped
in tank cars to Whiting, Indiana, and
the producers were paid unbelieva;bly
high prices. When Montana refineries
were established to handle this crude
they were compelled to pay ONE DOLLAR
PER BARREL BONUS ABOVE THE
POSTED FIELD PRICE.
When we look back at Salt Creek,
shipping to the Atlantic seaboard, and
Cat Creek, shipping to Indiana, we are
led to wonder what a little organization
could accomplish in Northern Montana.
This leads us to confidence that better
days are at hand. OF first Importance
is the campaign developed in Shelby
to create a Montana market for Montana
refined products. 1t is the first united
effort that has been exhibited ny the
North Montana oil industry, looking to-
ward solution of market problems, which
have heretofore been left for someone
else" to solve. Now that someone else''
is off the job, the producers are for the
first time looking toward united effort
to bring permanent solution to the un-
certainties that have marked the crude
situation for the last fourteen years.
The narrative regarding the early sta
bilization of the California oil industry
is Of particular interest to operators but
to it is also interesting to royalty inves-
tors, many of whom are inclined to doubt
the great royalty bargains which have
been available during the last few
months. They feel that they are ''too
good to be true" and therefore conclude
that there must be something wrong with
tAem. Those same people would have
been '.too wise" to have fallen for the
Southern Pacific's scheme to dispose of
its worthless" Kern River lands at
from $3.50 to $40 per acre.
The man who bought $50 acres of
Kern river land at $40 per acre probably
leased his land to the Associated or
some other operator who agreed to do
all the drilling and to give the landowner
121 barrels out of every 100 produced,
free of cost of production. In those
early days the situation was doubtless
pretty dfscouraging. The average smart
fellow" wouldn't have bought royalties.
The average acre in Kern river field
has to date yielded $35,355 worth of oil
The landowners share on the average
acre is $4,419 Accordingly. the owner
If $50 acres has realized $265,14O for
himself and those to whom he may have
sold part of his royalty. Those who
bought royalty on the average 16O-acre
-ract have received $353.55 from each
one per cent, averaged over more than
$500 acres Of producing ground.
There are some great opportunities
growing out of this present situation in
Montana. Examples win be furnished
% those who join with us In our buying.