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Show i I The National Enterprise , November 10, 1976 Page eleven BH Strikes Third Well CASPER, Wyo. Burton Hawks, Inc., (OTC .5625, .75) has announced a third apparent natural gas discovery in its has a 25 percent working interest in the wells and in 60,000 net checkerboarded acres under 120,000 gross five-weexploratory program acres earned by drilling the south of the town of Duchesne five-we- ll Odessa program. in the Uinta Basin of northeast Natural Gas Corp., Odessa, Utah. Two wells remain to be Tex., and others are particidrilled in the initial program, pating in the program. In the company said. addition, BurtonHawks and The latest apparent dis- Odessa Natural jointly own covery, No. 25-- 1 Right Fork approximately 20,000 net in acres Antelope Canyon-Federa- l, immediately north of the Duchesne County, apparent discoveries. was gauged upon completion In another development, of drilling at a rate of 4.1 BurtonHawks announced million cubic feet of gas per day, the company said. Production is primarily from a zone in the Green River formation at 4,040 to 4,055 feet and from two other Green River zones, at approximately 2,050 and 3,500 feet, which also RALEIGH, N.C. Telerent produced gas while being drilled with air. Casing has Leasing Corporation (OTC been set at 4,127 feet for 3.25, 3.75) has announced the signing of two major television production evaluation. over The apparent discovery is contracts totaling Telerent is a nine miles northwest of near- $1,450,000. est established gas production major independent television and 15 miles from the nearest leasing company with more pipeline. It is three miles than 90,000 television sets southeast of BurtonHawks installed in hotels, motels and No. 15-- 1 Wire Fence Canyon-Federa- l, hospitals in 42 states. The firstrof these major which is an apparent gas discovery from the same television contracts, according sandstone, and five miles west to Jack L. Lynch, vice presiof BurtonHawks' No.. 23-- 1 dent of operations, is for 1,100 color TV's installed at the Left Fork Antelope Canyon-- . Federal, an apparent gas dis- Peachtree Plaza Hotel in AtThe Peachtree covery from a different sand- lanta, Ga. stone. Both have been cased Plaza in downtown Atlanta is for production evaluation, recognized as the worlds tallest hotel with its 70 stores. BurtonHawks said. BurtonHawks-Husk- y The other major televiOiL Co. joint venture, owned 50 sion contract is for the Los percent by BurtonHawks, Angeles Bonaventure Hotel, ll 25-6s-5- w, agreement to purchase, on behalf of the BurtonHawks-Husk- y joint venture, a 37.5 percent interest in 2.205 acres in the immediate vicinity of a recently reported apparent oil discovery drilled by others in the Railroad Valley of Nye Nevada, 55 miles southwest of Ely. It is the first discovery in Nevada in 22 years. BurtonHawks said it also filed on 120,000 gross County, acres of federal lands in Nevada, well removed from the apparent discovery. Telerent Signs Major Contracts the largest hotel in Los Angeles, which is scheduled for completion in early 1977. The Bonaventure Hotel is located in downtown Los Angeles and features numerous restaurants and lounges with five cylinder-shape- d towers. Telerent will provide 1,526 television receivers as well as sophisticated sound systems. Both hotels were designed by John Portman of Atlanta, Georgia, who also designed the famed Regency Hyatt in Atlanta. Both properties are under the management of Western International of Seattle, partners in travel with United Airlines. Western International has world-wid- e properties under management contract. Jelly , Oil Wells. . Household Finance Offers to Buy Hamilton Intl FARMINGTON HILL, Mich.-Hamilto- n International Corp. (OTC 1.56, 1.81) said House- hold Finance Corp. has offered to buy all its assets for $35 million in cash. The offer would have to be approved by Hamiltons board and shareholders. It is a holding company whose principal assets are Alexander Hamilton Life Insurance Co. and St. Louis Pepsi-Col- a Bottling Co. Household Finance plans to retain only the insurance operations, a Hamilton spokesman said. Under the offer, common shareholders of Hamilton will recieve $4 a share. Holders of 4 percent preferred stock will get $20 a share. Holders of Series A convertible preferred will receive $2.12 a share and holders of Series B convertible will receive $1.00 a share. Last June Household Finance had offered to buy the insurance company assets for $26.8 million but Hamilton withdrew from the negotiations in August. PFC Gives Lear Okay on Gas Sales Petroleum The Agreement provides