Pacific Commerce and Produce

Oil Search Leaves One Asset, Anyway

By the Finance Editor

AN early end is likely to the

major search for oil in Papua

after more than £3O million ex penditure over the past 20 years.

The two major overseas partners— Vacuum Oil and the British Petroleum group—have indicated that they will provide no more money for the venture after the present series of wells is completed.

This leaves the Australian partner —Oil Search Ltd—the impossible task of carrying on alone unless new overseas capital can be found to finance the quest.

A search for such a partner has been going on unsuccessfully for some months and it can be taken for granted that nothing like the latest report from the company would have been issued if directors had seen any prospect of finding one.

In this report, the actual drilling companies, Australasian Petroleum Co. Pty. Ltd., and Island Explora tion Co. Pty. Ltd., announced that field activities would be brought to a conclusion at the end of the nre sent programme if no new partner was found, or unless “material en couragement” came from the current “Unfortunately,” said the report b?e 0 „o Ü btained C ° Uragement has

Directors reported that, of the four wells in the programme, only one well, Kuru No. 3, was still drill ing. Komewu No. 2, completed in March at 9,977 ft., had penetrated good reservoir sands but all tests had been negative.

Bariweka well, in which sub stantial gas finds had been made, had stopped drilling at 13,862 ft. with final tests still to be made.

Puri stopped drilling at 10,000 ft and had met no shows of oil.

Directors said tests would be made on three upper porous levels, but this was routine.

That leaves only Kuru No. 3, which is below 5,500 ft after meet ing early difficulties. Substantial gas flows from earlier Kuru wells were subsequently found to be underlain by salt water.

This factor cannot give much hope for an oil find in what appears to be the company’s one remaining hope. Furthermore, the prospects of finding any commercial use for the huge quantities of gas available do not appear bright.

Directors say in their report that it has not been found practicable under present conditions to formu late plans for commercial exploita tion of the gas found at Kuru and Bankewa. These reserves, however, constitute a potential asset which might be valuable later on, they add.

Obviously, here much will depend on the subsequent industrial de velopment of the Territory.

Calamitous though it may be to SG u • collapse of the search in vhich Territorians and Australians have invested so much money, faith and interest, it is at least encourag wasted know ttl at all bas n °t been nf E S^ of ? uch a lar S e potential cheap Power will un mcrease the attractive hftnr? P^ pu ,. a a ? a P ossi ble area for future industrial progress. gained' much ’ at least has been

Enterprise Oil Permit

Refused

A noth Eß adverse development l* th u e New Guinea oil quest l} a ? been the refusal of the sea^ 1 h 1 np ati w n * to extend the oil Guinea P r ° f snterpr5 nterpri se of New velopmen?NL. and Petroleum f u ? a °i an a d°?n WaS given for the re " reDresentntSif ? on ? pan y is making clarified ta onp S t 0 hav !- th e position the comn^ e u Suggestion 18 that ne company has not been suffici

f* ently active to warrant its retentic of the permit.

Meanwhile the company had a] nounced that a new hole on t] Sepik River area had been drills to 104 ft.

Directors had also announced, h only shortly before the refusal the extension was announced, th the company planned to drill sever shallow holes within the sedimentai basin found in 1955, and partly su: veyed in 1956 and 1957.

Object of the drilling was to ha 1 been to get more precise inforrm tion on the sub-structure of the an suitable for oil exploration, and i find, if possible, a suitable locatic for a deep test well.

To do this a drilling party le Madang on June 2. Even if activil by the company has not been a that the authorities might have d( sired, it is better to have son activity than none at all.

For the sake of all, and in tt interests of the pressing need fc an oil find, it is to be hoped ths the company will get its permit bac

promptly.

New Gold Mining

Plant for Enterprise

Meanwhile, gold production of Enterpri: by the company in July was 57 oz retorte bullion from treatment of 35 tons, whii 11 oz came from alluvial sources.

Directors say that satisfactory valui are being obtained from exploration ar development work at Edie Creek nes Wau. Crushmgs during April and Ms with a small battery yielded 149 oz n torted gold from 57 tons of developmer It has been decided to increase outpui “f n " ew P l an l is , bein £ bought for thi purpose, and should be operating soon.

Fijian Loan Succeeds

The loan of £1 million, Fijian current issued by the Government of Fiji an underwritten by the Australian stocl broking firm of lan Potter and Co., close fully subscribed. The £lOO securities we® r S a S t U es d of t 5 £ np 9 6aCl i a f nd carried interee rates of 5 per cent, for seven years (. - per cent - for 17 years, it was tlf second loan for the Fiji Governmerr t?aTian f firL. Underwritten b * the Aui

