TARANAKI PETROLEUM COMPANY.

Taranaki Daily News, Volume LI, Issue 264, 31 October 1908, Page 6

TARANAKI PETROLEUM COMPANY.

ANNUAL AlliliTlXU. The second annual meeting of tin hart-holders in the Taranaki Petroleuii 'oinpaiiy was held in ihe Theatre Uoyal u\v Plymouth, yesterday afternoon Vboul a hundred shareholders were pre cut. .Mr. U. Berry, ehainiian of direj :ors. presided, and, owing to his iudi.losition and at his request, .Mr. (J. K Liellriugi-r, a eu-direetor, assisted hin 11 the conduct, of the meeting. Tin >tiier directors on the platform wer Messrs. M. Fraser, J. Little, il.,]. Jones ). B. Roy, and H. Okey, with Air. Sim,, .on, the company's manager. KEPOKT A.\l> BALANCE-SHEET. The annual report and balance-sheet is printed and.circulated, and ahead; circulated in our columns, were take! as read. On in-half uf the chairman, Mr. B/.i ringer moved the adoption of the annua statements, and read the following re marks prepared by .Mr. Berry in explaining the figures presenled:— Liabilities.—i'lhe first item is the diminution of uncalled capital from £15,807 10s u'd on 30rh September, 1907, to £71)18 at the same period this year. Well you will renumber that one call became due just after last meeting, and another just before our annual balance this year. You will notice that there is £ISOO in the bank, and £2OOO odd of calls in arrears, mo&.iy recoverable, so that without some developments favorable to the company „.;our, it is not an-1 tieipated tiiat any further call will be required for nine months or even more. But we should know what success we are likely tw achieve before that time. A division of the amounts in arrears shows:—first call £-2,2 1.55, second call; £29, third call £144 as 4d, and fourth call £191!) 15s. A certain number of summons were issued on the first three calls, while such is jiot the case with tire fourth, and hence the difference. Since the balance .ijuO odd has ten received on account of the fourth call. Ihe item, "'sundry creditors £7(i 5s od,' includes portion of salary due on iOth September, 1908. to the manager and secretary, and sundry small accounts.' Assets.—On the assets side I wish to point out that Lite cost of bores given includes the values of derricks, buildings, engines, etc., while movable plant comes under the head of tools and general plant. The actual wages, fuel, repairs to plant, and sundries are as follow:

No. 1 Bore. £ s. d. \Vage9 152 14 10 Manager's salary 72 18 4 Sundries — Fuel, repairs to plant, etc. CO 5 5 Total amount during year £285 18 7 No. 2 Bore. Wages 186 19 8 Manager's salary ..104 3 4J Sundries — ] Fuel, repairs to plant, cte. 20 10 3 Total amount during year £3ll 13 5 No. 3 Bore. Wages 1101 11 10 Manager's salary .. .. .. .. 572 18 4 SundriesFuel, Tepairs to plant, etc. 347 4 11 Total amount during .mr £2021 15 1 No. 4 Bore. Sundries— Repairs after gale, etc. .. 15 5 0 No. 5 Bore. Sundries '. 3 lu' 0

The item of ••I'roohold property and options, lc-s options unrenewed]'' it may be explained, was nut written on as oilier options have been offered to your company, and which may yet prove to be of at least as much value as those lost. The deduction first, and the subsequent addition as provision for these or further options, were made upon the auditor's recommendation. Already some of the unrenewed options have been again offered to the company. Working account—This account needs very little explanation, but one item. that Of law costs £94 2s lOd, looks big, but £-33 odd of this was due .to defending a Supreme Court action, brought against us by the New Zealand Times, and whieia action we really won. caving the company some J-130 approximately.

