Many Alberta Oil Companies Bidding for Investors’ Funds
A. W. BLUEJuly151929
Many Alberta Oil Companies Bidding for Investors’ Funds
BUSINESS & INVESTMENTS
Hundreds of thousands of dollars are lost annually in Canada through careless investment. Fraudulent and worthless securities are being constantly poured on to the market to trap the unwary. A general observance of this simple maxim will assist in the reduction and elimination of this economic waste—
“BEFORE YOU INVEST—INVESTIGATE”
A. W. BLUE
CANADA’S imports of petroleum and its products last year amounted to $61,675,989 in value. The total output of the Dominion’s oil wells in the same year reached a total of 630,405 barrels, with an aggregate value of $2,058,935. On the basis of last year’s consumption our domestic production was sufficient to supply our market for a period of twelve days only. To meet our requirements for the remaining 354 days of the year we had to import mainly from the United States, and 61,675,989 Canadian dollars passed out of the country and out of our control. If this large sum could have been kept at home, its influence upon our general business development would have been considerable.
Canadians, accordingly, are following the progress of proving up Alberta’s extended oil domain with great interest and expectancy. That there is a market in Canada for greatly increased production is abundantly attested by the figures above quoted; and as Alberta, and especially the Turner Valley, continues to increase its production steadily, there is a rising hope that Canada will some day become independent of outside sources of supply in this highly essential commodity. It must be admitted, of course, that Alberta is not yet out of the prospecting stage. There are important evidences of oil, but production has not yet reached the stage where it can begin to take care of more than an infinitesimal fraction of our needs.
An expert appraisal of Alberta’s oil potentialities by T. G. Madgwick, petroleum engineer, for the Department of the Interior, at Calgary, is of timely interest. He says in part: “In proportion to the area over which drilling in Western Canada has so far been carried out, neither the number of wells nor the footage drilled can be said to have taken prospecting out of its preliminary stages. What is, perhaps, still less appreciated is the fact that, in spite of this, the results have been extraordinarily successful, far more so than at the equivalent stage of development in many an oil field which has since become a large producer.
“The same formations which are highly productive of oil and gas south of the International boundary, extend northward without losing their potential oil and gas productive character. Oil seepages have been described from the southern boundary of Alberta far beyond its northern limits. In the tar sands north of Edmonton we have by far the greatest manifestations of the occurrence of oil in the world.”
Many New Companies
V^T’HILE Turner Valley, thirty-five ’ * miles southwest of Calgary, has been receiving the lion’s share of attention so far, prospecting parties are spreading out into the province, and several hitherto wildcat areas have now reached the partially proven stage.
Perhaps, only second in potential importance to Turner Valley is the
Wainwright field, one hundred and twenty-five miles east of Edmonton, where a number of companies are now operating; and two or three, notably, the Wainwell Oil and Gas Co., have obtained considerable production of both oil and gas. In the southern extremity of the province we find such promising areas as Beaver Dome, Chin Coulee, Cypress Hills, Twin Butte, Red Coulee; and farther north, the Waite structure; immediately west of Turner Valley, Brooks, Jumping Pound, Monarch, Fabyan Wainwright, Viking; and in the far north, the McMurray field.
Now, turning to individual operations we find there is an increasing number of companies whose shares are listed on the recognized exchanges of the East and West, and their activity in the day-to-day trading is evidence of the broad public interest in them. Oil shares are extremely speculative, but there are few types of stocks which provide such quick returns if all goes well.
For the benefit of investors and speculators in oil shares I propose to examine here a group of the more important enterprises. In my last article we covered the Royalite Oil Company in some detail, and it is sufficient here to recall only that this is the outstanding operation in the Turner Valley, and is backed and controlled by Imperial Oil, Limited. Both Royalite and Imperial Oil are directly interested in several other developing companies.
Dalhousie and Foothills
TAALHOUSIE OIL COMPANY, LTD., was incorporated in 1926 with a Dominion charter, succeeding Southern Alberta Oils, Alberta Southern Oil Company, and Southern Alberta Refineries. Dalhousie holds 1,800 acres in Turner Valley, and likewise controls the Midwest Oil Company which holds eighty acres in Turner Valley. The company is capitalized at 3,000,000 shares of no par value, all issued, of which Royalite owns fiftyone per cent. Imperial Oil, Limited, is under contract with Dalhousie to drill their property. The basis of the contract is that when production is brought in, Imperial is to receive a percentage of this production for their drilling expenses. Seven wells are drilled or drilling, of which three are producing, one is closed, two abandoned, and a seventh engaged in drilling.
Foothills Oil & Gas Company is a subsidiary of Imperial Oil. It was formed in 1927, and absorbed the Dolomite Oils in that year on a basis of one Foothills for sixteen Dolomite. Foothills holds approximately 2,000 acres in Turner Valley, a large proportion in the northern part of the valley, and acquired earlier this year an additional 480 acres through its subsidiary company, the Southwest Petroleum Company. Foothills has a capitalization of 5,000,000 shares, no par value, of which 1,250,000 shares are issued. Imperial Oil owns in excess of eighty per cent of the issued stock, imperial Oil has charge
of the development work on these holdings, and has taken treasury stock in return for drilling expenses. Two wells are now producing and two more are being drilled.
