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By H. W. Page

Petroleum requirements since V-J day have been appreciably higher than predicted. Foreign operations now exceed maximum wartime levels by about 14 per cent. Domestic operations since V-J day have averaged 92 Per cent of the wartime peak. In spite of maximum foreign refinery runs, large exports of all products, except residual fuel oil, are necessary to meet foreign demand. During the next few years it is expected that foreign operations will continue at capacity, including new installations, but that, because of increases in foreign demand, exports will continue at about their present level. Domestic operations will increase during this period and crude production probably will exceed maximum efficient rates. Even after 10 years some exports probably will be required, but eventually these will be supplanted by increased output of foreign refineries, except for small tributary exports. The increase in domestic requirements will exceed the decline in exports. Unless findings of crude oil exceed present expectations, the increasing demand will be met by increased imports and synthetic methods-—such as the Hydrocarbon Synthesis Process for conversion of natural gas and coal to gasoline and distillates. Catalytic cracking installations will increase as crude availability decreases. This will help to meet the increasing demand for gasoline but will intensify the domestic shortage of residual fuel oil. Eventually larger imports will be required to satisfy the demand for this product. Introduction Under the pressure of the wartime period, there was time only occasionaly to look ahead in anticipation of what the postwar era held for the petroleum industry. Perhaps the general expectation was that a rather pronounced decline in the level of industry petroleum operations would take place shortly after the end of the war, with the impact felt mainly on the economy of the United States- It is of interest now, nine months after V-J day, to take inventory of the near-term situation and see what significant forces are at work. With this as a starting point, it should be possible to engage in something more satisfactory than pure speculation concerning trends in the immediate future and 10 to 20 years ahead. Present and Near-term Situation During the nine-month period following V-J day, foreign crude oil production and rebery operations have actually increased the These activities were at maximum capacity on V-J day but the continuation of drilling programs, the completion of new and rehabilitated refineries and of transportation facilities during the Past nine months have increased the foreign capacity. This added capacity has been fully utilized. Foreign crude oil production in May 1946 is about 14 per cent higher than during July 1945 and refining operations some 12 per cent higher' During the same period there has been a falling off in similar activities within the

Jan 1, 1947

By Joseph E. Pouge

For the purposes of this analysis it is assumed that the petroleum industry has undergone a basic economic change whereby the degree of competition present in its operation is reduced by the collective control of production brought about by statme-directed proration. Formerly freely competitive in all its parts, the industry is now fully competitive only in its marketing, its manufacturing and transportation, its search for new oil supplies, its drilling operations (with some qualifications), and its capital movements. The practical problem before the industry in its new status is the maintenance of equilibrium, with planned control of crude-oil production (proration) substituted for competition and price as the regulatory mechanism at one point in the supply-demand system. It is further assumed that proration has become so firmly established in the legal and operating framework of the business that it may be looked upon as an institution. The purpose of this paper is to call attention to the effect of unregulated drilling upon the orderly functioning of proration. Economic Structure of Petroleum Industry The economic structure of the petroleum industry, under the current form of proration, may be visualized, in simplified form, as shown in Fig. 1. This diagram is designed to indicate the existing mechanism whereby supply and demand are equated. Demand is created largely by conditions external to the oil business, whereas supply is conditioned by a series of stages incidental to the discovery, development and production of a resource. The time elements involved in changes in demand and supply are of an entirely different order, the demand factor being much more flexible and "quicker" than the supply factors. It should be observed, also, that the position of price, formerly between "demand" and "supply," has been moved to a sidewise location where it still affects demand but influences current supply only through its bearing upon proration, drilling and search. Proration has been substituted for price as a throttle at the well head, but at this point only. The mechanism now works in this fashion: a declining price stimulates demand and the

