With the advent of pump truck manifolding and suction manifolding, high rate (up to 66 bpm!) casing fracs are introduced to the West Texas Spraberry Trend with astounding results. The nation’s inventors scramble to come up with viable, cost-effective devices for drilling oil wells in the deepwater (water depths as deep as 100 ft!) Gulf of Mexico. One proposal calls for a gigantic “milk stool” – a huge submarine derrick with widespread legs on the bottom and a small platform above the surface on which a derrick and drilling rig are mounted. (Where will this insanity take us!) Light oil flowing at 550 bbl per day from a rank wildcat 600 miles north of Perth promises to establish the first commercial production on the entire continent of Australia. The first deep test for oil in Israel is spudded near the former Biblical city of Sodom (ironically, adjacent to a large salt deposit).
East Texas crude oil - $2.90 per bbl; U.S. – 2,885 rigs running
Ayatollah Khomeini, exiled in France, convinces oil workers in Iran to go on strike as part of their “holy war for the sake of God and for the liberation of our own people from the Shah.” The EPA waives a ban on “20-proof gasoline,” claiming environmental risks associated with the use of the 90% gasoline/10% alcohol fuel are inconsequential. U.S. crude oil imports hit a record 7.66 million bbl per day, but DOE Secretary O’Leary assures Congress that another gasoline shortage and the resultant long lines should not occur at least for the next 6 months. Refineries scramble to modernize so as to enable competitive octane number improvements in their gasoline stocks.
U.S. – 2,333 rigs running
North Sea oil prices hit a 5-year low of $13.27 per bbl on fears of a crude oil glut. For the first time, Mexico becomes a net exporter of gas to the U.S. Newly drilled wells add luster to the eastern Gulf of Mexico, but gloom to Alaska’s Cook Inlet. Companies such as Oxy that are dominated by crude oil operations report plans to cut their capital budgets, while companies such as Sun that are dominated by natural gas operations report plans to increase their capital budgets. The threat of strikes spreads across Russia’s energy sector as coal miners and oil and gas workers protest nonpayment of wages. (Despite the irregularity in their paychecks, vodka consumption by this sector has reportedly not been effected.)
WTI - $15.23 per bbl; Natural Gas - $2.20 per MMBTU; U.S. – 876 rigs running
Oil industry mergers achieve a mind-boggling scale, with Exxon gobbling up Mobil and Total swallowing Petrofina. According to the “experts,” mergers and acquisitions will continue to serve as the ultimate form of cost-cutting. In addition to mergers and acquisitions, petroleum companies continue to cut staff to cope with the new
low-price environment. Texaco announces plans to double the number of jobs it was planning to cut as recently as the previous month. Union Pacific Resources reports plans to reduce its Fort Worth headquarters staff by 14%. Meanwhile, the FTC mulls over the planned merger of BP and Amoco, while rumors of Royal Dutch Shell acquiring Chevron abound. U.S. and U.K. forces launch an attack on military installations in Iraq, sparking the biggest 1-day jump in crude oil prices in over six months.
WTI - $11.19 per bbl; Natural Gas - $1.95 per MMBTU; U.S. – 669 rigs running
The Rest of the Yarn
Born in a log cabin in Oklahoma in 1896, he attended O.U., Oklahoma Baptist University, and East Central State College in Ada, ultimately ending up with a law degree. By the end of the 1920’s he had teamed up with his brother-in-law to create a flourishing drilling company. With a father-in-law who was a successful oil man and his brother-in-law who had “a nose for oil,” he chose to focus on learning how to raise investment capital. Having mastered this art and with the retirement of his brother-in-law in 1937, he convinced two veteran Phillips Petroleum employees to join him in business. After one of his two partners left the business in 1940, he was named executive vice president of a new operating company that was named after him and his now lone partner.
Under his leadership, the new operating company became the first company to drill an offshore well out of sight of land. In later years he opted to enter the political arena, rising to the levels of governor and U.S. senator representing the state of Oklahoma. As a senator, he broke ranks with the oil industry backed congressmen who were seeking legislation to curb oil imports, choosing instead to tighten import controls via administrative action. This initially alienated him from many independent oilmen, but in his last major congressional victory, he convinced President Kennedy to institute his administrative program for tightening import controls. The program went into effect on January 1, 1963, the very day that he died of a heart attack. His attending physicians reported that Oklahoma’s senior senator was telling a humorous story at the time of his death. Offshore pioneer, philanthropist, politician and cofounder of Kerr-McGee Oil Corporation, the sparkling wit that had come to characterize his business and political dealings remained true to the end for Robert S. Kerr. And now you know…The Rest of the Yarn.
Readers are encouraged to submit brief, ostensibly true stories about notable personalities from our industry’s storied past. Submissions should be e-mailed to email@example.com.
Continuing with last month’s theme of well naming, name the 80’s TV sitcom that became the source of well names for a San Andres play in West Texas as recently as 2 years ago.
If you would like to participate in this month’s quiz, e-mail your answer to firstname.lastname@example.org by noon, December 15. The winner, who will be chosen semi-randomly from all correct answers, will receive a $50 gift certificate to a nice restaurant.
Answer to November’s Quiz
Because of the moose head outline of the peripheral well locations in a field in eastern Montana, many of the Bakken horizontal wells in the field have been named after the characters in the late 50’s & early 60’s cartoon series, “The Adventures of Rocky and Bullwinkle” (e.g., Chainsaw, Whiplash, Natasha and Peabody).
Answer to October’s Quiz
In 1953 Houston was the headquarters city for the largest number of American drilling contractors. The city that ranked second was Wichita Falls.
Congratulations to October’s winner (only one correct answer this month) – Mike Marlin with Baker Hughes Inteq.