It has been statea by a writer in a local newspaper that the manager gets £ls per week. Well, this is hardly correct. The amount of £l4 8s (id. lie also states that the secretary gets £250 per annum and a cadet £52. Again this is incorrect. The secretary gets

£250, it is true, but out of this he has to pay his own cadet's salary. Again. lie says: "The position of the company semes to be that there are six men employed at a weekly wage of £3G, requiring £2(i for management and supervision." The facts of the ease are that two drillers are employed at £0 per week and three men at 10s per day, and one engineer at .x.i 10s per week, about Is per hour for ten hours, equals Cl2, or £24 10s ins\eml of £3O, so that this has been increased by only 50 pur cent. In the face of such inaccuracies as these it is scarcely worth while going any further. The same writer gives the cost of management and supervision at £36 per week with the same inaccuracies in figures, and I have yet to learn that office expense are chargeable to supervision. However, the total, including rent, telephone and sundries, only amounts to £297 4s lOd for the year, or under £0 per week, instead of £ll as stated, a difference of nearly 100 per cent. One more matter that I would point out is 'that under the Companies Act, 1908, it is compulsory that a registered office be kept. I consider that this is all that ] need be said re the working account. Briefly, shareholders are reminded that this is yet only a prospecting company, and a profit and loss account is not) j kept as in a purely trading company. Directors' report—Very little in this rails for special mention, except 'in 1 future policy of the directors, and that will be more fully dealt with in the manager's report, which will be read to you. and he will also speak upon the subject. Hr. E. Griffith's seconded. Mr. Elwin said that there was a good deal of information that might have been inserted in the balance-sheet, and. again, there was some given that might lead the shareholders to believe that the affairs of the company were not conducted in as economical a fashion as they might be. He would like to draw attention to the two or time fact* which lie hud deduced from ',hc figures. It seemed that £21,088 had been received since the company was tormed, except that the amount of calls overdue had to be deduced. Against this, the company had spent C 21.562. with the exception of the balance now in the bank. In regard to the item ''freehold and option-;,"' had the company obtained any freehold or options since this company was formed? The chairman said the options were those taken over from the former company.

Mr. Elwin considered that the item, j "working expenses." on the face of it. i was singularly large. Tliev would, of! j course, include the office expenses, legal expenses, and s,> on. This vear the ollice expenses had really come to C 151.! Taking oft the rent of options, royalties, and the. proportion of the preliminary expense?, they would see that £OOO was the actual cost of carrying on the office and for working the company. ! That was about 21 or '22 per cent, of the whole money expended by the company. Then tliey had ail account of the work' done at the bores, the actual work having cost £2,858, including the manager's salary. They had bought £303 worth of casing, and at the present moment they appeared to have C 2300 worth or casing somewhere. Was it fit for use': Was a proper stockbook to'pt, or was the stuff lying haphazard about the premises.

I Jfr. Klwin was informed that stocksheets were kept; that all this casing was on the company's various properties, and that it could all be traced. In answer to a further query as to the necessity lor buying more when the company had all this in stock, the chairman said that the company had run out of certain sizes, llr. Elwin asked wlij'i £574 had been expended in tools when| there was £221) worth in stock.. Tlief explanation was that certain special, tools which were required in drawing the casing. j

lluiv many cng.nes liad the. company: got? There were lour, all of ilium Uil'mg been ordered or in ilie possession of the company before tlie decision to eoneoutrate operations on fewer bores. What comprised the item, "Sile and surveys ,X3OV" —(Josls of surveying a pieee of ground eminently suitable for, and leased as, the site for relinery works when required. Mr. Klwin went oir. The company had during the year spent .020:2 on work and .plant. In order lo do Iliac, they had kepi up an oliiee at a cos-: of .to!):). Jle did not think that any urivate business could 'be carried on ivith an expenditure of that kind .or] nerelv olllce work. The manager luulj icon 'engaged tor two years at JIToU i year. No doubt the manager had jeen under a misapprehension when he 'iimo here, and the company was un ler l misapprehension when they engaged lim. Things had not turned out as lad been expected. There was only mo bore instead of four or live to supcr'ise. The manager must have had :i ut of spare time during the year, lie ould no), expect to be 'kept busy super-