Jan 1, 1936

By Joseph E. Pouge

For the purposes of this analysis it is assumed that the petroleum industry has undergone a basic economic change whereby the degree of competition present in its operation is reduced by the collective control of production brought about by statme-directed proration. Formerly freely competitive in all its parts, the industry is now fully competitive only in its marketing, its manufacturing and transportation, its search for new oil supplies, its drilling operations (with some qualifications), and its capital movements. The practical problem before the industry in its new status is the maintenance of equilibrium, with planned control of crude-oil production (proration) substituted for competition and price as the regulatory mechanism at one point in the supply-demand system. It is further assumed that proration has become so firmly established in the legal and operating framework of the business that it may be looked upon as an institution. The purpose of this paper is to call attention to the effect of unregulated drilling upon the orderly functioning of proration. Economic Structure of Petroleum Industry The economic structure of the petroleum industry, under the current form of proration, may be visualized, in simplified form, as shown in Fig. 1. This diagram is designed to indicate the existing mechanism whereby supply and demand are equated. Demand is created largely by conditions external to the oil business, whereas supply is conditioned by a series of stages incidental to the discovery, development and production of a resource. The time elements involved in changes in demand and supply are of an entirely different order, the demand factor being much more flexible and "quicker" than the supply factors. It should be observed, also, that the position of price, formerly between "demand" and "supply," has been moved to a sidewise location where it still affects demand but influences current supply only through its bearing upon proration, drilling and search. Proration has been substituted for price as a throttle at the well head, but at this point only. The mechanism now works in this fashion: a declining price stimulates demand and the

Jan 1, 1936

By J. E. Pogue

That the domestic consumption of gasoline displays a marked seasonal variation, with a low in the winter and a high in the summer, is well known. It is logical to expect that the nature of the variation has itself been undergoing a change as a result of improvement in roads, general employment of closed cars, and growth of mass haulage; but so far as I am aware the change in seasonal variation has never been investigated and measured. It is the purpose of this paper to present the method and results of such an investigation, undertaken as a contribution to the technique of planning operating schedules now so prominent in connection with the functioning of the industry under a Federal quota system. For the method employed I am indebted to the suggestions and help of Frederick R. Macaulay,1 who kindly looked over the work sheets; and

Jan 1, 1934

By V. R. Garfias

With the exception of the United States and Russia, none of the leading world powers have within their boundaries the oil supplies needed to meet present peace-time requirements, and even in regard to the United States it is admitted by competent observers that the known oil reserves within the country are inadequate to meet demands for more than a comparatively few years. It follows, therefore, that the transportation of petroleum—almost entirely by tank steamers—from foreign fields to the main consuming centers is one of the most important factors affecting the present and future development of the oil industry. The world-wide distribution of petroleum is affected by numerous factors of which international politics is not the least important. The assurance of an ample supply of petroleum—one of the most essential munitions of war—is of paramount importance particularly to those countries subjected to the rivalries of powerful neighbors. And paralleling the importance of the control of an ample supply is that of its safe transportation from the fields to the consuming centers. To illustrate: France is dependent almost entirely on foreign sources for its petroleum requirements estimated at close to 100,000 bbl. daily, and in order to control such a supply after the World War it acquired an interest in the Iraq oil fields. Lately it has undertaken the construction of a pipe line from these fields to the Mediterranean seaboard in Syria with the expectation that late in 1934 these fields will supply between 30 and 40 per cent of the country's requirements. It should be noted, however, that the availability of this supply is entirely dependent on the safe operation in the Mediterranean at all times of an adequate fleet of tank steamers. Thus, in order to transport 40,000 bbl. daily, it will be necessary for one 10,000-ton tanker to leave Tripoli, the Syrian port, say for Marseille, every other day throughout the year while to meet the entire present peace requirements of France from the Iraq fields, a fleet of some 30 such tankers must be kept in continuous operation between Tripoli and Marseille.

Jan 1, 1934

By V. R. Garfias, R. V. Whetzel

It is estimated that world consumption of petroleum, its products and related fuels during 1935 will reach an all-time peak of 1,592,000,000 bbl. —about 5.4 per cent higher than in 1934. Demand increased within the United States approximately 6.1 per cent during 1935 and in foreign countries about 4.1 per cent. The figures in Table 1 indicate that during the past five years world's production of crude petroleum and related fuels exceeded demand every year and that the aggregate difference is approximately 239,000,000 bbl. The supply in the United States exceeded consumption by some 134,000,000 bbl. over the same five-year period, while outside the United States the excess over demand is shown to be 105,000,000 bbl. Table 2 combines the excess production in the United States with its favorable balance of exports over imports, showing that the United States has reduced its storage over the five years by about 132,720,000 bbl., and indicates that, including its excess of imports from the United States, the rest of the world may have an unfavorable balance of some 371,000,000 bbl. over the five-year period. Such difference in foreign countries is largely due to increase in stocks, and partly at least remains in our imperfect knowledge of consumption statistics as an unfavorable balance. Table 3

