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Journal A, PUBLISHED WEEKLY ' ESTABUSHEO IKI Votouif as Nombfr 7 Great Fall«, Montana, May 5, 1945 Cowl Met Paralyzes Drillin§ In Most time Oil Board Asks Speed in Passing Law to Correct Chaos in Industry 1 Need for speed in passing legislation to offset the recent court ruling on intangible drilling cost chargeoffs is emphasized in a formal resolution adopted this week by the Montana Oil Conserva tion Board, and sent to the entire Montana congressional delegation. The resolution points out that the uncertainty prevailing because of the ruling has already done irreparable damage to the war effort, in that it has virtually paralyzed drilling programs in many areas. It follows: WHEREAS, well drilling activ ities 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 1945 at an alarming rate in comparlsoi the record of like activities lished in comparable periods of the vear 1944, 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 ations 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 15, 194 6, an d; WHEREAS, despite the announce ment of the Commissioner of In ternal Revenue as recently pub lished in newspapers throughout the nation that no change income tax regulations will ! "for the time being," the oil and gas field operators feel that their right to deduct intangible ing costs from current income for income tax purposes, in accordance with regulations of the Internal Revenue Bureau in force for about 25 years last past, is subject to vocation by administrative ruling any time, and; WHEREAS, the continuance of new well drilling in Montana fields throughout the year 1945 at the rate established in 1944 is the minimum of such activity indubitably 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, a 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 weli drilling cause of burdens heaped upon them by way of substantial increases in costs of labor, materials, and neces sities of life, delay in obtaining re pair and replacement parts, etc., and the oil producers being compelled to adhere to crude oil price ceilings arbitrarily established by "freezing" subnormal prices prevailing in Oc tober, 1941, without regard to pro ducing costs prevailing then or thereafter, and; WHEREAS, ail operators and producers other than these inde pendently wealthy, and they are few in number, must pay all costs of new well drilling. Including equipment necessarily and properly chargeable to capital account, out of current income from sale of their crude oil as produced and unless they can be assured of their un n with estab i' In the be made well drill re at bt 'AW RMMKaM)M««d PïodAcUoi mate tor Mar—BMa. Per Da, _ IMM _IMAM m~S* BETTER ORDER THE NEW MAP! Now in the hands of the lith ographers and due to reach ns May 15, is that new 37x41 map covering 16 townships. Ranges 1W to 4W, inclusive, and Twps, 34N to 37N, inclusive. Takes In all of Kevin-Sunburst oil area, in cluding new Consolidated exten sion and extends to Canadian border. Each township 9x9 in ches. Limited printing. While they last, $1 each. Send remit tance to Supply Montana Oil Journal, P. O. Box 2050, Great Falls. Department, THREE QUIT KEY STATE OIL POSTS Two jobs of utmost impor tance to the Montana oil indus try are vacant. Fred Platt, Shel by, quite a few weeks ago as chief oil and gas supervisor, and no successor has bee pointed. Jim McGowan of the Montana Board is now at Shelby, filling in for Platt nntll a successor is named. Following in Platt's footsteps, L. G. Hinkley, who had headquartered ot Billings, covering the southeast ern part of the state, also turned in his resignation, to be effective June 1. Although the records main tained by the supervisors are of vital importance to the future of the state oil industry, salaries paid for the two lobs are much too low, in view-of the qualifications neded to successfully and efficiently fill the two posts, in the opinion of re sponsible operators. Another resignation affecting handling of the state's oil Industry was recently turned in by George Bartholomew. Helena, long m charge of the oil and gas division of the board of railway commis sioners. n ap Conservation STANOLIND BIG TIMBER WILDCAT MAKING HOLE Stanolind Oil & Gas Company has spudded its interesting wildcat near Big Timber, in south Central Mon tana, and made hole during the week to 773, with rotary tools. Lo 31-2N-15E. cation is SE SE SW U.S. WELL COMPLETIONS 1,024 DURING FEBRUARY (Ml MEN ARE PROMISED ENOUGH WPE FOR NEEDS Oil well completions of 1,024 In the short month of February were 2 above the January total and 76 above February, 1944; The number of active drilling rigs, however, has declined monthly from the high of 4,441 in November, 1944, to 3, the end of February. at There will be sufficient oil coun try tubular goods available in the third quarter of this year to meet the needs of oil men, according to PAW announcement. Nm» Pool, 100-Bo rrei Wall Via for Spotlight Kevin-Sunburst Aetna Spans 17 Miles; Outpost Locations Made The versatile Kevin-Sunburst field, condemned by some as being drilled out" More than ten years ago, put on an interesting per formance this week, with activity noted over an airline distance of 17 miles east and west. At the western end pf the 17-mile airline, interest centered in Consolidated Gas Comj ' T ~ 9 Barkuloo, a quarter of a mile east of the Consolidate loon- ^ n», w same farm that came in April 16 making 0 the field two miles west of previous producing limits, lue 'veil, in SE