vising one bore. Hud the directors ; made any attempt with a view of util- i ising his whole time? The reply was that Air. Simpson's : whole time' had been given in the ser- j vices of the company. He had been kept constantly engaged. Mr. Elwin couldn't see how only one boro could have taken Mr. Simpson's whole time. The chairman said that during the year he had been engaged upon very important and delicate work, endeavoring to shut off water. Mr. Klvin: With any success? Mr. Bellringer: No. 2 bore will speak for that. Mr. Elwin continued: After taking off the manager's salary there was lelt £2452 as expended in the actual working of the company, or 45 per cent, of the total amount expended during this year. The cost of supervision and management, he considered, was out of all proportion to the results that had been obtained. (Applause.) 'So. 2 bore, we are told, s-peaks for itself," he continue 1. The shareholders had been told lastyear that No. 2 was practically a dry bore, and since then comparatively little had been spent on it. Only a short time beiore tile issue of the balancesheet was work suddenly resumed at No. 2 bore, and "up came the oil." He would like to ask whether the manager had made any suggestion during the year that the directors should work at this well, where there was a prospect of some reward? How was it that work at No. 2 was so long'delayed? The chairman replied that the manager would reply to that. Mr. Elwin then referred to the "peculiar secrecy" which surrounded the working. Shareholders in this town, and in other districts were able only to surmise that anything was being done. He had no wish to infer that any shareholder had ever expressed a doubt as to the directors working in the interests j of the concern, but in a prospecting company such as this the more that was known throughout the country as to the working the better. There might be times, of course, when it was advisable that the directors should not disclose all the knowledge they had, but when the shareholders invested money, aai when manv of -the shareholders were poor people who could with difficulty scrape together the money to meet the calls, they were entitled to have some information. For the whole of the pa s t year nothing had been heard from the shareholders except thai if they were , offered ten shillings per share they would sell, and they would not inv;-.t again. That was not a proper feeling in respect of work of such magnitude

and a work that would do so uiueh good to the country. (Applause.) Mr. Elwin said he was requested to ask if the employees had been threatened with instant dismissal if they un ntioned petroleum outside the work:-. The chairman said that it •«■; ;; ; \ ■'■. that at one time there was eert.iin uifonuation which the directors t-uiHi-i.r.'.i should not be given outside, for they d : d not want stories circulated which ■•Eight in the end prove detrimental to the company. The employees were therefore enjoined not to disseminate the information. Mr. G. Blanehard asked if it were not. a fact that the men had received letters threatening dismissal for breach of this instruction.

Mr. Bellringer said that was so, and

ho thought the directors were unite right in insisting that the men should not talk about the company's business in the town. (Applause.) The report and .balance-sheet were then adopted, without dissent. THE MANAGER'S REPORT.

A report from the manager, Mr. W. A. Simpson, was read as follows:

No. 1 Bore.—He continued work at this bore only from the dale of his last report about the end of' October, 1007, until the 28th November of the same

vcar. He struck a lieavv How of gas at 2321 ft, which caused the water and silt to gush over the roadway, making it necessary to close down until the derrick was closed in. When he resumed

operations he lound the casing fast, an I as there was already a length of 5-inch casing lost in the hole prior to his arrival, if ithe casing should have to be removed it would be an expensive well to complete; so he advised the shutting-down of the well until the other wells were completed. No. 2 Bore. —This bore on the 7lh

