Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-01-08

poned from time to time for several
years by meeting which seemed to
promise better conditions, by opti-
mistic viewpoints and plans of in
dividuals opposed to proration, many
of whom have never been in serious
difficulties from lack of markets
J themselves. These better condi-
tions and optimistic plans have fall
led to materialize for the small pro-
lducer
The largest major company OPP
Grating In Kevin-Sunburst and Cut
Bank seems to feel that proration
is timely and sensible. and that 1t
will be Of aid in lessening distress
sed conditions while larger markets
are being developed. This attitude
we feel to be both friendly and
fortunate. Major companies were
not the first to cut the posted prices,
nor have they been picking up bar
gain leases. We feel that if any
such plan were their objective they
would be trying to aggravate the
present condition instead of trying
to work out a solution with US.
Drilling Under PROBATION
In this connection we are told
that the majors will use proration
to prevent further drilling by in
dependents while they, with their
large acreage and numerous ciOli-
cations will be able to continue
development. We learn by looking
at the record that this has not oc-
cured in the regulated states, and
as an illustration we again refer
10 East Texas, the worst trouble
spot in the entire oil industry.
Here we find that of a total of
24.118 wells, 1882 have been drill
led by Independents as against
1856 by the majors, or a per-
centage Of AZ for the independents
to SO for the majors, in spite of the
fact that 6O.15% of the total acre
age is owned by these same majors.
tions are being conducted on a ratio
only 1857 for the majors.
B. Setting the law which is on
the statute books into operation by
.prorating, is getting the oil bust
ness into politics no further than 1t /,
IS now. We have the law, we have
the Board we make the monthly
and quarterly reports, and we pay
the tax, but we receive no help in
ironing out our difficulties. If
present conditions continue, there
is danger that politicians may get
the State in the oil business, either
state owned refineries or
gas stations. The price could be
kicked so low by a state owned
refinery subsidized with taxpayers
money, that every interest in the
oil industry would lose. On the
federal side we know that Mr.. Ickes
would like nothing better than to
take over the management of our
business with its attendant troubles,
and this may yet obtain if the
entire industry does not show a
large capacity for self control and
self policing. This is what we pro-
pose doing with self imposed, pro
Queer administered, fair, and
equitable proration. We see no
reason why it would be administer
ed unfairly, but if discrimination
should develop, there would then be
a legal redress through the courts.
Market Expansion
c. PROBATION will have no re-
effect on expansion OF
markets. With benefits going to
all producers ratably, greater and
more united efforts will be made
to extend our markets with the sup ,
mort and cooperation of all pro-
iucers. It may be possible that
Droration would tend to discourage
The more desperate refining ven
lures which some promoters may :
hope to finance at the producers
expense and risk because of their
present distressed condition. T,
D. AS to the right of the State,
The industry, and the communities ;
which benefit thereby to require /.
of the oil conservation
aw so as to bring about orderly ;
we believe that right to :
De superior to any individuals right
o unrestrainedly develop mineral
resources so as to create economic
ind physical waste such as we now :
lave in our oil fields. The law =:
vas passed to prevent the occurrence
If such waste, and is in accord