Annual Meeting of the American Institute of Mining, Metallurgical, and Petroleum Engineers, 14–18 February, New York City
This paper presents a methodology for long-range studies of petroleum supply, to meet protected demands, that involves modifications of procedures used previously. This paper continues a series of papers on this general topic in the AIME, the most elaborate recent one being that by Warren Davis given in February 1958.
The procedures considered here begin with the assumption that the governmental framework of regulations and taxes remains fixed but that price changes. After these procedures have been reviewed, the effects of changing certain governmental controls will be considered in order to judge their potential effects on future supply. This is an essential step because controls cannot be expected to remain static in a situation changing as much as the petroleum industry and because such changed are within the scope of alternative ways of adjusting to impending problems.
The first procedure begins with:
trends in drilling success,
relation between field income from oil and gas and footage drilled,
declines incapacity from production,
trends in capacity of new and producing wells,
all monetary values are in constant 1958 dollars, and
get amounts of domestic crude petroleum production.
From these components protections are obtained of:
numbers of future producing wells required,
new wells drilled,
crude oil found,
capacity of producing wells,
production costs, and
average wellhead crude oil price consistent with the footage-field income relationship.
No attempt is made at this time to explain trends in future production of natural gas or natural gas liquids. Simple protections of these are assumed for the future which are consistent with past trends and forecasts by the American Gas Association. Such forecasts take account of trends toward deeper wells, increasing gas-oil ratios and increasing condensate-oil ratios, but we are not directly concerned with an analysis of gas and condensate in this paper.