TARANAKI PETROLEUM COMPANY, LTD.

Taranaki Daily News, Volume L, Issue 61, 2 November 1907, Page 2

TARANAKI PETROLEUM COMPANY, LTD.

ANNUA!, MEETING. CAUSTIC SPEECH BIT THE CHAIRMAN. About a hundred shareholders attended the annual meeting yesterday of the Taranaki Petroleum Company, Limited, in the Theatre Royal yesterday. Air D. Berry presided, and before formally opening the proceedings expressed his pleasure at again meeting the shareholders, although he and the other directors regretted that tliey had no better tidings to oiler. The minutes having been confirmed, the chairman read the following < MANAGER'S KEl'OltT. j •'■When 1 arrived in New Plymouth on tile 2nd June of this year, and I took charge of tlio dill'crcnt bores belonging to .your company, I found the No. 1 or Birthday well flowing a limited quantity of oil whenever the tap was opened, the bore having been shut down for some time.

No. 2 well was down to a depth of 2090 feet, with 2085 feet of sin easing, and 1711 feet of Oin casing. The well was reported to be dry, and that the water was shut off, but to prove this I instructed Mr O'Dowda, the driller in I charge of this bore, to pump all the water out, but after lowering it some 400 feet, I found it impossible to lower any further, thus showing that it Avas not shut off. I then ordered the Sin casing to be drawn, and proceeded to lower the Oin casing down to rock sufficiently solid to shut the water off, if such could be found. After lowering

the Oin casing to 1000 feet, I found that there was.no rock sufficiently hard to shut off water. Oil was found at different depths, lait it was limited in quantity, and in strata so soft that it would not stand up without casing, and, under the circumstances, of no commerc/al value. At a depth of 2114 feet, the easing became tight, apparently by the cavings packing round the pipe, and this has shut off all the upper water. I have now drilled and put in 2109 feet of Sin casing in soft material, which will not stand up without being so eased. At the base of the Oin casing there is found from one to two barrels of oil per day, but also in material that will not stand without casing, and a perforated pipe would have to be put in, in order to keep the well from filling up. A small quantity of salt water accompanies the oil.

I found No. 3 well with 1S8!) of Sin casing, and 1073 feet of Gin casing in it. This bore was also reported to have shut water off, but on pumping it, it was found that the water could not lie lowered. I then had the Oin casing lowered, to try and find rock as at No. 2, but did not get anything hard enough to rest the casing on until 2346 feet was reached. This bore is now in a granular limestone, a somewhat harder formation in which I hope to shut off water, and it may reasonably be expected to find oil at a greater depth, in commercial quantities, and in rock that will not cave in and spoil the bore. Some twenty barrels of oil have been pumped out of this bore from various deptlis, and independent of the oil flowing on the top of water when we started.

When I took charge of No. 4, I found that there was 180 feet of Sin and 1200 feet of Bin casing in (he bore. On continuing, I adopted the method of boring a. smaller hole, and allowing the easing to cut its own way in the soft strata, in order to ascertain if there were any rock sufficiently hard to rest the casing on, but found none down to 10S0 feet. Upon finding a lied of SO to 00 feet of running sand, which followed the casing down, and this easing having become fast, it parted in pulling, but after a deal of trouble and expense, I got th.* Oin easing out, and then advised your board to put in lOin easing to' where the Sin was, and lower the latter to where the Oin was, or even lower.

On becoming acquainted with the formation encountered in the different, borei' and the limited quantity of oil so far obtained, and the condition of No. 1, on the 4tli of October I advised your board to close down Nos. 4, 2 and 1. and put No. 3 on double shifts, in order to make it a test well, and to retain the workmen to remove No. 5 and rig on some location that had to be tested in the near future.

Upon opening up the No. 1 or Birthday well and pumping up the oil lying on the top of the water, I found nothing but water, and lower mud ; n solution. I pulled the rods and found a piece wire in the valves. After clearing this, I re-ground the valves and put tliem back, but after pumping for a few hours on water and a little oil, the valves clogged again, and had to be pulled. I then decided to sand-pump the well, and in lowering this, water and oil llowed over the top of the casing, proving conclusively that the well was lull of water. T found an obstruction, about ten feet below the bottom of the easing, which 1 concluded was the 2!) feet of strainer pipe reported by Driller O'Dowda as left in the wells. About 18 feet further down we met another obstruction, which T concluded was a length of Sin casing also spoken of by Mr O'Dowda. As the well had caved badly, I concluded to lower the casing below the obstruction if possible. I put on seven feet of casing and it went down of its own weight. 1' took this oil' again, and put on twelve feet. This also went dowr, and I have now some 40 feet of extra easing in the well, and all c>f this went down without reaming. I (iml the formation similar to what was in No. 3. There was only 2185 i fet of pump tubing in this bore. As to the policy I am prepared to recommend in the future, it is briefly this: that the directors continue operations on No. 3 down to a sufficient depth to thoroughly test the iloturoa district, in the meantime closing down all the other bores, taking the plant at No. 5 to some location to be decided on by the board; then, if No. 3 proves itself to be the success it is hoped to be, and which it is anticipated, owing to the strata of oil which we are constantly passing through, and the change of rock which has occurred, we have bright prcspects of getting on permanent oil at a greater depth.

