Sowers, Don, Member AIME, Humble Oil and Refining Co., Tulsa, Okla.

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Introduction

Preliminary statistics indicate that 1961 will be a better profit year than 1960. As reported by "The Oil and Gas Journal", net earnings of 20 major oil companies averaged 7.5 per cent higher for the first 9 months of 1961, as compared with the same period in 1960. Crude oil production appears to be about 100,000 B/D higher than in 1960, and LPG production is up from 3.5 to 4 per cent over 1960.

The increase in production is partially offset by an increase of 10 million bbl in crude stocks. Product stocks appear to be in line with 1960 and the recent cold weather may cut down stocks of heating oils.

Drilling activity for 1961 may be slightly less than in 1960. As a result, it is doubtful if crude oil reserves will increase during 1961. However, because of gasoline plant construction during 1961, LPG production and reserves will probably show an increase. Gas reserves will probably show' some increase again in 1961 because of the increased number of successful gas wells.

Since drilling activity is the predominant factor in generating oil and gas production, let us examine what has happened since 1945.

U. S. DRIVING ACTIVITY

Post-war drilling activity increased from about 29,000 wells in 1946 to slightly over 58,000 wells in 1956, as shown on the chart. The number of wells drilled during this period increased each year, with the exception of 1949. From 1956, the wells drilled decreased through 1958, recovered somewhat in 1959 and reached an eight-year low of about 47,000 wells drilled in 1960. Drilling activity in 1961 should be at about the 1960 level.

Successful wildcat oil wells increased from about 500 in 1946 to about 1,800 in 1955. The increase was continuous with the exception of 1952. Since 1955, there has been a decrease in successful wildcat oil wells to about 800 in 1960 and may be even lower in 1961. Discover wells provide locations for extension wells which in time make up additions to production and reserves.

Successful development oil wells in general follow the pattern of successful wildcat oil wells. Total successful oil wells during this period represent about 93 per cent of total successful oil and gas wells. However, since 1955, total successful oil wells as a per cent of total successful oil and gas wells, ranged from 93.6 per cent in 1955 to 91.6 per cent in 1960.

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