Evening star., 1942-09-08
Wildcat Oil Operator
Is Central Figure in
Quest for New Wells
Liabilities Run High
With Eoeh Dry Hole
Thot He Digs
BY JOHN WARD,
Wide World.

ARTES1A, N. Mex, Sept. s.-In-
dependent oil operators-the little
guys in oil--are being called on to
deliver in a game where the blue
chips are down and the stake is
victory.
To grease its growing war machine
and those Of her Allies. the United
States needs vast new pools of
petroleum to supplement ebbing re-
serves in this country and to re-
place the production of fields lost
on worldwide battlefronts.
Such new developments must sur
mount obstacles never before en-
countered. One of the knottiest of
these problems-transportation-has
been a continuing concern OF the
Government, but multifold diff
culties also concern the operators.
One of the central figures In this
quest for new Oil Is the wildcat
operator, who CANDLES for riches or
ruin every time he starts well.
Plenty Of Liabilities.
Such a man is Nay Hightower,
one OF the many operators in South
eastern New Mexico, Texas and
Oklahoma who have developed a
large percentage OF their properties
by wildcat drilling. In simpler
terms, this means the sinking of a
well where there Is no assurance
OF accomplishing anything more
than making a pretty hole in the
ground.
Bringing in an oil we'll does not
always mean wealth for the wildcat
operator, He usually operates to
the limit of his credit and his liza
bilities multiply with each dry
hole" There are royalties to pay
the private land owner. the State
or the Government, depending on
whose land he drills.
And there are additional "over-
riding royalties" to pay If he is not
the original lease owner. Then there
are production allowables which
limit the output OF his well, if he's
lucky enough to hit oil, so that
the general market OF gasoline.
lubricants and fuel oil will be kept
stable.
Those are just some aspects of
the business.
While the cost of producing
barrel of oil-the lifting costs" the
oilmsp call it-have climbed from
81 cents in June, 194l, to SO cents
in June, 1912, in this area, the ONCE
of Price Administration has frozen
prices as of October l, 194l, at S1O4
barrel.
Since enemy submarine action in
the Gulf of Mexico and along the
Atlantic Seaboard reduced the num-
ber OF tankers available, there has
also been a corresponding slash in
the amount of oil each State is al
lowed to produce daily.
Thus, the United States has been
forced to cut oil production at the
same time when more petroleum is
needed to make up for that lost
in the Netherlands, in Central
European states and in the Russian
Caucasus. a
This looks like policy of cross
purposes, cutting down production
while a need for more oil exists, but
1t isn't. The answer is that there are
only so many tank cars, SO many
tankers to transport the oil, and
that the domestic market must be
Kept within control. That's the why
OF reduced production.
On the other hand, no one knows
how long this war will last, and the
United Nations must be assured of
oil supplies to keep tanks rolling
and the planes flying. And the
industry needs to know where it's
oil is coming from after available
reserves are gone. That's the why
OF the hunt for new pools.
What Big Raid Takes.
Regarding demand, which means
carrying the war to the Axis, SEN
ator O'Mahoney puts it this way:
A large scale air raid, such as
that by the Raj over Cologne, con-
sumes about 1000, 900 900 gallons of
aviation gasoline. 1t takes about
100000 barrels or more of crude
oil to produce that much aviation
gasoline. Daily crude oil production
in the United States is about 3.70O.-
900 barrels. Government experts
estimate Uncle Sans known reserve
are 10000, 600 900 barrels.
And, underlining the Importance
OF encouraging the wildcat operator
to step up his activities, are these
figures by Government expert
that OF approximately $4,000 600 900
barrels OF new reserves discovered in
the world in the last two years, only
slightly more than one billion was
discovered in the United States.
ITS problem and mighty tough
one" said Neville Penrose of Fort
Worth. Tex, operator OF extensive
properties in Texas and New Mexico,
"but we'll whip it,"