Jan 1, 1936

By V. R. Garfias, R. V. Whetzel

It is estimated that world consumption of petroleum, its products and related fuels during 1935 will reach an all-time peak of 1,592,000,000 bbl. —about 5.4 per cent higher than in 1934. Demand increased within the United States approximately 6.1 per cent during 1935 and in foreign countries about 4.1 per cent. The figures in Table 1 indicate that during the past five years world's production of crude petroleum and related fuels exceeded demand every year and that the aggregate difference is approximately 239,000,000 bbl. The supply in the United States exceeded consumption by some 134,000,000 bbl. over the same five-year period, while outside the United States the excess over demand is shown to be 105,000,000 bbl. Table 2 combines the excess production in the United States with its favorable balance of exports over imports, showing that the United States has reduced its storage over the five years by about 132,720,000 bbl., and indicates that, including its excess of imports from the United States, the rest of the world may have an unfavorable balance of some 371,000,000 bbl. over the five-year period. Such difference in foreign countries is largely due to increase in stocks, and partly at least remains in our imperfect knowledge of consumption statistics as an unfavorable balance. Table 3

Jan 1, 1936

By R. V. Whetsel, V. R. Garfias

Jan 1, 1934

By R. V. Whetsel, V. R. Garfias

For some time the writers have been compiling and analyzing statistics of consumption and production of petroleum, its products and related fuels, in order to arrive at a fairly accurate picture of the world-wide situation of the petroleum industry. In production, crude oil, natural gasoline, benzol and alcohol blended with motor fuel have been considered. In consumption not only refined products, but crude consumed as fuel, refinery losses, ships' bunkers and blended fuels have been taken into account to obtain a true balance between supply and demand. Statistics from practically every country and territory have been studied, and where actual figures were not available the estimates have been based on all the data available. The figures in Table 1 indicate that during the last five years the world's production has exceeded demand every year and that the aggregate difference is some 207,150,000 bbl. The supply in the United States exceeded consumption by 111,401,000 bbl. over the same five-year period and in 1931 and 1932 the demand exceeded supply, while outside the United States the excess of output over demand was 95,749,000 bbl. Table 2 combines the excess production in the United States with its favorable balance of exports over imports, showing that the United States has reduced its storage over the five years by about 136,-595,000 bbl., while in Table 3 it is shown that, including its excess of imports from the United States, the rest of the world has added 343,-745,000 bbl. to storage during the period in question, the greatest accumulation coming in 1934. Table 4 shows the world's consumption classified by countries according to the principal products. These tables also indicate that at the end of 1934 the statistical position of the petroleum industry outside the United States was decidedly unstable, a situation that probably will become more acute as a result of the added Iraq production; and that the present favorable statistical position of the industry in the United States, which is partly due to the excess of exports over imports, may be to some extent jeopardized by the unstable situation in the foreign market.

Jan 1, 1935

By A. R. Denison

The area discussed in this report comprises a group of 38 counties lying in the northeast corner of Texas. It covers all, and extends beyond, the borders of what is commonly described as the East Texas Basin. It includes two major oil fields, Van and East Texas; two major gas fields, Bethany and Waskom; and a number of fields, both oil and gas, of lesser importance. All commercial oil production comes from beds of Upper Cretaceous age and almost exclusively from the basal member, the Woodbine sand. Gas is produced from both Upper and Lower Cretaceous beds with the newer production from the older beds. East Texas Field This field continued as in 1932 and 1933 to dominate the drilling and production situation throughout the oil business. A total of 3681 producing wells was completed in this field during 1934. This is an increase of 1215 over the 2466 producers completed during 1933. Total wells

