Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1940-07-27

gMN HESE are days of pleasant optimism
for owners of Montana royalties
- especially those in Kevin-Sunburst
field, royalty checks arrive for the
month of June. Royalties are usually
paid on the goth of the following month,
and the June checks are now reaching
royalty owners.
Many checks are double the average
for previous months of the year. Nearly
all show increases. This results from
the fact that the field was operated at
capacity for six week, starting on May
Is and ending July 1. During that time
the Kelvin operators cleaned out their
wells, put many idle wells on the powers
and acidized many. With the exception
of the large wells in the Ellingson dis
trict north of Kelvin and big we'll in
the high gravity pool, there was little
new production, yet Kelvin runs jumped
to around 500 barrels per day.
To those of us who are still think
ing in terms of the days when this
field paid royalty owners from a
half million to three-quarters of
million dollars per year, this brought
realization that Kelvin field and our
investment therein has by no means
s'gOne to pot" For few brief days
we saw what this old ''Giant of the
North" might do, IL given an Oppor-
tunity. ThrOttIed down, it looked
as though this field were destined
stO pay royalty owners only a quarter
of a million dollars or less per year
from now on. But now we know
that the Chant can again arise
if given the opportunity.
Royalty owners of Kelvin field have
been living on Tight rations' for several
years, as the production of this field
has been curtailed in favor of Cut Bank
crude but it now appears that with the
Cut Bank field on the decline, the keyn
field is due to come back into Importance
with the result that present leases will
produce more oil, without additional
drilling, and additional drilling and acidi-
Eating will build up daily production to
meet all requirements.
We issued a bulletin to members this
week regarding the sudden change IN
the Canadian situation. This was, of
course of particular interest to owners
of royalty in Cut Bank field where the
sudden demand greatly exceeds the avail
able amount of crude. That has an i'm
mediate effect on Kelvin, however, in the
case of Producers Refining company OPP
orators who are now putting their leases
at capacity production to supply re-
quirements of the Socony-Vacuum re-
finery operations at Cut Bank, while
the Producers Refining Cut Bank crude
is being diverted to Canada.
The wide open" rule of June did
not reach the royalty owners ON
leases operated for the Producers
Refining Co.-merely those serving
international Refining OO.--sO an
other group is TO have good news
In their royalty statements for July
and for succeeding months while
these leases are produced at capacity.
To many of US, the curtailment in
both Cut Bank and in Kelvin had brought
encouragement our royalty earnings
were considerably less than in years
past. When International again cur
tailed its purchases, we were again set
back, because we had hoped for some
new drilling, on our properties and the
possible development Of production on
farms which have had no drilling what
ever. We know that in the open spaces
of Kelvin field there are millions of
barrels of oil to be had, whenever the
market demands. We have been steadi-
ly buying royalties covering these open
spaces" and now we hope for the coming
of the time when this oil will be needed.
The sudden change in the Canadian
market shows how quickly this oil situa-