The Daily News. WEDNESDAY, OCTOBER 13. A TEST THAT FAILED.

Taranaki Daily News, Volume LII, Issue 212, 13 October 1909, Page 2

The Daily News. WEDNESDAY, OCTOBER 13. A TEST THAT FAILED.

On June lltli last, Mr. D. Berry, shortly after having resigned his seat on the directorate of the Taranaki Petroleum Company as the outcome of a senoils difference of opinion between him self and the whole of the other directors of tile company, addressed a circular to shareholders calling attention to the special meeting of the cunipany called lor the lUth of that mouth to consider tile matters in dispute. The circular stated:

"bo fflr the company have obtained from one to live barrels of oil per dav, seldom the latter. Shares are now from ils Ud to 8s each. 1 1,1 <'oing to offer to guarantee not l?s-> Thau *2O barrels per day under it heavy penalty which will make the shares worth from 20s to 3(ls each."

At the special meeting referred to, Air. I Berry repeated his oner to take ova' the bore ami to give the company at least '2O barrels of oil a day for U days, under a guarantee of &i per day. He was conliUe.nl, lie said, that this could be done, ami had no., liie least doubt about 't, or he wmila not risk .1:50 of his own money. The events leading up to Mr. Berry's resignation and his subsequent oiler to tile shareholders to produce '2O barrels a day from No. 2 well, from which lie allege-I the manager was only abie to produce from one to live barrels, should be fairi liar to all who have followed the fortunes of petroleum development in the district. Air. Berry opposed the decision of his fellow-directors to extend tho engagement of. Air. Simpson to the end of° tile linancial year, on tile broad ground that the company

"had a right to a much greater measure of practical administration, initiative and guidance in its affairs than nad hitherto been shown."

Air. i. n» m his subsequent letters to the I,i,iversed at length the operations oi n:.' company during the previous launtlis, and sought to show that the shareholders' money was being

.squandered; that the oil alleged to have been secured was to a great extent nonexistent; that the perforated casing was not where it should have been, i.e., iyposite the oil seams; e.u.l that 111' casing was not properly perforated. in short, the burden of Mr. Berry's com niuuications to the Press wasMhaL the manager was not competent, and that it was time a change of management was tried. The change desired by Mr. berry was obvious from the commencement, but it was placed beyond doubt when he submitted his offer to increase the producing capacity of the well. Opinion was naturally very much diviJ ed as to who was in the right, but as was to be expected ill", lierry's offer go a-begging. For our part, iv.held that the failure of the manager u. produce the liest results from the bores was largely owing to the tlivided authority between himself and Mr. Berry (as chairman of directors) and we advocated that the manager should be given an absolutely flee hand. Xliie, also, was the view taken by the directors wli.'n they had lo decide between Mr. Berry and" Mr. Simpson, and the latter was given what he had never had before, cartc-Manehe to carry out his prospecting work according to his own ideas, unhampered by the opinions ol Mr. Berry or any other person. This was the position when the special meeting above referred to was held. J t will be remembered that just prior to Ihat meeting a | compromise of a sort was arrived at '.n the advice of representatives of outshb shareholders, which had for iLs object t lie prevention of a deadlock, and which inmlt- it pi«iible for Jli\JJcri;j»to. resume his seat on the directorate, Tint, ; s

one nf the dim-tors put it. "tied hand and foot.'' so far as the supreme control at the bores was concerned. Th; meeting unanimously carried a motion of eonlidence in the directors and mana-

ger. In the meantime the manager, Mv Simpson, was beginning to show results at No. 2 bore, justifying the decision of the directorate in giving him a five hand. Negotiations were almost at

once opened between the directors and Mr. Berry with a view to agreeing upon the conditions of his challenge test, hat some little time elapsrd before theie were completed. The bore during this period steadily increased its weekly volume of production from eight barrels a day to fifteen barrels a duv. and in tlw?

