The people's voice. [volume] (Helena, Mont.) 1939-1969, 1952-09-05

| more money is put into the ground than
is ever taken out of it.
An oil lease on land that has no oil
under it has no value whatever, re-
gardless of how much bonus and rent
al may be paid for it. Just because oil
is discovered does not mean that some
one has made a million dollars, and
the Devils Basin field is a good illu-
stration. Since the discovery of oil
there in 1919, the whole field has pro-
duced a total of $26,152 worth of OIL
sold the assignment of one lease
there myself for more money than
that And 400 acres of it by the way
was state land too. wonder how much
royalty the state records show was
received from that tract. The total
production of the Cat Creek oil field
from the date of discovery in 1920 to
Jan. LIST, 1851 was $30,010,029. The state
owns Sec. 1868 in that field that I
believe is leased to the Farmers Union
Oil Co. What royalty, rentals and bonus
es has been collected on that tract.
How does it compare with the total
production of the field?
1t is well known by biologists that
oil is found only in highs" or traps
where it has accumulated from soca1led
drainage areas that run from 20 to
several hundred times the area of oil
concentration. Taking the state as a |
whole, it is extremely doubtful that as |
much as 20 of the area will be found |
productive. Even that much though |
would be a lot, as it would amount to |
about 40 townships, or a strip of land
miles wide and 240 miles long. Any
estimate however, is at best, just a
wild guess.
If we assume for the sake of argu-
ment that % is correct, then 500 of |
the $5,500,000 the state has collected
in the last fiscal year in oil lease rent |
a lie hnyo
$12.15 per acre for the 900 acres, |
is not only velvet but something for |
nothing. Or to put it another way the |
oil producers have paid to the state
the equivalent of about $1,225 per acre
for what eventually may be productive
acreage 1t will take at least 25 years
to drill out the acreage. If they con-
tinue to pay $0.75 per acre rental on the
leases for that length of time, they
will have paid the equivalent of $4,000
per acre for the productive land
This is in addition to any royalties
paid under their lease agreements I
Sounds to me like a pretty good deal !
or the state, especially in view of
he fact that $1,000 per acre for leases
n absolutely proven territory is con-
iidered a high price.
The $780, 900 collected to date plus
entails for the next 25 years will
mount to just about $4,000, 900. This {
' III NC III duulIIOn 10 any royalties
hat might accrue, and is strictly gam +
ling money that the gullible wild
ALTERS are willing to pay for the
of gambling. But who are we l
When it comes to telling them what t
hey should do? Our schools can use
he money to good advantage. even if
has the slot machine racket beat
nile. WE'LL so much for that, Now for Z
he proposed new lease legislation !
According to the article first men
Toned in this discussion, the Interim
committee proposes t h a annual
money rentals shall be applied and C
redited upon the royalty accruing to !
he state during the year for which
aid annual money rental shall be L
aid to the state" That provision II
GEMS perfectly clear to me- 1t only ap- 8
lies to rental and bonus payments
lade during the current year on pro-
ucIng land only. Itadoes not apply on o
on producing land and therefore APP h
lies only to about % of the total
ears from now. Payments previous to | b
he current year are not affected 2
Its effect would be something like :
his: Assume an oil well is drilled on a q
acre tract. Assume it's production e
} be 100 barrels per day. At $500 per L,
ariel, 121a % annual royalty would
e S9,126. Rental of rs cents per acre =
ould be $50. Difference to the state IL
so negligible that it is not even
orth the breath to discuss it, If pro- n
uction of the well was only 10 bar IN
Els per day, state royalty would be
~ per year. Why make mountain
ut of a pimple? Il
E. J. PARKINSON, Great Falls tt