Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1940-01-27
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Experience, The Teacher

A LII reasoning is retrospect, we
y are told; it consists in the appli-
- A cation of facts and principles
previously known. This shows the very
great Importance of knowledge, especial
ly of that kind called experience. And
experience always dearly bought, is
the greatest asset of a man who would
succeed in the industrial world. 1t takes
experience to succeed in any line of en-
deavor yet the hardships Of experience
frequently drive many people away from
success The weaklings drop out; the
stalwart drive on, capitalizing their ex-
perience
We have in mind the Butte man who
was intrigued by the oil business in the
early days of Cat Creek. He decided to
drill well so he Joined with some others
in an enterprise regarding which he knew
nothing. The best evidence of his lack
of experience is in the fact that when he
got through, his company had only 16
per cent of the oil: with royalties total
ing "a per cent 1t is impossible for an
operator to pay all the costs of drilling
and producing out of 16 per cent, giving
away "a per cent To make money, the
figures must be reversed. The operator
must have the "a per cent; 6 per cent
is the maximum royalty he should pay
To many people this experience would
have definitely ended a career in the oil
business, but not for this man. He de-
cided to capitalize his experience be-
cause he had learned how money is made
in the oil industry. His lesson had been
learned by the "reductio ad absurdum"
principle-where a good thing had been
carried to an evil by absurdity. In other
words, he had been the victim of too
much royalty and he decided to profit
thereby and take the other side on the
next venture.
He joined up with a petroleum geolo-
gist known to every member of this or
ganization, and he backed this geologist's
judgment by buying royalty on properties
which this geologist would approve. They
began making money and they went one
step farther. This geologist had been
locating oil structures for others on
per diem retainer. He and his Butte
friend decided to lease up these struc-
lures for themselves. They EARNED
out" the leases, retaining overriding
royalties. One or two of these struc-
lures were oil fields. The geologist
and the friend have made tremendous
fortunes.
Hundreds of people lost money in Cat
Creek and it never occurred 10 many of
them that they might capitalize their
experience. In most cases they carried
to extremity the adage 1.-THE burned
child shuns the fire." In other words.
they resolved never again to warm their
hands or to enjoy the comfort of
warm fireside.
Those who financed the discovery well
in Kevin-Sunbunst field should have
been the ones to profit most by the
development of this great field. They
had a more intimate knowledge of the
field than any others, although they
may have had their expectations erased
by the failure of their syndicate to make
money. The HUMAN ELEMENT and
not the oil field was responsible for that
failure and everyone knew it. But how
many of them profited by their exper-
fence? We do not know but we believe
that most of them were driven away
If we make just one investment and go