I aggregate produced during th,. month of .Mr. Simpson's, test 24S barrels of steamed oil for less than 21 actual working days. Tiien the well was transferred to Mr. Berry for the purposes of his test, about the middle of .luly, the agreement being that he was to have eight weeks ill which to "make good" his undertaking, and at the end of that time the manager was to resume control of the bore. At that time we wrote that we hoped the conditions imposed on Mr. Berry were such that nothing would be done that would impair the producing capacity of the well. While having ',o doubt that Mr. Berry would leave nothing undone to increase the daily flow of oil, care should be taken that fie satisfactory condition of affairs at the bore was not being subjected, to risk. So 10115, wc as assurance was forthcoming, everyone would heartily wish Mr. Herry success 111 his efforts. 011 the 14th August, a report from Mr. berry was published by our contemporary stating that the whole of the fivcincii casing had been withdrawn. "As expected," the report stated, ''the perforated casing was not quite in the right places," nor were there, in Mr. Berry's opinion, nearly enough perforations. On the Kith Align-1 Mr. Berry reported that eight length- of casing bad been protracted, and lojO feet 0" the casing replaced in the bore. '"Oil Friday morning." the report proi-cede-l "the oi) had risen from about .1000 feet

I to williin -1110 fret of the top, or an in I crease of approximately SIO gallons.'' § Oil 30tli August, Mr. Berry report".! I that tl»' work (if putting in the deepwell pillllji had been comjilc'tcil 011 tiio 24th, and pumping was started, ov r eleven barrels being lifted in one hum*, and later in the week a rim averaging Hl'/, (barrels per hour was chronicled On tile Gth September, he reported that owing to the accumulation of fine sand in the pump and pipes, it became necessary to draw tile • pump piping the previous week, but he hoped to com mcuee the test proper on 13th or 1-il.h inst. with the well clear- of all oil, silt and water. The crucial test of 24 wooing days commenced on Tuesday, lull September, and accordingly concluded on Monday last, lltli inst. 'Trior to tin; commencement, a licensed surveyor took measurements of all the oil tlie'n in the tanks. Oil the 20th September It:. Berry published a report which staled, inter alia, that on the lirst day ft.pumped over ten barrels per hour'from 3.30 p.m. till 7 p.m. (a total of 3.') burl'els). On the Friday following ihe port stated that tile pump' again averaged ten barrels per hour oil a run ■>> twelve hours (equal to 120 barrels). His report, would seem to show, therefor. l that Mr. Berry secured .155 barrels during his first week, for only Iji/, hours actual pumping. A further porlion ol the report is interesting, wherein Mr Berry says: "The absurd rumor that tin casing is over-perforated is worthy oi the source from winch it emanated' but it may be satisfactory to the autini to know that the sand has decreased at least one-half." On September 23 our evening contemporary reported thai ' one of its reporters, visitim, the binthat morning, found the pump "liftinc almost pure oil at last/' and that Mr" Berry had informed them that whik he bad pumped fully twice the quantity required, yet. it contained so much watei that it was yet doubt ful whether il would go 40 per cent oil. The full result of the, test is now available, and the report of the sm veyors, Messrs Sladden ami Paliiirv i that between September 13ih and Octi tber 12th, there has been obtained 512' gallons of oi! in all! This works out ai 112 barrels, or one-quarter of tile 'quantity Mr. Berry guaranteed, mule,- pen ally of C2 a day. to produce. Our pur P°f® U n«>t to inagniTv Mr. Berry'* con, plete failure to substantiate hiserious charges against tile capability of the.manager. The results speak foi themselves." Mr. Simpson, on a month's test, proved that the well could produce over eleven barrels every working davj Mr. Berry followed immediately after I him, and, putting his theories into practice, failed to produce more than hall the amount, instead of double as lu guaranteed. No more complete vinilica tiou of Mr. Simpson's management am no moie thorough condemnation of th impropriety of permitting "local es pert?" to interfere with the uorkm

management could possibly have been given. The "merely mechanical difficulties" with which our contemporary charged the manager with wasting time over have now been shown to be such as only the resource of an expert can ■ overcome, and no one should be move willing to concede the fact than Mr. | Berrv. In our opinion, now that Mr. Simpson ha* resumed control of tlw bore, and noting with a free hand, he will soon re-demonstrate that the .well is a paying one. Although wc haxe n") I oliioial knowledge of the fact, we believe he will immediately proceed to bore deeper, and demonstrate, as he ha 6 done in Xo. :\ f and as he always advocated should be done at Xo. 2, that there is better oil in the deeper levels. Had deeper boring not been so strongly opposed in February last when the manager reported in favor of so doing, in our opinion Xo. 2 would have been a payable producing well to-day. Anyhow, the shareholders have now something tangible upon which to "weigh up" tlw situation, and reflect on whose judgment it would have paid thein to rely.