for (OTC 6.625, 7.125) has re- United Gas to take a minimum ceived approval from the Fed- of 35 million cubic feet daily eral Power Commission to sell through at least July 1977. for a limited term, up to 50 Deliveries are initially running million cubic feet of natural at about 48 million cubic feet a gas daily to United Gas Pipe- day. DALLAS Lear line Co., Houston. The gas sales contract will help to alleviate United Gas curtailment on pipeline deliveries on natural gas to Gulf Coast and northeast markets, Lear said. Under terms of the contract, United Gas Pipeline will pay Lear $1.84 per thousand cubic feet of gas delivered. Max W. Woodward, Lear president, said this gas sales contract will have a sizeable impact on Lear's operating results for the fiscal 1977 year, which began Oct. 1. We estimate that the gross revenues to Lear will be a minimum of about $20 million through July 1977, he said. . and where the next buck comes from byD. VanDeGraaJf Executive Director, Utah Petroleum Association Admittedly, this is an over-simplificatio- n, but here goes: Lets say the guy at the grocery store paid his supplier 65 cents for a jar ot jelly. cents he could pay his overhead and receive an honest profit. In that case, if the guy at the store sold the jar of jelly for 75 cents we would say it was a fair price. Now lets say the supplier tells our friend at the grocery store that he is going to have to pay 70 cents a jar for jelly; what will the store owner do? Well, he can do one of several things. First, he can sell the jar hes got for 75 cents, buy a replacement jar for 70 cents and reduce his overhead and profit by 5 cents. To reduce overhead he may have to eliminate an employee or provide a poorer quality of service. If he reduces his profit below an honest return he may choose to invest his time and money in another activity and close the store. He would be out of work and nobody could buy jelly. Something else that could be done would be to sell the jar hes got for 75 cents, pay 10 cents overhead, borrow a nickel and buy a replacement jar. He could borrow (take) from his own Lets say for an additional 10 savings or borrow from someone clses. This presumes that in order for one person to borrow, someone else must be in a position to earn and save. If he continued to borrow from himself he would eventually go broke, close his store and nobody could buy jelly. If he borrowed from someone else he would have to raise the selling price of jelly enough to either pay back his loan writh interest or provide an adequate return on the borrowed (invested) money. This might be a good approach if he can find an investor. Another alternative would be to sell the jar for 75 cents, pay his overhead and not In which case, buy a replacement jar. nobody could buy any jelly. If our grocer decides that the consumer is best served by having an adequate supply, even if at a slightly higher price, he will likely take yet another option. He will go to the jar on the shelf and raise its price by 5 cents. That way he will be able to pay his overhead, realize an honest profit and buy a replacement jar. He can stay in business and Mr. or Ms. Consumer can put jelly on the kids sandwiches. There might be those who complain that the grocer already owned the jar on the shelf and that he should not raise its price because he would have received his necessary return at the lower price. They dont think about where the replacement jar is going to come from. there is a . . .Speaking of oil wells similarity between them and jars of jelly. Costs arc going up, investment money is hard to find, shortages are unacceptable because everybody wrants to buy a jar of gasoline; still the consumer (read Congress) believes prices should be related only to the money that has already been spent. They don't think about where the replacement jar of energy is going to come from. Oil is found deeper in the ground, further offshore or at more lonely outposts. Other energy sources depend largely on Coal gasification, developing technology. solar, oil shale, etc. will need hundreds of millions of dollars to be developed. That money needs to be generated in todays market so we will have replacement energy available tomorrow. Raising the price of oil coming from an It is a positive old" oil well is not a rip-oftoward providing adequate supply at step f. the best possible price. Congress apparently doesnt believe this. At least they insist on continuing price controls at artificial levels and not allowing the generation of necessary development I capital. suppose we shouldnt be surprised; after all w'hat do they know about the price of jelly. |