THE PETROLEUM INDUSTRY

Taranaki Herald, Volume LX, Issue 143768, 17 April 1912, Page 2

THE PETROLEUM INDUSTRY

A FIELD FOE INVESTMENT. As a field for speculative investment there are few industries more attractive than that of petroleum, especially when a proposition is offered in proved territory. The latest statistical information available on the subject shows that the capital invested in oil and kindred comxianies throughout the world known in London amounts to over £120,000,000. Californian oil companies alone have paid! about £10,000,000 in dividends, while the capital invested in that State is estimated at about £20,000,000. Last year the production was estimated at seventy-five million barrels, which, at 14s per ton, or 50 cents a barrel, represents a profit over £7,000,000. The value of the United States output of oil m 1908 was £26,302,623, arid employment was found for 48,000 workmen drilling and operating the wells, not counting those employed in the re-'* fining and other allied industries. The Californian Oilfields, Ltd., has a capital of £500,000, of which £400,000 has actually been paid. The dividend in 1906 was 30 per cent., in 1907 40 per'cent., and in October, 1910 an interim' dividend of 10 per cent, was paid. In J une last the £1 shares were worth over £5.

The Standard Oil Company is, of course, the greatest of all, and its profits in a single year have amounted to over £20,000,000, or 100 per cent, on the total-stock.

Going to another country we find: . that the Burmah Oil Co., Ltd., was registered in Edinburgh ;, on May 15, 1902. The capital was increased from. £1,600,000 to £2,500,000 in March, 1905, and to £3,500,000 in June, 1910, when ;1,000,000 ordinary shares of £1 each were created, of which 635,000 were distributed by way of bonus to ordinary shareholders, at the rate of one for every two held. Dividends (including bonuses) paid on ordinary shares have been:—For 1902, 1903, and 1904, 15 per cent, each year; 1905, 10 per cent.; 1906, 20 per cent.; 1907 and 1908, 30 per cent.; 1909, 30 per cent. In July, 1910, a bonus of 50 per centi was paid in fully paid ordinary shares, and on November 9, 1910, an interim dividend of 10 per cent, was paid. The balance-sheet for. 1909 showed general reserve £840,000;. insurance fund £150,000; capital reserve £80,000; share premium account £135,805; and a cash balance of £31,002 after paying dividends and bonus. Tliese facts prove what huge profits can be made out of oil companies, audit is fair to assume that the Taranaki (N.Z.) Oil Wells, Ltd., with its proven and unproven territory, will in course of time also yield large profits to its fortunate shareholders. This company has the first essential of a colonial oil field undertaking, an extensive tract of oil bearing territory, which, when 011 is produced in commercial qualities, will justify the remunerative formation of subsidiary companies. Not only is this property one , of the most extensive in the Empire, but it has a conspicuously advantageous position in being close to- prosperous manufacturiugand industrial centres.. The fullest possible ■ development of the field is a matter of industrial urgency, and this, it is not open to doubt will make the flotation of subsidiary petroleum producing undertakings, after the commercial value has been proved, a Busi-ness-transaction of less than ordinary difficulty. As a prospective parent company, the Taranaki (N.Z.) Oil Wells Ltd., will enjoy exceptional advantages. The accessibility of the property, is a feature of great importance, as the machinery and - plant foY sinking wells can be delivered at a minimum cost, and, further, such advantages apply equally to the distribution of petroleum., • Where oilfields have been located on monoclines, and wells bored, flowing and pumping wells having a long life have been met with. The Taranaki oilfield is on a nionoclinal fold, and a long life for the wells may therefore be anticipated. ' , The work which has been carried on

at Moturoa has resulted in bringing into production as proved territory; an area sufficiently _ large to justifyrthe provision of capital for further drilling operations, and for the erection of a refinery. Petroleum of high quality has been demonstrated to be obtainable in commercial quantities at low cost over a large area, and the foundation has been laid for the creation of a profitable business. The mode in which the crude oil should be dealt with, so as to yield the largest profit, is a question which can only be conclusively determined in the light ,of experience, but it is evident that in the first instance the motor spirit may advantageously be regarded as one of the primary products. Petrol (motor spirit) is in increasing demand, with which it seems doubtful if the world’s known supply can keep pace. If public interest in oil shares continue to increase as it has done during the past few weeks in London, the market in these securities may soon assume dimensions surpassing the most sanguine anticipations of its sponsors. Recent dcveldnmente, though quite unexpected by the great majority of nj vestbrs, have been long predicted by furseeing observers, conscious of the immense potentialities of oil fuel, and here wo may recall that for months past, in the columns of “The Finnncier.’* considerable attention has been devoted, week by week, to the various oilfields of the world. Sooner or later, the .subject was bound to excite considerable interest among the investing public, and recent events have more than confirmed these expectations. With the steadily increasing demand for petroleum, companies should be able to dispose of as much oil as.they can produce at remunerative prices. The increase in the demand will necessarily, stimulate the opening up of hew sources of supply, and hero the investor will find opportunities for making his fortune. The potentialities of liquid fuel production are very great, and. according to all indications, the next few year, qr even months, are likely to witness important developments in this hopeful fidd, of commencal enterprise.