November last was shut down at a depth of 2188 ft. and remained untouched until the 24th August, since which time the easing had been withdrawn, perforated, and replaced in the well, which was redrilled and cleaned out to a depth of 2214 ft. The upper water was still shut oil', but some little salt water w<;s , coming from below where the upp-r water was shut oil'. The Iwre from the I 10th to the 20th instant produced about 2200 gallons of pure oil, besides some ' 500 gallons discarded whilst cleaning . out the silt. The well was now filled I with oil to within 300 ft of the top. Operations had been suspended for two days owing to the annual inspection of. the boilers. He recommended that the cleaning out and testing ot No. 2 bors be .continued until such time as they have ascertained the daily production, and then, if practicable, the bore be sunk down to the depth where the heavy flow of gas and oil in No. 1 had been obtained. No. 3 Bore.—The. work at this bore for the year consisted principally of putting in 8-inch casing from' 1580 ft, where it was. to 2300 ft, reaming the hole larger for same, with the hope of shulting'oll' the upper water with this

larger easing, but without success; a 1.'.0 working and lowering the (i-iuch casing and pulling it all out on several'occasions, in the endeavor to shut oil' the water with this casing. The depth drilled at first was 110 ft. but this by no means represented the amount of drilling done, as it was necessary many limes to withdraw the 0-inch casing, thus allowing the well to cave in, necessitating the redlining of. in many cases, 400 ft to 700 ft over again, an'n involving practically the same amount of labor as at first. When the friction on the easing became too great to handle it, he had had to draw the 0-inch drill and ream the well irom 1580 ft t> 2:loiifl, and then continue with this size down to ils present depth, testing, pulling, and rcpulling. The water was not yet shut oil', but while it had not been completely dry, it had been nearly so on several occasions. lie would not recommend the sinking of this bore any deeper until the water was absolutely shut oil'. Asked to supplement his report, Mr. Simpson addressed .the meeting. In the course of a speech lasting about twenty minutes he dealt with the great amount of talk and the great lot of dissatisfaction tliev had heard about. But those who did the most talking were those who knew the least. A question had been a>ked as to how he had been kept employed after one or two we Is were shut down. Now, he hadn't come here to take to pick and shovel because a bore had been shut down, or to sack a scall'old-inan and take his place. There was an outcry about the amount of money spent in' testing No. 3. It was a. mere bagiilcllc compared with Hie sums spent in developing new territory in Borneo, Sumatra, California, and other oil-bearing countries. Now. hj" reckoned that lately J,e had been accused of every crime in the calendar, tried without judge or jury, condemned, and brought here for execution. (Laughter.) He repudiated the expenditure on

Xo. 3, lor lie had not started the boro. I Ue detailed how he had found that this | well, though claimed to he dry, was not ;o, and he amplified his written report is to the methods adopted in endeavorng to shut oil' the water, lie had been it uil-buriug ever since 1885, and he N ladu't asked the directors to come out t .lid give him any points; and he didn't j eckou that any new directors would be . ible to teach'him very much, either, il'ter meeting with no success in No. 3 or the time he suggested trying Xo. 1, ( vliich was the only well that had not ( men driven below the oil vein that' had ;iv(!ii such results in the "Birthday. 1 ' lad he not come here the drillers would lave gone on boring in this well withnit getting a dry hole, and they'd most iiirely have got on to the oil vein withrat shutting the water off. When he ami) here the company was "sailing ilong nicely to bankruptcy," and they'd lave been there before now. The posi,iou at present was satisiaetory to liose shareholders who went to the lores for their information, and he was ihvays glad to meet tlieni there. Of ■our.se, if the shareholders were noi iutislied witli their manager they eould lispense with him ami get a man able ,o put down the 'bores to suit them. Jut he 'knew his business, and he wasn't ;oing to take any notice of the "clap'rap in the street." If the directors ,vere not satisfied with him at any time le would say to them, "For sake, et me out.''' As for the directors re'using to re-engage him, there was this ispect, could they get him! in answer to .Mr. A. Bayly, who vanted to know Mr. Simpson's opinion if Xo. 2 bore, he said that it would lave been better had the bore been put lown with S-inth casing, but he coniiderod it was in good shape for going lown and tapping the vein which they ixpcclcd to get at 2313 ft. if they could 'ouli'ol the soft formation in the ficinity of ihe present strike, this vein ind the lower one should make a prolitible well. Whether or not he would hut oil' the present How of oil in going arther down depended on the formation ind other circumstances.

