Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1939-10-07

operation, with improved production,
low-cost methods The investment per
barrel of reserves will be far lower in
the future than 1t ever has been in
the past, through greater efficiency in
modern production methods.
Royalty owners have to sit on the
sidelines and watch for they have no
power over drilling. They can, however,
see to it that their families and their
friends see the products of the companies
which buy the royalty oil. They, too,
must become conscious of the fact that
the oil business has come to the place
where united effort is the most i'm
portant factor of success.
As reward, royalty owners may
expect to see as a direct result of in
creased sales of products of their oil,
increased drilling activity on their pro-
pennies and increased runs of oil The
man who is at all foresighted will be
able to glance at a map of Cut Bank or
of Kevin-Sunburst or even of Pondera
and point out farm and say: Here is
some oil land now idle that is going to
be developed in the not distant future"
He will purchase a share of that oil in
full confidence that an operator will
drill the ground and deliver the royalty
oil to the rightful owners, free of cost
of production.
AS we see it, the only way for the
average investor to capitalize this very
apparent opportunity is through the
purchase of landowners royalties. There
are few oil companies now financing.
Public financing of oil companies DIS as
rare as the herds of buffalo that once
roamed the Montana plains. There is
no such thing as investment in a
refinery today Pipelines, one of the
most lucrative forms of investment, will
not likely ever be financed by private
caDital again. The element of sur
prise. 30 important for ''little fellow
to break into big business is forever
banished by the regulations of sale of
securities
Royalty investments that afford
large profit will remain available only
until the upswing in drilling starts. The
amount of highly valuable royalty avail
able today is relatively small. We be-
lieve that a man with $4,000 could pick
up all the bargain royalties now avail
able in North Montana. He would
doubtless make a fortune. With the
removal of these few bargains that can
be had, the price of these and other
royalties would increase from so to 100
per cent we believe.
Opportunities like the present,
when we can clearly see the future,
make us look back to the beginning
of Kevin-Sunburst when we might
have bought 4: royalty covering
the entire field, with a relatively
small Investment. To date that 1%
royalty would have paid us ap-
proxmateIy S445, 100000. Or had
we gone into Cut Bank when that
country was considered ''ram pas
ture'' and bought ~ royalty over
the whole field, it would have I'm
the eight years of commercial pro-
duction paid us some $40, 100000.
There is a total of $615, 100000 we
NIGHT have made, had we been
able to see into the future.
WE could not possibly foresee the OPP
-ortunities that existed at that time.
But the present opportunities are appar-
n to anyone who knows anything about
he Montana oil industry. We KNOW
here is OIL we KNOW there villa be a
market for dt: we KNOW in terms of
asst experience what amount it is safe
o pay for royalties. We have bought
Qualities recently at prices comparable
nth those we would have had 10 pay
IEFORE either Kelvin of Cut Bank had
n oil field. On basis of cost we feel
ertain that IL the lands are drilled and
ii is found. we are going to make a
arge Drofit-doubtless two or three
mes greater than will be possible from
similar investment one year hence.
If the adage is true that half of the
rofit Is in the buying. then it must be
me that the present is the time to buy
ndowners royalties in North Montana
IL fields.