POVERTY BAY PETROLEUM CO.

Poverty Bay Standard, Volume I, Issue 60, 11 June 1873, Page 2

POVERTY BAY PETROLEUM CO.

The following papers have been handed to us for publication. The first fyn tains the offer of amended terms made to the Provisional Directory by Messrs. Cooper and Ross; and the second is a carefully calculated estimate, by W. Steuart, Esq., shewing the advantages accruing to the Company, and. the relative profits under the original and amended terms which have been accepted on behalf of the shareholders s— THE PROVISIONAL DIRECTORS OF THE POVERTY BAY PETROLEUM AND KEROSINE CO. (LIMITED.) Gentlemen, —Since the Public Meeting held at Gisborne in the Hall, on the 28th ult., at which we agreed with intending shareholders in this Company to transfer our interest in the whole Oil Spring Block on consideration of our receiving one thousand paid up shares in the said Company, and fifteen per cent, royalty upon the gross output of all oil from the springs out of which we bound ourselves to pay the yearly rent of the block to the native owners, we have seen cause to make considerable modification of these terms which we now submit for your approval. We agree to transfer our whole lease of all the Oil Spring Block'to the shareholders as before for the consideration of one thousand paid up shares in the Company, and a royalty of fifteen per cent, upon the net proceeds of all the oil from the springs, provided that the Company pay the rental to the owners. In other words that we are to receive one thousand shares and fifteen per cent, royalty upon the proceeds of the oil, after the cost of production and rent have been deducted from the gross amount realized by its sale. —We are Gentlemen, yours faithfully, Cooper and Ross. Estimating the yield of oil to to be 50 barrels a day, would give 18,250 barrels of crude oil for one year, which at 35 gallons each would give a total of 638,750 gallons. Allowing a loss of one third in refining (about 15 per cent, being lost as per analysis) it would leave 425,832 gallons of refined oil as the year’s operations, which may be taken to cost Is per gallon to produce, and to fetch 2s per gallon to sell. Under the two arrangements the respective profits of the Company, and Messrs. Cooper and Ross would stand in round numbers relatively thus : — No. 1. Messrs. Cooper & Ross to receive 1000 paid up shares, and 15 per cent, royalty on gross output, they paying the rent. Co. C. & R. To 50 barrels (425,832 ■gallons at 2s) £42,583 Less 15 per cent, royalty £6,388 £6,388 Do. cost of work 425,832 gallons at Is £21,291 £27,679 Joint returns for division . £14,904 Less 1 tenth on C. 4 R.’s shares ... ... ... £1,490 £1,490 £7,878 Less rent paid by them £6OO Nett profits, or about 33 per cent, on joint returns, to C. &R. ... £13,414 £7,278 No 2. Present arrangement. Messrs. Cooper and Ross get 1000 shares; 15 per cent, on nett profit, the Company paying the rent. Co. C. & R. To product as above ... £42,583 Less cost of working as above ...£21,291 Rent ... £6OO £21,891 Joint returns for division £20,692 Deduct 15 per cent. royalty .. ... £3,103 £3,103 £17,589 Deduct 1 tenth on C. & R’.s shares £1,759 £1,759 Nett profits, or about 25 per cent, on joint returns, to C. 4R. ■••• £15,830 £4,862