Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1943-07-10

Adrill the land and go to a deeper
8horizon in which oil may be found.
The greatest oil fields are frequently
those found at greater depths, owing
to rock pressure. Accordingly, the
royalty investor may have not only
one but many opportunities for profit
through deeper drilling until pros
peetors have tested all the forma-
tions within the reach of the drill.
OF course, royalties are specula-
tive. To invest in royalties is to
take risk. Only by taking risk
does anyone get ahead There is risk
raising wheat crop, with attendant
hail, drOnth, insects and blight.
There is risk in everything in life
that is worth while-utopian theories
to the contrary. If Mother Nature
has deposited a large amount of oil
under certain acres of ground, the
royalty owners on that tract will
profit greatly. If Mother Nature has
been less generous, the royalty
profits viii be proportionateIy less.
Greatest profits justly go to those
who are willing to risk their invest
ments by buying far in advance of
the drill.
This week we secured 80 acres
in fee simple on a structure mapped
by the U. s. Geological Survey, now
under lease by one of the major
companies. We bought the land in
fee simple, turned the lease to the
major company and our members
viii divide the royalty among them,
each taking whatever portion Of the
royalty he can afford. by @affordD
we mean the dictation of his iudg-
ment. No sensible investor would
risk all his money ON this one "wild-
cat" The chances are perhaps eight
to one that there is no oil under this
30 acres. If there is oil under this
80 acres the return viii possibly be
as much as 100 to one. The price
of this royalty is so low that large
odds are afforded, because it is
long way from present production.
In this case we contemplate a
thorough test of the formations
down to and including the top of
the Madison limestone. This operator
may find nothing and abandon the
test at the top of the lime. Next
year or five years or 10 years hence
another operator, inspired by the
finding of oil in lower horizons,
may drill a Devonian test. At that
time our royalty on the 80 acres
will still be good. No matter who
produces the oil, the royalty owners
will receive, free of cost of produc-
ton, 1215 barrels out of every 100
barrels produced.
We have confidence that present
drilling in Montana will develop one
or more new oil fields. Which wild
cat is going to strike, none knows.
But we who have faith in the State
of Montana viii try to have a little
royalty on or near each one of these
tests. We viii look confidently to
the future because we viii own
property that win be ours per-
petually, good or bad. BY spreading
our investments we will have taken
advantage of the law of averages.
Also we viii have the political as
surance of partnership with not one
but several farmers whose rights are
likely to be kept inviolate.
Our current publications this week
had important news for owners of
royalties on a score of properties
which have been inactive for years
but which may soon develop into
some Of the most valuable in the
state. These illustrate our statement
that in royalty investments the worst
may become the best, with deeper
drilling.
General publications win be sent
: to those who request them.