Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-01-22
Rumors Becloud Market Situation
HEARING on
PROBATION IS
DRAGGING On

4 @ - - = 49, N#@ - n = - W y =
Big guns doomed in the proration
controversy of north Montana pro-
ducers as the hearing RECOMMENDED
on Thursday of this week in Hotel
Rainbow at Great Falls.
Whereas Il was expected that the
hearing would end last Saturday.
the petitioners announced that they
had called experts to describe to
the state OIL Conservation Board
prOration methods employed in other
states.
Accordingly, the board adjourned
until Thursday, allowing the mem
bers a few brief days to catch up
on their business affairs which have
had to wait since the fourth day of
the month while operators wrestled
with the compiling OF evidence suit
able for presentation to a court,
in anticipation of an appeal to the
courts from any order that may be
issued by the board.
The ''rassle" of the operators ter
minated with the resumption of the
hearing Thursday as H. c. Bret
schneider, former president of the
Midnorthern Oil company, took the
stand and testified regarding the
principles and aims OF proration
Bretschneider is Colorado represen-
tative of the Interstate compact,
created in February, 1885, to regu-
late ALLEGATION OF production among
oil states. He declared that prora-
ton Is now generally accepted as a
permanent institution of the oil in
dustry, based on sound engineering
principles which will add to the
longevity OF production OF oil fields
and result in maximum ultimate
recovery of oil.
He defined proration as a 'flevel-
ing process to stabilize the price
Of oil" No state which employs
proration will ever give 1t up, he
declared, since the principle of
keeping the supply regulated to the
amount required by the market
results in a stabilized market for
the entire industry
The witness expressed the opinion
that the estimates Of Fred G. Plat.
engineer, on the cost of a 30-day
test for purposes of proration was
too high. The figure given was
aibout 100000 for the two fields. I
Bretsohneider said this figure was
entirely too high but made no .
estimates Of the cost He said +
that in his opinion it would be
to test those wells
which make less than five bar
rels and this would leave but
243 wells to be given a 30-day
test.
The proponents on Friday morn
ing provided as a surprise wit
ness r. Staley proration umpire
Of the state of New Mexico since
July 10. 1890 Mr.. StaIey was
tate geologist Of New Mexico from
1925 to 1880. New Mexico has had |
tate proration since 1895, to care
or a production far in excess of the I
OF New Mexico, in
which there are 2,40O wells subject {
o proration. Hobbs field, alone,
las 252 wells with a potential of I
100000 barrels per day, he testi- t
led. The market is but 5, 600 bar
els per day and the wells are pro-
ated accordingly. The basis of pro- 7
alton is a two-hour flow and the a
reduction of the second hour is
multiplied by "a to determine the
otentiai Of each we'll The entire
larket is allocated among IL fields
'ith provision for a top well allow 9
BILE There are three fields with a 9
'ta1 production of around 800 bar II
els per day which are not subject
proratfon, he said.
Regarding Kevin-Sunburst and cut
ank fields he said he was not suf-
GENTLY familiar with the producing
orizons to offer an opinion on
ethods of proration. He was un- W
illing to express an opinion on the e
CURES of F. c. Plat as to the cost II
determining potentials but testi- ri
ed that in New Mexico the expense "
borne by the operators h.
Proration has not deferred refin- II
y construction in New Mexico, he r
i'd, three new refinerfes having
zen built since proration was adopt
/ He said ne knew Of no crude
] contracts that had ben disrup-
d as a result Of proration.
Cross examination ended at 8
clock Friday afternoon, after COW
ing In detail the proration methods
New Mexico but with little or no
ference TO Montana. Staley stat
that he and his staff are paid
the operators under a voluntary
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