Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-02-19

in lis finding that much evidence was
produced showing that State proration
Is working satisfactorily to both inde-
pendent and major companies In Ie4as,
Oklahoma and New Mexico. The majority
Of the Board finds that this mas no
bearing on Montana because conoarons
in this state are not comparable 20 con
ditiOns in those States. The reason why
conditions are not comparable is because
all such states are producing under
some form Of PROBATION which removes
the inequities that exist In Montana
However, the basic reason for the estao-
lishment of PROBATION in those states ls
the same reason why PROBATION should
be established In Montana; namely, over
production.
AS a member OF the Board / have en-
mitted to our body from an Impartial
standpoint. / went into this nearing
with an open mind as regards the Ques-
ton OF prOratiOn- 1t was my view that
the Board was created for the purpose
Of preventing waste and conserving our
natural resources. If it does not have
that function. there Is no reason for Its
existance With this in view 1t was
necessary for the Board fiHst to deter
mine whether or not there was waste
II so. a duty devOlved upon the Board
to correct the condition causing 1t, If
possible.
I am convinced, after hearing all the
evidence. that there is waste in the
northern Montana fields. principally
brought about by Over-production, but
also in part. by the negotiable distri-
button OF the market The evidence
shows that in Kelvin Sunburst field there
has been a loss OF reservoir gas energy
which has probably allowed some of the
oil 10 become inert and there has also
been considerable water intrusion which
has been shown resulted in by-passing
and isolation of considerable oil which
Will never be recovered as a consequence.
Present shut down conditions are accel-
This Vncfa-4thn longer II
tinues. the greater the waste will be.
Storage is also a form Of waste. as
shown by the evidence Of Glenn Staley,
Umpire from New Mexico, and. there
problem. 1t IS my opinion that the in
equitable oil producing and marketing
practices. now prevailing in the Kelvin
Sunhurst and Cut Bank fields, constitutes
waste, as shown by the evidence. which
II not soon corrected by action of this
Board. or otherwise, will inevitably re-
suit in less to the State Of Montana
in production taxes, and loss of royalties
from State-owned lands which would
directly reduce revenues of the public
school funds. Waste having been estab-
ished. the Board IS confronted with the
necessity Of acting to prevent 6orser
vation Act provides
l. Production of crude petroleum In
the State of Montana in such manner
and under such conditions and IN SUCH
AMOUNTS as to constitute or result In
waste is hereby declared to be opposed
to the public interest and is hereby
PROHIBITED" (Sec. 1854. / rem 1887
am of the opinion that this section
gives the Board ample power and author
ity to order the prOration Of production
In my opinion this Board should make an
order of proratiOn, and fix an equitable
and flexible plan Of production for the
Kelvin SunburSt and Cut Bank fields
which will protect all producers. big and
little In a share in the market prevent
waste, and conserve our natural resources
Dated this 14th Day of February, 1888
O. NJ. WEBB
Member,
OIL CONSERVATION BOARD
OF THE STATE OF MONTANA