Show Mountain Fuel Asks Forming Of Output Firm i I IBy Bv By Robert W. W Bernick I I Establishment of oC a stock company to take over production production pro pro- pro pro-I and exploration activities of the Mountain Fuel Supply Co has been asked of regulatory bodies in Utah and Wyoming I The new firm would then sell gas from seven established fields and from the huge Church Buttes field to the Mountain Fuel Supply Supply Supply Sup Sup- ply Co I Mountain Fuel promised that the divorcement would mean no I increase in rates to present consumers consumers con con- sumers under current economic conditions But separation of the productive facilities of the firm from distribution distribution distri distri- would mean that eventually e I distri gas supplies would be hiked 50 for consumers in the two states the firm said Salt Lake brokers Tuesday upped quotation of stock of the fuel company from 2350 2125 to 2400 2500 on news of the divorcement move Declares Oear Benefits Jules D. D Roberts vice ice president in charge of distribution for the firm stressed that industrial users of gas in Utah would benefit particularly particularly particularly par par- from the divorcement The Wyoming commission set June 28 as hearing date on applicatIon application application cation of the Utah firm The Utah public service commission is not expected to act for several days I as two members of the body are out of the city Utah Natural Gas Co a newly organized firm finn with substantial I eastern capital has asked the commission for permission to build a transmission line from Boundary Buttes San Juan county Utah fields Divorcement would provide de a greater flow of equity cap capital tal I needed in the risky business of discovering and developing gas t I fields Mr Roberts Roberta explained j I I He said such operations unlike transmission and distribution cannot cannot can can- I not be a adequately financed by term long-term debt through issuance of bonds or obtaining of mortgage I loans E Eyes cs New ew Fi Firm rm The only feasible alternative he added would be through organization organization organization or or- of a new production company which would be able to toI I obtain equity risk capital As a result of the divorcement capital stock of the Mountain Mounta n Fuel I Supply Co would be reduced from Crom I to and I. I number of shares outstanding from Crom to Each stockholder of the present See Page 3 Column 8 I F I Firm Bids ifor Fo Output Unit Uil Continued from Page On One company would receive one-half one share of stock in m the new firm on the basis of one share held in inI I Mountain Fuel Some Sonic of the new firms firm's stock would a ace accrue c c r rue u e to Mountain Fuel in payment for forthe forthe forthe the valuable gas properties worth worthan worthan an an estimated Assumed As Debt The r remaining would be assumed b by the new firm as debt Mr Roberts said it was planned that the successor production company company com corn pany would sell sufficient of its remaining worth of common stock to raise funds for exploration lion The exploration program en envisages envisages envisages en- en visages completion of 30 producing producing producing ing wells at Church Buttes Wyo He said Mountain Fuel Supply Co would have exclusive call caIl upon all supplies of fuel discovered within the next 20 years ears as well as from present properties Mr Roberts made this statement statement state state- ment in answer to a query as to whether the new firm would sell natural gas to the Pacific Gas Electric Co for distribution in the San Francisco areaNo areaNo areaNo area No contracts have been discussed discussed discussed dis dis- dis- dis cussed cuss or 0 options p t I ion o n s given to toP toP P G E for any gas from Church Buttes Mr r. r Roberts added The report that Mountain Fuel was dealing with P G E has received wide currency in financial journals jour jour- nals Consumer Service Mr Roberts said that by 53 1952 under the divorcement program Mountain Fuel hoped to be able to serve ser up to consumers compared with the tho 12 at beginning beginning beginning be be- ginning of this year yearS This would require an annual volume of cubic feet of gas with a peak load of cubic feet he reported Some cubic feet would have ha lave to be drawn daily from the seven established fields at Powder Wash Vash and Vest West Hiawatha in Colorado East Hiawatha in Wyo- Wyo ming ining and Colorado North Middle and South Baxter Basin fields in Wyoming and Clay Basin Daggett Daggett Dag- Dag gett county Utah Requirements from C Church h u r c h Buttes would rould be more than cubic feet daily from 6 six x wells weBs now producing on the field and 21 24 wells weBs to be drilled at a acost acost cost of each Reserves at Church Buttes were estimated at cubic feet proved and cubic feet semipro ed at the seven old fields cubic cubie feet for a total of |