Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-02-19
FOR PROBATION
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That there is no evidence, either oral
or documentary, OF any unlawful dis
elimination in the purchase Of crude
petroleum in either the Kelvin -Sunburst
or the Cut Bank field. The evidence
establishes the fact that purchasers have
been buying crude oil from some pro-
ducers and not from others operating
in the same districts also, that the
barrels of crude oil purchased from the
various leases have not been, in some
instances. at least, adjusted to respec-
tive well producing pOtentials of com
peting operators. Such practices Of oil
buyers have been long established in
Montana as we'll as other oil producing
states, and whether or not they are
susceptible to change by or through
highly controversial question that this
Board finds 1t is not necessary at this
time to decide. II is certain that this
Board has no lawful authority to direct
or regulate the purchase or sale OF
crude petroleum.
The evidence shows estimated potential
capacity of all oil wells in Kelvin Sun
burst and Cut Bank fields in excess OF
market demand for crude oil existing in
October. 1881. This condition was brought
about by withdrawal of many Canadian
crude buyers. effective October 1, 1887,
and the seasonal decline in consumption
Of gasoline in the marketing territory
of said fields. Evidence was introduced
showing that certain producers in the
Cut Bank field have recently made con
tracts for the sale Of oil to two refin-
cries now in process of construction.
There was also evidence showing that the
construction Of other new refineries, or
additions to existing refineries, is under
serious consideration; that reductions In
freight rates that would greatly facili-.l
tate expansion of markets for Montana
crude are virtually assured; that a cam
paign has been Initiated, and Is being
via mr. nv rarf Monfnuu
producers and refiners whereby Montana /
residents are being urged to use gasO-
line made in Montana from Montana
crude to the exclusion Of gasoline shipped !
into the State Such evidence was offered +
by the producers opposed TO any oil pro- /
ration policy and was so impressive that I
this Board is convinced that within I
very short time there will be markets for (
all crude oil now available for sale in
said fields.
That there is not. and there has not
been, any physical or economic waste of
crude petroleum in the Kelvin Sunburst
and Cut Bank fields. or either. that
could have been, that may now be.
corrected o. reduced by proration OF
crude petroleum production.
That some witnesses have asserted i'm
proper and wasteful oil producing prac
tices in the Keyin-Sunburst field due to
Of gas-oi producing ratios
established in other United States fields ,
where similar conditions prevail also
failure of some operators to properly
pquiD their wells for conservation Of gas
produced with oil. The testimony ad- )
dnced being insufficient to afford the
basis for action by the Board at this
lime. the Board will investigate such
charges, and take such action as the
facts disclosed by our investigation war
-ant
The evidence established the fact that
'eriOus wafer problems exist and have
or MANY years past existed, in certain /
lreas Of the Kelvin Sunburst field. {
The Board finds that no physical (
suffered by reason of the cessation of /
producing 0neratiOns involving wells To- n
ated In such areas for either long or &
hort neriOds Of time. On the contrary d
he Board is Of the opinion that the O
oneratiOn Of wells producing 5
water in quantity. forty to fifty barrels T
4 water to barrel Of oil. such as Il
eStifi"d to nv witnesses for the Pro- a
'Onents of DrOratiOn. may constitute a {
eriOus menace 10 the maintenance OF s
valuable oil producing | h
wells IN the same neiGhbOrhoOd on ac- v
omit NJ the apparentlv uncomfortable q
waste nv decreasing local structural hy- a
rOstatie pressure that some experts testi- u
iad 70 he essential to prOper drainage
Z oil producing sands or zones 1t may
hnrefore he proper and advisable to plug o
"rtain wells in the interest Of cOnser- c
alton OF oil and gas deposits in the II
levin -SnnbuESt field, hut inasmuch as d
his BOARD has no authority to order the
Juggling Of any WELL II will bring the