Jan 1, 1935

By H. B. Fuqua, B. E. Thompson

The area discussed in this paper, commonly known as the West Texas district, is easily divisible into three geologic provinces, the Midland Basin to the east, the Delaware Basin to the west and the West Texas structural platform separating these two. Production in Garza, Scurry, Mitchell, Howard, Glasscock, Irion, Reagan and central Crockett counties is associated with the east flank of the Midland Basin. That in Loving and Reeves counties is associated with the Delaware Basin. All other production and developments discussed in this paper belong to the province of the West Texas structural platform. Because of certain developments that have occurred during the past year, it has been found necessary to slightly revise one of the fields as grouped by Mr. Reith in last year's paper1. The Scarborough-Leck field has been broken down as follows (Table 1): The Leck field is shown separately because it is producing from dolomite; while the Scarborough area, producing from sand, is regrouped and designated as " Scarborough-Kermit-Halley," which includes the producing sand belt across Winkler County from Ward County to New Mexico. It is believed that this is a more logical division of Winkler County and that considerable future work will be avoided by making this change before further production figures have accumulated under the present set-up. A number of new fields are listed in Table 1, some of which may represent extensions of other produeing arras. The authors, however, are inclined to believe that they represent new fields. In either event, less work is involved ill adding two areas together, if they later prove to be one, than in attempting to separate a maze of production data into two fields after they have been erroneously carried as one for a number of years. The Howard-Glasscock field is designated in this review as the Chalk-Roberts field and the Denman production on the Howard-Mitchell County line is included in the Iatan field. Development during 1934 Development in West Texas during the year 1934 showed a marked increase over the previous year both in exploration and ill exploitation

Jan 1, 1935

By V. H. Wilhelm

Greater stabilization in the petroleum industry was effected during 1934 through stricter compliance with curtailment measures and the establishment of the Pacific Coast Petroleum Agency. Various estimates of individual, company and state reserves revealed the fact that they were inadequate to sustain the present rate of production over a lengthy period, therefore drilling operations were increased during the year both in proved and wildcat territory. This greater activity resulted in the addition to reserves at Mountain View, Mount Poso and Edison in Kern County, Santa Barbara in Santa Barbara County and Playa del Rey in Los Angeles County. Additional reserves were also established in the Long Beach and Santa Fe Springs fields, in Los Angeles County, due to operators being successful in isolating small prolific sand bodies, formerly disregarded during the flush production periods.

Jan 1, 1935

By H. K. Shearer

Drilling for oil and gas in Arkansas in 1934 showed more activity than in any year since 1929; with a total of 96 completions, including 36 oil wells, 1 gas well and 59 dry holes. Of the producers, the lone gas well and 35 oil wells were in old fields, and one wildcat producer opened a new pool. Of the dry holes, 16 were in or near fields and 43 were wildcats. The total reported initial daily production of the oil wells was 9013 bbl., averaging 252 bbl. per well. Active drilling operations numbered 65 at the close of the year, compared with 26 at the beginning.

Jan 1, 1935

By C. E. Shoenfelt

Operations ill Colorado oil fields in 1934 were not quite so extensive as in 1933, but much better results were obtained and one new oil field was discovered. In all, 26 wells were drilled, of which 9 were oil wells, 1 was a gas well, and 16 were dry holes. New oil production totaled 10,220 bbl. and new gas production totaled 33,714,000 cu. ft. This compares with new oil production in 1933 of 1238 bbl. and new gas production of 14,307,000 cu. ft. Dry holes in 1933 totaled 29 as conlpared with 16 in 1934. Oil was discovered in the Hiawatha gas field, Moffat County, in 1934 in the Mountain Fuel Supply Company's No. 4B Wilson, C. NE. NW. of sec. 23, 12N., 100W. This well was completed in a sand in the Wasatch (Tertiary) at 2304 to 2337 ft., after plugging back from 3797 ft. It made 20 bbl. of oil initially. No. 4B Wilson is the first well in the Rocky Mountain region to discover oil in commercial amounts in rocks younger than Cretaceous, and while it is not expected that Hiawatha will develop into an oil field of important proportions, eventually it may produce a considerable amount of oil as the gas pressure declines. The Hiawatha gas field was discovered in 1926, on one of six structures in what is known as the Vermillion Creek gas area. It is a northeast-