Rubber Production, Profits

made° r £94 Si bbBr + Estates ’ L td„ Papui Anrlf .S 24 ’ 41 i, ne profit for the y gar 1 April 30—a fall of £5,430, or 18 per cera bv £S S f a „ fte /. < i U , t . tlnß ■J'PrbclatloS char” tkm £ of 2 nW V- 36 ’ and raisin £ amortisE; £2 89l f plantatlon Property by £l5B i cuUram d 9ft a f Previously announced, w t\ £l5 000 Per cent - and requirn *,ia,ooo. Production of dry rubb.c th-elv e tn b n B’B6J 8 ’ 86 J lb t 0 481 265 due ere tween L " ab normally low rainfall b.c rween December and March Pnct « production and for delivery to ports t while ar p e ricS Aust . ralia average 19.8 d II averlgeS M 38d re ib Sed ° V6r aU gradd cefsion prlces A wer e caused by the rn du s trv JL tl ? e American automobile ini thh? the d o tors state ‘ In add ltlon t £entpmher Col^ l ?-°^ wealth Government la:£ of P lo mb nS abol i shed the Primage charm foreign P r? v,K CSnt - on the im P° rt of as other g h/n^ r enterin £ Australia. On tM: n hand the government has guarantee?

Pto New Guinea growers a minimum of 19 lb, which, in effect, makes for stabilisa tion of the industry.

I Meanwhile Papuan rubber plantations .have announced the following production for June: Kerema, 33.644 lb (May, 135,000 lb); Mariboi, 82,448 (77.118) lb; Rubberlands. 39,100 (36,400) lb; Lolorua, V 39.049 (42.029) lb. For July, Koitaki pro duced 103,100 (June, 102,100) lb.

Whaling Quota Filled

I The Byron Bay subsidiary of Norfolk [island and Byron Bay Whaling Co., Ltd., has completed its quota catch for the 0958 season. An average was obtained ■of 10 tons of oil from each whale. This [yield is three tons per whale more than last year’s average. Operations at Norfolk Island were last reported as due to begin on August 3.

SP Insurance Div.

I Southern Pacific Insurance Co., Ltd., de clared a final half-yearly dividend of 5 -per cent, making a steady 10 per cent for the year. This is payable on August 15.

Sandy Creek Produces Less

I Sandy Creek Gold Sluicing, Ltd., in July, foroduced 38 oz 10 dwt gold from 820 cubic yards of material. This compared with (the June recovery of 61 oz 5 dwt from

I The Stock Market

I Dominant features of trading on Aus tralian Stock Exchanges in the past month have been the explosive Middle East situa tion, which culminated in troop landings in Lebanon and Jordan, and the im minence and presentation of the Federal Budget. After a short-lived fall as a result of the Middle East crisis, the market re turned its rise and, despite the presenta tion of an unpopular Budget, it was only ■lightly below the year’s highest point on ■August 8. iOn August 7 the market actually achieved a peak for the year of 258.40. (Closing point on August 8 was 258.19. A month earlier the index had stood at I With the presentation of the Federal Budget, which gave no relief in company, •personal or sales tax, general belief around the market is that the buoyant tone of [trading will now be short-lived. A steep Kali of £lB6 million in rural incomes, in fcuding a 30 per cent, fall in the wool (cheque, a big fall in exports, and sliding ■overseas reserves are considered certain to have a delayed impact on share prices

[before long.

I A prominent feature of the market ■towards the close of the period w T as the [drop in shares in Oil Search, Ltd., to Ithe lowest point for 20 years. After the (announcement that the long quest for oil in the Territory was drawing to its close Ithe already weak shares dropped from 2/1 to 1/4. Before the fall in |price more than 10,000 shares changed .hands in an unusual burst of trading. |The shares have now made some recovery Ibut are still at lowest levels for years.

I Other oil shares, including Timor Oil from which little has been heard lately, Ijoined in the general rise but most later sank back. Ampol Exploration shares leapt po around 10/- on news of an oil showing in the Kimberleys area of Western Aus tralia. A later test showed the indication to have been negative and drilling is pro

ceeding.

Sydney Sales Prices

July 9 Aug. 8 ■Burns Philp ... 55/9 56/6 (Burns Philp (SS) . . 47/- 47/-

C.S.R. . .

£43/17/6 £42/10/- Dylup Plantations 14/9 14/6 Hackshalls 42/- 45/6 Kauri Timbers . . . 20/3 19/4% Kerema Rubber . . . 10/- 10/9 Koitaki . . 11/3 12/9 Lolorua . . 7/- 7/9 Mariboi . . 5/6 6/3 Norfolk Is.

Whaling 4/6 4/11 Queensland Insurance 69/9 70/- Rubberlands 5/6 5/6 Sthn. Pac.

Insurance 56/- 56/- Steamships Trading . 44/9 44/9 W. R. Carpenter Hold. 14/9 15/- Timor Oil . 3/- 3/5

Oil

And Mining Shares

Fiji

Aug., ’39 July 9, ’58 AUg. 8. '58 Emperor . b9/ll b5/9 — Loloma . .

S25/6 b29/6

Papua-New Guinea

Bulolo . . . , b!24/b35/b35/- N.G.G. Ltd. bl/10 bl/9*/a b2/0V 2 Oil Search b3/ll b2/6 bl/7»/ 2 Ent. of N.G —. b7d s8d Papuan Apm b4/ll b9d b9d do. opt. . — b6V 2 d b4d Placer Dev. b68/6 b86/6 b91/6 Sandy Creek bl/5 b4d b3d