THE SEARCH FOR OIL

Taranaki Daily News, 9 December 1926, Page 11

THE SEARCH FOR OIL

TARANAKI OILFIELDS, LTD CHAIRMAN CONFIDENT OF SUCCESS. OKOKE THE CENTRE OF INTEREST. The second annual general meeting of shareholders in Taranaki Oilfields, Ltd., New Zealand, was held in Melbourne on November 29. There was a fair attendance of shareholders. The chairman of directors, Mr. W. A. Watt, M.H.R., presided. The chairman, in moving the adoption of the report and balance-sheet went on to say: "We have to wrest success from territory, measured in hundreds of square miles rather than in acres, in much of which we had little earlier work on scientific lines to guide us. The detailed geological survey of our areas is in itself a huge undertaking, and would be greater but for the excellent large-scale work accomplished by the New Zealand geological survey department. To drill every structure on our leases would be within the capacity of few, even, of the greatest oil corporations. But if the field is so extensive, the inducement to attack the problem is equally great. Success would be the biggest thing nationally and commercially that has yet happened in Australasia.”

After speaking at some length on the factors that have to be taken into account in the search for oil and the prospects of the company, Mr. Watt said that they must continue the prudent policy of providing the most up-to-date and efficient staff and equipment and of taking care that each well was put down on the location of definitely best promise. Haphazard work, he said, must be avoided. “I have felt it necessary to drive home the essential facts, so often forgotten in connection with genuine efforts to establish the industry in virgin territory,” said Mr. Watt. "That is, that the search for oil, although inevitably speculative in character, is a highly specialised and technical business, and one in which the long view and the broad vision are necessary. Had the verdict of half a dozen dry wells been accepted as conclusive there would be few producing areas in the world to-day. We have not lost faith in our enterprise. Our general manager and our geologists, past and present—mainly drawn from producing fields—are firm in the belief that oil in large quantities exists in. New Zealand, and they are still sanguine that it will be our good fortune to strike it. The board had no reason to entertain a less optimistic view.” AID OF BRITISH CORPORATION. In explaining why only one well is proceeding at present Mr. Watt said: "Many 'Structures have been reported on, and certain well sites indicated for drilling, but other investigations are also moving to their conclusion, some of which suggest the possibility of still greater promise. Delay, in putting idle rigs to work again has been due solely to the desire to restrict drilling to the best locations obtainable, and to spend the money in hand to the best advantage. Where it has seemed probable that the prospects of a structure still under examination might prove better than those of areas finally reported on, it has been deemed wise to defer drilling until the relative values are established beyond reasonable doubt. "I am able, however, to indicate that very shortly a further well will be commenced in Taranaki Province. The new location is at Okoke, lying about seven miles north-east of Tarata, and 22 miles in an air line from Moturoa, the locality of the wells which gave some oil in former days. The particular area selected has been the subject of most careful study by practically the whole of the company’s geological staff at various times, and is highly appraised. “Subject to the settlement of terms in detail, an agreement is being entered into with a powerful British oil corporation of world wide activities and experience, with a view to the co-operation of that concern in the development of the oil resources of New Zealand. Beyond this general announcement, I do not think it wise to go to-day, for reasons of policy, but I would add this, that if, as we hope, the arrangements lead to a substantial amount ot British capital being devoted to the survey and drilling, of the company’s properties, our chances of success will be materially improved.”

THE SUBSIDIARY' COMPANIES.

In regard to subsidiary companies, Mr. Watt said: "The Taranaki Company retains the. greater interest in these subsidiaries —round about 90 per cent, in each case;.and there is no duplication of field staff, the whole of the geological work, drilling, etc., being done for them by the Taranaki Company. Our balance-sheet is affected by this arrangement to the extent that, if you wish to discover what funds remain available, you must take into account, besides the Taranaki balance, the amounts also remaining in the hands of the three subsidiary companies. The total of these figures at the present date is in round figures £115,000, and we have in addition three complete drilling plants and large stocks of casing and other essential stores for well sinking.” Speaking of the extension of options Mr. Watt said that these options were given at the time of the first and second issues of the capital. The suggestion was that the period of each of the two sets of options should be extended, by, say, 18 months. The reasons given in support of thia suggestion boiled down to the fact that, during the option periods so far, less actual drilling had been done than was anticipated when they were granted. If shareholders approved of the principle of extension the board recommended that the periods of the respective options be extended by 18 months each upon payment of Is 6d a share option. QUESTIONS AND MOTIONS. A Shareholder. —Is the board satisfied that the new well is the best site available. The Chairman. —Yes, it is satisfied with all the main considerations. Okoke, where we hope to have the rig in January, was given much thought, one of the main items being the question of accessibility, because, of the difficult regions that have to be traversed. Mr. C. Fraser, managing director, said that New Zealand shareholders held the view that a free extension of the options would not be fair to the majority of shareholders. For every three of the 464,240 shares issued there were two options outstanding, .and there would not be any trouble if every shareholder held his proportion of options. That condition did not exist, because options and shares had been bought and sold separately. If all the options were extended the company would receive about £22,500, which was sufficient to finance the drilling of another bore. The chairman said that of the first issue,

about 85 per cent, of original holders still held options which amounted to 65 p*r cent, of the total issued. Of the second issue the proportions were 85 and 75 |>er cent, respectively.