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Show AUGUST 3f 1970 OIL & MINING JOURNAL PAGE 2 Tract surrounded by producing wells, EMC Energies informs shareholders of Casper, EMC Energies, Inc. Wyo., told shareholders the He said there is also a possibility that the companys investment is secured by an Campbell County by two test wells. properties in New Mexico which are currently returning enough revenue to assure a payout. EMC also received a substantial block of stock in the other company as a bonus, Catron said. northern drilling tract in wildcat lease in will be offset companys oil Campbell County, Wyo., is practically surrounded by The General Services Administration, which has been authorized to dispose of tungsten from the nation's stockpile of metals, has invited producers to Washington to discuss price and market problems at an informal meeting. The outcome of this meeting is vital to U.S. mining states because the policy of the GSA will have much to do with whether or not the industry will be able to place additional tungsten mines on stream. Because of the abnormally low price for tungsten for the last several years, no new primary production has been initiated, resulting in the dependence of the United States and the rest of the world on the U.S. government stockpiles. Those stockpiles were built up through 1956 at prices of up to $66 per short ton unit. More than half of the government stockpiles have now been disposed of. The remainder of what was once a huge surplus is now being prepared for sale by the General Services Admininstration. The method by which the U.S. government disposes of its stockpiles will have considerable repercussions on the United States taxpayer, as considerable pressure has been brought to bear by major U.S. consumers to withhold the sale of the stockpile from the international market and, in turn, to sell the stockpile to them at a price 50 below the world market price. Then they, in turn, would conceivably upgrade the material and the production of tungsten carbide, tungsten powder and ammonium paratungstate and sell them for a solid profit to themselves at the expense of the U.S. taxpayer. The abnormally low price of tungsten has serious repercussions for both the U.S. and world industry, since it causes the tungsten industry to defer the exploration, development and mining necessary to bring on new production, and a critical shortage of important metals will have resulted. To those dependent upon the mining industry, a bust and boom cycle will follow, causing considerable problems for U.S. manufacturers who have succeeded in lobbying the price down from the world market price of $70 to $75 per STU to $50 per STU, and they will find that they do not have adequate sources of supplies to keep machinery and personnel operating while the mad scramble proceeds to try to develop new tungsten production. GSA desires to sell tungsten to the international market to raise needed funds for the U.S. Treasury. If it were to follow the program of setting much less than the world price on tungsten, the primary beneficiary, other than the strong Washington lobby, would be the Red countries. That is, Russia, East Germany, Poland, Rumania, Bulgaria and Czechoslovakia, which have traditionally received their supply from mainland China. Mainland China has dropped out of the world market as an exporter, causing the Eastern bloc, which is opposing us in Vietnam, the Middle East and other sensitive areas throughout the world, to buy their tungsten in the West. The primary supply from the West, as you would guess, is the U.S. government stockpile. However, instead of the U.S. selling it to them at the world price, they find themselves in a position of forcing their own market price by the pressure of the U.S. manufacturer and, therefore, selling to the Eastern European bloc at a much lower price than they otherwise would pay for the metal. This would not only lose money for the U.S. taxpayer, but, in effect, subsidize foreign governments with U.S. products consumed and lost forever with no reciprocal goodwill to the United States. The cry of inflation has been raised by consumers, but the fact is that the U.S. government is proposing to sell the production at $50 STU for which it paid an average of close to $61 per STU 14 system may be in years ago anything but inflation. A two-pric- e order, but that two-pric- e system should be based upon the sale to U.S. manufacturers at at least the average price that the U.S. has paid for it, e.e. $61 STU, with restrictions against export. And our government should sell in the international marketplace at the international market price, which today is $70 per STU. This simple solution would and should help satisfy the interests of the country to the benefit of the U.S. taxpayer and also keep from subsidizing our foreign adversaries. Just as important, it would allow a reason to encourage exploration and development of new primary sources which are urgently needed to satisfy the world's demand and, hopefully, allow