Mr. Klwin suggested that the company slio'ild allow ifr. Simpson to put down No. 5, so that he would not have mistakes of the past to contend with. Was there money enugh? The chairman said there was enough money in sight for putting down a new boiv. but the matter was one for the directors to decide. In answer to further queries from ilr. Klwin. he said it was impossible to tell what a liore would cost until it had been completed, lie would not prognosticate as to the probabilities in developing No. 5.

Mr. S. Teed asked if there were any better prospect of shutting off the soft formation in an 8-incli than in a 5-inch bore.

Mr. Bewley said there was a considerable misunderstanding amongst shareholders as to this ''soft formation." He hud gathered that this soft formation came into the bore with the oil, and sometimes it would take six months to And out whether it was going to continue. As long as it was there it was quite impossible for the oil to flow freely. Mr. Simpson was endeavoring to cope with that now in No. 2, and it would be foolish to go on with another bore until they saw what measure or success he achieved. APPRECIATION

Before proceeding with the election of directors, Mr. T. C. Schnackenberg said he would like tp table a motion of appreciation of the services of the directors in the past year. The shareholders had so far only had to provide the capital, and in the future they hoped to do work that was no harder -and more pleasant—walking into the secretary's office twice a year to draw their dividends. Hut the directors ought to have some recompense for the time an] energy given on the shareholders' behalf. They would all agree that at the present stage it was quite impossible sufficiently <>r adequately to recompense them for what they had done, but to show their appreciation he would ask the shareholders to support his motion that the directors be authorised to dra.v £2OO from the funds for their services, leaving the manner of its distribution to the directors themselves. There might be a dilfcrenee of opinion as to tlio policy of the company, but the shareholders would agree on'two points, firstly, the sooner the dividends cai.ic, the .better; and, secondly, the untiring energy the. directors had put into their work. The chairman in particular was entitled to a large measure oi their thanks. Mr. A. 11. Steeds seconded.

Mr. IClwin said tliat last year, when it was proposed to vote the directors £250, he had moved to reduce the

amount to £IOO, and on this occasion he couldn't sec that the company was any better able than it was then to pay the directors adequately. When a dividend was declared, or'when the credit side of the working account came up to somewhere about the debit, he would be prepared to consider a vote like this, but now he would move that the amount be reduced to £IOO. The amendment was seconded.

Mr. Rowley .pointed' out Hint in the event of tlio company not lining successful, Mr. Elwin would lot the directors go without adequate remuneration. If tliey were entitled to any money, they were entitled to it now.

The amendment was lost by a large majority, only ten supporting 'it. Mr. Elwin moved a hearty vote of thanks to the manager. Mr. E. Griffiths seconded, and suggested adding that the shareholders express their confidence in his management. "

This was accepted by the mover, ami the motion carried by 'acclamation. Mr. Simpson, in acknowledging the vote, said he had given the wells us much attention as if they were his own, and he had done his best to be economical. He hoped at next annual meeting there would be more smiling faces. .Mr. .Schnackenberg's motion was then put and carried by 44 to 13. many refraining from voting. ELECTION* OF DIRECTORS. Messrs. (!. E. Bellringer, ,1. J. Ehv ; n. and M. Eraser were nominated for the i directorate. The ballot resulted in Messrs. Bcllringer anil Eraser lieiii.' reelected. The voting was as follows M. Eraser 845, C. 15. Bellringe,. 824, J J Elwin 22!).

ELECTION OK AUDITORS. Messrs. If. Baily (807) and 0. T. M'lls MID) were elected auditors. jr r . ]|. Lewis was also nominated, receiving 171 votes. ' "