One reason for (lie heavy expenditure on the various bores lias been having to fr-st every strata showing any (logroe of hardness, and the pulling of the (iin easing so frequently in consequence of this easing not being sufficiently large to pass Hie -lin freely, and 110 more of this (iin casing should be used in country such as ours.—l am, etc., W. A. Simpson. CHAIRMAN'S HKPOET.

In moving the adoption of the report and balance-sheet, which had been published and circulated amongst the shareholders, the chairman called attention 1 to "a most untruthful and scurrilous article" that appeared in the Taranaki Herald of the £'2nd Inst., and, not coiltent with publishing the article hero it had been wired to the leading Wellington papers. As most of the shareholders were aware, these two Wellington papers had tried to saddle the company with something like £l3O to £l5O f«r advertising, although the directors had never given an order, but allowed the Wellington, brokers the sum of £75 to advertise with, stipulating that this amount should not be exceeded without the directors' express consent. Tint the brokers had run up advertising accounts to the tuno of about £lB7 qdd, which the directors refused to pay, and fought the action in both the' lower Courts and in the Court of Appeal, where the Chief Justice lield that the company was not liable fpv more than the £7O agreed to be paid. Hence it w'as easy to understand the eagerness with which the Wellington papers had copied the article in the ITcrald and commented upon it, only the now paper, the Dominion, refusing to publish it until they had heard both sides of the ease. It must be remembered dial lliis article allecled not only this company, hut all other prospector/ companies in Taranaki, and it might have the effect of making it very bard to get calls paid in any of them, ft would be in the recollection of most that a party consisting of (he proprietor of (lie Herald, in comp:inv with Mr C. ('. Fair, thou manager of ilte Moluron Petroleum Com-

p:uiy, wont. to Wollinjjloii. wliorp a '•JminpjiL'iK l Imicli nipf tlipni, and it was <*nt ninl dried lltnt- Hip proposed now company should lie liandod ovov to ii \V"lli!iMtnii syndic 11\ TCithcr four or livo wvyo, la lio AVi'lliiurtnn dhwtovs. and tlir li'fvnl nu\ii:i!-! , r of ilic oompany wns ic> ho ;i YTidlinainn mnn, and. minor '■ru'il. :i T;']-tf inn nf fho proprietor of Hie TTornld. Fifty fliousnnd nnmtds was to ho p)M to tlie tlion Tlio Herald Imd ol>i"(»f'pd In Hto directors' for C50,0()ll. of wlllfll HIP slmrolioldors know. Tlioro wn* iwt miic'i dinVroru'-p in {]i ; > figures, pxropt tlmt tiro laior splienm wn- a privat-' Some of tlio sli:\iv'li<ildor« v:r.vc not

satisfied with tin proposal to Tie haiKl n cl OVfi? to a WoTTingtou syndicate, called IV meeting. of shareholders, anil upset

the little game, with the result that th M'oprietor of the Herald, in a lit oi qilcett—or might it not have been that ic was farther behind the scenes than he rest of the directors?—sold out his hares at the then liiiih price, aiul with he proceeds erected the building from I'hioh he now hurled anathemas at those vho had had tlie courage to stick to heir guns. Since then lie had not had ! good word to say for the company, flic article in question saidt ''The dieetors regret, that the Birthday bore ;as not realised anticipations. The oil ias been lost, and water lias again made ts appearance." ' What the directors ad said was: "The water was not shut ill', and oil was only coming in lesser uantities." These were very different tatements, and showed how words •light be twisted to suit the occasion, , : hen so desired. Again, the article said hat when Hie company was formed the osilion briefly was: '"The Birthday veil was pronounced by the late Jlr fair to be on payable oil; ground hart icen broken on'the Prison Reserve in l'der to comply with the terms of the ■asc, and there were a number of opions which need not be exercised for ome time." Now, what were the acts? Mr Fair, who was a director as fell as the manager, stated that the birthday bore would turn out 400 bar-

