Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1945-05-05


in that 1t has virtually paralyzed
It follows:
WHEREAS, well drilling activ-
tiles In the oil and gas producing
fields of Montana, as well as in
areas under lease for prospecting
for new sources of oil and gas pro
duction, have declined during the
first four months of 1915 at an
alarming rate In comparison with
the record of like activities estab-
hshed in comparable periods of the
year 1894, and;
WHEREAS, we have been in
formed by many of the Oil and gas
field operators and drilling con-
tractors, and we know from per
sonal knowledge as to our individ-
ual interests In well drilling oper-
atoms that uncertainty and alarm
created by the decision of the Unit
ed States court of appeals for the
fifth circuit, dated March 6, 1945, in
the case of F.H.E. Oil Company
versus Commissioner of Internal
Revenue, generally referred to as
the Intangible Development Cost
Decision" has been since March 5,
1945, and it now is, one of the prin-
cipal reasons for the abandonment
or indefinite deferment of new well
drilling operations that were
planned for commencement in Mon
tana fields on and after March Is.
1945, and,
WHEREAS. despite the announce
ment of the Commissioner of In
ternal Revenue as recently pub
liShed In newspapers throughout
the nation that no change in the
income tax regulations will be made
for the time being" the oil and
gas field operators feel that their
right to deduct intangible well drill
ing costs from current income for
income tax purposes, In accordance
with regulations of the Internal
Revenue Bureau In force for about
Is years last past, is subject to re-
vocation by administrative ruling at
any time. and;
WHEREAS, the continuance of
new well drilling In Montana fields
throughout the year 1915 at the rate
established In 1914 is the minimum
of such activity individually re-
quired to maintain the volume of
crude oil production recommended
by the Petroleum Administrator for
War as necessary to supply mini
mum demand for crude oil from
Montana fields by industries classed
as essential for purposes connected
with the war effort, and;
WHEREAS, large majority of
the oil field operators have carried
on their well drilling and oil pro-
ducing activities throughout the
present war emergency under con-
ditions most unfavorable and dis
couraging to them. with little or no
financial profit realized by those
most diligent in well drilling be-
cause OF burdens heaped upon them
by way of substantial increases in
costs of labor, materials, and neces-
stiles of life. delay I'm obtaining re
pair and replacement parts, etc, and
the oil producers being compelled
to adhere to crude oil price ceilings
arbitrarily established by freezing
subnoruaai prices prevailing In DC
tober, 1871, without regard to pro-
ducing costs prevailing then or
thereafter, and;
WHEREAS, all operators and
producers other than these indie
pendently wealthy, and they are
few In number, must pay all costs
of new well drilling, including
equipment necessarily and properly
chargeabIe TO capital account, out
Of current income from sale of their
crude oll as produced and unless
they can be assured of their UNI
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