Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1942-07-18

rect but there is q diminishing use Of pc
troleum products and the necessity for bring
ing In additional wells is less.
MIR. JOHNSON-u there is actually a
diminishing use for oil as you suggest, then
why is it that the government is calling on
the oil industry to bring in thousands Of
wildcat oil wells during this year2 That is
what the operators have been called upon
to do Despite the fact that the price Is
lower than 1887 prices yet the cost Of bring
ing them in is much more.
MIR. HENDERSON-It may be they want
some special products.
MIR. JOHNSON-For the reason they
know that oil is now and win continue to
play a very important part in this war.
Now, Mr.. Henderson, do you have pending
in your office, and have you had for several
months, applications for authorizations Of
a price increase for crude petroleum
throughout the United States?
MR.. HENDERSON-We have had requests
for increases in the price Of petroleum and
petroleum products We have made three
increases in the price of the finished pc
troleum products in recent weeks.
MIR. JOHNSON-Yes, but that is not
what am talking about You have helped
GQe Dig IElOW WHO - Selling t4lc 444lASIlCQ
product; there is no question about that;
but those small producers out in Oklahoma
and Texas those small producers and OPP
orators with their wells of 5. 10 and IS bar
rels-and there are thousands of such wells
in Oklahoma and eastern Texas-they have
not received any increase at all, have theyP
Mr. HENDERSON-No since we stabil-
lied the price some months ago.
l..
creased it, and, if so, when?
MR. HENDERSON, do not believe we
have increased the price of crude.
MIR. JOHNSON-No, I am sure you have
not.
MIR. HENDERSON-The question was up
along toward the end of last year; and we
asked the Federal Trade commission to
make a study of 1t, in addition to our own
studies, and found that the returns Of the
oil companies, including those for the crude
line, were substantial, and it did not seem
that a price increase was warranted.
MR. JOHNSON-Now, MIR. Henderson. I
agree that the returns of the major oil
companies have been substantial there is
no question about that. What am talking
about it the little independent oil producers
individuals and small companies-that are
actually in distress. They are closing down
their wells have closed down many of them
in the last six months in Oklahoma. What
about those2 Does your investigation show
they have had substantial returns on the
Investments
MIR. HENDERSON, cannot give you just
offhand the results Of the inquiry but I
know there are many independents who
nave had adequate profits, and it has not
seemed that the price of crude warranted
In increase either from reasons Of cost, lack
If profit, or necessity for expansion.
MR. JOHNSON-Yet, your same investi-
gators found the major oil companies were
untitled to three increases on their refined
Ill products Now, Mr.. Henderson, do you
,laim to be an expert on oil, or do you
depend on gentlemen who are experts?
MIR. HENDERSON-N I have a reason
lble working familiarity with oil economies
MIR. JOFNSON-But the fact is you have
lot investigated or even considered the ap-
,lication of these small independent oper-
ltors. What you are talking about is pos
IDLY few large independent operators and
he major oil companies. They have made
money; we all agree to that But you have
lot investigated these little small-producing
armers who have wells Of from 5 to 10
'arrels and who are struggling along and
many Of them losing money and folding up
nd closing down their wells, or selling out
It give-away prices to the major oil COM
'anies.
Now, the fact is, these applications Of the
producers have been before you
or several months. Have you personally
tudied any of these applications
MR. HENDERSON-No I have not per-
onally studied them.
MIR. JOHNSON--You admit that you have
ot personally studied them at all?
MR. HENDERSON-No
MR. JOHNSON-Do you propose to study
hem and give consideration to them?
MR. HENDERSON, certainly shall.
MR. JOHNSON-Well, thanks, now we
ossibly may be getting somewhere. That is
he most encouraging statement I have
card from you Mr. Henderson.
Now you stated a while ago that while you
ad not made any increase in the crude oil
rice, you had given three increases in the
efined products. That is the very thing we
re complaining about The public has to
ay more for refined products, yet the pro-
ucers are not getting the benefit of those
lcreases
MIR. HENDERSON-Tho increases were
lade by reason of representations coming
trough the Oil Co-ordinator's office that