HISTORY OF THE COMPANY.

Dominion, Volume 13, Issue 62, 6 December 1919, Page 5

HISTORY OF THE COMPANY.

WHY WAIPATIKI WAS SELECTED

DR. WANNER'S AUTHORITATIVE THEORY

.The history of the company makes interesting reading and incidentally it points to the fact that but for the incidence of the war tho opportunity of acquiring the property and up-to-date plant .would never havo been open to tho company. Long, ago, it appears, it was ear-': marked by the world-famous Dr. Wanner, tho German geologist, as a giltedged investment for the group' of foreign capitalists in whose interests he was sent ?, to ,f,P y out tue lnncl - To bo explicit; the Wmpatiki Oil Wells Ltd. was iormed for the purpose of acs quiring and operating • the plant and certain boring rights recently owned by the Kotuku Oil Wells Syndicate Ltd., situated upon the property of one Thomas'. iUXseil, of Waipatiki, in the provincial' district of Hawke's Bay, containing in. the aggregate 435 acres, and lying a few miles from Weber, on the Napier railway line. This site was selected by Dr. Wanner, who spent several months fully and exhaustively testing the surrounding country,, and was chosen on account of its high, geological position, coupled with its hemg,in close proximity to one of the largest and purest benzine gas sprint in; the world, from which gas ,is led through a six-inch main to the boiler that supplied tho power for boiling opera-" tions. . * vIX THE ABSENCE .OF WATEE. ""

. The pil-boring plant, machinery, buildings, dwelling houses, were erected and the bore put down 2GOO feet at a cost of about ,£40,000 by a company whose controlling office was in London. They were operating several other test bores in .New Zealand; but owing to the difficulties in administration and war 'conditions, they were forced to abandon operations when this boro had reached a depth of 2600 feet. Dr. Wanner in selecting this site stated that if in putting SKV l •? here no water Vas stru <* at jWO feet it would be a most desirable feature in 'the prospoct of a successful P?re. ■ As. yet ho wnter has been met with. Dr. Wanner also stated that no boro could be said to have- been tested under a depth of 5000 feet. /

I EXPERT'S REPORT. t Recently the company desired for their own information to have a report made upon the oil and gas possibilities, and secured the sen-ices of Mr. R, Speight, M.Sc, F.G.S., F.G:S. (Am.), of Canter' bury, one of the most eminent geologists of New Zealand. This'report deals exhaustively with the possible volnme of natural gas obtainable, and also with the geographical conditions relating to oil prpspecta. As the company has decided to vote all its resources in obtaining oil, the portion of tho report relating to tho oil prospects is quoted, as follows; "LOCATION OF SITES FOR BORES .FOR OIL. "No. 2-bore.;has been located on,'an.excellent site for testing the nature of the ground in tho northern part of your ?w\- !t is also stratigraplnwillv from 1200 to 1500 feet lower than JJo.'-i bore, but seeing that the latter well is* in-very good condition-, and tarries .'the' 8-inch casing to a depth of 3500 feet, I prefer it to No. 2as an exploring well. If it is decided to sink another well, I believe a, site close to the gas springs would bo ■best; but this would have little advantage over No. 1 well. Further, if it were decided' to prospect in-a different part of-tho area, I would suggest a site on the flat at tho foot of the slope, to the cast of the Oparae homestead; but the only advantage this would: have oyer No. 2 well would, be that it would- test untried ground. However; the stratigraphical conditions would bo quite analagous fo those of No.'2 bore, and the results might be no more interesting. I thereforo advise a concentration of the activities of the company on the neighbourhood of No. 1 bore. If theso should prove satisfactory, then a trial should perhaps bo given to the ground to the south of tho saddle over which the Pongaroa Road passes, but operations; should only be commenced in the locality after careful consideration, of the records and results disclosed on sinking No. 1 bore to deeper levels.