rels per'day, but that lie had telegraphed to the late Premier 200 barrels, so as to be on the safe side. And as even ten barrels would have been a payable well, and as he had stated that no more prospecting was required ho made a commencement at Nos. 2 and 3, ordered machinery, tools and casing, pegged out the sites for Nos. 4 and 5, and ordered the timber and machinery, lie himself going to Turakina to buy the engine for No. 4. Mr Berry said that lie had always tried not to say one word against the late manager, ir there was any blame now for using that gentleman's name, "the fault is not mine, but the fault of the Herald and no one else." As to the statement that on the Prison Reserve option they had only to break gi'ound to hold the lease, this was also untrue. The lease stated that boring had to be started on the first day of June, 1900, and that boring was to go on continuously until 1000 feet was bored or payable oil obtained. "At No. 3, Mr Fair told me as chairman, that

he expected the best well of the field," and lie was allowed to push on that bore, the engine being taken from No. 1 for the purpose. As to No. 4, the timber and machinery were on the ground, and as the directors eould only get a short extension of time work was also pro-

ceeded with there. The same applied to No. 5, with the exception of the engine. The truth of all these statements eould be vouched for at the company's ollice. He did not think the

Herald could slww any proof of their statements. The article then said that ".the proper and obvious course was to definitely prove the Birthday bore before spending more money than was absolutely necessary." They had found out how easy it was to prophesy after ■the event. The directors also were now aware that it would have been the proper course, and no doubt it would have been adopted but for the fact that

none of the directors was an oil expert, and they had to follow the advice given them by their late manager. Even the Herald did not advocate this course when it was in its power to do so, nor had it ever advocated this until the present time. Another of the paper's assertions, which, he said, like the rest, was incorrect, was that they had spent £1456 on the Birthday bore. The facts of the case were that when the £50,000 in

shares were issued of which the proprietor of the Herald took a large number this sum had to be allocated, and the sum of £BIB was allocated to this bore, leaving a balance of £(i;!8 18s 3d. Crediting

the engine and machinery takeij to No. 3 at .€350, this left £2BB 18s 3d as expenditure. Of this the nightwatchman took £144, share of the manager's.salary £7B, and the remainder was £66.18s 3d. If they reckoned the amount of oil

sold they would see the bore was really in credit. Another matter the Herald mentioned was that there was a sum of £145 3s lOd set aside pending litigation. Well, if they read any papers but their

own they must have seen it reported that the matter had been settled in the company's favor. They also said, with persistent inaccuracy, that "since the formation of the company, about a year ago"; the company was formed nearly eighteen months ago. This very paper was lately taking a gentleman to task for saying "nearly thirty years ago" when it was really about twenty-one or twenty-two years ago. Did the shareholders note that the percentage of error was about the same? But it was on a different, occasion. The next statement

that cal'ed for attention was that "there is now nearly £16,000 of uncalled capital." Well, he would merely say that there was £15,867 10s of uncalled capital, £l7 Customs deposit, £OS 3s 3d due to the company for oil sold and not paid for, £7l 15s cash in the bank, 32,0!)t) shares unallotted, 175 forfeited shares, £2OO I2s 6d calls iri arrear, or a grand total of £48,493 0s Od—very different to "nearly £16,000." The .Herald might reply that the 32,000 unallotted shares were valueless, and no doubt the wish was father to the thought. But at any time those shares might be worth more than par value. Although he might be considered too optimistic, he

did not doubt that oil would be found in large quantities under the rock now being bored through in No. 3. He would not sell out his shares at £1 each. (Applause.) He believed the manager was equally confident, though that gentleman very naturally fought, shy of making a definite statement. The latter part of the article was as* far as the poles asunder from real sympathy. The directors tried all through to shield the memory of the late manager, but it wns

quite impossible, after the article mentioned, that they as directors could remain silent, and he considered that all fair-minded people would acquit them of blame and let it rest where it should, on the proprietor of the Herald, "It

may interest the shareholders to know,' [ continued ill'. Berry, "that the directors hold some 3207 shares in the company, and that none of them have sold a share. But, on the contrary, two of them at least have bought more within the last few months. This, X consider, shows

the confidence in the venture, in spite of tin- set-back over the Birthday bore, for which your directors are not responsible." One more matter was that the call made payable on tlie 11th October had been and was still coming in as well as any other call. And what contributing shareholders would be