NE SE 15-35N-4W, spudded in Thursday. It is expected to aid materially in determining the pool trend. At the eastern end of the 17 mile airline, in a section of the field lo reason. ng neglected for no good , Enfield Oil Company brought In Its No. 2 Grass, C HW HE SE I745N-1W, with an initial of 100 barrels, following 1.000-gallon arldizatlon of the EIUs-Madison contact at 1491. This well Is in the same sec tion as one of the most inter esting wells ever drilled In the Kevin-Sunburst field, the Fraz er-RIce "deep test" that flowed considerable hlgh-gravlty her crude from the Devonian at 3390, and that was abandoned, back In the old cable tool days, because H was found impossible to handle a heavy flow of car bon dioxide gas that accom panied the oil. In between these two wells, and north and south of the line connect ing them, there were many other interesting developments during the week, including the completion of six wells, announcement of five new locations, and continuation of activity on 14 wells either rigged or making hole. Outside of the Enfleld-Grass well, the most interesting completion of the week was Pacific Western's No. 7 on a U. S. lease in C SW NE NW 9-35N-3W. This well had an initial of 138 barrels In 48 hours, of which percent was water. Pumped steadily, the oil output held up nut the water declined to 15 percent. Balance of the completions were (Continued on Page S) a in - up 50 UNION IS ABANDONING TEST ON WILLOW CREEK Union Oil Company this week was abandoning its wildcat on the Willow Creek anticline, west of Cho teau, after testing an oil showing in the Sunburst sand, 3230-Î240. It got water In the top of the Madison lime at 3488. When it started this well, the company filed notice of in tention to test the Devonian. Whether additional drilling will be done on the structure has not been announced. WILL LOWER 10-INCH IN FULTON'S WILDCAT With Ted Hawley in charge, op erations have been resumed In Bui Fulton's wildcat southwest of the Cut Bank field. Reaming is now under way, with the 10-inch pipe be lowered from 2013 to 2400 feet, to shut off bentonite. When the 10 inch is landed, effort will be made to get down to bottom, 2725, and recover a bailer, before drilling is resumed. Base of the Colorado is expected at about 3100. Unusual in terest attaches to this wildcat in that it is making water from top to to and had no ttom. ss TEXACO WILDCAT NEAR BORDER DRILLING, 2145 The Texas Company is drilling at past 2145 feet with rotary tools in its interesting wildcat In the Head light Butte area, three miles south of the Canadian border and about six miles northwest of the nearest producers in the north end of the Cut Bank field. It is reported this well will test the Madison Lime. WILDCAT NEAR DUNKIRK | GETS WATER IN MADISON a sh . the Dunkirk area, ended In this week when Thorpe & Walker's No. 1 O'Laughlin. ln SW SW NW 3-31-lW, got sulphur water in the Madison lime at 1820. an oil field Iby, In failure ^ | THREE FINISH TO PAY SAND IN CUT BANK Three completions, one mak ing five barrels hourly after shooting, the other making 25 barrels in eight hours after a shot, plus another still testing after shooting, were recorded during the week In the Cut Rank field. Three new locations were made, and 14 wells are rigged up or making hole. The completions were Wright Hagerty's Tribal 5 No. 5, Texaco Walker No. 3, and Unlon-Bailley No. 3, in the order given. Completion of the Consolidated Gas Company's westward extension of the Kevin-Sunburst field, that widened the boundaries of that field to within two miles of the eastern edge of the Cut Bank field, (Continued on Page 7) SOUTHEAST MONTANA WILDCAT PASSES 4150 Stanolind Oil & Gas Company's interesting and important wildcat between Broadus and Miles City, In Powder River county, extreme southeastern Montana, this week re rted hole made to 4154 feet with tools. At that was run. The po heavy duty rotary depth, Schlumberger 9-tnch hole is now being reamed lo I2*A-inch. If this well is drilled to reported objective, it will lie the deepest hole ever put down in the state. Airline, it is more than 300 miles southeast of Great Falls, il lustrative of the wide open spaces in Montana's oil areas. Nearest oil field is Soap Creek, 100 miles south west. DEVON POOL EXTENSION DRILLING AT 250 FEET • Attempting to extend Texaco's new Devon area pool a quarter mile to the north, the company's No. 2 Weir has spudded In and is drilling past 250 feet. Eastern boundary the pool was apparently defli last week, when the No. 2 well on the Ekholt farm, a quarter of a mile east of the discovery well, got sulphur water at the top of the Madison lime. Of ned WILDCATS NEAR BORDER TESTING MADISON LIME After getting a good gas flow in the Cut Bank sand, wildcat of the McLeod Oil Company, northwest of the Cut Bank field and four miles north of the Alberta-Montana bor der, has run 5 5/8-inch pipe to 4728 feet and is drilling ahead with cable tools to the Madison lime. Four miles to the northeast, Trans-Al berta No. 1 has a fishing Job in the Madison lime, at 3840 feet. MID-MONTANA WILDCAT STANDING, 5930 FEET After drilling to total depth of 5930 feet, wildcat of the Mid-Mon tana Oil Company on the Harlo Dome structure in Wheatland coun ty, south central Montana, it shut down waiting for interpretation of a Schlumberger survey. It Is be lieved in or near the top of the Devonian. Location is in 13-7N-18E. AVERAGE DAILY PRODUCTION Week Boded April £8, 1845 ■ MAI Ml IMM ba rre ea * »A«T * : - IMAM Deereeae 9.070 DMNM 470