"That Petroleum exists on your property is undoubted, as the gn.i emanates, and tho presence of a small quantity of oil in tho bores clearly indicate, ..The structural conditions are also' : favoiirable for the accumulation of.oil-provided that a bed capable of holding oil in quantity exists, at a moderate depth. .On tho other hand it muat_ he jhdmitted that oven in regions in parts' : of tho world where oil is known to occur in payablo quantities, boring for petroleum is specu-' lativo. Now, in-New Zealand no payablo oil has been located up to tho present in any well put down even in country similar to yours. This is not an insuperable objection, as your well may. bo the first of a successful series, but duo weight must be given to the/fact ns stated. Tailing all" circumstances into consideration, especially tho great profit that would accruo in tho caso of a successful strike—which is quite possible in connection with your territory—l consider your company is quite justified in taking tho risk of continuing your No. 1 boro to a depth of, say. 5000 feet, especially as it is such a good bore. In fact, it would be a great pity if this wero not done."

BORING. . The Kotuku Oil Well Syndicate Ltd. left off boring, and for tho aforementioned reasons, at a depth of 2336 feet. During the time of this syndicate closing down and the Waipatiki Oil .Wells commencing work tho bore filled up.350 feet, and this had to bo cleaned out bofore drilling commenced, Prilling ins

been continuous with a few slight interruptions during the whole period, and the bore now stands at a depth of 3600 feet. A very hard strata of papa was struck at a depth of 2700 feet and continued .for over 250 feet. Eight from the commencement of the drilling an increasing flow of- gas was secured, and as the bore is boing pushed down, so larger quantities of gas aro released. Quite recently oil indications commenced to become more and more evident, and tho company now deem that Mr. Speight's report seems very likely to be literally fulfilled, and a rich flow-of oil should result. Actual traces of oil are quite apparent in tho residue brought up by the sludge pump, and bright and hopeful signs are given that this company will be one of the favoured.

NATURAL GAS.' A very largo flow of. gas is obtainable with littlo delay, three bores having been put down to a depth of SO feet, 120 feet, and HO feet respectively, and a good flow- obtained from each level, and in addition a ve'ry good flow is obtained from the surfaco somo littlo distance from the bore. All four flows aro coupled up and provide heat at the boilor, and lightivnd'heat to tho cottages.

EOYALTY. The royalty payable to Thomas M'Neil, the owner of tho land, is 5 per cent of the value of all crude oil and other products of petroleum at the well or bore's mouth obtained irom tho said land and also ..in resect of all coal or other miner T als at th ■■ sl>f s mouth, such net value to be th. . .-'ling price of sue l coal or other mi) ..-•,ls at the pit's v >ath (less the cost of winning and deli ering the same afcthe pit's mouth) r.nd also 2s. 6d. per chain per annum fo'' all pipes laid below the surface of tho ground, and ss. per annum per chain for all tram lines laid upon the surface of the said land.

THE PLANT. Tho price paid by tho company for the property was .£14,000, and of the purchase money payable in cash ,£ISOO has been paid by the company, and the balance .£ISOO is now secured by debenture mortgage to tho vendors for three yeaxs, bearing interest'at G per cent per annlSl An independent valuer, Mr. J. M. CoPS lins, manager for J. J. Niven and Co., Ltd., at Palmerston North, sets down the value of the company's oil well plant and buildings and other fixtures at well l over JEIO.OOO.

PRELIMINARY EXPENSES. The expenses required to increase the capital oi the company as above (exclusive of brokerage) are estimated to

amount to Tho amount payable as commission for procuring subscriptions for the present issue of the said increase of-21,702 £1 shares shall not exceed 5 per cent.

REASON FOR INCREASE OP CAPITAL'. Tho company, owing .fro the exceptionally healthy prospects, feel that they can with every confidence ask the public to subscribe liberally to this issue. More casing and several other renewals are necessary. A chango of casing is now imperative, the 8-inch casing in use having served its turn, and it is necessary to reduce to 0-inch casing, gorao 4500 feet is wanted, and the company have just completed the p'nrchaso of this quantity at a greatly reduced price on'present figures. ' Large vats or receiving stations must be provided for, moro especially ns the company aro extremely sanguine of "striking" uil, APPLICATION FOR SHARER,

Application for shares should be forwarded to tho representative or secretary of the compnuiy, together with tho amount payablo on application. No application for less than 25 shares will be accepted. If no allotment is made on any application tho deposit will be returned in full, and if the number of shares allotod on any application is less than tho number applied for the balance of application money will be applied in reduction of tho allottee's future liability on the shares allotted,