HOME OIL COMPANY sprang into the speculative limelight early this year when its No. 1 well came in as a 600-barrel-a-day gusher, thus ranking among the first three wells of the valley. Home’s No. 2 has since come in with a gas flow of approximately 15,000,000 cubic feet a day, but at the time of writing the well is being deepened, and its exact status cannot yet be determined. Home holds 360 acres in the central part of Turner Valley. In March last, Home purchased from United Oils 160 acres of leases lying directly east of their previous holdings. Imperial Oil conducts all drilling operations on the company’s properties. Home is capitalized at 1,000,000 shares, one dollar par value, with 880,000 shares outstanding. An initial dividend of twenty per cent was recently declared. Four wells are either drilled or drilling.
Lowery Petroleums, Limited, was incorporated in March, 1929. The Imperial Oil has undertaken drilling contracts on the company’s forty acres in Turner Valley. A portion of this acreage lies immediately to the southwest of Home Oil Company, and the balance is due east of the Southwest Petroleum. In March last, 200,000 shares of the company’s stock were offered to the public at a price of four dollars per share.
Southwest Petroleum Company is a subsidiary of Foothills Oil and Gas Company, which is, in turn, a subsidiary of Imperial Oil. Its properties consist of 640 acres of oil and gas rights in the southern part of Turner Valley. Capitalized at 1,000,000 shares, no par value, approximately 500,000 shares are outstanding. In January last, 50,000 shares were offered to the public at two dollars per share. A satisfactory drilling contract has been arranged with Imperial Oil, and one well is under way with others in prospect.
Alberta Pacific Consolidated Oils is one of the older companies which has withstood the gales of misfortune that have eliminated a large number of the original companies formed during the course of the first boom in Calgary oils. Alberta Pacific Consolidated was incorporated in 1914, and was originally a holding company until the directors decided on a policy of securing petroleum and natural gas rights. Today, the company controls the rights on some 10,000 acres, made up as follows: 240 acres in Turner Valley, 160 acres in Sarcee field, 400 acres in Jumping Pound, 850 acres in Williams Field, 160 acres in Monarch field, 2,040 acres in Milk River field, 2,330 acres in Coutts field, 1,600 acres in Red Coulee field, and 1,960 acres in Del Bonita field; all in Alberta. Of the 5,000,000 one dollar par shares authorized, 1,500,000 are issued and 3,500,000 are still in the treasury. During the present summer the management proposes to drill on a block of eighty acres in Turner Valley in the same section as Home and Associated Oil, and to drill five wells in the Milk River section. The company furthermore has a strong treasury, with no liabilities whatever, according to official report. On January 1, 1929, the company’s assets included the following: cash and bonds, $200,000; 150,000 shares of Home Oil stock, worth at current market prices, well over $3,000,000; royalties, etc., $40,000; eighty acres in Turner Valley, $400,000; equipment, $15,000; credit with Department of the Interior, $11,000, and 10,000 acres petroleum and natural gas rights, $10,000.
Associated Baltic and United
ASSOCIATED OIL AND GAS CO. was organized last year, holding eighty acres in Turner Valley adjoining
United Oils, Limited. Capitalized at 1,000,000 shares, one dollar par, all stock is issued. Imperial Oil is under contract to drill the company’s lease, taking repayment from production. One well has been located, and operations will be under way immediately.
United Oils, Limited, was organized in 1918, taking over the assets of the United Oils of Alberta, Limited, on a basis of one share of new stock for one share of old. United Oils operations in the past have been largely as a holding company, having control over a number of properties in Turner Valley and elsewhere. The company has one gas well in the Foremost District of Alberta and one well in Turner Valley. The policy of the company has been to sublease their property for others to develop on a basis of cash payment, royalties, etc. The following subleases are held: Home Oil, 160 acres, cash, $1,000,000, royalties one-fifteenth of all production; Associated Oil and Gas, eighty acres; Baltac Oils, eighty acres; also Calmont Oils, Delphi Oil Co., Dome Oil Company, Vimy Oils, Limited, Calla Oils, Limited, and others in other fields. The company is capitalized at 3,500,000 shares, no par value, of which 2,500,000 are outstanding. On April 1, 1929, the capital was increased to the above by the creation of ten new shares for one old. Some twenty wells are drilling or are about to be drilled on properties which the company has subleased on a royalty basis.
The Calgary and Edmonton Corporation, Limited, has a history which covers the rise and tremendous economic expansion of the Canadian west. The company’s beginnings date back to the year 1891 when Mackenzie and Mann built the Calgary and Edmonton Railway, and were given a large grant of land of more than 1,000,000 acres to facilitate construction. This grant covered the petroleum and mineral rights as well as the surface ownership. As the country developed, this land was gradually sold off to settlers, but the company reserved the petroleum and mineral rights; and with the discovery and development of oil in Alberta these rights have come to assume tremendous potential value. As the old company had disposed of the bulk of the land formerly held, and distributed most of its capital, it was decided some little time ago to organize a new Canadian company for the more aggressive exploitation of the oil rights. The present company is, consequently, the outgrowth of the Calgary and Edmonton Land Corporation, original shareholders receiving ten shares in the new company for each old share held. The company has an authorized capital of 3,250,000 shares of no par value, of which 2,415,000 shares are issued. The oil and gas rights on approximately 1,200,000 acres along the foothills section of the province are held in fee and not subject to any royalty to the government. The area controlled extends north as well as south of Calgary, covering not only proven fields, but areas that are believed by their structures to have great potential possibilities. Some of the companies which have acquired leases are the Hudson’s Bay-Marland Oil Company, the Nordon Oil Company, Sterling Pacific, Meriand, Advance, Mayland, Lowery Petroleum, Royalite, Imperial Oil, Commonwealth and others. The terms upon which the company leases its properties are usually on the basis of a 12 per cent royalty until the well has been paid for, and after that a twenty per
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