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Show AUGUST 3, 1970 OIL & MINING JOURNAL PAGE 3 Panel sees increase in drilling programs as way to meet worlds petroleum needs Investor participation will play an increasingly important role in the development of U.S. oil and gas resources in this decade, according to panelists at a seminar on oil and gas drilling programs sponsored in Los Angeles recently by Resource Programs Institute, Inc. Panelists discussing The Role of Drilling Programs in Future Petroleum Supply were John M. King, chairman of the board of King Resources Company; Dov Amir, president of Equity Resources Corp.; Nathan M. Shippee, chairman of Prudential Funds, Inc.; and J.N. Murphy, and cautioned that 80 per cent of the worlds oil reserves are and that a unfriendly substantial percentage of the balance is in Venezuela where loyalty to the U.S. government is questionable. Enlightened legislation was said to be the reason why the U.S. oil and gas industry has thrived and outpaced those of other countries with greater reserves. Such legislation, according to the panel, is considered an economic necessity and is therefore not expected to be chuckin' altered significantly in the near future. The panelists agreed that the risks of oil and gas exploration by American companies are greater in foreign countries. It was suggested, however, that the urgent need to develop oil and gas resources around the world and the fact that American companies and investors seem to be in the best position to o few By contribute funds, may A shortage of capital and a lack of investment incentive pose problems for the petroleum industry in meeting worldwide requirements for oil in the '70s, according to recent studies by New York's two largest banks. eventually help create a new climate of cooperation between countries. The Chase Manhattan Bank, in its annual analysis of the world's industry, notes that the accumulated needs for oil in the '70s are expected to exceed 200 billion barrels more than twice as much as in the '60s. 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. vice president of I.N.C. Exploration Corp. non-Commun- NEW ISSUE The oil and gas industry will need $40 billion during the next 10 years to effectively develop resources, panel members said, and all of it cant be generated from within the industry. Even the major oil companies shortly will have to seek investor participation for development programs, speakers agreed. According to panelists, 6,000,000 Shares Common Stock $0.01 Par Value MINES, INC. OFFERING PRICE: 3 Cents Per Share Copies of the offering circular may be obtained from the undersigned only in states where the undersigned may legally offer these securities in compliance with the securities laws thereof. million potential investors in tax brackets of 40 per cent and up will be available for such investment during the next decade, making it necessary for the industry to conduct an extensive educational program to bring '.ts product to the attention of this sector. The deficit of spending reflected both an inability to generate sufficient capital funds from operations and also a lack of incentive to reinvest, according to the Chase Manhattan. The Chase study covered 27 companies whose of the production in 1969 accounted for nearly three-fifth- s worldwide output BONNEVILLE SECURITIES, INC. 601 Kearns Bldg. (801) 322 The panel predicted a severe shortage in oil and gas reserves ist "Clearly, says the Chase Manhattan, "if the worldwide requirements are to be fully satisfied, the petroleum industry will need to match the growth of demand with progressively higher capital and exploration expenditures." The bank found no positive assurance that the industry actually will spend as much as required. "Its outlay for exploration and development in the United States during the '60s failed by a wide margin to measure up to indicated requirements," it continued. VEDCO-WAHW- AH 10 Chuck Hayward Salt Lake City, Utah The First National City Bank of New York also took or lack of it note of the problem of spending by the petroleum industry and ints affect on future production. City Bank, in a study of 37 leading United States oil companies, took note of the cutbacks in capital-spendin- g plants within the industry and added: "Even at the lower levels now expected, the financing of capital expenditure programs will present increasing problems for the oil - 3515 industry." City Bank found that the industry had been seeking out new sources of funds in such areas as the Eurobond market and in greatly increased selling of commercial paper and participations in petroleum drilling programs. "The prospect of unabated growth in petroleum demand," the bank continued, "indicates that, in the years ahead, still further adaptations and innovations will be required. Without these new financing approaches and tax and price levels that will allow companies to face up to continuously rising costs, a dangerous gap in supplies of both energy and capital will begin to open." 731 East South Temple Salt Lake City, Utah IS OFFERING PARTNERSHIPS IN a special. Schedule D drilling program the Overland Dome field. With four in its oil and gas field in Wyoming producing wells in this field which Classic Mining Corp. wildcatted and proved out, we feel the chance of successful petroleum yeld and potential capital growth are highly favorable in this program for both the company and the individual investor in the Schedule D program. Partners in our drilling program will enjoy such income tax advantages As to the actual capital outlays required by the industry in the '70s Chase Manhattan suggested they would exceed $300 billion, or more than double the amount spent in the as: '60s Federal tax deduction for intangible drilling and development costs. Tax exempt income of up to 22 of that earned from oil and gas A factor in the Chase Manhattan's pessimism toward the likelihoood of the petroleum industry coming up with the required financing to meet accelerating world needs b the decline in the 1969 earnings for the group of 27 companies studied. Earnings last year amounted to $5.6 billion, down 1.6 from 1968, the first drop in net income since 1958. "This is a development that cannot continue for long," the bank's study states "and some force of correction must soon come into play if the group b to be able to meet all its market obligations in the future." production. IF YOU WOULD LIKE additional information on our drilling program, clip and send the coupon below. CLASSIC MINING CORP. 731 East South Temple Salt Lake City, Utah Please send prospectus on your participating drilling program to: f SILVER MINING STOCKS fcove Name I 0 prft potential RAN6E 4c TO U PM SHARE jj We specialise in silver, yeld end uranium docks and selective penny mining stocks. We accept collect calls on buy orders. Address J. City and State 21 H. DILLON & CO. W. 412 Sprogue, Spokane, Wash. T9201, Tel. 138-443- Member Spokane Stock Exchange Q Q g 1 J0 |