Jan 1, 1935

By Alfred H. Bell

Illinois produced 5 per cent more crude oil in 1934 than in 1933, because there was less curtailment, and. the value of the year's production at the wells was 35 per cent more than that of the previous year. The average price of Illinois crude oil in 1934 was $1.13 as compared with $0.87 in 1933, an increase of 30 per cent. The quotas of allowable production for Illinois during 1934, as authorized by Oil Administrator Harold L. Ickes, were as follows: January, February, March, 12,000 bbl. per day; April, May, 12,500; June, July, 12,600; August, 12,500; September, October, November, 12,000; December, 11,700. No other restrictions on production were in effect during the year until Oct. 11, when it was found necessary to prorate the fields to 75 per cent, a curtailment of 25 per cent below the quota fixed by the Federal Administrator. On Dec. 1 the curtailment was reduced to 18 per cent and on Dec. 18, to 15 per cent. Production in Illinois by months during 1934 was as follows: Barrels Barrels January...................... 393,000 July........................ 394,000 February.................... 337,000 August..................... 402,000 March....................... 394,000 September.................. 378,000 April......................... 373,000 October.................... 352,000 May......................... 411,000 November.................. 305,000 June......................... 392,000 December................... 321,000 Total ................... 4,452,000 In spite of higher prices for crude oil, fewer wells were drilled in Illinois in 1934 than in 1933 (Tables 1 and 2). Of the 26 wells drilled, 10 were oil producers, 8 were in proved fields and 2 were in a new pool in Wabash County, l½ miles south of the nearest production, one was a small gas well on the Stubblefield anticline in Bond County, one was an input well for repressuring in the Colmar-Plymouth field, McDonough County, and 14 were dry holes, mostly scattered wildcat tests.

Jan 1, 1935

By B. C. Craft

Louisiana experienced deeper and increased drilling during 1934, resulting in the discovery of five new fields: Bosco, Acadia and St. Landry Parishes; Lake Hermitage, Plaquemines Parish; Roanoke, Jefferson Davis Parish; Gillis, Calcasieu Parish; and Four Isle, Terrebonnc Parish. New sands were discovered at New Iberia, Iberia Parish; Lake Washington, Plaquemines Parish; Sligo, Bossier Parish; and in the Rodessa gas field, Caddo Parish. Other miscellaneous events worthy of mention are the continued leasing of prospective oil and gas lands in North and South Louisiana, extensive geophysical work in the Gulf Coastal area, and increased interest in the development of flank production on piercement type domes, resulting in the acquisition of flank acreage and the leasing of several shallow domes in the Gulf Coast and Interior salt-dome areas. The total oil production for Louisiana during 1934 was 32,529,082 bbl., an increase of 6,929,280 bbl. over 1933. The total daily production at the end of the year from 2421 wells was 102,752 barrels. North Louisiana During the year, 144 oil wells and 68 gas wells were completed in North Louisiana as compared with 111 oil wells and 47 gas wells during 1933. The North Louisiana oil production was 9,274,050 bbl. as compared with 10,023,580 bbl. during 1933, a decline of 749,530 bbl. The normal decline in the old fields and especially in the Zwolle area was partly offset by increased production in the Converse field, Sabine Parish, and by acid treatment of wells in the Zwolle, Converse and Caddo fields. There were no new fields discovered during 1934. During the year R. W. Norton enlarged the boundaries and reserves of the Rodessa gas field. A series of gas-bearing sands, was discovered in J. B. French, No. 1-B, sec. 34, 23 N. 16 W., below the oolitic lime found at 5500 ft. in which formation all previous wells had been completed. The total depth of this well was 5825 ft. Subsequent drilling has resulted in

Jan 1, 1935

By B. C. Craft

Development and exploratory work in Mississippi during 1934 was rather active, resulting in the expansion of the proven area and the drilling of a number of important wildcat wells. Mississippi showed a decrease in drilling operations during 1934. There were 36 completions from 18 counties during this period compared with 58 completions from 22 counties during 1933. There was a considerable decrease in activity in the Jackson gas field in Hinds and Rankin counties with only 9 completions, resulting in 8 gas wells and 1 dry hole compared with 17 gas wells, 2 oil wells and 7 dry holes during 1933. Leasing and geophysical work was reported from several sections of Mississippi last year. Extensive exploration and drilling were carried on in Lamar, Hancock, Pearl River, Greene and Stone counties and on the flanks of the Jackson anticline. Exploration will be continued in these areas during 1935. Four important wildcats were completed during 1934, all of which were reported as being structurally high, but without having important shows of oil or gas. These tests were: Hix and Germany's, J. J. Newman Lumber Co. No. 1, sec. 21-4N.-15W., Lamar County, abandoned at 3520 it. in the Wilcox; United Gas Public Service Company's Davis No. 1, sec. 30-1N.-5W., Greene County, abandoned at 7439 ft.; Gulf Refining Company's May L. Williams No. 1, sec. 33-5S.-17W., Pearl River County, abandoned at 4800 ft.; and Clarke County Oil Company's S. B. Kirkland No. 1, sec. 10-2 N.-16E., abandoned at 4002 ft. in the Eutaw. Another interesting wildcat was Gulf Refining Company's Dantzler Lumber Co. No. 6, sec. 22-4S.-llW., Stone County, abandoned at 7700 ft. (according to reports below the Selma chalk). A total of 114 of the 132 gas wells completed in the Jackson gas field are still producing and have a combined open-flow capacity of 4,145,-696,000 cu. ft. Four of the abandoned gas producers were never connected to the lines. The open-flow capacity of three wells in the Amory field is approximately 1,000,000 cu. ft. Producing against a line pressure of 50 lb., the demand during December greatly exceeded the capacity.