pleased to hear was that no further calls would be necessary for at least six months, or perhaps eight months, unless some startling developments devoutly to be hoped for—took place. Personally, he had given his best services and business knowledge to the company for some eighteen months. He had attended

fifty-four directors' meetings out of sixty-two held, sometimes leaving the train to go to them direct after a whole day eouiing from Wellington, where he had been on the company's business. Of the oight meetings he had missed, six he was prevented from attending owing to the fact that lie was 'engaged on the company's business elsewhere, and the oth v ; . on account of a very severe accident that he met with in the South. In concluding, he said he would be pleased to answer any questions from shareholders, Tliejg were oue or two present who were npt entitled to speak, and he would advise them to keep quiet. Mr. llprry resumed his scat amidst applause, Air J. J. Gilbert said he blamed the directors for the failure of No. 1. They knew perfectly well that tlie Birthday well was not on payable oil, and they should have stopped when they found that out, and extricated themselves from the mess the late manager had got them into. He himself had seen the late manager—who was now dead and gone —act the hypocrite on this platform. There had been a lot of humbug, and he ( the speaker) had seen through it. Why hadn't the 'directors shut down

all the bores pending the arrival of the new expert? They had plenty of experts lice, for., lost as good as the man they hid now engagid. But he woul-l say this of Mr Simpson—he was an honest man. Mr Oilbert again assorted that the directors had known the llirth day well was a fraud.

Mr Berry gave an emphatic denial. 'The directors had not known there was anything wrong with the Birthday well until they had turned it 011. Mr Adam.-, one of the. world's greatest petroleum experts, had advised them that the well was a payable one. The directors were business men. not oil experts, and they acted 011 expert advice, "Honestly." be said, "we knew nothing wrong with the well." Where had Mr Gilbert got his information, and why hadn't ho given the directors the advantage of his knowledge? Mr Gilbert raid he had got the in- | formation with his gycfss. He liadi known at last meeting, that the Birthday was not a payable well. Mr Fair had told tlieni they would have a bore down on oil last Christmas, There was I

no oil yot, and no likelihood of any. J'lie chairman: That's a mailer of opinion.

Mr C. E. Bellringer emphatically resulted the accusation. lie had liot known the Birthday was a fraud. If Mr (iilbert had had this information at I the last annual meeting it would have been a more manly thing to have challenged the late Mr George Fair oil the platform. (Applause). lU> should

have said, "You're a liar," rather than liave waited till the man was dead and then to have come and abused his shadow. Mr ("iilbert had not adopted the fair and straightforward course. (Applause). Continuing, Mr Bellringei said that-as soon as the directors got an idea that there was something wron" with >io. 1 bore they got the advice of an expert, who advised them to clear the hole out. The. position was critical.

Had the directors acted on their own initiative, and by a mistake damaged the prospects of success, they would have been severely criticised by the shareholders. So they asked Mr Adama, one of the best oil experts in the Old

World, and hj? said the well promised to be a payable one, but it wanted cleaning out. Then they found that there had been a break, and that part of the pump and a length of casing had fallen down the well. He had been told that

some of the former directors had known of this, but some people were ever ready to attribute evil motives in such circumstances. But lie was satisfied the late manager knew of it, for the break happened in his presence. The present manager in efforts to prove the well had found this obstruction, and had had to I sink past it. The advice of the manager was before them. The sharehold' ers by their applause or their silence at last meeting had adopted the policy of

their late manager, which was to test several bores. That policy the speaker had endeavored to carry out, until he was assured by Mr Simpson that it was contrary to the best interests of the company. He had known nothing wrong with the bore, and he honestly believed every other director was in the same position. Mr Gilbert asked why the bore had not been cleaned out.

Mr. Bellringer said they knew nothing about it.

Mr Gilbert: What? Do you mean to tell ine that a man who had been on the bore for tell years knew nothing about it? Barney O'Dowda ought to have known.

Mr O'Dowda objected to the introduction of his name in the discussion. Mr Gilbert said that the staff had given the directors the "same old yarn every week." They must have known it was all humbug. When Mr Simpson came here he felt like exclaiming, "Thank God, we have got an honest man at last!" A shareholder marvelled that Mr Gilbert, possessing this information, had returned his shares in the concern. (Applause). The report and balance-sheet were adopted, only Mr Gilbert dissenting. ELECTION OP DIRECTORS', Messrs D. Berry and J. B. Roy were unanimously re-elected to the-director-ate.