an orderly transition from a government stockpile which may exhaust itself within two years to be met by new U.S. production. EMC Energies recently producing oil wells. Ed M. Catron, president, said acquired an overriding royalty the company has a working interest in three producing tracts interest in a320 acres in the in the Hilight Field. By the of the agreement, Catron Hilight Field there and terms the communitization of the tract said, company is guaranteed with adjacent tracts to comply the return of its $50,000 with state required well spacing investment plus 10 interest regulations has taken place. A within the next 25 months, in test well on the acreage is under addition to the overriding will way. royalty interest which tracts Catron told shareholders the continue for so long as the tract is offset by producing wells are productive. He said the company has to the South, southeast and East, and production has been made another $50,000 short found approximately one mile term mortgage arrangement with northeast and one mile a going concern at substantial commercial interest rates. The northwest. assignment of overriding royalties on seven producing 30-mon- th has cash assets of $120,000 and a monthly gross EMC cash inflow from royalties, investments and interest in excess of $5,200, Catron said. He estimated that, based on several contingencies, the company could enjoy a gross cash inflow of over $10,000 per with all its well costs month and overhead paid by the end of the calendar year. Participation gains investor nod Continued from Page 1 into the stock of operators who program offered increasingly larger programs. Often, however, the investor could have done as well simply by purchasing the companys stock. Also, as is often the case, all good things must eventually come to an end. For many This Announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities. The offering is made only by the Offering Circular. conversion features in oil and gas drilling programs is highly significant. Every drilling program should maximize tax leverage wherever possible. Stock conversion and other additional opportunities VALTECC of nonprofitability investment. the 300,000 Shares Common Stock remairrs for the program PRICE: $1.00 Per Share ($0.20 Par Value) of the Offering Circular may be obtained from ; VICTOR CARTWRIGHT THEOBALD G, PEARCE INCORPORATED P.0. Box 10 68 South Main Provo, Utah 84601 Phone: 375-257- 0 Salt Lake City, Utah Phone: 364-180- 3 Other offices in Phoenix and Tucson Subscriptions $10 Per Year non-returnab- le Published weekly in Salt Lake City, Utah, by Charles E. Hayward of 4386 W. 3780 South, Granger, Utah 84120. Mailing address: P.O. Box 19243, Salt Lake City, Utah 84119. Serving the mining and oil industries of the Rocky Mountain Region. Articles and information herein are true and factual to the best knowledge of the publisher. Information and opinions published are the sale responsibility of the publisher and do not reflect the attitudes or opinions of the merchants, brokers, corporations and service firms whc advertise herein or otherwise sponsor this publication. Second Class Postage Paid at Salt Lake City, Utah Advertising Rates: Display Advertising Classified Advertising Phone: Editor & Publisher operator to spend each dollar wisely and in such a fashion as to maximize the chance of finding the most profitable volume of oil for each dollai spent. Prior to 1969, drilling program analysis by those outside the drilling program industry was normally on a rather superficial basis, and was usually based on rumor and report rather than on hard facts. As a result, there was almost no correlation between the program operators oil finding record and his ability to sell his program. However, little blame could be placed in this regard on either the investor or his investment counselor. First, little objective information was available to explain on what basis the results of such programs could and should 25 Cents a Copy 487-07- 68 $2 col. inch $2 for 20 words or 298-37- his However, prime means by which the drilling program investor will profit INCORPORATED y The importance of tax advantages and of stock features also add liquidity and for profit to the drilling program investment, as well as providing a means by which the investor can measure the profitability of NEW ISSUE Copies drilling program operator stocks, this end came in 1970. 03 chuck Hayward be evaluated. Furthermore, even when the basic data required was normally not readily available. In 1969, this situation greatly improved. New map shows Nevada geology Nev. A revised RENO, edition of the Geologic Map Index of Nevada has been issued by the Nevada Bureau of Mines, University of Nevada. The new map index may be seen at the Bureau and at the library of the Mackay School of Mines, or separate copies may be ordered through commercial blueprinters in the Reno area. Compiled by Ira A. Lutsey of the bureau staff, the new map includes 45 new entries not shown on the earlier edition published in 1968. |