Jan 1, 1935

By C. E. Shoenfelt

The deepening of the General Crude Oil Company's No. 1 Meyers, NE. NE. SE. of sec. 22, 24S., 36E., in the Cooper area of Lea County, in April, 1934, resulted in the discovery of an oil field of major importance. The discovery well is an old well drilled by Cranfill $ Reynolds and completed in July, 1929, in limestone at 3438 ft. for an initial production of 90,000,000 cu. ft. (estimated) of 'gas. Deepening operations were started early in April, 1934, and cores were taken from the old total depth of 3438 to 3508 ft. A Haliburton test taken through the drill stem at 3439 to 3460 ft. showed 50,000,000 cu. ft. of gas with an increase of 5,000,000 cu. ft. between 3461 and 3474 ft. When completed the well tested 12,000,000 cu. ft. of gas and 5000 bbl. of oil at 3474-3508 feet. The new oil field—the result of this discovery—is between the Eunice and the Jal fields, closer to the productive area of Jal than to that of Eunice but far enough away from both to be considered a separate area. Eventually, all of these pools may be joined together by productive oil wells to form a single unit of large size. They lie in a general northwest-southeast alignment and the intervening areas have not been condemned by dry holes. In the drilling campaign that followed this discovery, 24 wells were drilled, of which 23 were oil wells with combined initial productions of

Jan 1, 1935

By H. B. Fuqua, B. E. Thompson

The area discussed herein, commonly known as the North Texas district, embraces the following 10 counties: Archer, Baylor, Clay, Cooke, Foard, Hardeman, Knox, Montague, Wichita and Wilbarger. It is underlain by two major structural features. The northernmost portion of the district, including Cooke, Montague, northern Clay, Wichita, Wilbarger, Foard and Hardeman counties, is underlain by the system of buried mountains known as the Red River uplift, which is parallel to and closely related to the Wichita-Amarillo uplift of Oklahoma and the Texas Panhandle. While the presence of a great majority of the numerous oil fields of the area is traceable to this feature, the production in Archer, southwestern Clay and southeastern Baylor counties is due to the influence of what is known as the Cisco Arch (so called because of its influence on Cisco deposition), the axis of which extends in a northwest-southeast direction across Archer County. It has been impossible for the authors to isolate the statistics for production for each of the many small pools of this district, as such statistics are not kept by the operators except for the district as a whole, therefore Tables 1 and 2 are comparatively short. The number of wells

Jan 1, 1935

By S. H. Cathcart

Price, production and drilling operations exceeded any year since 1930. A top price for crude of $2.55 was maintained from May 1 to November 6 and increased activity about coincides with that period. The average crude price for the year was: Bradford, $2.46; Kane-Butler, $2.34; Southwest Pennsylvania, $2.13. Production for the year exceeded 15 million barrels, an increase of about 2 million barrels over 1933. That this increase was more than justified by market demand is indicated by a reduction of 892,000 bbl. in stocks for the year. Two classes of data appear on Table 1, which are differentiated by footnote references. Where possible the .figures were obtained from individuals and companies that, from long acquaintance and varied contacts, are most capable of supplying an estimate where an estimate is necessary. The remaining data represent a rather careful compilation from all available published records (see p. 378). Drilling operations and production as summarized by the Oil City Derrick are as shown on Table 2.

Jan 1, 1935