TARANAKI PETROLEUM CO.

Taranaki Daily News, Volume LIII, Issue 319, 5 June 1911, Page 3

TARANAKI PETROLEUM CO.

TJIE AGREEMENT TO SELL. The following is taken from the Dominion's commercial column in Friday's issue:— "The option granted to Mr. Henry, which covers a period of six months on a deposit of £2OOO, is very certain to be exercised. Oil company registration has been very active in Great BriI tain, and in April the registration included the France-British Oil Trust, with a capital of £250,000, to carry on a general financial business; the Asiatic Petroleum Company (Egypt), with a capital of £200,000; the Central Ohio Oilfields, capitalised at £100,000; the Western Pacific Oilfield, with a capital of £30,000; the Venezuelan Oilfields Exploration Company, with a capital ot £157,500; the West Coast Oil Fuel Company, with a capital of £IOO,OOO. There is thus every evidence of a mild boom, and the Taranaki concern is certain to be taken up. The price to be paid to the Taranaki Petroleum Company workb out at about 12s per share cash, and one fully paid-up share in the new company for every two now held. The sale is practically at 22s per share, and it is believed that the company could have done better. Mr. Henry pays £IOO,OOO, and the company could have had an offer of £140,000 from a syndicate equally as strong as the one with which Mr. Henry is associated. If the new company is capitalised at £400,000, or even £300,000, it will be grossly overcapitalised. It is most likely, however, that the capital will be £300,000, in £1 shares; 150,000 shares would have to be issued to provide the stipulated working capital of £IOO,OOO and the cash payment to the present shareholders of the Taranaki Petroleum Company; 50,000 shares will be needed for distribution to the Taranaki shareholders, and the syndicate will no doubt want 100,000 shares to repay itself for securing the option and floating the company. The gain to New Zealand will be substantial in that we will have expert management and adequate capital to develop an oilfield that has been

proved and that gives promise of being permanent. It remains to be seen how the new company will be affected by the ever-present labor question." ACTIN G -CIIAIRM AN INTERVIEWED. Seen on Saturday in connection witli the foregoing statement, Mr. C. E. Bellringer, the acting-chairman of the company, declared that no offer of £140,000 had ever reached the directorate, although he understood that mention of such an amount being available had been mn-Io verbally to a director. He explained that when the company was first approached with a view of placing the undertaking under offer to probable purchasers the directors decided that no offer would be entertained unless the persons making it would be willing to pay a substantial deposit. To this they had rigidly adhered right through the period which had since elapsed, and during which they had frequently been approached from different quarters and asked to put a price on the concern, and to give options ranging from one tu six months. In no case had any offer been made in which any party had been willing to pay the deposit asked, with i the exception of the dealings with Mr. J. D. Henry, who had cabled accepting ihe conditions, as already published. "Mr. Henry met us very fairly," continued Mr. Bcllringer. "lie said to us when leaving, 'Now, I want you to understand that you are perfectly at liberty to receive any offers until I pay the deposit. I don't want to stand in your way at all. and if anyone else offers you more than I have agreed to pay, then you are quite at liberty to accept the offer.' Mr. Henry has faithfully carried out every promise he made to us during the negotiations, and I personally am confident that he will carry the negotiations to a successful issue."

"Now, you can see that we could hardly consent to put a price on the concern for this other party without placing them upon the same obligations as was placed upon Mr. Henry—that we should receive a deposit. They failed to make such a deposit, or to agree to pay one, and went further, telling us it was most unlikely that we would find anyone likely to purchase under those conditions. They were told again that a deposit was absolutely essential, but although eight weeks elapsed between that time and the date of the receipt of Mr. Henry's favorable cable, they did not 'come to light' with their deposit. After the receipt of that cable we were approached again, but it was, of course, quite impossible to deal with them when Mr. Henry had agreed to pay the deposit." "No," he continued, "you can gay definitely that no offer of £140,000 was ever made to the directors, but I believe one of them was told verbally that £140,000 could be obtained. That gentleman was interviewed by the company's solicitor, but our insisting on a deposit proved a stumbling block. Would it Vie fair for Us to allow Mr. Henry, or these other people, or anyone else to have our business in their hands to do as they liked with for six months, unless we had some guarantee, or some deposit as to their bona fides!" "About the over-capitalisation, I have nothing to say," said Mr. TCellringer, "but this—that £IOO,OOO seems rather an outside estimate of the amount likely to be retained by the purchasers to repay themselves for securing the option and floating the company. The writer of the Dominion's article can have no definite information as to their intentions, and has presumably made the amount as big as possible. That his prediction has had little effect locally, though it has been much discussed, was shown to-day when £1 shares offered at auction brought 22s 3d." ANOTHER STATEMENT DENIED.

'•Statements are being made in the town." remarked the reporter, "that when you fixed up to sell the undertaking" for £IOO,OOO, Mr. Henry said he would willing have given much more. Is there any truth in that '!" "Xo truth, whatever." was Mr. Bellringer's reply; "£IOO.OOO was his price, not ours. ' We tried hard to get £],")0,000, and stuck for a long time for £125,000. We had lengthy negotiations, night, meetings and day meetings, always trying to do our best for the shareholders. But Mr. Henry stood firm. He said, '£loo,ooo is my limit. I can't honestly recommend my principals to pay more.' As I have said, there was one matter—that of the deposit —on which we would not budge, and eventually we agreed to accept his offer, with'the addition of £IO,OOO if oil were struck at No. 5 before the completfon of the negotiations, we insisting that such an occurrence, and not an unlikely one. would greatly enhance the prospects of the field."

"I woidd like to emphasise this. In our negotiations for the sale of the eompany we had to bear in mind—and it' was uppermost in our thoughts—that the interests of the whole district were largely involved, as well as the interests of a large number of people throughout the Dominion. The directors were particularly alive to this. Our first aim was to get what we believed to he a bona fide company to come here and bore for oil. That appeared to us, and still appears to me, to be the first consideration. Mr. Henry's oiler was the first that commended itself to us in this light. And, supposing that the directors had fixed a price considerably in excess of

what Mr. Henry wo'.ild give, and had refused to come down, the whole thing would have been turned down, and we should have been condemned on all hands for standing in the way of the interests of the district. I have no hesitation in saying that had Mr. Henry gone back: to England without having arranged with us to sell the undertaking to him, nothing further could have been done for a long time." In conclusion, Mr. Bellringer said the directors were perfectly satisfied, from the remarks made by Mr. Henry, that his group of financiers will faithfully carry out everything Mr. Henry had said.