Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-03-12

/" HERE is none who is familiar with
the situation in Northern Montana
n who is not breathing more easily
with regard to the market Tor crude oil.
While there is no occasion for "hog-
wild" production or acidization or new
drilling it is apparent that the natural
market which belongs to north Monana
oil fields, because of their geographical
location, is to be developed with the
result that Montana will have the most
stable market in its history
Had the industry accepted the theory
that North Montana oil fields should
confine their output to a triangle with
Butte on the south, Kalispell on the west
and Wolf Point on the East then the
outlook was none too promising. 1t
would mean lean" proration for all
production for the rest Of the life OF
these fields.
But now it has been demonstrated that
Montana gasoline can be sold in ldaho
and Washington on the west and in the
Dakotas on the east. Furthermore it is
quite definitely established that the gal
lonage of Idaho and washington does
not belong by sacred precepts TO the
California refiners Neither does the
Dakota gallonage belong to the Mid
continent by any royal dictum.
Let refineries grow up in this territory,
there is no question about the future.
Iulb Is q WeIlAlOty bnab ID gums "
GROWING business. 1t is new, unde-
veloped country where the future holds
great promise-as contrasted with older
districts where soil has been depleted
and business is likely to diminish. The
tendency of our refiners will be to IN
CREASE business in the future, so we
have no hesitency in saying again that
FORTUNATE is THE MoNTANAN WHO
HAS OIL IN UNDERGROUND STORAGE.
The possibility of the national oil stu
alton seriously injuring the local situa-
ton is growing more remote, II we can
but believe foremost authorities me
publication of reference to the article
on Hidden Equities in Oil Reserves IN
The Magazine of Wall Street brought
many INQUIRIES for copies of the article
but we have no copies on hand. rms
article develops some interesting side
lights and we urge members to write
direct to The Magazine of Wall street
for copies of the issue of February 20.
One interesting feature is tabulatlon
of leading oil companies showing NOT
only the reserves held by each put
showing the approximate reserves be-
longing to the owner of a share OF
stock in each of the companies.
AS an example, The Texas company
is shown to have reserves OF 1,OOV,-
OOO, 900 barrels, adequate to take care
of the company's present sales tor ~
years, meaning 88 barrels OF reserves
per share of common stock. Figuring
that each barrel is worth SO cents after
cost of production, this indicates
worth of $50 per share against price
of $50 per share of common STOCK.
Standard of New Jersey is shown TO
have 3,6OO,OO0,000 barrels of reserves,
adequate for 20 years and giving ~
barrels per share of common, worth
$63.5O as against a $50 price Tor
common stock.
This article leans to the opinion that
the price of oil is going to increase as
it becomes more scarce, saying:
In the light of present-day scientific
knowledge, our gasoline supplies Will
ultimately come from processing coal
in which a great many millions are al
ready invested abroad. This complex
technical operation will not be CONNER
cially practicable with oil selling at less
than "a a barrel; it is mot Likely to be an
attractive field for new capital until the
growing scarcity forces the price OF OIL
to Sc, and possibly more.
The implications of $4-to-$6-per-bar-
rel petroleum of Humble Oil common,
as shown in the accompanying table
with the common stock equity computed
at a value of soc a barrel, are readily
evident Some fnroads will necessarily
he made on Humble's reserves before the
peak in national production is crossed,
advancing the cost of oil to 81 or better
and initiating coal hydrogeneraton TO
make up the deficiency in supplies. But
IL Humbles reserves are sufficient for 81
years at the current rate or production,
as indicated in the table, it is apparent
that the great bulk of these will go on
the market in the concluding high-price
phase of the oil industry.
1t is a well-established fact that the