AUDITORS. It was decided to elect two auditors. Discussing the amount of remuneration, the chairman said he thought seven guineas each would be a fair thing. Mr Kelsey said he would charge twenty guineas for the recent audit. Mr. Buxton moved that £2O be paid. The chairman ruled that Mr. Buxton had no voice in the proceedings, as a call on his contributing shares had not been paid. It was eventually decided to pay Mr. Kelsey £2O, and to allow this year's auditors seven guineas each, a motion fixing the remuneration at ten guineas being defeated by 24 to 11. Messrs. T. 0. Kelsey, Hugh Bailey, and H. J. Lewis were nominated, and the two latter elected by ballot.

THE MANAGER. A shareholder asked that Mr. Simpson, the manager, should give the meeting his views. 1

Mr. Simpson, who announced he had taken up some of the shares himself, said he had not expected this, for he had put his speech in writing and handed it to the chairman, who had read it to the meeting. He was, however, very pleased to hear one man in New Plymouth say a good word for him. He had not known until his arrival in Sydney that, he was engaged by his Government for a company, but had expected to eome to New Zealand to develop the

oilfields for the Government, intending afterwards to get a contract from the Government to put down bores and work the wells. He would not have come at the invitation of a company. But things had been very satisfactory since his arrival. A shareholder had just asserted that the directors had been aware that the "Birthday Well'' was a failure. He could bear out the chairman's denial. When he (Mr. Simpson) had gradually

opened out the true facts of that well he had been called a pessimist. Mr. Berry had said to him, "Don't you think the well will produce 200 barrels a day

when she's cleaned up? It's been reported to us as a 400-barrel well." He answered that if 198 were deducted from the 200 and the remainder divided by two lie would be nearer the. actual re-

sult. Hut that didn't say there was no oil in New Zealand. He was confident I that there was, but he was not going to J say they'll get it. He wasn't a prophet or the son of a prophet. But there wero

good indications. Thev had struck oil in varying quantities at all depths in drilling, and it was floating about on the shore. He then referred to shareholders'

excitement—the rush for shares and rise in price when it leaKed out that No. 3 showed a little oil recently. The public o ; f New Plymouth was like a barometer,

| always up and down. He didn't believe I

m the system of supplying weekly re-1 ports to the Press. He considered that I

was only in the interests of the stockbrokers, who were making money whether oil was struck or not. Jt stockbroker must have his reports, and if he got two alike there was a row. He advised people to hold their shares. They thought nothing of throwing away hundreds in horse-racing. There had been enough money paid to bookmakers in

Taranaki in the last five years to thoroughly exploit the whole country from | Dan to Beersheba. But if a man had five shillings paid up on a share in an oil company he looked up the scrip every i morning, and began to wonder "what the they're doing up at the wells!" DIBECTORS' HONORARIA. Mr. -J, E, Wilson moved that £2oo be voted to the directors for their services, of this amount £l5O to go to the chairman. (A shareholder: Wait till they give us a dividend.)" No, the bulk of the work and worry was done before any company reached a dividend - paying stage. He referred fo the energy and time, devoted by the .directors to the company's business, and congratulated tlie shareholders upon having so many

business men on the liQard. In Ms opinion they had got the very best men, and it was but fair that they should receive some recompense or remuneration.

Mr. Hickman F. Russell seconded. Mr. Elwin, while endorsing all that had been said concerning the directors, considered that the payment of such a sum at this stage would have a very bad effect on the company. He moved as an amendment that the directors be voted £IOO, to be divided as they thought fit, Hr. Ciaukrodger seconded. Mr. Berry said lie wouldn't do the same work again for £250 a year. In the initial stages of tho company he had had to give three days a week to the affairs of the company, later four days a week, and now iFtook fully three days, a week. This meant that his own l>usi. |

ness had to be attended to at night, and it often took him till after midnight. j

'the amendment was carried on a show of hands.

Five shareholders called for a ballot. The directors, after consultation, asked these shareholders not to press tin' point, and tTie application was withdrawn.

Mr. if. F. Knssell then moved a further amendment to allot Cl5O to the directors. J" " purely prospecting concern such as this he thought it unfair io ask the directors to give their time for nothing. Mr. Frethey seconded. This amendment was lost, and the meeting allirmed honoraria of £IOO.

.\fr. l'.lwin, in proposing a hearty vote to tho directors for their serves daring the pasjt eighteen months, said he felt he was but expressing the i fooling* of the whole of tho shareholders when he Raid he would willingly vote a really remunerative amount to the directors when they had progressed so far ns to show the shareholders some prospoet of getting their money hack. (Applause.) This concluded the business.